Opinion
B228310
12-07-2011
KING SOLOMON MANAGEMENT, INC., Plaintiff and Appellant, v. LOS ANGELES COUNTY PUBLIC GUARDIAN'S OFFICE et al., Defendant and Respondent.
Arent Fox, Jonathon E. Cohn and Collin Seals, for Plaintiff and Appellant. Andrea Sheridan Ordin, County Counsel, Leah D. Davis, Assistant County Counsel, Doraine F. Meyer, Principal Deputy County Counsel, and Syna Dennis, Deputy County Counsel for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC387600)
APPEAL from a judgment of the Superior Court of Los Angeles County, David L. Minning, Judge. Reversed.
Arent Fox, Jonathon E. Cohn and Collin Seals, for Plaintiff and Appellant.
Andrea Sheridan Ordin, County Counsel, Leah D. Davis, Assistant County Counsel, Doraine F. Meyer, Principal Deputy County Counsel, and Syna Dennis, Deputy County Counsel for Defendants and Respondents.
King Solomon Management, Inc. (doing business as Dreier's Nursing Care Center) (Dreier's) appeals from the summary judgment in favor of respondents Los Angeles County Public Guardian's Office (LAPGO) and LAPGO's employee William Ortega. We conclude that issues of material fact exist as to whether the stated reason for denying the transfer of a patient from the Los Angeles Metropolitan Medical Center (LA Metro) to Dreier's was defamatory and whether it constituted a tortious interference with Dreier's prospective economic advantage. We reverse the judgment.
FACTUAL AND PROCEDURAL SUMMARY
Dreier's is a nursing home for elderly patients with mental and physical disorders. Hospitals transfer such patients to the nursing home when acute care is no longer necessary. LAPGO assigns public conservators for some of these patients. Ortega is a deputy in LAPGO's Placement Unit (also known as Special Services Unit). The unit coordinates patient transfers by liaisoning between the clinicians who make the transfer recommendations and the conservators who approve or deny them.
The record on appeal includes a few select excerpts from depositions of various individuals affiliated with Dreier's and LAPGO that cover some of the salient points of the parties' dispute. These excerpts provide little or no background information about the two organizations and the various deponents. To the extent the parties do not appear to disagree about background facts, we have drawn a few such facts from the second amended complaint and the parties' briefs.
In October 2007, Ortega and conservator Sonae Domingo visited Dreier's to oversee the transfer to another facility of a patient assigned to Domingo. When they attempted to leave with the patient's original medical records, Ortega got into an altercation with Dreier's administrator John Haedrich. Haedrich complained about the incident to Ortega's supervisor, who brought the complaint to Ortega's attention. On February 4, 2008, Ortega signed a form on Domingo's behalf denying the transfer of a patient assigned to Domingo from LA Metro to Drier's. The stated reason for the denial was "Pending concerns re: treatment of CT's [conservatees] by Dreier's staff." Before signing the form, Ortega consulted with Domingo, who denied the transfer because she was concerned that a client of hers had been overmedicated at Dreier's and that the altercation in October 2007 had taken place in front of her client.
The complaint alleged that Ortega became belligerent with the nurses and kicked open the door to Haedrich's office. According to Domingo, Haedrich, too, lost his temper—he raised his voice, cursed, and slammed his office door.
Dreier's sued LAPGO and Ortega for intentional and negligent interference with prospective economic advantage, defamation, and negligence. The operative second amended complaint alleged that Ortega had signed the form without authorization and had fabricated the reason for the transfer denial. The trial court sustained respondents' demurrer and dismissed the case. In Dreier's previous appeal, we reversed the judgment of dismissal as to the causes of action for intentional and negligent interference with prospective economic advantage against LAPCO and Ortega, and as to the cause of action for defamation against Ortega. (King Solomon Management, Inc. v. Los Angeles County Public Guardian's Office (Aug. 5, 2009, B211530 [nonpub. opn.]) (King Solomon I).)
Respondents filed a motion for summary judgment on June 24, 2010. The trial court granted the motion and entered a judgment in respondents' favor. Dreier's timely appealed.
DISCUSSION
I
A defendant who moves for summary judgment must show that the plaintiff cannot establish an element of a cause of action or must establish a defense to the cause of action. The burden then shifts to the plaintiff to show that an issue of material fact exists as to the cause of action or defense. To do that, the plaintiff may not rely upon the allegations of the complaint but must adduce specific facts showing the existence of an issue of material fact. (Code Civ. Proc., § 437c, subd. (o)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849 (Aguilar).)
We review an order granting a motion for summary judgment de novo to determine whether there are no triable issues of material fact. (Aguilar, supra, 25 Cal.4th at p. 860.) We "view the evidence in a light favorable to plaintiff as the losing party [citation], liberally construing [plaintiff's] evidentiary submission while strictly scrutinizing defendants' own showing, and resolving any evidentiary doubts or ambiguities in plaintiff's favor. [Citations.]" (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) We may affirm a summary judgment if it is correct on any ground that the parties had an adequate opportunity to address in the trial court, regardless of the trial court's stated reasons. (Blanco v. Baxter Healthcare Corp. (2008) 158 Cal.App.4th 1039, 1058.)
Questions decided on appeal from a judgment on demurrer are the law of the case. They are not subject to redetermination in a later appeal except on substantially and materially different evidence. (See Bigbee v. Pacific Tel. & Tel. Co. (1983) 34 Cal.3d 49, 57 and cases cited in that decision.) The doctrine of law of the case binds the parties, as well as the courts involved in subsequent proceedings in the same case, to legal principles propounded in an earlier appellate court opinion. (Morohoshi v. Pacific Home (2004) 34 Cal.4th 482, 491.)
II
The tort of defamation includes "a false and unprivileged publication . . . which . . . ¶ [t]ends directly to injure [the plaintiff] in respect to [its] . . . business," most often by reflecting on the plaintiff's "integrity and competence." (Civ.Code, § 46, subd. 3; Regalia v. The Nethercutt Collection (2009) 172 Cal.App.4th 361, 369.) In King Solomon I, supra, B211530, we found that the complaint sufficiently pled a cause of action for defamation because it alleged that the stated reason for the transfer denial— "Pending concerns re: treatment of CT's [conservatees] by Dreier's staff—was false.
The truth of the allegedly defamatory statement "is a complete defense against civil liability, regardless of bad faith or malicious purpose." (Smith v. Maldonado (1999) 72 Cal.App.4th 637, 646.) The defendant needs to prove "the substance of the charge, irrespective of slight inaccuracy in the details, 'so long as the imputation is substantially true so as to justify the "gist or sting" of the remark.' [Citations.]" (Id. at pp. 646-647.) But a substantive change to an originally truthful statement of fact, such as editing, rearranging words or removing or adding language, may render it capable of a defamatory innuendo. (Id. at p. 652.)
The trial court granted summary judgment on the defamation claim on the ground that the stated reason for the transfer denial was substantially true as it reflected "in general terms" the concerns of conservator Domingo, who denied the transfer. Viewing the evidence in the light most favorable to appellant as the non-moving party, we conclude that there exist issues of material fact as to whether the statement is substantially true.
In her deposition, Domingo stated that she denied the transfer because of two concerns she had about Dreier's: that a client of hers had been overmedicated and that, during the October 2007 altercation, Dreier's staff had behaved in a rude and inappropriate manner in front of her client. But she denied having written the reason for denial and stated that she disagreed with its actual phrasing. The statement refers to concerns about Dreir's treatment of multiple patients, while Domingo's notes and the deposition of Lucille Lyon, whom appellant identifies as LAPGO's Division Chief, suggest that Domingo's concerns may have had to do with a single patient. Lyon also testified that overmedication was not a concern because prescribing medication is a medical decision, which the nursing staff must follow. She stated that Dreier's staff had appropriately responded to the overmedication complaint received a year earlier either by asking the prescribing physician to review the medication or by seeking a second opinion. Lyon's deposition testimony raises an issue of fact as to whether Domingo's concern about overmedication can be characterized as a concern about treatment. Domingo's other concern—about the behavior of Drier's staff during the October 2007 incident— does not appear to have anything to do with the patient's treatment. Because Domingo agreed that the statement on the form did not accurately phrase her concerns and because the term "treatment" is both broader and less specific than Domingo's stated concerns, we cannot find that the statement is substantially true as a matter of law.
Respondents seek to establish the truth of the statement through a January 2008 audit report by the Department of Health and Human Services and an undated list of Dreier's federal deficiencies between 2003 and 2007. Although these documents identify various problems at the nursing home that predate the February 4, 2008 transfer denial, respondents present no evidence that Domingo, Ortega, or anyone else at LAPGO had "pending concerns" about patient treatment based on these violations or was even aware of them. Respondents have thus not met their burden of proof on this issue. Rather, the evidence on appeal indicates that LAPGO's witnesses either had not seen the audit report, had no concerns about Dreier's, or did not recall having any concerns.
In its opposition to defendant's separate statement and again on appeal, Dreier's cites to deposition testimony by Ortega, Domingo and others at LAPGO, indicating that they had not seen the audit report, but not all relevant testimony appears to have been included in the record on appeal. The failure to include it is not fatal because defendants have the burden of proving the truth of the statement that there were "pending concerns" about patient treatment at LAPGO.
Respondents' reliance on Dreier's various pre-existing violations appears to be based on the assumption that they have to prove there were actual problems with patient care at Dreier's whether or not LAPGO was aware of or was concerned about these problems. But Dreier's deficiencies and violations, whether known at the time or later discovered, were not the reason given for the transfer denial. As we stated in King Solomon I, the reason for denial is susceptible to a defamatory meaning because "[a] trier of fact reasonably could conclude that LAPGO, a public agency charged with overseeing the care of incompetent persons, had declined to place a patient in the nursing home because it believed she would not be properly cared for." This determination is law of the case. Thus, whether anyone at LAPGO had concerns about patient care at Dreier's raises an issue of fact separate from the actual existence of deficiencies in patient care or other violations.
Respondents argue that the statement contains an "unflattering" opinion rather than a fact. But the question in defamation cases "is not strictly whether the published statement is fact or opinion. Rather, the dispositive question is whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact." (Franklin v. Dynamic Details, Inc. (2004) 116 Cal.App.4th 375, 385.) That LAPGO had pending concerns is an assertion of fact, subject to verification independently from the factual basis of such concerns.
We conclude that there are issues of fact whether the reason for denial is substantially true in light of Domingo's stated concerns about Dreier's. Respondents have failed to establish that LAPGO had concerns about any other existing violations.
III
The tort of intentional interference with prospective economic advantage has the following elements: '""(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." [Citations.]' [Citation.]" (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.)
In turn, negligent interference with prospective economic advantage requires that "(1) an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship. [Citation.]" (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 786.)
Both torts require an economic relationship with a third party and a probable future economic benefit to the plaintiff. The trial court granted summary judgment finding: "As a matter of law, there is no economic relationship [between] plaintiff and the hospital containing the probability of future economic benefit to plaintiff because the placement of the County's conservatee into plaintiff's facility is completely contingent on the Public Guardian's approval of the transfer. . . . As such, the relationship [between] plaintiff and hospital only affords plaintiff the possibility of future economic benefit, not the probability of such." In King Solomon I, we specifically rejected respondents' argument that patient referrals cannot establish the probability of future economic benefit because they are contingent on the conservator's approval. Our decision on this legal issue is law of the case, binding on the parties and the trial court. It is not subject to redetermination in this appeal.
In our previous decision, we also found that the complaint had sufficiently alleged the existence of a long-established relationship between Dreier's and LA Metro, which was a significant source of patient referrals and had made an actual referral in this case. Respondents recharacterize the economic relationship at issue as one between Dreier's and the referring physician, Dr. Grimes. They then rely on Ortega's declaration, that he did not know Dr. Grimes referred patients to Dreier's, to challenge Dreier's ability to establish the rest of the elements of intentional interference with prospective economic advantage. We find that appellant has produced evidence that raises a triable issue of fact whether the stated reason for denial was designed to and actually disrupted the economic relationship of Dreier's and LA Metro. The transfer form identified LA Metro as the origin of the transfer and was handled by LA Metro's social worker Fany Toshkov. In his deposition, Ortega admitted that he had dealt with LA Metro and Toshkov. It could be reasonably inferred that he knew enough about the economic relationship at stake in this case.
Similarly, appellant's proferred evidence could support a finding about the damage to its relationship with LA Metro and the ensuing economic harm. For instance, Toshkov stated that LAPGO's alleged concerns about Dreier's affected her opinion of the nursing facility so much that she brought them to the attention of the discharge planner and administrator of the unit where the patient subject to transfer was staying, and she no longer considered Dreier's a suitable placement for LA Metro patients. Connie Esparza, who was in charge of marketing at Dreier's, stated that in 2007 there were five to seven patient referrals from LA Metro, half of which resulted in placement. According to Esparza, there were no patient referrals or placements from LA Metro in 2008.
The trial court denied defendants' evidentiary objections, and defendants do not ask us to review its ruling on specific objections within this appeal.
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Respondents argue that negligent interference with prospective economic advantage requires a special relationship, and that LAPGO and its employees owe a statutory and fiduciary duty to the conservatee rather than the nursing home. But the special relationship required for this tort is not of a fiduciary nature; rather, the main factor in determining that such a relationship exists is "the foreseeability of the economic harm to the plaintiff from the defendant's negligent conduct . . . . [Citation.] [Italics omitted.]" (North American Chemical Co. v. Superior Court, supra, 59 Cal.App.4th at p. 782.) A reasonable trier of fact could find it foreseeable that the statement justifying the transfer denial would affect the nursing facility's eligibility for future patient referrals and cause economic harm that is not too remote or speculative.
In King Solomon I, we found that respondents were not immune from liability for tortious interference with prospective economic advantage under the Tort Claims Act (Gov. Code, §§ 815.2, 820.2) because the complaint alleged that Ortega had no discretion to deny the transfer. Respondents renew their argument based on evidence that Domingo rather than Ortega denied the transfer. The argument is unavailing because there still is no evidence that Ortega had discretion to freely paraphrase Domingo's reason for the denial so as to render it defamatory. Moreover, issues of fact exist as to the validity and effect of this reason, which various individuals identified as unusual. Specifically, Toshkov stated that the reason line on a transfer form is usually left blank, or if a reason is given, it is that the recommended nursing facility does not have a locked unit. Lyon testified similarly that LAPGA rarely denies transfers; in the only other case when a transfer was denied, it was because the conservator believed the patient needed to be at a locked facility. It is thus far from clear that a transfer form may be used to air concerns about a nursing facility's treatment of patients or to make other complaints.
Viewing the evidence in a light most favorable to appellant, we cannot conclude that respondents are entitled to a judgment as a matter of law on the causes of action for tortious interference with prospective economic advantage.
DISPOSITION
The judgment is reversed. Appellant is awarded its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
EPSTEIN, P. J. We concur:
WILLHITE, J. SUZUKAWA, J.