Lolli vs. Liberty Dental Plan of California, Inc.

Plaintiff contends that the demurrer should be overruled because the 3AC cures each defect regarding damages identified by the Court in the demurrer to the Second Amended Complaint and adequately alleges non-speculative damages with particularity. Plaintiff contends that the 3AC identifies with particularity the jobs Plaintiff declined, as well as adequately pleads damages for lost bonus compensation, and lost ownership compensation. Plaintiff asserts that if the Court perceives any defect in the FAC, leave to amend should be granted.

To plead deceit based on intentional misrepresentation, a plaintiff is required to allege with particularity “as many as seven essential factual elements: ‘(1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff’s reliance on the defendant’s representation was a substantial factor in causing that harm to the plaintiff.’ [Citation.]” (Laukhart v. El Macero Homeowners Assn. (2023) 92 Cal.App.5th 889, 903.)

“The essential elements of a count for negligent misrepresentation are the same [as intentional misrepresentation] except that it does not require knowledge of falsity, but instead requires a misrepresentation of fact by a person who has no reasonable grounds for believing it to be true.” (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 231.)

“The elements of a claim for fraudulent concealment require a plaintiff to show that: ‘(1) the defendant . . . concealed or suppressed a material fact, (2) the defendant [was] under a duty to disclose the fact to the plaintiff, (3) the defendant . . . intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff [was] unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.’ ” (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1130.) “Concealment is a species of fraud, and ‘[f]raud must be pleaded with specificity.’ [Citation.]” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 878.)

“Fraud must be pleaded with particularity. General and conclusory allegations are inadequate. [Citation.]” (Ibid.)

“Fraud must be specifically pleaded; a general pleading of the legal conclusion of fraud is insufficient. Every element of the cause of action must be alleged in full, factually and specifically. [Citation.]” (Tindell v. Murphy (2018) 22 Cal.App.5th 1239, 1249.) “This pleading requirement of specificity [for a fraud cause of action] applies not only to the alleged misrepresentation, but also to the elements of causation and damage.” (Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 776.)

The SAC alleges that from November 2022 through early March 2023, Plaintiff was recruited and ultimately hired as chief executive officer of Defendants, Liberty Dental Plan of California, Inc., Liberty Dental Plan Corporation, and Project Freedom Holdings, LLC. (3AC, ¶¶ 4, 9.)

Plaintiff alleges that on January 9, 2023, Plaintiff met with Dr. Neshat at the Pelican Hill Golf Club for meeting to discuss whether Plaintiff would be willing for Dental Corporation; that during that meeting, Plaintiff asked Dr. Neshat “several specific questions about Liberty Dental’s (i.e., Dental Corporation) business, and its contracts with dental practitioners, Medicaid and Medicare, to provide dental services in many states;” and that Plaintiff “explained that her decision to become the chief executive officer of Dental Corporation was contingent on Neshat’s answers to the questions, especially because the contract that was being discussed to attract Ms.

Lolli was incentive-laden for attaining profitability.” (3AC, ¶¶ 11-12.) It is alleged that Dr. Neshat stated he had authority to answer Plaintiff’s questions as Dental Corporation’s chief executive officer and chairman of its board of directors, and answered Plaintiff’s questions untruthfully, and at least in one instance, answered a question recklessly and without regard to its truth. (3AC, ¶ 13.) The 3AC contains a chart setting forth the questions Plaintiff asked, Dr. Neshat’s answer, and “Why Neshat knew statement was false when he made it on January 9, 2023.” (3AC at pp. 4-7.)

It is alleged that Dental Corporation provided Plaintiff with a “CEO Package” document, which stated that “part ownership of the company would be provided to Ms. Lolli that would pay Ms. Lolli between $13,935,000 and $33,894,000, with payments due on June 30, 2026, June 30, 2027, and June 30, 2028,” and that an “updated ‘Incentive Plan Overview’ provided to Ms. Lolli after her employment began stated that the payout would be between $19,724,000 and $29,297,000.” (3AC, ¶ 14.) It is alleged that “[t]he part ownership offered to and provided to Ms. Lolli was in the nature of a joint venture, because Neshat, Dental Corporation and Ms. Lolli’s had an undertaking by two or more persons jointly to carry out a single business enterprise for profit. Ms. Lolli, as the chief executive offer, and Neshat, as the chair of

the board of directors, had joint control over the venture, they shared the profits of the undertaking, and they each had an ownership interest in the enterprise. Neshat also was a part owner of Dental Corporation at all times he spoke falsehoods to Ms. Lolli, including after the parties signed an Employment Agreement on February 17, 2023. [Citation.]” (Ibid.)

It is additionally alleged that Dental Corporation also promised to pay Plaintiff a “base compensation of $750,000 (Exhibit 3, Employment Agreement, ¶ 4(a)), and an annual bonus of $750,000 per year, with the specifics regarding how Ms. Lolli could accomplish the bonus to be set forth by Dental Corporation no later than June 30, 2023. These specifics were never provided to Ms. Lolli, nor did Dental Corporation collaborate with her to determine how the $750,000 bonus was calculated.” (3AC, ¶ 16.)

The first through third causes of action incorporate the foregoing allegations. (3AC, ¶¶ 19, 31, 38.)

As to damages, the first through third causes of action allege that Plaintiff was harmed, because she “forewent other chief executive opportunities, took herself off of the market.” (3AC, ¶¶ 25, 36, 44.) Plaintiff alleges that she “very likely would have been offered positions as chief commercial officer at Blue Cross Blue Shield of Massachusetts, with which she had already had six interviews, at an annual salary of at least $2 million, chief health plan officer at Health Care Partners of Minnesota, with which she had already had five or six interviews, at an annual salary of at least $1.5 million, and chief executive officer at Wisconsin Physician Services, with a salary of $1.0 million at a bonus of $800,000, but she informed those companies that she had accepted the position at Dental Corporation and would no longer accept job offers from those companies.” (3AC, ¶¶ 25, 44.)

The latter allegation is incorporated into the second cause of action. (3AC, ¶ 31.)

The 3AC also alleges that Plaintiff was “also damaged because she only accepted the chief executive officer position at Dental Corporation based on a compensation package that included: (a) substantial part ownership payout of between of between $13.935 million and $33.894 million, and (b) an additional annual bonus of $750,000, based on criteria that Dental Corporation promised to provide Ms. Lolli by June 30, 2023, but never did. (See Exhibit 3, Employment Agreement, at ¶ 4(b).)” (3AC, ¶¶ 26, 45.) It is additionally alleged that “[t]he part ownership payout was payable for maintaining EBITDA between 7.5 percent and 8.5 percent (Exhibit 1, p. Lolli0019) that Neshat misrepresented to Ms. Lolli that Dental Corporation routinely achieved.” (Ibid.) It is additionally alleged that “[a]lthough Ms. Lolli was terminated in May,

2024, these damages are sought based on Neshat’s representations and the nature of the joint venture relationship between Ms. Lolli and Neshat.” (Ibid.)

Plaintiff alleges that she “found out after she accepted the position at Dental Corporation that the company was going to lose money and not be profitable in 2023, i.e., had a negative EBITDA. Negative EBITDA indicates that a company’s operational earnings are not enough to cover its operating expenses. In simpler terms, it means the company is losing money. The profitability (EBITDA) targets could not be, and were not achieved.” (3AC, ¶¶ 27, 46.)

All of the foregoing allegations are incorporated into the second cause of action. (3AC, ¶ 31.)

To recover on a fraud claim, a plaintiff must suffer actual monetary loss. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1240 (“Alliance Mortgage”).) “There are two measures of damages for fraud: out-of-pocket and benefit of the bargain. [Citation.] The ‘out-of-pocket’ measure of damages ‘is directed to restoring the plaintiff to the financial position enjoyed by him prior to the fraudulent transaction, and thus awards the difference in actual value at the time of the transaction between what the plaintiff gave and what he received.

The “benefit-of-the-bargain” measure, on the other hand, is concerned with satisfying the expectancy interest of the defrauded plaintiff by putting him in the position he would have enjoyed if the false representation relied upon had been true; it awards the difference in value between what the plaintiff actually received and what he was fraudulently led to believe he would receive.’ [Citations.]” (Ibid.)

“Misrepresentation, even maliciously committed, does not support a cause of action unless the plaintiff suffered consequential damages. [Citation.]” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1064 [internal quotations omitted].) “ ‘If the existence—and not the amount—of damages alleged in a fraud pleading is “too remote, speculative or uncertain,” then the pleading cannot state a claim for relief.’ [Citation.]” (Ibid.) “Damages are not recoverable if the fact of damage is too remote, speculative or uncertain. [Citations.]” (Block v. Tobin (1975) 45 Cal.App.3d 214, 219.) “There mere probability that a certain event would have happened, upon which a claim for damages is predicated, will not support the claim for furnish the foundation of an action for such damages.” (Thompson v. Asimos (2016) 6 Cal.Ap.5th 970, 990, internal quotations and citations omitted.)

Plaintiff’s allegation that she sustained out-of-pocket damages because she “forewent other chief executive opportunities” and that she “very likely would have been offered positions” at other companies remains speculative.

Plaintiff does not allege that she had any actual offer of employment from any of these other companies. While Plaintiff now alleges that she had already had six interviews with Blue Cross Blue Shield of Massachusetts, and had five or six interviews with Health Care Partners of Minnesota, it remains speculative whether Plaintiff would have obtained offers of employment. Plaintiff adds no facts to support the possibility of any offer of employment from Wisconsin Physician Services. (Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 776-777, 773 [finding that the complaint adequately alleged damages for a cause of action for promissory fraud where the complaint contained specific allegations of damages including that defendants repeatedly told key employees/plaintiffs that if they stayed with the company until it was sold, they would be paid a bonus that would be enough for the plaintiffs to retire so that they continued to stay with the company, that one of the plaintiffs turned down nine offers of employment from other companies during that period on reliance of defendants’ promise of a bonus at the time of the company’s sale, and that upon the sale of the company, the plaintiffs never received the bonus for retirement as promised].)

Plaintiff cites to Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, as supporting that damages are adequately pled where it was very likely that an individual would have signed a will. However, the Court of Appeal reached this conclusion because “Beckwith’s complaint clearly alleged facts showing that if he had presented MacGinnis with the will, it was very likely MacGinnis would have signed it, . . . .” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1064 (“Beckwith”).) These facts included that Beckwith and his partner, MacGinnis, were in a long-term, committed relationship for almost 10 years; that they leased an apartment together and were occasional business partners; that MacGinnis showed Beckwith a will he had saved on his computer which stated that upon MacGinnis’s death, his estate was to be divided equally between Beckwith and Susan Dahl, MacGinnis’s sister and only other living family, with whom he had an estranged relationship. (Id., at p. 1046.)

The facts also included that in May 2009, MacGinnis’s health began to decline and as he was in the hospital awaiting surgery, he asked Beckwith to locate and print the will so he could sign it. (Id. at p. 1047.) Beckwith went to their home and looked for the will, but he could not find it, and when Beckwith told MacGinnis that he could not locate the will, MacGinnis asked Beckwith to create a new will so that he could sign it the next day, which Beckwith did, but Beckwith did not present the will to MacGinnis based on statements made by Dahl to Beckwith to not present the will to MacGinnis for signature because one of her friends would prepare trust documents for MacGinnis to sign. (Ibid.)

After surgery, MacGinnis was placed on a ventilator, and after removing MacGinnis from the ventilator

following doctors’ recommendations, MacGinnis died. (Ibid.) Under these facts, the Court of Appeal concluded that the complaint alleged facts showing that if Beckwith had presented MacGinnis with the will, it was very likely MacGinnis would have signed it.

In contrast, the only facts alleged to support that it was “very likely” that Plaintiff would have been offered positions at Blue Cross Blue Shield of Massachusetts and Health Care Partners of Minnesota is the number of interviews she had with each company. This is insufficient to support that an offer of employment was forthcoming, and in turn, these damages are uncertain and speculative.

With regards to the benefit-of-the-bargain damages alleged by Plaintiff based on a “compensation package that included (a) substantial part ownership payout of between of between $13.935 million and $33.894 million, and (b) an additional annual bonus of $750,000, based on criteria that Dental Corporation promised to provide Ms. Lolli by June 30, 2023,” Dr. Neshat first contends that plaintiffs generally cannot recover benefit-of-the-bargain damages for fraud-based claims unless there is fraud committed by a fiduciary.

“ ‘In California, a defrauded party is ordinarily limited to recovering his “out-of-pocket” loss . . . .’ [Citation.]” (Alliance Mortgage, supra, 35 Cal.4th at p. 1240.) This does not apply when a victim is defrauded by its fiduciaries. (Id. at p. 1241.) “In this situation, the ‘broader’ measure of damages provided by sections 1709 and 3333 applies. [Citations.]” (Ibid.)

Here, the 3AC alleges that the part ownership offered to and provided to Plaintiff was “in the nature of a joint venture, because Neshat, Dental Corporation, and Ms. Lolli’s had an undertaking by two or more Ms. Lolli’s had an undertaking by two or more persons jointly to carry out a single business enterprise for profit. Ms. Lolli, as the chief executive offer, and Neshat, as the chair of the board of directors, had joint control over the venture, they shared the profits of the undertaking, and they each had an ownership interest in the enterprise.”

Joint venturers have a fiduciary duty to act with the highest good faith towards each other regarding affairs of the joint venture. (Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 524-525 [fiduciary duty between two parties who formed a joint venture to develop real estate for profit].) “ ‘A joint venture . . . is an undertaking by two or more persons to carry out a single business enterprise for profit.’ [Citation.] ‘There are three basic elements of a joint venture: the members must have joint control over the venture (even though they may delegate it), they must share the profits of the undertaking, and the members must each have an

ownership interest in the enterprise. [Citation.]’ [Citation.] ‘Whether a joint venture actually exists depends on the intention of the parties. [Citations.] Where evidence is in dispute the existence or nonexistence of a joint venture is a question of fact to be determined by the jury. [Citation.]’ [Citation.]” (Unruh-Haxton v. Regents of University of California (2008) 162 Cal.App.4th 343, 370.) Assuming the truth of Plaintiff’s allegations, they are sufficient to allege a joint venture.

As set forth above, the 3AC alleges that Plaintiff accepted the chief executive officer position at Dental Corporation based on a compensation package that included a part ownership payout to Plaintiff, and that Dental Corporation provided Plaintiff a “CEO Package” document, attached as Exhibit 1, which stated that it would pay Plaintiff between $13,935,000 and $33,894,000, with payments due on June 30, 2026, June 30, 2027, and June 30, 2028, as well as that an “updated ‘Incentive Plan Overview’ [attached as Exhibit 2] provided to Ms.

Lolli after her employment began stated that the payout would be between $19,724,000 and $29,297,000.” (3AC, ¶ 14.) It is also alleged that the part ownership payment was payable for maintaining EBITDA between 7.5 percent and 8.5 percent that Dr. Neshat mispresented to Plaintiff that Dental Corporation routinely achieved. (3AC, ¶¶ 26, fn. 2, 45, fn. 4.) It is alleged that the parties signed an Employment Agreement on February 17, 2023, which is attached as Exhibit 3 to the 3AC. (3AC, ¶ 15.)

Based on Plaintiff’s own allegations, these payouts were not due until June 30, 2026, at the earliest, which is two years after she was terminated in May 2024. (3AC, ¶¶ 26, fn. 2, 45, fn. 4.) Additionally, Plaintiff’s Employment Agreement, including the Incentive Unit Award Agreements, along with the “CEO Package” document and updated “Incentive Plan Overview”, do not indicate that this part ownership payment was contingent on maintaining EBITDA between 7.5 percent and 8.5 percent, and instead, indicates only that the payout was based on time, and “Imputed Common Unit Value.” (See Exs. 1-3 to 3AC.)

The “CEO Package” document only indicates that the projected value of the alleged payment reflected 7.5% and 8.5% EBITDA margins. (See Ex. 1 to 3AC, “CEO Package” at p. 6; Ex, 2 “[W]here a complaint alleges that a written contract contains certain text, but the contract is attached to the complaint and does not contain the alleged text, then the assertion in the complaint can be disregarded. There, the allegation in the complaint is directly and plainly contradicted by the exhibit.” (Panterra GP, Inc. v.

Superior Court of Kern County (2022) 74 Cal.App.5th 697, 712, fn. 13.) “ ‘While the “allegations [of a complaint] must be accepted as true for purposes of demurrer,” the “facts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the

pleading, will be given precedence.” ’ [Citation.]” (Moran v. Prime Management, Inc. (2016) 3 Cal.App.5th 1131, 1145- 1146.) Thus, the facts appearing the exhibits attached to the 3AC are accepted as true, and as they are contrary to the allegations in the 3AC, are given precedence. As before, there are no allegations as to how this payout was to be achieved, i.e., the conditions to achieving this payout, and whether Plaintiff met those conditions to achieving this payout, thus, rendering Plaintiff’s alleged damages based on this payout to be speculative and uncertain.

Further, there are no allegations showing a relationship between “Imputed Common Unit Value” and Dr. Neshat’s alleged misrepresentations relating to Dental Corporation’s business and its contracts with dental practitioners, Medicaid and Medicare, and profitability. Consequently, Plaintiff’s damages for the alleged part ownership payout is uncertain and speculative.

Lastly, the 3AC now alleges that Dental Corporation promised to pay Plaintiff an “an annual bonus of $750,000 per year, with the specifics regarding how Ms. Lolli could accomplish the bonus to be set forth by Dental Corporation no later than June 30, 2023.” (3AC, ¶ 16.) It is also alleged that these specifics were never provided to Plaintiff and that Dental Corporation did not collaborate with her to determine how the $750,000 bonus was calculated. (Ibid.) As the allegations do not tie the bonus to Dr. Neshat’s alleged misrepresentations and/or fraud concerning profitability, and the 3AC does not otherwise allege facts showing the basis for the bonus or showing that Plaintiff was entitled to this bonus, this alleged lost bonus damage is uncertain and speculative.

The Court has afforded Plaintiff three opportunities to cure the insufficiently pled damages. However, Plaintiff’s damages remain inadequately pled as they are speculative and uncertain.

Code of Civil Procedure section 430.41(e)(1) states, “In response to a demurrer and prior to the case being at issue, a complaint or cross-complaint shall not be amended more than three times, absent an offer to the trial court as to such additional facts to be pleaded that there is a reasonable possibility the defect can be cured to state a cause of action. The three-amendment limit shall not include an amendment made without leave of the court pursuant to Section 472, provided the amendment is made before a demurrer to the original complaint or cross-complaint is filed.” (Code Civ. Proc., § 430.41(e)(1).)

As Plaintiff has not offered additional facts to be pleaded to show a reasonable possibility that the defect can be cured,

the demurrer to the first through third causes of action is SUSTAINED, without leave to amend.

Dr. Neshat’s Request for Judicial Notice Dr. Neshat requests that the Court take judicial Notice of copies of relevant pages of Plaintiff’s certified deposition transcript (Ex. A), and a true and correct copy of the Complaint filed in Beckwith v. Dahl, Case No. 30-2010- 00394872 (Ex. B.)

The Court GRANTS Dr. Neshat’s request that the Court take judicial notice of excerpts of Plaintiff’s testimony at deposition (Ex. A). Plaintiff’s testimony about an annual performance bonus appears to relate to the alleged $750,000 annual bonus for “maintaining profitability,” and thus, is inconsistent with the allegations in the SAC. “[A] complaint's allegations may be disregarded when they conflict with judicially noticed discovery responses.” (Bockrath v. Aldrich Chemical Co., Inc. (1999) 21 Cal.4th 71, 83; (Del E.

Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604-605 [“The court will take judicial notice of records such as admissions, answers to interrogatories, affidavits, and the like, when considering a demurrer, only where they contain statements of the plaintiff or his agent which are inconsistent with the allegations of the pleading before the court”].) In passing upon a demurrer, the court can properly take judicial notice of any inconsistent statement made in declarations or contained in a party’s deposition, but cannot properly consider the testimony of defense witnesses tending to refute a plaintiff’s claims. (Id. at p. 605.)

The Court GRANTS Dr. Neshat’s request as to the Complaint filed in Beckwith v. Dahl pursuant to Evidence Code section 452(d), but declines to take judicial notice of the truth of hearsay statements therein.

Dr. Neshat is ORDERED to file and serve an answer to the 3AC within 10 days.

Demurrer by Entity Defendants Defendants, Liberty Dental Plan of California, Inc.; Liberty Dental Plan Corporation; Project Freedom Holdings, LLC (collectively, the “Entity Defendants” or “Dental Corporation”), demur to the first, second, and third causes of action of Plaintiff’s 3AC.

The Entity Defendants contend that the first cause of action for Intentional Misrepresentation, second cause of action for Fraud by Concealment, and third cause of action for Fraud – Negligent Misrepresentation fail to allege that Plaintiff suffered non-speculative damages because of any purported fraud. The Entity Defendants’ make the same substantive arguments as made by Dr. Neshat. They additionally contend

that Plaintiff fails to plead a causal connection between any purported fraud and her unearned $750,000 bonus.

Plaintiff’s opposition is substantively identical to her opposition to Dr. Neshat’s demurrer.

Like Dr. Neshat, the Entity Defendants contend that Plaintiff’s allegations about other employment opportunities, part ownership payout, and bonus are speculative and uncertain.

The demurrer is SUSTAINED, without leave to amend, as to the first through third causes of action for the same reasons discussed above with regards to Dr. Neshat’s demurrer.

In light of the foregoing, the Court declines to consider additional arguments as to causation regarding the $750,000 bonus.

Dental Corporation’s Request for Judicial Notice Dental Corporation requests that the Court take judicial notice of paragraph 12 of Plaintiff’s original Complaint in this matter (Ex. A), and excerpts of Plaintiff’s deposition (Ex. B).

The Court GRANTS Dental Corporation’s request that the Court take judicial notice of paragraph 12 of Plaintiff’s original Complaint in this matter, pursuant to Evidence Code section 452(d).

The Court DENIES Dental Corporation’s request as to the excerpts of Plaintiff’s deposition.

Dental Corporation is ORDERED to file and serve an answer to the 3AC within 10 days.

Plaintiff’s Motion to Compel Production Plaintiff, Marti Lolli (“Plaintiff”), moves for an order compelling Defendant, Liberty Dental Plan Corporation (“Liberty Dental Plan Corp.”), to produce documents in response to Plaintiff’s Request for Production (“RFP”), Nos. 19 and 20, and award sanctions in the amount of $4,500.

Plaintiff contends that this motion seeks an order compelling Liberty Dental Plan Corp. to produce the Elevance contact and Liberty Dental Plan Corp.’s financial statements, which seek documents that are directly relevant to Plaintiff’s fraud claims. Plaintiff also contends that the financial statements are relevant to Plaintiff’s claim for gender discrimination. Plaintiff additionally contends that the Court should award monetary sanctions in the amount of $4,500 pursuant to Code of Civil Procedure sections 2031.310(h), 2023.030(a), and 2023.050(a)-(c).

Liberty Dental Plan Corp. contends that the instant motion will be rendered moot if the Court sustains, without leave to amend, Defendants’ demurrers to Plaintiff’s fraud claims in her Third Amended Complaint (“3AC”). Liberty Dental Plan Corp. also contends that Plaintiff fails to show good cause for the documents sought by RFP, Nos. 19 and 20. It asserts that Plaintiff does not assert that the Elevance contract is relevant to her discrimination claim and she offers no admissible evidence or specific facts showing it is relevant to her fraud claims.

It also asserts that the financial documents sought are not relevant and relies on misrepresented deposition testimony by the Person Most Knowledgeable (“PMK”) of Liberty Dental Plan Corp as to the reasons for Plaintiff’s termination. It asserts that the request is overbroad in scope and time. It further contends that Plaintiff’s request for sanctions should be denied because both RFPs at issue seek irrelevant documents containing sensitive financial information and because Plaintiff’s counsel failed to meet and confer in good faith as required.

As a threshold matter, the motion is timely as the deadline to file a motion to compel was extended to January 30, 2026, and the motion was filed on this date. (ROA 221, Declaration of Michael A. Conger (“Conger Decl.”), ¶ 6, Ex. 4.)

A demanding party may move for an order compelling a further response to a demand for inspection if a statement of compliance with the demand is incomplete, a representation of inability to comply is inadequate, incomplete, or evasive, or an objection in the response is without merit or too general. (Code Civ. Proc. § 2031.310(a).)

A motion to compel further responses to a request for production “shall set forth specific facts showing good cause justifying the discovery sought by the demand.” (Code Civ. Proc. § 2031.310(b)(1).) For a request to produce documents, “a party who seeks to compel production must show ‘good cause’ for the request . . . but where, . . ., there is no privilege issue or claim of attorney work product, that burden is met simply by a fact-specific showing of relevance.” (Glenfed Develop. Corp. v. Superior Court (1997) 53 Cal.App.4th 1113, 1117 (“Glenfed”).)

Arguments made in the moving papers or in a separate statement are insufficient to satisfy this requirement; good cause must be shown by way of admissible evidence, such as by declaration. (Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 224.) If the moving party demonstrates good cause, then the opposing party must justify any objections. (Kirkland v Superior Court (2002) 95 Cal. App. 4th 92, 98.)

RFP, No. 19 Please produce any WRITINGS or documents that constitute contracts you have with Elevance.

Plaintiff argues that the Elevance contracts are relevant to her fraud claims. In light of the Court’s ruling to sustain, without leave to amend, Plaintiff’s fraud-based claims, the motion to compel as to RFP, No. 19 is DENIED, as MOOT.

Plaintiff raises for the first time in reply that the Elevance Contract is within the scope of discovery and is reasonably calculated to lead to the discovery of admissible evidence as to future lost earnings which is available as damages for Plaintiff’s discrimination claim. “[P]oints raised in a reply brief for the first time will not be considered unless good cause is shown for the failure to present them before. [Citations.]” (Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010.) No good cause is shown for the failure to present this argument before. The Court declines to consider all new points, arguments, and evidence presented for the first time on reply. (See Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010; Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538.)

RFP, No. 20 Please produce any WRITINGS or documents that constitute financial statements, including but not limited to profit and loss statements, balance sheets, and income statements for the period January 1, 2018, through present.

Plaintiff contends that financial documents are relevant to test whether Dr. Neshat’s representations to Plaintiff regarding Liberty Dental Plan Corp.’s financial performance, both before and after COVID, were true. Plaintiff also contends that these documents are relevant to her gender discrimination claim and whether Liberty Dental Plan Corp.’s reason for terminating Plaintiff was pretextual.

Liberty Dental Plan Corp. contends that Plaintiff’s attempt to establish relevance of the financial documents for Plaintiff’s discrimination claim relies on a false assertion that Liberty Dental Plan Corp.’s PMK testified Plaintiff was terminated due to decisions that “were going to have a negative financial impact on the company.” Liberty Dental Plan Corp. asserts that the deposition transcript shows that Plaintiff was terminated due to her poor judgment in making personnel changes, and not due to financials. Liberty Dental Plan Corp. also asserts that the request is overbroad in time and scope. Liberty Dental Plan Corp. contends Plaintiff thus fails to establish good cause to allow her access to financial information, especially considering that she currently works for a competitor.

Here, financial documents to test whether Dr. Neshat’s representations are true are no longer relevant given the ruling on the demurrer. As to Plaintiff’s remaining claim for

gender discrimination, Plaintiff’s counsel provides that on July 16, 2025, counsel personally took the deposition of the PMK for Liberty Dental Plan Corp. regarding the reasons Plaintiff was terminated, and that of the reasons identified was because “the business decision Marti was making were going to have a negative impact on the company.” (Conger Decl., ¶ 2.) The excerpts of the deposition confirm this was a reason listed for Plaintiff’s termination. (Iglesias Decl., ¶¶ 3, Ex. B, Deposition of PMK of Liberty Dental Plan Corp., 14:9-21 [“Marti was making key business decisions that were going to have a negative impact on the organization”], 18:7-19:21 [“ ‘The business decisions that Marti was making were going to have a negative impact on the company’ ”], 25:6-15, Ex. 3 to Deposition of PMK of Liberty Dental Plan Corp.)

Plaintiff, however, fails to show that the “negative impact” on the company/organization from the “business decisions” was related to financials or would be reflected in the financial documents sought. The excerpts from the deposition for the PMK of Liberty Dental Plan Corp. indicates that these “business decisions” involved two decisions. (Iglesias Decl., ¶¶ 3, Ex. B, Deposition of PMK of Liberty Dental Plan Corp., 18:7-19:21, 20:10-12.) One was Plaintiff’s decision to separate/terminate a key leader who had local knowledge and connection with key Florida leaders during critical Florida negotiations. (Iglesias Decl., ¶¶ 3, Ex.

B, Deposition of PMK of Liberty Dental Plan Corp., 18:7-23.) The second was that Plaintiff “was . . . looking to make brute force organization cuts [around 18 to 20 percent of head count] with key leaders at the organization that had historical knowledge for day-to-day processes” which would have a very negative impact had they been separated. (Iglesias Decl., ¶¶ 3, Ex. B, Deposition of PMK of Liberty Dental Plan Corp., 18:24- 19:21.) Based on the foregoing, Plaintiff fails to meet her burden to establish good cause to request financial statements of Liberty Dental Plan Corp.

Additionally, the request is overbroad in time. There is no showing that Plaintiff requires financial statement from January 1, 2018, through the present.

Monetary Sanctions Plaintiff requests monetary sanctions in the amount of $4,500 pursuant to Code of Civil Procedure sections 2031.310(h), 2023.030(a), and 2023.050(a)-(c).

It is mandatory for a court to impose a monetary sanction against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel a further response to a demand for production, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust. (Code Civ. Proc. § 2031.310(h).)

In light of the Court’s ruling on the motion, the Court DENIES Plaintiff’s request for monetary sanctions.

The Case Management Conference is vacated.

Defendants to give notice. 104 Citibank vs. Brown, 25-01491063 Plaintiff Citibank, N.A. (“Judgment Creditor”) moves for an order assigning rights to payment of monies from the medical practice of defendant Neal J. Brown aka Neal Brown aka Dr. Neal J. Brown aka Neal J. Brown D.D.S. aka Neal Jay Brown D.D.S., individually and dba Neal J. Brown Cosmetic & General Dentistry (“Judgment Debtor”) to Judgment Creditor for application toward the judgment in this action. Judgment Creditor also seeks an order restraining Judgment Debtor from encumbering, assigning, disposing, or transferring any of the rights to payment.

Code of Civil Procedure section 708.510(a) provides that, except as otherwise provided by law, upon application of the judgment creditor on noticed motion, the Court may order the judgment debtor to assign to the judgment creditor all or part of a right to payment due or to become due, whether or not the right is conditioned on future developments. This section includes but is not limited to wages due from the federal government not subject to withholding under an earnings withholding order, rents, commissions, royalties, payments due from a patent or copyright, and insurance policy loan value. “A right to payment may be assigned pursuant to this article only to the extent necessary to satisfy the money judgment.” (Code Civ. Proc., § 708.510(d).)

Judgment Creditor obtained a judgment against Judgment Debtor in the amount of $80,427.85. Judgment Creditor has not received any collections on the judgment. (Declaration of Sandra I. Tiberi ¶ 3.) Judgment Debtor is informed and believes that Judgment Debtor has rights to payment of money from Judgment Debtor’s medical practice from the following insurance companies: Aetna, Inc. (and its subsidiaries); Blue Cross of California (and its subsidiaries); Blue Shield of California (and its subsidiaries); Anthem Blue Cross (and its subsidiaries); Cigna Group Insurance (and its subsidiaries); Humana (and its subsidiaries); United Healthcare (and its subsidiaries); United Health Group (and its subsidiaries); Molina Healthcare (and its subsidiaries); Health Net of California (and its subsidiaries); Health Net (and its subsidiaries); PacifiCare of California (and its subsidiaries); First Health (and its subsidiaries); Health Care Service Corp (and its subsidiaries); Elevance (and its subsidiaries); United Concordia Companies, Inc. (and its subsidiaries); Medicare; and various other insurance companies. (Id. ¶ 5.)