Maldonado vs. CalOptima

To grant a motion to seal, the court must expressly find that:

1. an overriding interest exists that overcomes the right of public access to the record; 2. the overriding interest supports sealing the records; 3. a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; 4. the proposed sealing is narrowly tailored; and 5. no less restrictive means exist to achieve the overriding interest.

(Cal. Rules of Court, Rule 2.550, subd. (d); McGuan v. Endovascular Technologies, Inc. (2010) 182 Cal.App.4th 974, 988.)

Examples of documents that may qualify to be sealed are:

• Documents containing trade secrets, (see In re Providian Credit Card Cases (2002) 96 Cal.App.4th 292, 300; McGuan v. Endovascular Tech., Inc., supra, 182 Cal.App.4th at p. 988 [business’ quality control records and complaint handling procedures may be sealed]); • Documents containing material protected by a privilege, (see Huffy Corp. v. Superior Court (2003) 112 Cal.App.4th 97, 108 [documents protected by attorney-client privilege may be sealed]); • Confidential settlement agreement, (see Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283).

A sealing order must: (a) specifically state facts supporting the above findings; and (b) be narrowly tailored (i.e., it should direct sealing of only those documents and pages that contain material that needs to be placed under seal; all

other portions of each document or page must remain in the public file). (See Cal. Rules of Court, rule 2.550(e)(1); Weil & Brown, Cal. Prac. Guide Civ. Pro. Before Trial (Rutter 2017) ¶ 9:418.1.)

In this case, the requirements of Rule 2.550 have been met.

Defendant CalOptima Health has shown that there is an overriding interest in protecting the confidentiality of the documents at issue because they contain health and medical information protected by disclosure under Health Insurance Portability and Accountability Act (HIPAA).

An individual’s privacy rights in their health and medical information are sufficiently substantial to overcome the right of public access to the information contained in the subject documents. Thus, the interest supports the sealing of the documents.

Plaintiff also has shown that a substantial probability exists that the overriding interest will be prejudiced if the records are not sealed, that the proposed sealing is narrowly tailored, and there are no less restrictive means to achieve the overriding privacy interest.

In addition, the requirements of Rule 2.551 have been met.

No other party to this action or third-party has opposed the motion or shown that the requirements of Rule 2.550 or Rule 2.551 have not been met.

Therefore, the court will grant the motion to seal.

Defendant CalOptima Health shall give notice of this ruling.

Motion for Leave to File Cross-Complaint

Defendant Family Choice Medical Group, Inc.’s Motion for Leave to File Cross-Complaint is GRANTED.

Defendant Family Choice Medical Group, Inc. is ORDERED to file the proposed Family Choice Medical Group, Inc.’s Cross-Complaint, attached as Exhibit 1 to the Declaration of Adam E. Wayne,

within 15 days of this ruling and to serve the Cross-Complaint upon all named Cross-Defendants within 60 days of this ruling.

Pending Motion

Defendant Family Choice Medical Group, Inc. (Defendant FCMG) move for leave to file the proposed Family Choice Medical Group, Inc.’s Cross-Complaint (Proposed Cross-Complaint) against Defendant Conifer Value-Based Care, LLC (Defendant Conifer).

Standard for Leave to File Cross-Complaint

Civil Procedure Code section 428.10 provides that:

A party against whom a cause of action has been asserted in a complaint or cross- complaint may file a cross-complaint setting forth either or both of the following:

(a) Any cause of action he has against any of the parties who filed the complaint or cross-complaint against him. . . .

(b) Any cause of action he has against a person alleged to be liable thereon, whether or not such person is already a party to the action, if the cause of action asserted in his cross-complaint (1) arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause brought against him or (2) asserts a claim, right, or interest in the property or controversy which is the subject of the cause brought against him.

(Code Civ. Proc., § 428.10.)

If the party wishes to file a cross-complaint against a plaintiff or cross-complainant who filed a complaint or cross-complaint against the party, they must do so before or at the same time as the they file the answer to the complaint or crosscomplaint. (See Code Civ. Proc., § 428.50, subd. (a).)

If the party wishes to file a cross-complaint against a party that has not filed a complaint or cross-complaint against them, they may do so any time before the court has set a date for trial. (See

Code Civ. Proc., § 428.50, subd. (b).)

If the party misses these deadlines, the party “shall obtain leave of court to file any crosscomplaint.” (Code Civ. Proc., § 428.50, subd. (c); see also Code Civ. Proc., § 426.50 [“A party who fails to plead a cause of action subject to the requirements of this article, whether through oversight, inadvertence, mistake, neglect, or other cause, may apply to the court for leave . . . to file a cross-complaint, to assert such cause at any time during the course of the action.”].)

If the proposed cross-complaint is compulsory, leave must be granted so long as defendant is acting in good faith. (See Code Civ. Proc., § 426.50 [“The court, after notice to the adverse party, shall grant, upon such terms as may be just to the parties, leave . . . to file the crosscomplaint, to assert such cause if the party who failed to plead the cause acted in good faith.”]; Silver Organizations, Ltd. v. Frank (1990) 217 Cal.App.3d 94, 98-99 [“Factors such as oversight, inadvertence, neglect, mistake or other cause, are insufficient grounds to deny the motion unless accompanied by bad faith.”].)

A compulsory cross-complaint is a cross-complaint that is asserted against the plaintiff (or crosscomplainant) and contains a cause of action that is related to the complaint (or cross-complaint). (See Code Civ. Proc., § 426.30, subd. (a).)

A cause of action is “related” to the complaint if it “arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint.” (Code Civ. Proc., § 426.10, subd (c).)

In order to be related, there does not need to be “’an absolute identity of factual backgrounds for the two claims, but only a logical relationship between them.’ At the heart of this approach is the question of duplication of time and effort; i.e., are any factual or legal issues relevant to both claims?” (Currie Medical Specialties, Inc. v. Bowen (1982) 136 Cal.App.3d 774, 777, citations omitted, quoting United Artists Corp. v. Masterpiece Prods. (2d Cir. 1955) 221 F.2d 213, 216.)

Claims that are only loosely related in that they involve some of the same parties and the same

matter, directly or indirectly, are not logically related if the trial of the claims does not involve a duplication of time and effort due to the fact that there are factual and legal issues that are relevant to both claims. (See ZF Micro Devices, Inc. v. TAT Capital Partners, Ltd. (2016) 5 Cal.App.5th 69, 84.)

All cross-complaints that are not compulsory are permissive cross-complaints.

Leave to file a permissive cross-complaint is within the discretion of the court, which may be granted “in the interests of justice.” (Code Civ. Proc., § 428.50, subd. (c).)

There is a liberal policy regarding granting leave to file cross-complaints. (Align Technology, Inc. v. Bao Tran (2009) 179 Cal.App.4th 949, 967; see also Code Civ. Proc., § 426.50 [“This subdivision shall be liberally construed to avoid forfeiture of causes of action.”].)

Here, the Proposed Cross-Complaint arises out of the same transaction, occurrence, and controversy that is alleged in Plaintiff Leticia Maldonado’s Fifth Amended Complaint.

The Fifth Amended Complaint asserts a single cause of action against Defendant FCMG for violation of Civil Code section 3428. (See Fifth Amend. Compl. at pp. 12-13.)

The Fifth Amended Complaint alleges that Section 3428 imposes upon Defendant FCMG a duty of care to Plaintiff to arrange for medically necessary care and Defendant FCMG breached that duty when Dr. Lowell Gordon, who was acting as the medical director for Defendant FCMG, denied Dr. Joel Berman’s request for authorization for surgery. (See id., ¶¶ 23, 27, 62-65.)

The Proposed Cross-Complaint asserts a single cause of action against Defendant Conifer for express contractual indemnity. (See Decl. of Adam E. Wayne, Exh. 1 at pp. 4-5.)

The Proposed Cross-Complaint alleges that on or about June 1, 2009, FCMG entered into a Management Services Agreement (MSA) with Quality Medical Management, Inc. to manage certain management and administrative services, including the process by which requests for

authorization for medical services submitted on behalf of Defendant CalOptima Health’s members are reviewed for medical necessity, and that Defendant Confider is the successor-in-interest to Quality Medical Management, Inc. (See id., ¶ 9.)

Thus, Defendant FCMG “delegated the duty of utilization management and review services for FCMG to Cross-Defendant[] [Conifer], including reviewing for medical necessity, the requests for authorization submitted by Dr. Berman on behalf of Plaintiff in February of 2022.” (See id., ¶ 14.)

The Proposed Cross-Complaint also pleads that in February 2022, Gordon was an independent contractor working as a medical director for Defendant Conifer. (See id., ¶ 11.)

As a result, Defendant Conifer is obligated indemnity Defendant FCMG “against all claims, damages, and liabilities incurred by FCMG that arose out of or resulted from Cross-Defendant’s conduct of its performance of utilization and review duties with respect to the allegations in Plaintiff’s [Complaint].” (See id., ¶ 15.)

Thus, the Proposed Cross-Complaint is related to the Fifth Amended Complaint and may properly be asserted pursuant to Section 428.10.

However, the Proposed Cross-Complaint is not asserted against the plaintiff or cross-complainant, so it is not compulsory.

Nonetheless, the court has discretion to grant leave to file a permissive cross-complaint where it is related to the Complaint.

In addition, trial is not scheduled for another 10 1⁄2 months, such that filing of the Proposed Cross- Complaint should not cause any undue delay or prejudice to any party in preparing for trial.

Defendant Conifer contends that the MSA contains an arbitration provision and that Defendant FCMG’s cross-claim should be arbitrated. (See Decl. of Donna Costanza, Exh. A, § 16.)

Defendant Conifer also argues that the cross-claim is premature and futile because Section 9 of the MSA provides that “neither party shall be liable to the other party hereunder for any claim covered by third party insurance, except to the extent that

the liability of such party exceeds the amount of such third party insurance coverage.” (Id., Exh. A, § 9.1.)

Defendant Conifer asserts that, because there has been no settlement or judgment in this case, whether Defendant FCMG’s liability exceeds the amount of third party insurance coverage cannot be determined.

However, it would be preferable to allow Defendant FCMG to file the Proposed Cross- Complaint and then for Defendant Conifer to file a motion to compel arbitration and/or a demurrer, motion for judgment on the pleadings, or motion for summary judgment. (See Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 [“[T]he preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings.”].)

In this way, the court may address the issue squarely on the merits.

Therefore, the court will grant the motion for leave to file a cross-complaint.

Defendant FCMG shall give notice of this ruling.

4 ADM Capital Singapore Pte. Motion to Be Relieved as Counsel Ltd vs. Nath Counsel Jeffer Mangels & Mitchell LLP’s Motion to Be Relieved as Counsel for Plaintiff ADM Capital 30-2022-01252773 Singapore Pte. Ltd. is GRANTED.

Counsel Jeffer Mangels & Mitchell LLP is ORDERED to submit to this court a proposed Order Granting Attorney’s Motion to Be Relieved as Counsel – Civil (Form MC-053), that is completely and correctly completed, within 10 days of this ruling.

Within 15 days of receiving the signed Form MC- 053 back from the court, Counsel Jeffer Mangels & Mitchell LLP is ORDERED to serve Plaintiff ADM Capital Singapore Pte. Ltd. with the signed Form MC-053, notice of the Order to Show Cause hearing set forth below, and notice of this ruling, in the manner described in Rules of Court rule 3.1362(d).