PENNY v. SILVER LAKE MEDICAL CENTER, et al.

(Stanley Mosk Courthouse: Dept. 307) August 19, 2026 DEPARTMENT 307 LAW AND MOTION RULINGS

9:15 a.m., Wednesday, August 19, 2026 PENNY v. SILVER LAKE MEDICAL CENTER, et al. [23STCV11008] DEFENDANTS ZURICH AMERICAN INSURANCE COMPANY AND STEADFAST INSURANCE COMPANY'S DEMURRER TO THE FOURTH AMENDED COMPLAINT DEFENDANT NAUTILUS INSURANCE CMOPANY'S DEMURRER TO THE FOURTH AMENDED COMPLAINT MEET AND CONFER: OK On both demurrers, counsel met and conferred telephonically in compliance with Code Civ. Proc., Sec. 430.41. (Wilson Decl., P. 2; Ramos Decl., P. 3.) TIMELINE: Medical malpractice and products liability action 5/13/2013: Defendants Ethicon Inc., Ethicon Endo-Surgery, Inc., and Ethicon US, LLC (collectively, "Ethicon") [1] issue a voluntary recall for the Echelon Flex Endopath Stapler Reload (Black) 60mm x 4.4mm (Model No.

ECR60T) (the "Stapler") due to the potential for incomplete staple line formation from reload damage during the firing sequence. Ethicon is a subsidiary of Defendant Johnson & Johnson, Inc. ("J&J"). [2] 5/29/2013: Ethicon sends an urgent recall letter concerning the Stapler to all affected customers. The recall letter requests that customers examine their inventory immediately to remove the affected Stapler. Circa 6/2013 to 2/2014: Defendants Dr. Houshmand Naim ("Dr. Naim") [3] and W.L Gore & Associates, Inc. ("Gore") [4], and nominal Defendant Success Healthcare 1, LLC dba Silver Lake Medical Center ("Success Healthcare") receive the recall letter concerning the Stapler. 2/11/2014: Ethicon withdraws the recall of the Stapler. 1/13/2016: Dr.

Naim performs a laparoscopic revision of the vertical sleeve gastrectomy surgery on Plaintiff Esther Penny ("Plaintiff") at Success Healthcare's hospital, Silver Lake Medical Center. During the surgery, Dr. Naim uses the Stapler. The following day, Plaintiff calls Dr. Naim's medical office complaining of severe pain when swallowing and a fever. 4/22/2016: Dr. Naim performs a barium swallow test on Plaintiff and informs Plaintiff that the results are normal. 4/25/2016: Plaintiff presents to the Emergency Room at Encino Hospital, suffering from high fever, sepsis, and abdominal pain.

Plaintiff is diagnosed with an intra-abdominal abscess and hospitalized at Ronald Reagan UCLA Medical Center. Plaintiff's doctors at UCLA notice a "displaced" staple at her surgical site, although Plaintiff does not discover this until September 2022. 4/25/2016 to 12/2022: Plaintiff endures periods

of fever and abdominal pain. Plaintiff undergoes numerous additional surgeries to repair a gastric leak and other complications from the gastrectomy surgery. 5/15/2016 to 5/2021: Plaintiff contacts Dr. Naim numerous times to determine the cause of her complications. Dr. Naim repeatedly tells Plaintiff that her complications are normal and that she is experiencing typical pain from the procedure. 5/26/2020: After Plaintiff begins to research her symptoms, she discovers a list of symptoms on the website of a "stapler litigation" law firm and retains counsel to pursue potential stapler-related claims. 8/11/2020: Plaintiff enters into a tolling agreement with Ethicon and J&J to toll the statute of limitations for potential claims against them. 5/7/2021: Dr.

Naim provides Plaintiff with a letter admitting that he had used the Stapler during the gastrectomy surgery. 7/20/2021: Plaintiff receives Dr. Naim's records. However, Plaintiff does not receive a list of specific items used during her surgery until 9/16/2021. 9/2/2022: Plaintiff receives an expert's report stating that a CT performed on Plaintiff on 6/17/2016 at UCLA appeared to show a displaced staple from the gastrectomy staple line. 9/23/2022: Plaintiff enters into a second tolling agreement with Ethicon and J&J to toll the statute of limitations until 1/31/2023. 1/2023: Plaintiff enters into a third tolling agreement with Ethicon and J&J to toll the statute of limitations until 3/17/2023. 1/11/2023: The FDA notifies Plaintiff that the Stapler used by Dr.

Naim and Success Healthcare had been recalled by the manufacturer in 2013. 3/11/2023: Plaintiff enters into a fourth tolling agreement with Ethicon and J&J to toll the statute of limitations until 5/17/2023. 5/16/2023: Plaintiff files the original Complaint in this action. 1/26/2024: The U.S. Bankruptcy Court for the District of Delaware enters an order permitting Plaintiff to pursue her claims against Success Healthcare as a nominal defendant, so long as Plaintiff pursues recovery for any judgment through Success Healthcare's insurance policies. (See Zurich Request for Judicial Notice ("RJN"), Exh.

A; Nautilus RJN, Exh. F.) 2/15/2024: Plaintiff files a First Amended Complaint ("1AC"), after the Court grants Plaintiff's motion for leave to amend the complaint on 2/9/2024. On 5/1/2024, the Court sustains Dr. Naim's demurrer to the medical malpractice claim in the 1AC with leave to amend. (Nautilus RJN, Exh. A.) 5/31/2024: Plaintiff files a Second Amended Complaint ("2AC"). On 8/28/2024, the Court sustains Dr. Naim's demurrer to the medical malpractice claim in the 2AC with leave to amend. (Nautilus RJN, Exh.

C.)

9/30/2024: Plaintiff files a Third Amended Complaint ("3AC"). On 3/6/2025, the Court sustains Dr. Naim's demurrer to Plaintiff's medical malpractice claim in the 3AC without leave to amend. (Nautilus RJN, Exh. E.) 12/30/2025: Plaintiff files a notice of partial settlement with respect to Ethicon. 3/5/2026: The Court grants Plaintiff leave to file a Fourth Amended Complaint ("4AC") to add Success Healthcare's insurers as defendants, including Defendants W.R. Berkeley Corporation, Ironshore Specialty Insurance Company, Nautilus Insurance Company ("Nautilus"), Zurich American Insurance Company ("Zurich"), and Zurich's subsidiary, Steadfast Insurance Company (collectively with Zurich, "Zurich/Steadfast"). 4/7/2026: Plaintiff files the operative 4AC, alleging causes of action for: 1.

Medical Malpractice 2. Strict Products Liability 3. Strict Liability - Failure to Warn 4. Negligent Failure to Warn 5. Products Liability Negligence 6. Negligent Recordkeeping 6/11/2026 and 6/12/2026: Nautilus and Zurich/Steadfast, respectively, file automatic extensions to their response deadlines to the 4AC. 7/13/2026: Zurich/Steadfast files this Demurrer to the 4AC, which is followed by Plaintiff's Opposition (8/6/2026) and Zurich/Steadfast's Reply (8/12/2026). Nautilus files this Demurrer to the 4AC, which is followed by Plaintiff's Opposition (8/6/2026) and Nautilus's Reply (8/12/2026).

TENTATIVE RULING: DEFENDANTS ZURICH AMERICAN INSURANCE COMPANY AND STEADFAST INSURANCE COMPANY'S DEMURRER TO THE FOURTH AMENDED COMPLAINT is SUSTAINED without leave to amend. DEFENDANT NAUTILUS INSURANCE CMOPANY'S DEMURRER TO THE FOURTH AMENDED COMPLAINT is SUSTAINED without leave to amend. I. ZURICH/STEADFAST'S DEMURRER -- SUSTAINED without leave to amend Zurich/Steadfast demurs to the entire 4AC pursuant to Code of Civil Procedure section 430.10, subdivision (e) on the grounds that each cause of action in the 4AC is barred by the relevant statutes of limitations.

A. Relevant Limitations Periods Governing Plaintiff's Claims

Plaintiff's 4AC against the insurers of Success Healthcare is based on theories of medical negligence and products liability. (See 4AC, generally.) Code of Civil Procedure section 340.5 ("section 340.5") provides the relevant statute of limitations for professional negligence. Section 340.5 states in relevant part, "[i]n an action for injury or death against a health care provider based upon such person's alleged professional negligence, the time for the commencement of action shall be three years after the date of injury or one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first." (Code Civ.

Proc., Sec. 340.5, italics added.) Section 340.5 effectively creates two separate limitations periods, both of which must be satisfied if a plaintiff is to timely file a medical malpractice action. ¿ (Dolan v. Borelli (1993) 13 Cal.App.4th 816, 824-825 (Dolan).) First, a plaintiff must file her claim within one year of first discovering the injury and the negligent cause of that injury. ¿ (Dolan, supra, 13 Cal.App.4th at p. 825.) The one-year statute of limitations under section 340.5 begins to run once the patient "has 'notice or information of circumstances to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his investigation..." (Gutierrez v.

Mofid (1985) 39 Cal.3d 892, 896-897 (Gutierrez), citing Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93, 101 (Sanchez).) "Thus, when the patient's 'reasonably founded suspicions [have been aroused],' and she has actually 'become alerted to the necessity for investigation and pursuit of her remedies,' the one-year period for suit begins." (Gutierrez, supra, 39 Cal.3d at p. 897, citing Sanchez, supra, 18 Cal.3d at p. 102.) For this one-year limitation period, "[d]iligence is only relevant to determine when [a plaintiff] should have suspected wrongdoing.

Once a plaintiff actually has the requisite suspicion, the statute of limitations commences to run. It is not tolled by efforts to learn more about the matter short of filing suit. " ¿ (Kleefeld v. Superior Court (1994) 25 Cal.App.4th 1680, 1684, italics added.) Second, a plaintiff must file her claim within three years of first experiencing harm from the injury. ¿ (Dolan, supra, 13 Cal.App.4th at p. 825.) A plaintiff who does not discover the negligent cause of an injury until longer than three years after first experiencing harm from the injury is therefore unable to bring a medical malpractice claim against the medical practitioner or hospital whose malpractice caused the injury. (Ibid.)

Notably, this three-year requirement is tolled by any of the following: "(1) upon proof of fraud, (2) intentional concealment, or (3) the presence of a foreign body, which has no therapeutic or diagnostic purpose or effect, in the person of the injured person." (Code Civ. Proc., Sec. 340.5.) However, "the fraudulent concealment tolling provision 'does not come into play, whatever the lengths to which a defendant has gone to conceal his wrongs, if a

plaintiff is on notice of a potential claim.' [Citation.]" (Barber v. Superior Ct. (1991) 234 Cal. App. 3d 1076, 1083, italics added.) Code of Civil Procedure, section 335.1 ("section 335.1") provides the relevant statute of limitations for Plaintiff's products liability claims. Under section 335.1, the time to commence an action to recover for an injury to an individual "caused by the wrongful act or neglect of another" is two years. "Products liability claims brought under either negligence or strict liability theories are subject to delayed accrual under the discovery rule." (Fox v.

Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 809 (Fox).) Under the discovery rule, the accrual of a products liability cause of action may be delayed until "the plaintiff has reason to suspect that his or her injury resulted from a defective product." (Id. at p. 813.) B. Both Theories of Liability Asserted Against Success Healthcare's Insurers Are Barred By the Applicable Limitations Periods Here, each cause of action in the 4AC arises from the original gastrectomy surgery at Success Healthcare's hospital on January 13, 2016 in which Dr.

Naim is alleged to have used the defective Stapler, leading to Plaintiff's surgical complications. (4AC, P.P. 22-23.) Plaintiff admits that she was suffering from "severe pain" when swallowing and other symptoms, including a fever, as early as the day after her surgery. (Id. P. 24.) Zurich/Steadfast argues that Plaintiff had clearly suffered an "injury" within the meaning of section 340.5 as early as the day after her surgery because she had inquiry notice of Dr. Naim and Success Healthcare's alleged wrongdoing based on her severe symptoms arising immediately after the surgery. (Mot., at p. 9.)

Even so, Plaintiff specifically alleges that when she inquired about her symptoms, Dr. Naim falsely informed her that her pain and symptoms were likely caused by a hernia repair he had to perform during the surgery. (4AC, P. 24.) A reasonable person in Plaintiff's position (who has no apparent medical training and no apparent reason to question her surgeon at this point) would have no reason to doubt that her pain following the gastrectomy was typical of the surgical recovery process, particularly because Dr.

Naim had allegedly concealed from Plaintiff that her symptoms were a cause for concern. Assuming the truth of Plaintiff's allegations that she was not yet suspicious of wrongdoing, it is not clear that Plaintiff had true "inquiry notice" of her tort claims in January 2016 because Dr. Naim's alleged concealment suggests that Plaintiff did not yet have the "opportunity to obtain knowledge [of wrongdoing] from sources open to her investigation..." (Gutierrez, supra, 39 Cal.3d at pp. 896-897.) Notwithstanding the above, Plaintiff alleges that she continued to have severe pain while eating in the months following the surgery. (4AC, P. 25.)

On April 22, 2016, Dr. Naim performed a barium swallow test on Plaintiff and told Plaintiff that the results were "normal" (although he did not produce the actual test results). (Id. P. 26.) However, three days later Plaintiff presented to the ER with a high fever and abdominal pain and she was found to be septic and suffering from seizures. (Id. P. 27.) The ER performed a CT scan of Plaintiff's abdomen and pelvis due to her reports of pain. (Ibid.) The Encino Medical Center staff noted that there was "a

questionable disruption of the suture line at the site of the collection..." (Ibid.) Plaintiff was then transferred to UCLA due to her abdominal pain and was admitted to UCLA's bariatric surgery service. (Id. P.P. 27-28.) The following day, another CT of Plaintiff's abdomen and pelvis was performed. (Id. P. 29.) The CT results demonstrated a "known breakdown" of the gastric sleeve staple line. (Ibid.) Plaintiff then had to undergo a second surgery for a gastric sleeve leak the following day, on April 27, 2016. (Id.

P. 31.) It is at this point, in April 2016, when Plaintiff was hospitalized and underwent a second, unplanned surgical procedure, that a reasonable person in Plaintiff's position should have begun to suspect that an investigation into her injuries was necessary. As referenced above, the one-year limitations period for negligence suits begins when the patient has been "alerted to the necessity for investigation and pursuit of her remedies." (Gutierrez, supra, 39 Cal.3d at p. 897.) A patient in Plaintiff's position, who continued to experience such severe abdominal pain that she was hospitalized and subject to additional corrective surgery, despite Dr.

Naim's apparent contentions that her pain was "normal" or merely a "cold," would have been on inquiry notice that she had suffered serious harm during her initial surgery. Tellingly, Plaintiff admits that she contacted Dr. Naim on May 15, 2016 "inquiring as to what went wrong during her January 13, 2016 surgery." (4AC, P. 32.) Even assuming that Dr. Naim's continued assurances to Plaintiff that "nothing went wrong during her surgery" were sufficient to undermine a finding of inquiry notice at this point, Plaintiff's complications only continued to worsen. (4AC, P. 32.)

On June 17, 2016, Plaintiff presented to UCLA Medical Center with rib pain. (Id. P. 33.) A CT scan of Plaintiff's abdomen was taken, in which UCLA physicians noted that "there was a dense punctate structure which might be a displaced staple from the gastrectomy surgical site." (Ibid.) While Plaintiff alleges that she was not specifically aware of this observation until she received her expert's report in September 2022, this notation in her UCLA medical record would have been accessible to Plaintiff as early as June 2016 if she had diligently investigated the cause of her ongoing injuries.

At minimum, Plaintiff's medical records from third parties between April and June 2016 would have given her the "opportunity to obtain knowledge [of wrongdoing] from sources open to her investigation..." such that she could have independently verified Dr. Naim's fraudulent contentions. (Gutierrez, supra, 39 Cal.3d at pp. 896-897.) Further, on August 1, 2016, Plaintiff underwent yet another procedure at UCLA to revise her sleeve gastrectomy. (4AC, P. 34.) Plaintiff alleges that during this second surgery, UCLA physicians found and removed a surgical clip along the fistula track behind Plaintiff's spleen. (Ibid.)

Plaintiff further admits that she contacted Dr. Naim again several times beginning in August 2016 "to determine the cause of her severe and painful symptoms, and the need for numerous procedures, following the January 13, 2016 surgery." (Id. P. 36.) Plaintiff essentially concedes in the 4AC that by August 2016 she suspected that something wrong had occurred during the surgery. Plaintiff also would have had sufficient information from her UCLA medical records (had she conducted an independent investigation beyond merely asking Dr.

Naim) to discover Dr. Naim's wrongdoing. At this point, because reasonable diligence and an inquiry through

her UCLA medical providers could have revealed facts suggesting a negligent cause of Plaintiff's injuries, the Court finds that the one-year limitations period for medical negligence and negligent record-keeping likely began to run in August 2016. (Code Civ. Proc., Sec. 340.5.) Even assuming that, with diligence, Plaintiff could not have specifically discovered that Dr. Naim's use of the Stapler contributed to her injuries, by May 2020, Plaintiff admits that she "ran across a list of symptoms from a 'stapler litigation' law firm ... and wondered whether a defective stapler could have been a factor in her leak, infection and subsequent injuries and surgeries." (4AC, P. 40.)

As a result, Plaintiff retained counsel from a "stapler litigation" law firm, who helped her enter into a tolling agreement with Ethicon and J&J. [5] (Ibid.) By May 2021, Plaintiff alleges that she asked Dr. Naim to advise her as to what type of stapler he had used in her surgery to determine whether she had a claim against the stapler's manufacturer, and Plaintiff received a response from Dr. Naim on May 7, 2021. (Id. P. 43.) Based Plaintiff's own admissions in the 4AC, by May 2021, Plaintiff was indisputably on notice that her symptoms could have been caused by a defective stapler during the surgery, she had hired a law firm to pursue potential claims related to the surgery, and she was already specifically investigating whether the Stapler had been the cause of her injuries.

Even if Plaintiff did not have absolute knowledge of Dr. Naim and Success Healthcare's wrongdoing, the one-year limitations period for negligence under section 340.5 and the two-year limitations period for products liability under section 335.1 necessarily began to run (at the latest) upon Plaintiff's suspicion of wrongdoing in relation to the use of the Stapler during her surgery. (See Fox, supra, 35 Cal.4th at p. 809.) That Plaintiff took additional time to gather more facts to support her claim does not impact this analysis. (Knowles v.

Superior Ct. (2004) 118 Cal. App. 4th 1290, 1300 ["The limitations period begins when the plaintiff's suspicions are aroused. The period is not affected by the plaintiff's diligence in finding facts to support his lawsuit."].) Plaintiff filed her original Complaint in this action on May 16, 2023. Even using May 7, 2021 as the most generous possible date of accrual of Plaintiff's claims, both her negligence and products liability theories were time-barred by the time the Complaint was filed. By May 7, 2021 at the very latest, Plaintiff effectively admits that she was on notice that she had suffered injuries, that the injuries occurred during her initial surgery with Dr.

Naim, and that she suspected that her injuries involved the wrongful use of a stapler so much so that she hired a "stapler litigation" law firm and began researching the Stapler used in her surgery. (4AC, P.P. 22-40.) Even without actual notice of the specific model or lot number of the Stapler, the specific manufacturer, or confirmation of the recall itself, the facts alleged on the face of the 4AC are sufficient to indicate that Plaintiff had presumptive notice of her tort claims, such that her claims accrued and the applicable limitations periods began to run over two years before the filing of this lawsuit.

The Court is not required to accept Plaintiff's tolling theories at true where the factual allegations admitted on the face of the 4AC undermine such theories as a matter of law.

Notably, the Court has previously sustained Dr. Naim's demurrer to the 3AC on the same grounds without leave to amend based on substantially similar factual allegations to those alleged in the 4AC. (See Minute Order, 3/6/2025.) Although the Court permitted Plaintiff to file the operative 4AC for the purpose of including the Success Healthcare's insurers as defendants, the factual allegations in the 4AC suffer from identical statute of limitations defects compared to those in the 3AC. Despite having five opportunities to overcome the statute of limitations in her pleadings, Plaintiff repeatedly fails to demonstrate an avenue through which her tort theories in this lawsuit are not time-barred.

Any further opportunity to amend the complaint would be futile and an inefficient use of judicial resources. Therefore, Zurich/Steadfast's demurrer to the 4AC is SUSTAINED without leave to amend. II. NAUTILUS'S DEMURRER -- SUSTAINED without leave to amend Nautilus demurs to the entire 4AC pursuant to Code of Civil Procedure section 430.10, subdivisions (d), (e), and (f) on the grounds that Nautilus was improperly joined to this action as an insured and that each cause of action in the 4AC is precluded by the applicable statutes of limitations.

Because Plaintiff's theories of liability against each of Success Healthcare's insurers is the same, Nautilus's statute of limitations defense is identical to the defense raised in Zurich/Steadfast's demurrer. (See supra, Section I.B.) For brevity, the Court incorporates this analysis by reference herein and reaches the same conclusion with respect to the tort claims asserted against Nautilus. The Court need not address Nautilus's additional grounds for demurrer because Plaintiff's entire lawsuit against Nautilus is time-barred as a matter of law.

Therefore, Nautilus's demurrer to the 4AC is SUSTAINED without leave to amend. III. REQUESTS FOR JUDICIAL NOTICE -- GRANTED Zurich/Steadfast requests judicial notice of the Stipulation and Order (dated January 26, 2024) entered by the U.S. Bankruptcy Court for the District of Delaware. (Zurich RJN, Exh. A.) The Court takes judicial notice of the existence of this U.S. Bankruptcy Court ruling pursuant to Evidence Code section 452, subdivision (d). Nautilus requests judicial notice of the following documents: 1.

Notice of Ruling on Demurrer to the 1AC (dated May 1, 2024) in this action. (Nautilus RJN, Exh. A.)

2. Plaintiff's 2AC filed in this action. (Nautilus RJN, Exh. B.)

3. Amended Notice of Ruling on Demurrer to the 2AC

(dated August 28, 2024) in this action. (Nautilus RJN, Exh. C.)

4. Plaintiff's 3AC filed in this action. (Nautilus RJN, Exh. D.)

5. Notice of Ruling Sustaining Demurrer to the 3AC (dated March 18, 2025) in this action. (Nautilus RJN, Exh. E.)

6. Order Approving Stipulation (dated January 26, 2024) in U.S. Bankruptcy Court for the District of Delaware. (Nautilus RJN, Exh. F.) The Court takes judicial notice of the existence of these court records pursuant to Evidence Code section 452, subdivision (d). Moving Defendants are to serve notice of the respective rulings. This tentative ruling ("TR") shall be the order of the Court unless changed at the hearing and shall by this reference be incorporated into the Minute Order. TR emailed to counsel and posted to Court's website on8/18/26 at 1:30 a.m.

Ethicon was dismissed from this action on 2/26/2026.

J&J was dismissed from this action on 10/9/2023.

Dr. Naim was dismissed from this action on 3/6/2025.

Gore was dismissed from this action on 6/17/2024.

Although Plaintiff executed multiple tolling agreements with the alleged manufacturers of the Stapler, no such tolling agreement was executed with Success Healthcare or its insurers. | Home -->)" -->