Elite Healthcare Resources LLC vs. Star Nursing Services, Inc.

Hart Union High School Dist. v. Regional Planning Com. (1991) 226 Cal. App. 3d 1612, 1616 fn.2.) Extrinsic evidence may not properly be considered on demurrer or on a motion to strike. (Ion Equipment Corp. v. Nelson (1980) 110 Cal. App. 3d 868, 881; Hibernia Savings & Loan Soc. v. Thornton (1897) 117 C. 481, 482.)

34-2022-00314757-CU-DF-GDS: Elite Healthcare Resources LLC vs. Star Nursing Services, Inc. 06/22/2023 Hearing on Demurrer - Civil Law and Motion - Demurrer/JOP in Department 53

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal. App. 3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . ., we are not concerned with plaintiff's possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal. App. 3d 690, 696-697.) “[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v.

Anderson Union High School Dist. (1996) 50 Cal. App. 4th 726.) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action - not whether they are true. (Serrano v. Priest (1971) 5 Cal. 3d 584, 591.)

Third Cause of Action (False Light)

Defendants’ demurrer is sustained with leave to amend. To state a cause of action for false lightinvasion of privacy, “the false light in which the plaintiff is placed must be highly offensive to a reasonable person.” (Fellows v. National Enquirer, Inc. (1986) 42 Cal.3d 234, 238-239.) “False light is a species of invasion of privacy, based on publicity that places a plaintiff before the public in a false light that would be highly offensive to a reasonable person, and where the defendant knew or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the plaintiff would be placed.” (Price v.

Operating Engineers Local Union No. 3 (2011) 195 Cal.App.4th 962, 970.) “‘A “false light” cause of action is in substance equivalent to a libel claim, and should meet the same requirements of the libel claim, including proof of malice [where malice is required for the libel claim].’” (Medical Marijuana, Inc. v. ProjectCBD.com (2016) 6 Cal.App.5th 602, 616 [citations omitted]) “Indeed, ‘[w]hen a false light claim is coupled with a defamation claim, the false light claim is essentially superfluous, and stands or falls on whether it meets the same requirements as the defamation cause of action.’” (Jackson v.

Mayweather (2017) 10 Cal.App.5th 1240, 1264.) “Depending on the specific allegations in a case, causes of action for false light and intentional infliction of emotional distress may be redundant to a defamation cause of action and subject to dismissal on demurrer for that reason.” (Dickinson v. Cosby (2017) 17 Cal.App.5th 655, 692.)

Here Plaintiff’s false light cause of action does nothing more than repeat the allegations in the unchallenged libel/slander causes of action. (FAC ¶¶ 67-69.) Plaintiff does not include any additional allegations which would differentiate the cause of action from the libel/slander causes of action. In opposition, Plaintiff does not challenge that assertion and instead argues that it is entitled to plead in the alternative. This is a correct proposition of the law in the abstract but not in this scenario. This is true because as seen above, a false light claim is redundant to a libel claim when it is premised on the same allegations. Indeed, a demurrer was properly sustained to a false light claim which did nothing more that “incorporate[] all of the factual allegations of [the] libel claim and added no further allegations.” (Couch v. San Juan Unified School Dist.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2022-00314757-CU-DF-GDS: Elite Healthcare Resources LLC vs. Star Nursing Services, Inc. 06/22/2023 Hearing on Demurrer - Civil Law and Motion - Demurrer/JOP in Department 53

(1995) 33 Cal.App.4th 1491, 1504.) Plaintiff’s false light claim does the exact same thing and is subject to demurrer.

Fourth and Fifth Causes of Action (Intentional and Negligent Interference With Prospective Economic Advantage)

Defendants’ demurrer is sustained with leave to amend.

A claim for intentional interference with prospective economic advantage required Plaintiff to allege “(1) an economic relationship between the plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of that relationship; (3) an intentional act by the defendant designed to disrupt that relationship; (4) actual disruption of the relationship; and (5) economic harm ” (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 944.) In addition, the plaintiff must allege that the “interference was wrongful ‘by some measure beyond the fact of the interference itself’.” (Della Penna v.

Toyota Motor Sales, U.S.A. (1995) 11 Cal.4th 376, 393.) A claim for negligent interference is essentially the same and only differs in the sense that the conduct was committed negligently and not intentionally. (Venhaus v. Shultz (2007) 155 Cal.App.4th 1072, 1078)

Defendants argue that these causes of action are deficient because Plaintiff has not alleged any existing economic relationship with a third party. In these two causes of action Plaintiff alleges that it “and other healthcare facilities were in an economic relationship that would have resulted in an economic benefit to” Plaintiff and that Defendants “interfered with existing contracts or future clients of” Plaintiff. (FAC ¶¶ 72, 77.) Plaintiff also alleges that Defendants interfered with “this perspective [sic], beneficial relationship ” (Id. ¶¶ 73, 78.)

While Plaintiff argues that Defendants are misinterpreting the FAC and ignoring the allegations that “in an economic relationship” with “other healthcare facilities”, Plaintiff fails to appreciate that it alleged that Defendants interfered with “existing contracts or future clients.” (FAC ¶¶ 72, 77.) The import of this allegation is that Defendants interfered with a contract, which is not the subject of this tort, and that they interfered with “future clients” which at most is a hope for some future economic relationship with future clients as opposed to an existing one. “[A] hope for an economic relationship and a desire for future benefit” is not cognizable under this cause of action. (Roy Allan Slurry Seal, Inc. v. Am. Asphalt S., Inc. (2017) 2 Cal.5th 505, 510 [citations omitted].)

The demurrer to the fourth and fifth causes of action on the sole basis that Plaintiff failed to allege the existence of an existing economic relationship is sustained with leave to amend.

Seventh Cause of Action (Tortious Interference With Contract)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2022-00314757-CU-DF-GDS: Elite Healthcare Resources LLC vs. Star Nursing Services, Inc. 06/22/2023 Hearing on Demurrer - Civil Law and Motion - Demurrer/JOP in Department 53

Defendants’ demurrer is sustained with leave to amend.

“The elements of a cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) “A cause of action for intentional interference with contract requires an underlying enforceable contract.” (PMC, Inc. v. Saban Entertainment, Inc. (1996) 45 Cal.App.4th 579, 601.)

Defendants argue that Plaintiff has failed to allege the existence of any actual contract with a third party. In making this argument, they point to paragraphs 86 and 87 of the FAC. In paragraph 86, Plaintiff alleges that Defendants interfered “with contractual relationships between [Plaintiff] and existing healthcare providers that [Plaintiff] provided services to.” (FAC ¶ 86.) In paragraph 87, Plaintiff alleges that Defendants “knew of the contracts and made performance more difficult.” (Id. ¶ 87.)

The Court finds these allegations are insufficient. Plaintiff has not identified any specific contract in the body of this cause of action with a third party that these Defendants interfered with. A vague reference to “contractual relationships” with healthcare providers and “the contracts” are not sufficient allegations of a valid contract between Plaintiff and a third party, even if the Court construes the FAC liberally as urged by Plaintiff in opposition.

However, the Court does reject the contention that the cause of action is deficient because Plaintiff fails to allege whether any contract is written, oral, or implied by conduct. Defendants cite no authority for that proposition.

The demurrer to the seventh cause of action is sustained with leave to amend on the sole basis that Plaintiff failed to allege the existence of any contract with a third party.

In summary, the demurrer is sustained its entirety with leave to amend as set forth above. While Defendants argue that no leave to amend should be granted because this is Plaintiff’s “second bite at the apple”, this is incorrect. This is the first challenge to the complaint on which the Court has ruled as Plaintiff filed a first amended complaint prior to Defendants’ previous demurrer as was its right pursuant to CCP § 472(a). The Court will not at this early stage find that Plaintiff will be unable as a matter of law to correct the above identified deficiencies.

Plaintiff may file and serve an amended complaint no later than July 3, 2023. Defendants shall file and serve their response within 30 days thereafter, 35 days if the amended complaint is served by mail as modified by the CCP 430.41 extension if necessary.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2022-00314757-CU-DF-GDS: Elite Healthcare Resources LLC vs. Star Nursing Services, Inc. 06/22/2023 Hearing on Demurrer - Civil Law and Motion - Demurrer/JOP in Department 53

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.