Parsa v. Caplan

Filed 10/10/07 Parsa v. Caplan CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

APPEAL from a judgment of the Superior Court of Los Angeles County, James A. Bascue, Judge. Affirmed.

Law Office of Lawrence P. House and Lawrence P. House; The Davidson Law Firm and James A. Davidson for Plaintiff and Appellant.

Hinshaw & Culbertson, John W. Sheller and Filomena E. Meyer for Defendant and Respondent.

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Cyrus Parsa appeals from an order granting summary judgment in favor of Richard H. Caplan in Parsas actions for professional negligence, fraud, and negligence per se. Parsa contends that the trial court erred in 1) finding that Caplan met his summary judgment burden with respect to causation; 2) finding that Parsa failed to present a triable issue of material fact with respect to causation; 3) failing to address Parsas claims for fraud and negligence per se; and 4) sustaining Caplans evidentiary objections. Finding no error, we affirm.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Parsa served concurrently as the laboratory director for Medimex Clinical Laboratory and for Pacific Hospital of Long Beach. In January 2001, the Centers for Medicare and Medicaid Services (CMS) completed a survey of the business practices of Medimex and found Medimex to be out of compliance with seven Clinical Laboratory Improvement Amendments of 1988 (CLIA) conditions of participation, including the condition of Laboratory Director.[1] CMS found that these deficiencies posed immediate jeopardy to patient health and safety and required Medimex to provide credible evidence that the immediate jeopardy [had] been removed and that action [had] been taken to correct all of the Condition-level deficiencies in question. Medimex retained Caplan to assist in responding to CMSs Statement of Deficiencies. Medimex submitted an allegation of compliance, but CMS found this allegation insufficient to show that Medimex had corrected all of the deficiencies. CMS imposed sanctions on Medimex, including suspension and revocation of Medimexs CLIA certificate. These sanctions were affirmed at an administrative hearing held in April 2003.

As the director of the Medimex laboratory at the time of the deficiencies, Parsa was also prohibited from owning or operating any laboratory for two years under 42 U.S.C. part 263a (i)(3). Consequently, Parsa lost his position as laboratory director at Pacific Hospital of Long Beach. Parsa alleges that the sanctions resulted in a loss of income totaling $800,000.

Parsa brought the instant action against Caplan, claiming damages of $800,000 for professional negligence, fraud and negligence per se. Both Caplan and Parsa moved for summary judgment. The trial court found that Parsa failed to raise a triable issue of material fact with respect to causation of damages and granted summary judgment in favor of Caplan. Parsa filed this timely appeal.

DISCUSSION

The Supreme Court established the standard of review for an order granting summary judgment. A trial court properly grants summary judgment where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. [Citation.] We review the trial courts decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.] (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.) A defendant moving for summary judgment must show that the plaintiff cannot establish at least one element of the cause of action by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) In the trial court, once a moving defendant has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, the burden shifts to the plaintiff to show the existence of a triable issue; to meet that burden, the plaintiff may not rely upon the mere allegations or denials of its pleadings . . . but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action . . . . [Citations.] (Merrill v. Navegar, Inc., supra, at pp. 476-477.)

I.                   Caplan Met His Burden For Summary Judgment By Demonstrating That Parsa Cannot Show Causation.

A claim for professional negligence requires: (1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney's negligence. (Coscia v. McKenna & Cuneo (2001) 25 Cal.4th 1194, 1199.)

Specifically, to prove causation, the plaintiff must establish that but for the alleged negligence of the defendant attorney, the plaintiff would have obtained a more favorable judgment or settlement in the action in which the malpractice allegedly occurred. The purpose of this requirement, which has been in use for more than 120 years, is to safeguard against speculative and conjectural claims. [Citation.] It serves the essential purpose of ensuring that damages awarded for the attorneys malpractice actually have been caused by the malpractice. (Viner v. Sweet (2003) 30 Cal.4th 1232, 1241.) Although causation is most often a question of fact, it may be decided on summary judgment as a question of law if, under undisputed facts, there is no room for a reasonable difference of opinion as to the legal effect of the evidence presented. (Kurinij v. Hanna & Morton (1997) 55 Cal.App.4th 853, 864.)

Proof of causation is similarly essential for claims of negligence per se and fraud. (Evid. Code, 669 subd. (a)(2); Zumbrun v. University of Southern California (1972) 25 Cal.App.3d 1, 12 [In fraud, the pleading must show a cause and effect relationship between the fraud and damages sought; otherwise no cause of action is stated.].)

The trial court found that Caplan met his summary judgment burden by demonstrating Parsa did not and cannot show a causal link between any negligence or fraud on Caplans part and Parsas loss of income. We agree.

Parsas first cause of action stated that Caplan owed a duty of care to Parsa because Parsa had retained Caplan as his attorney and that Caplan breached this duty by failing to competently advise and defend Parsa during the administrative proceeding. Specifically, Parsa alleged that Caplan lacked the requisite expertise to represent Parsas interests in the administrative proceeding, pointing out Caplans failure to prepare an adequate response to CMSs Statement of Deficiencies. Parsas second cause of action stated that Caplan defrauded Parsa when he accepted $12,500 from Parsa to defend Parsa at the administrative hearing and then failed to perform any further legal services for Parsa. Parsas third cause of action stated that Caplan had violated the Rules of Professional Conduct when he failed to act competently, failed to inform Parsa of the conflict of interest between Parsa and Medimex, and used Parsas money to fund Medimexs defense. In each of these causes of action, Parsa alleged damages equal to his loss of income.

Caplan provided the findings of the administrative law judge as evidence supporting his summary judgment motion. These findings lay out Medimexs violations of seven CLIA conditions of participation. The administrative law judge held Parsa largely responsible for the violations through lack of oversight. Because Parsa himself was responsible for the deficiencies, Parsa cannot demonstrate that he would have been able to achieve a more favorable result through distancing himself from Medimex prior to the administrative appeal.

Furthermore, Parsas claim that Caplan caused his damages by failing to preserve Parsas right to an administrative appeal is dispelled by the declaration testimony of Parsas own expert, Dawn Brewster. Brewster asserts that administrative appeals in the context of CMS sanctions against laboratories never succeed: CMS has never failed to establish at least one deficiency existed to support sanctions. Every reported decision is in favor of CMS on at least one of the cited deficiencies. This testimony indicates that even if Parsas right to an administrative appeal had been preserved and even if Parsa had been represented by competent counsel, Parsa cannot demonstrate that he was likely to have achieved a more favorable result at the administrative hearing. Parsas sanctions are a direct result, not of incompetent counsel, but of his own demonstrated failure to meet CLIA conditions.

Parsa argues that the findings of the administrative law judge are insufficient to meet Caplans burden because competent counsel could have obtained resolution with CMS without resorting to an administrative appeal. This argument fails because of the multitude of violations found by CMS, any one of which could have supported Parsas two-year prohibition from directing a laboratory. In order to avoid the need for an administrative hearing, Medimex would have had to provide evidence that all of the Condition-level deficiencies had been corrected. Even if Parsa were to have had competent, independent counsel, Parsa could not have corrected all the listed deficiencies without the approval and funding of Medimex. Therefore, the assertion that competent counsel could have implemented a plan sufficiently addressing each violation is speculative and does not undermine a finding that Caplan met his summary judgment burden.

In this case, Caplan provided evidence through the findings of the administrative law judge that Parsa cannot establish that Caplan caused Parsas damages, either through professional negligence, fraud, or negligence per se. The burden therefore shifted to Parsa to show that a triable issue of material fact remained.

II.               Parsa Did Not Meet His Burden of Showing a Triable Issue of Material Fact as to Causation.

Parsas opposition to Caplans summary judgment motion did not set forth any facts demonstrating that a triable issue of material fact existed with respect to causation. While a plaintiff need not prove causation with absolute certainty, the plaintiff must nevertheless show a reasonable basis for the conclusion that it is more likely than not that the conduct of the defendant was a cause in fact of the result. A mere possibility of such causation is not enough . . . [Citation.] (Ortega v. Kmart Corp. (2001) 26 Cal.4th 1200, 1205.)

Parsa asserted that he was not represented by competent, independent counsel because Caplan failed to disclose his inexperience in health care law and administrative procedure to Parsa and failed to inform Parsa of the conflict of interest between Medimex and Parsa. As a result, Parsa asserts, Parsa lost the opportunity to correct the deficiencies and could not distance himself from Medimex or avoid Medimexs sanctions. Parsa also claims his damages arose from Caplans failure to preserve Parsas right to an appeal or do anything for Parsa in conjunction with the administrative hearing, including advising Parsa not to testify. The record does not support these arguments.

Parsa has presented no evidence for his assertion that competent counsel would have obtained a more favorable result through resolution of the deficiencies found by CMS. While Parsas expert, Brewster, suggested in her declaration that early and competent intervention may result in less severe sanctions in some circumstances, this does not raise a disputed issue on this record. There is no evidence that a more favorable result was probable or even possible. In addition, Brewsters declaration conflicts with Parsas theory that he suffered damages related to his loss of standing in the administrative appeal. Brewster made clear that prior administrative decisions have uniformly upheld CMSs recommended sanctions. Since Parsas own expert admitted that administrative hearings have historically proven fruitless, no triable issue exists as to whether Caplans failures relating to the administrative hearing caused Parsas damages.

Parsa failed to meet his burden of showing a disputed issue of material facts.

III.            Parsas Causes of Action for Fraud and Negligence Per Se Also Fail.

Parsa failed to raise a triable issue of material fact with respect to causation of damages as to each cause of action. Causation is an essential element of both fraud and negligence per se; Parsa did not make that showing.

Parsas claim that Caplan caused his loss of income through fraud is unsupported by the record. Parsa alleges that Caplan purposefully misled Parsa into paying Caplan for legal representation in an appeal when Caplan knew that Parsa had already lost his right to appeal. Even assuming this to be true, this alleged fraud could not have caused Parsas claimed loss of income. By the time of the administrative hearing, as Parsas expert declares, Parsas only potential opportunity for avoiding sanctions had passed.

A similar analysis applies to Parsas claim of negligence per se for Caplans alleged violation of Rules 3-110(A), 3-130(E), and 3-600(D) of the Rules of Professional Conduct. Parsa alleges that Caplan violated the Rules by failing to advise Parsa of his right to appeal, by failing to prepare Parsa in his role as a witness in Medimexs administrative appeal, by allowing Parsa to testify at Medimexs administrative appeal, by using Parsas money to pay for Medimexs defense, and by misleading Parsa into believing that Caplan was representing him. Assuming for the purpose of this argument that all of this was negligence, Parsas own expert establishes that Parsa could not win on appeal. Therefore, Caplans alleged violations of the Rules of Professional Conduct could not have caused the damages he alleges.

Parsas only plausible argument for negligence per se is that because Caplan failed to advise Parsa of the alleged conflict of interest between Parsa and Medimex as required by Rule 3-310(E) of the Rules of Professional Conduct, Parsa did not retain independent counsel, and consequently was unable to avoid sanctions. This argument fails, however, because Parsa did not and cannot show that independent counsel would have achieved a more favorable result.

The trial court did not err in granting Caplans motion for summary judgment.

IV.             The Trial Court Did Not Err In Sustaining Caplans Evidentiary Objections.

Parsa has not raised any legal argument in support of his contention that Caplans objections should not have been sustained. Therefore, this issue is waived. (Department of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd. (2002) 100 Cal.App.4th 1066, 1078 [Mere suggestions of error without supporting argument or authority other than general abstract principles do not properly present grounds for appellate review].)

DISPOSITION

The order granting summary judgment is affirmed. Caplan is awarded his costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

ZELON, J.

We concur:

PERLUSS, P. J.

WOODS, J.

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[1] The conditions violated were: Patient Test Management (42 C.F.R. 493.1101), General Quality Control (42 C.F.R. 493.1201), Laboratory Director, Moderate Complexity Testing (42 C.F.R. 493.1403), Laboratory Director, High Complexity Testing (42 C.F.R. 493.1441), Technical Supervisor (42 C.F.R. 493.1447), Clinical Consultant (42 C.F.R. 493.1453), and Quality Assurance (42 C.F.R. 493.1701).