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$: 36 - findforms.com · 2 3 4 5 6 7 8 9 10 11 12 13 1415 16 17 18 19 20 21 22 23 24 25 26 i i \.._,'-27 28 50lIDER lc WALLACE TODD M, SCHNEIDER (State Bar #158253) JOSHUA KONECKY (State$
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Case 3:07-cv-03406-MMC Document 2-6 Filed 06/28/2007 Page 1 of 65

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50lIDERlc WALLACE

TODD M, SCHNEIDER (State Bar #158253)JOSHUA KONECKY (State Bar #1 82897)W,R "HANK" WILLSON (State Bar #23332 i)SCHNEIDER & WALLACE180 Montgomery Street, Suite 2000

Ban Francisco, California 94104Tel: (415) 421-7100Fax: (415) 421-7105TT: (415) 421-1665

LINDA ROSS (State Bar #85563)LAW OFFICE OF LINA ROSS2204 Union StreetSan Francisco, California 94123Tel: (415) 563-2400

SCOTT KAKI (State Bar #120791)ROBOOSTOFF & KALKl, PLC369 Pine Street, Suite 610Sán Francisco, Californa 94 i 04Tel: (415) 732-0282Fax: (415) 732-0287

Attorneys for Plaintiffs

SUPERIOR COURT OF CALIFORN

COUNY OF ALAMEDA

MELINDA CAMBELL, on her own behalf, Case No. RG0522I764and on behalf of all others simlarly situated,

Plaitiffs,

vs.

SUTTER HEALTH, and DOES I though 25,inclusive,

Defendants.

PLAITIFF'S OPPOSITION TODEFENDAN'S REQUEST FORJUICIA NOTICE

Date: Februar 9, 2006Time: I :30 pmDeparent: 22

Judge: The Honorable Ronald M. Sabraw

PLAINTIFF'S QpposrrON TO DEFENDANT'S REQUEST FOR JUDICIAL NOTICE

Campbell v. Sutler Health. el al., Case No. RG0522 i 764


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SCHEIDERlcWALLACE

Pursuant to California Evidence Code §455(a), because the items Defendant wishes-to be

noticed are improper for judicial notic;e, Plaintiff hereby opposes Defendant's Request for Judicial

Notice:

Plaintiff opposes Defendant's Request for Judicial Notice, and respectfully requests that this

Court not take judicial notice of the unpublished order, complaint and briefofwhich Defendant

seeks notice. Californa Rule of Court (CRC) 977 states: "an opinion.. .that is not certified for

publication or ordered published must not be cited or relied on by a cour or a par in any other

actÍon." (Emphasis added.) Because the order in Tweedy v. NeO Financial Systems, Inc. is

unpublished, it must not be cited or relied upon.

In addition, the ojlinIoI' in Tweedy was decided before the Californa Supreme Cour's

opinon in Parnell v. Adventist Healrh System/West (2005) 35 Cal.4th 595, whicb confed that

Defendant's balance biling practices are unlawfuL. Tweedy merely tracks the reaonig of the

cour in Swansan v. St. John's Regional Medical Center (2002) 97 Cal.App.4th 245, wbicb, as

shown in Plaitiffs Opposition to Defendant's Demurer, is inapplicable to tls cae. In addition,

the cour in Tweedy ignores the opinon of the Cour of Appea in Nishihama v. City and County of

San Francisco (2001) 93 Cal.App.4th 298, which stated that a hospital's "lien rights do not extend

beyond the amount it agree to receive from (the plaintiffs insuer) as payment in ful for servce

provided to piaitiff." (!d. at 307.)

Finally, pleadigs and briefs filed by an unelated par in an unelated case are not proper

for judicial notice here. The complait and brief of wmch I?efendant seeks notice have nothg to

do with the facts of ths case, and have no preceential or evidentiar value in ths case. Ths cae

should.be evaluated on its facts, and in light of Plaintiffs allegations.

Respectfully Submitted,

Date: Januar 27, 2006 SCHNEIDER & WALLACE

J-~~1NA --Han WilsonCounsel for Plaintiff

P~INTlff'S OPPOSITON TO DBFENDANT'S REQUES FOR JUDICIAL NOTICE

Campbell v. Sutter Health, et al., Case No. RG05221764i


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Tc: Marcia Augsburger From: Schneider and Wallace . jl2712006 3:15:31 PM (Page 2 of 26)

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;CHBRk WALCE

TODD M. SCHNIDER (State Bar #158253)JOSHUA KONECKY (Sta Bar #182897)W.H. "HA" WILSON (State Bar #233321)SCHNIDER & WALLACE180 Montgomer Strt, Suite 2000San Fracisco, Californa 94104Tel: (415) 421-7100Fax: (415) 421-7105TTY: (415) 421-1665

LINA ROSS (Stae Bar #85563)LAW OFFICE OF LINA ROSS2204 Union Strt

San Fracisco, Calforna 94123Tel: (415) 563-2400

SCOTT KA (Stte Bar #120791)ROBOOSTOFF & KAKl, PLC369 Pine Strt, Suite 610

San Fracisco, Caforna 94104Tel: (415) 732-0282Fax: (415) 732-287

Attrneys for Plaitiff .

SUPERIOR COURT OF CALIFRN

COUN OF ALA

MEINA CAMBELL, on her own behaand on beha of al others s1rar1y situted

P1ai,

Cas No. RG05221764

PROOF OF SERVICE

vs.

SUTR HEALTH, and DOES 1 thougb25,inclusive,

Defendants.

PROOF OF SERVICE


To: Marcia Augsburger. . From: Schneider and Wallace .1/27/20063:15:31 PM (Page 3 of 26:

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SCHER&; WALCE

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PROOF OF SERVICE

Sections 1013(8),2015.5 C.c.P.

Campbel et al. v. Sutter Health,Alameda Superior Court Case No.: RG05221764

I am a citizen of the Unite Staes and am employed in the County of San Fracisco. I am

6 ver the age of eighteen yea and not a par to the with entitled acton. My business address is

7 180 Montgomer Street, Suite 2000, San Fracisco, CA 94104.

8 . On Janua 27, 2006, I served the followi:

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1. Platis Opposition to Defendant's Request for Judicil Notice; and

2. Plaitis Opposition to Defendant's DemUIer to Plaintis Fit Amended

Complaint

n the pares by placing tre copies therof for faimle trmission to the number lite below

in a seed envelope, postge fuy praid, for deposit in the United Slate Mai at San

racisco, Califonua, addressed as follows:

Maia Augsburger

McDonough Hollan & Allen PC555 Capirol Mal, 9t Floor

Saciaento, CA 94814-4692

Facime: (916) 44-8334

I declae uner pety of peiur under th laws of th State of Caforn tht th foregoin

s ti and correc and tht ths Declation is executed on Janua 27, 2006, at San Fracisco,

alomia.

-2-PROOF OF SERVICE


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TODD M. SCHNEIDER (SBN 158253)JOSHUA KONECKY (SBN 182897)W.H. "HANK" WILLSON (SBN 233321)SCHNEIDER & WALLACE180 Montgomery Street, Suite 2000San Francisco, California 94104Tel: (415) 421-7100Fax: (415) 421-7105TTY: (415) 421-1665

LINDA ROSS (SBN 85563)LAW OFFICE OF LINDA ROSS2204 Union StreetSan Francisco, California 94123Tel: (415) 563-2400

SCOTT KAKI (SBN 120791)ROBOOSTOFF & KALKIN, PLC369 Pine Street, Suite 610San Francisco, Californa 94104Tel: (415) 732-0282Fax: (415) 732-0287

RICHARD E. BRANDT (SBN 44893)MACIA L. AUGSBURGER (SBN 14686)JOHN C.J. BARNES (216694)McDONOUGH HOLLAND & ALLEN PC555 Capitol Mall, 9il FloorSacramento, CA 95814Tel: (916) 444-3900Fax: (916) 444-8989

Attorneys for Defendant Sutter Health

ReceiveDrEg O,~ 2UU61

M.H. & A.

SUPERIOR COURT OF CALIFORN

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Plaintiffs,

vs.

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Attorneys for Plaintiff and the Proposed Class

COUNTY OF ALAMEDA

SUTTER HEALTH, and DOES 1 through 25,23 inclusive,

24 Defendants.

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19 MELINDA CAMPBELL, on her own behalf, Case No. RG05221764and on behalf of all others similarly situated,

SrnNEIDER& WALLACE

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JOINT STIPULATION AN REQUESTREGARING PLAINTIF'S FILING OFOPPOSITION TO DEFENDANT'SDEMUR

Date: February 9, 2006Time: 1:30pmDeparent: 22Judge: The Honorable Ronald M. Sabraw

JOINT STIPULATION AND REQUEST REGARDlNGP'S FILING OF OPPOSITION TO D's DEMURRERCampbell v. Sutter Health el a/., Case No. RG05221764


To' RelayFax via port COM401/27/06 17:42 FAX 916444 8989

From: 916 44 8989MI

112 0064:42:05 PM (Page 2 of 2)~002

1 STIULATION AN REQUEST2 The pares stipulate an request tht Plaintibe permtted to fie her Opposition to

3 Defendant's Demurr to Plaitiffs Firt Amended Complait (and acmpanyig Opposition to

4 Defendant's Request for .Judicial Notice), set for hearg on Febni 9, 2006, on Januar 30, .

5 2006. The pares do not reques tht the date for the fig ofDefendats reply brief, or the date

6 of the hearg, be changed.

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8 Repectful1y Submittd,

9 Date: Januar 27, 2006

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SCHNER & WALLACELAW OFFICE OF LINA ROSSROBOOSTOFF & KAKl, PLC

1tt1J~~Counel for Plati

McDONOUGH HOLLAN & ALLEN PC

/L~John C. . BarsCounel for Defendat Sutter Heath

Jooo STIULTION AN REUET REARING P's FILGOP OPPONTO D'sDEMCampbell v. Suner Hetrh, et aL, Cae No. RGOS221764 .

1

SCHNIDER& WALCE


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1 PROOF OF SERVICE2 Sections 10I3(a), 2015.5 C.c.P.

3 Campbel et 01. v. Sutter Health,

4 Alameda Superior Court Case No.: RG04190588

5 I am a citizen of the United States and am employed in the County of San Francisco. I am

6 ver the age of eighteen years and not a par to the within entitled action. My business address is

7 i80 Montgomery Street, Suite 2000, San Francisco, CA 94104.

8 On Januar 30, 2006, I served the following:

9 1. Joint Stipulation and Request Regarding Plaintis Filng of Opposition to

10 Defendant's Demurrer

11 n the paries by placing tre copies in a sealed envelope, postage fully prepaid, for deposit in the

12 nited States Mail at San francisco, Californa, addressed as follows:

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Richard BrandtMarcia Augsburger

John BaresMcDonough Holland & Allen PC

555 Capitol Mall, 9th FloorSacramento, CA 94814-4692

Scott KalRoboostoff & Kalki

369 Pine Street, Suite 610San Francisco, CA 94104

Linda RossLaw Offces of Linda Ross

2204 Union StreetSan Francisco, CA 94123

I declare under penalty of perjury under the laws of the State of Californa that the foregoing

21 's tre and correct and that ths Declaration is executed on Januar 30, 2006, at San Francisco,

22 alifomia.

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SCHNIDER& WALLACE

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PROOF OF SERVICE


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,'r .'r" ~ McDONOUGH HOLLAND & ALLEN PC

( 2Attorneys at Law 20'( F'RICHARD E. BRANDT (44893) .'" "t,:,MARCIA L. AUGSBURGER (145686) ". C r;~, 2- Iv

3 JOHN C.J. BARNES (216694) ¿: . '0

555 Capitol Mall, 9th Floor -4 Sacramento, CA 95814

Phone: 916.444.3900 '"

5 Fax: 916.444.8989 --'f

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6 Attorneys for Defendant Sutter Health

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SUPERIOR COURT OF CALIFORNIA

COUNTY OF ALAMDA

1 O' MELINA CAMPBELL, on her own behalf,and on' behalf of all others similarly situated,

11

12Plaintiffs,'

)))))))))))))))))

Case No. RG0522i 764

SUITER HEALTH'S REPLY BRIF INSUPPORT OF DEMUR TO THEFIRST AMNDED CLASS ACTIONCOMPLAIT

Daie: Februar 9, 2006Time: 1:30p.m.Place: Deparent 22Honorable Ronald M. SabrawTrial Date: NoneComplaint Filed: July 8, 2005

v.13

SUIR HEALTH and DOES i thugh 24,14 inclusive,

Defendants.

MH--i:-'" Sutter Health's Reply In Support of Demurrer 10 First AmendedComplaint 894350v7 09504(0502


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i. SUMMARY OF CRITICAL ARGUMENTS ON REPLY TO DEMUREROPPOSiTION

Plaintiffs' opposition confirms that the Amended Complaint fails to allege any of the required

elements of a malicious prosecution claim. Plaintiffs cite nothing in the Amended Complaint to

support an allegation that Sutter Health fied any prior, independent actions, without probable cause,

and with malice, that terminated in Plaintiffs' favor. Plaintiffs acknowledge that they want this Court

to rule now that the liens were null and void and thus should have terminated in Plaintiffs' favor.

The opposition states the alleged wrong was the service or assertion of hospital lien notices.

Under the HLA. hospital lien notices merely preserve hospitals' potential lien rights. CaL. Civ. Code

§§ 3045.1, 3045.3, 3045.4. The notices do not creaie liens. See Parnell v. Adventist Health

Systemlesl, 35 Cal. 4th 595, 602 (2005). The HLA creates a "statutory nonpossessory lien" if an

underlying debt is owed. fa at 602"12. As the Parnell Cour explained: "(A) lien under the HLA is

simply a legal claim upon the propert of another in satisfaction of a debt owed by a patient for

medica servces provided by the lien claimant." ¡d. A claim is not an ~ction. At most, a lien

notice is a representation that the hospital has statutory lien rights, but it is not an action.

Actions that may arse from service of hospital lien notices include: (1) an action by the

hospital to. enforce the lien agaist the torteasor or other- par who made payment to the patient,

puruat to Civil Code section 3045.4; and (2) a deClaratory relief clai by'the patient, or torteaor

agaist the hospita before the lien is paid to detenne whether the hospita has sttutory lienngbts.

Plaitiffs do not allege that any prior actions terminated in their favor. They may not p~ue. a .

-declaratory judgment now, when. the liens have aleady been paid, because the relief they seek is

,retiospectiv~ and claims for declartory reJIefmust relate to an existing. or futue controversy.

Plaintiffs' tre complaint is that Sutter Health accepted. payment on lien claim where there

was no underlying debt. A malicious prosecution action canot be based on the defeIÌdart's mere

acceptace of payment. It requires that the defendant have filed some adversaral action t1having a

proeeurallife of its own." Zaros v. Stroud, 32Cal. 4th 958, 965 (2004). Accpting payment on

claims is not such an action, nor. is asserting an HLA. lien. An HLA lien has "the same

characteristics as a tyiealien." Parell, 35 Cal. 4th at 603. As a matter of law, a lien is a

ISutter Health's Replv In Support of Demurrer to First Amended Comelaint lla4J~v7 f19S1Oi


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subsidiary procedural matter that wil not support a claim of malicious prosecution. Adams v.

Superior Court, 2 Cal. App. 4th 521, 528 (1992). Therefore, an HLA lien is a subsidiary'procedural

action that will not support a malicious prosecution claim.

For the same reason, Plaintiffs' abuse of process claim fails, and it is barred by the litigatiqn

privilege in any event. Abuse of process requires allegations showing use of the judicial process for

an unintended purpose. Hospital lien notices are-not asserted in ajudicîal process.

Accordingly, all of Plaintiffs' caust:s of açtion fail and the Amended Complaint must be

dismissed with prejudice.

A. The Amended Complaint Does Not Plead A Prior Action, As Required ToState A-Malicious Prosecution'Claim.

Plaintiffs base their complaint exclusively on the sÜbsídiar "assertionll of liens against their

tort recovery. not on any action to hold them liable.' Hospital. liens are not asserted against

patients nor fied in court. Cal. Civ. Code § 3045.3. Parnell, 35 Cat. 4th at 601-02. Liens do not

tae. the form of a complait. Id. A lien notice merely provides notice of the amount of charges the

hospital deems ~easonable .and necssa, i.e., notice of a claim. Parnell, 35 Cal. 4th at 606-07. No

sumons issues and no par files an anwer or demurrer to the lien. Idat § 3045~1 et seq. lnde'ed,

the assertion of a hospital lien has absolutely no procedur effect on the injured paries' cae.

Timely serviçe of the lien notice merely preseryes a lien nght that may not ever be satisfied. If the

patient recvers nothng frnm the torteaor, the hospita collects nothng. ld at §§ 3045.2, 3045.4.

If the patient is successful, the hospita may Oiuy recver up to 50% oftlie judgment, compromise or

settlement after prior liens are pald. Id. at § 3045.2. Thùs, hospita liens are completely dependent

on the outcome of the patient's complait agaist the torteaor. Id. at §§ 3045.1, 3045.2, 3045.4.

Because assertion of a hospital lien is a dependent subsidiar procedur act, it canot

support a malicious prosc;cution claim. See e.g., Chauncey v. Niems, 182 Cal. App.3d '967, 974

(1986) (proceedings that depend on other proceings do not support malicious prosecution claims);

Adams, 2 Cat. App. 4th at 528 ("(SJubsidiar proeeural actions withn a lawsuit such as an

application for a restraining order or for a lien will not support a -claim of malicious prosecution.fl).

.1 Opp. 3:10-18, 4:6.9, 8:23-25, 9:4-7.15-23 ("(There wil be'a favorable

judgment for Plaintit'and the. class ifandwhen this Court rules on Plaintifls reqllest for classwide declartory relief that the liens at issue are null and void.';).~~-~ 2Sutter Health's Replv In Support of Demurrer to FirSt Amended ComDlaint 89435ßv7 09504/0501


It is not a mfuII-blown' ."." independent, separate, adversarial action, involving the expense and

trauma of preparing a response, and having a procedural life of its own." Zamas, 32 CaI. 4th at 965.2

Civil Code section 3045.4 describes the hospital's right to fie an action based on non-payment of the

lien. Nishihama v. City and Caunty of San Francisco, 93 Cat. App. 4th 298, 309 (200 ¡). See a/so

Parnell, 35 Cat. 4th at 601-02. Plaintiffs do not allege that any such actions were fied or that

Plaintiffs or anyone who paid judgments or settlements were ever sued for nonpayment of the liens.

Nonetheles~, Plaintiffs urge this Court to consider the assertion of liens to be "ancilary

proceedings" suffcient to support a malicious prosecution "caim.3 Toward this end, Plaintiffs submit

that because the effect of a legally untenable wil contest "is... to infringe on the interest of the

will's proponent in freedom from unjustifiable and wieasonable litigatioß.1! the assertion of liens

should also be cOßsidered "3?cilar proceedings.!! Again, Plaintiffs allege the wrongdoing was

asserton of the liens, not litigation, let alone "unjustifiable and uneaonable litigation" against

them. In any event, will coi:testS are adversaral actions, unike hospita Iienš. WiI contests are

initiated by filing pleadings with the court in the form of a civl complaint. Crowley v. KatlemanJ

8 Cal. 4th 666, 691 (1993) (citig Cat. Prob. Code § 8250). The clerk issues a summons directing

the will's proponent to file a responsive pleading. Id The proponent, in tu, may answer or

demur to the complaint. Id The proponent 304 objector are then entitled to a jury trial on the

ments. Twxfordv. Twyord, 63 Cal. App. 3d 916,922 (1976). Once fied, the will contest "has the

effect of injectig new factual and legal issues into the probate process, and of placing on the will's

proponent the buren of mounting a defense to those issues." Id at 69i.4 Thus. a will contest is a

IICivil Action" under Code of Civil P~.oceur section 3~7 et seq. A lien is not.5

2 See also Adams, 2 Cal. App.,4th at 528; Sierra Club Foundation, 72 Cal. App. 4th 1135, 1152 (1959); Sheldon Appel

Co. v Albert & Dliker, 47 Cal. 3d 863, 812 (1989); Downey Venture v. LMI Ins. Co", 66 eal. App. 4th 478, 498-499\1998). .Plaintiffs Memorandum Of Points And Authorities In Oppasition To Defendant's Demurrer To Plaintiffs FirsAmended Complaint ("Opp.") 4:15-17.4 Indeed, the fiing of a wil contest changes the overall poste of the cae: "(The fiing of such a contest can

dratically trnsform the probate of a wil frm a roútine ex pare procedur often conducted by simple affdavit (Frob.

Code, § 8220. subds. (a) & (b)), into sharly adversaral and hotly contested litigation,. necesitating lengthy andexpensive discovery and trial." ¡d. .5 Plaintiffs also attempt to compai the asrtion ofhospítal liens to the filing of cross-cmplaints' and the institution of

speial insanity proings. Opp. 4:l5-17, citing Twrd. 63 Cal. App. 3d at 921-922 (filing of reuest for admissionsis depend"ent and not suffcient "action" to support malicious prosecution claim). However, unlike a lien, a cross-complaint creates an action ~istinct and separte fromthe original complaint. Bertero v. National General Corp., 13 Cal.

3Sutter Health's Reoly ln SUDoort of Demurr to First Amended ('.nmnIHint lõOA'lcn..'J tlOC/ni;n,


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A MaliciousProsccution Claim Based on a Hospital Lien Requires aTermination of an Action Favorable to the Plaintiff Even If the Lien wasnot Valid.

Plaintiffs concede they did not challenge the validity of Sutter Health's liens to legal

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termination in their favor. Opp.9:15-23. They argue invalidity of the liens is the same as favora.ble

termination, but acknowledge that the Amended Complaint 'requires this Court to rule "that the

liens were null and void, and thus termInated in favor o"fPlaintiff and the Class." Opp. 3:10-18,4:6-

9,8:23-25,69:4-7, 15-23.7 This unequivocally confirms that according to Plaintiffs' Amended

Complaint no court has determined in a prior action that the liens were null and void. Thus,

Plaintiffs have not stated a claim for malicious prosecution. Zamos, 32 CaL. 4th at 965.

Invalidity of the liens is no substitute for favorable termination. See, e.g., Crowley, 8 CaL.

4th at 686. As the Crowley.court explaied, whether a prior action was legally tenable goes to the

issue of whether the plaintiff in the prior action had probable cause, not to whether the action

terminated favorably to the defendant in the prior action. Id The favorable termination

requirement goes to whether the defendant in the prior action was finally determined to. be, ,innocent. Id These two. elements, the .malicious pràsecution defendant's lack of probable. cause

and favorable termination in favor of the plaitiff l1~erVe different puroses, and the legal tena1Jilty

of the underlying action is not the standard by which to judge whether the action was

terminated in Iplaintitsl favor.1I Id (Quotig Warren.v. Wasserman, Camden & Casselman, 20

Cal. App. 3d 1297, 1303 (1990) (emphasis added)). . In Warren, a law fino fied a cross-clalm that

3d 43, 52 (l9?4)..The.cross-defendant bemes, for proceurl pwposes, a defendat. Jd Dismissal of the origiialcomplaint does not affect the independent" exisence of the cross-complait. ld The sae is b1e for special insanity

proceedings. Twfnrdj 63 Cal. App. 3d at 922. Even when initiated with other litigation, insanity proceedings areÛldependent and do not depend upon other litigationJor their prosecution. ld., citing Cal. Weir. & Inst. Code § 5201 etseq.6 "(Tjhere .wil be a favorable judgment for Plaintiff and the class if and.

when this Court rules on Plaintiffs request forclasswide declartory relief that the liens at issue are null and void." .7 Plaintiffs also attempt to support their argument by mischaracterzing an arment Sutter Health made on page 15 of

itsinitial brief. Opp. 9:2-4. The portion of Sutter Health's brief Plaintiffs cite stted: "rl)t appear that Plaintifts seek adeclartion tht HLA liens .that were based on extinguished debts .are null ard void. This is an improper reques for anadvisory opinion, as Parnell has already anwered the question definitively. Parnell, 35 Cal. 4th at 609." This measthat if Plaintiff' Amended Complaint does not'request this Court to determine the validity of each lien, then aU thedeclartory relief action seeks is an opinion tht i.r an HLA lien Is based on an extiguished debt, then it is null and void.That question has ben answered by Parell, but not the question or whether the liens at Issue in tbis case were inCact based. on extinguished debts. That question has. néver .been determined, according to the. Amended .Complaint and Plaintiffs' Opposition. Threfore, no malicious prosecution action may be brought at this tie.

~i:-" 4Sutter Health's Reply In Support of Demurrer to First Amended ComDlaint 894350v7 09501002


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was later dismissed because the statute of limitations had run. Warren, 20 CaI. App. 3d at 1299.

The cross-defendant then fied a complaint for malicious prosecution against the law firm, arguing it

had satisfied the favorable termination. element because an action that was barred by the statute of

limitations was not "legally tenable." Id at 1300, 1303. The court disagreed, explaining that the

malicious prosecution plaintiff had confused the elements of probable cause and favorable

tennination and holding that lack of legal tenability does not satisfy the favorable termination

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requ~ement. Id at I302~04. Thus, even if the liens at issue here were "null and void" when they

were asserted, the Amended Complaint does not plead termination in Plaintiffs' favor. See ¡d.

Plaintiffs also ask the cour to do away with the favorable termination element, arguing that

forcing.them to obtain such terminations would be an lIutter waste." Opp.9:19-21. On the contra,

without the requirement, all defendants in all civil cases could sue plaintiffs for malicious

prosecution. Every civil complaint would invite a cross-complaint for malicious prosecution. Thus,

the requirement that Plaintiffs obtain a favorabÍe judgment in a prior action on the merits eiIures

that judicial resources are not wasted. The strct requirements of malicious prosecution ar

necesar to prevent. expanding the malicious prosecution tort. Cantu y. Resolution TrUst Corp., 4

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Cal. App. 4th 857, 873 (1992). See also Sheldon Appel, 47 Cal. 3d at 872

Thestrct.pleading requirements do not flex depending on how diffcult it is to obtan a

favorale judgment on the merits. On the coIitr, as the Warren court acknowledged, par~s

wishing to assert a malicious prosecution claim may have to go to extrordinar_ lengt:

An allegation. defendants prosecuted a prior action knowig that the applicable statuteof limtations has ru on the clai does not reflect on the merits of the action. Whlefiling a lawsuit knowig the limitations period has ru is a pett act which waesjudicial resources, if a litigant wants to pursue a malic~ous prosecution actionunder those circumstances, he_ must eschew the procedural defense, forgo th'eeasy termination, and obtain a favorable judgment on the merits. Otherwse, thepolicy reaons behind requirig a favorable tennination would be thwared if alitigant could meet the favorable termination requirement simpIy by allegigdefendants knew the action wa bared by the statute of limitation.

Warren, 220 Cal. App. 3d at 1303.

Finally, Plaintiffs argue they are excused from pleading termination. becuse they pwprt to

represent a class. Opp. 9:I5~23. However, Plaintiffs. class statu does not excuse their failur to

5Sutter Health's Reply In Support of Demurrer to First Amended ComDlaint RQd1(1 MUAmCl1


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allege favorable termination.8 This would undermine the purpose of the substantive law of

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malicious prosecution: 1lClass actions arc provided only as a means to enforce substantive law.

Altering the substantive law to accommodate procedure would be to confuse the means with the

ends- 10 sacrifice the goal for the going." Mirkin v. Wasserman, 5 Cal. 4th 1082, I 103 (1993)

(quoting City of San Jose v, Superior Court, 12 Cal. 3d 44,/, 462 (1974)).

Plaintiffs Fail To Explain Why, As A Matter Of Law, Sutler Health DidNot Have Probable Cause To As~ert Liens Under Swaiisoii.

For liens asserted prior to Parnell, Plaintiffs appear to argue that Sutter Health must show it

c.

actually relied on Swanson in order overcome the allegation it lacked probable cause. Opp. 6:9-15.

However, this is not the legal .standard for detemining ~hether there was probable cause. The

question is whether Swanson and other authorities made it at least arguable that Sutter Health could

assert liens against insured patients. Sheldon Appel, 47 Cal. 3d at 878, 885. Sutler Health has

aleady demonstrated that Swanson, Nishihama, tral cour rulings, and the words of the HLA itself

made it at least arguable that assertg liens against insured patients was pennssible.9 Plaintiffs'

-aguents that.some authorities supported contrry arguents does not change ths. Sheldon Appel,_

47 Cal. 3d at 878, 885.

For liens asserted afer Parnell, Plainti.ffs argue that lack of probable. cause is obvious

because their Amended Complaint relates only to liens asserted where no debt was owed. Ths_

arguent is a ruse. There- are no such liens yèt becuse no cour has rued on the validity of the

19 liens. In fact, Plaitiffs want ths Cour to rnakethe det~nnnation. Even afer Párnell there are so

many arguents that hospitas may make to support a lien ngbts tht it caot be credibly alleged

tht Sutter Heath asserted liens ~thout probable cause before a court' resolves :nultiple issues on

each lien and determnes the liens are invalid. See Parnell, 35 Cal. 4th at 609.611; Sheldon Appel,

47 Cal. 3d at 878, 885. Ths action is prematue.

8 If Plaintiffs believe that they are unable to challenge hospital liens on an individual basis, there ar proceures

available to them, such as cordination of cases under Code of Civil Procedur section 404, that would permit- tlem toadjudicae the validity ofliens en masse.

9 See Sutter Health's initial brief on this motion at H.C.I. Additionally, contr to Plaintiffs' assertion, Sutter Health was

a defendant in the Tweedy l'. NeO case, along with a Sutter Health hospital, Sutter Rosevile. See Sutter Health's ReplyTo Opposition To Reqest For Iudicial Notice, fied herewith.

---:-.. 6 _Sutter Health's Reply In Support of Demurer to First Amended ComDlaint f1a43~,,7 na~iosoi


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D. Plaintiffs Misstate The Malice Requirement.

2Plaintiffs contend that malice exists when "proceedings are .instituted primarily for an

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improper purpose." Opp. 8: i O~ i I. However, the malice element also requires Plaintiffs to

demonstrate that the underlying action was prosecuted out of actual hostility, il wil, or with a

subjective intent to deliberately misuse the legal system for personal gain or satisfaction at the

expense of the wrongfully sued defendant. Downey Venture, 66 Cat. App. 4th at 498-499. Plaintiffs'

Amended Complaint alleges that Sutter Health "knew, or should have known, that the liens were

not based on a legally enforceable debt." Amend. Compo ~ 23 (emphasis added). This is not the

actual intent necessar to support a finding of malice.

E. Plaintiffs Have Failed To Support Their Abuse Of Process Claim And ToAvoid The Litigation Privilege.

11 The tort of abuse of process has two elements, neither of which Plaintifs have alleged:

12 "rT)here must be wrongful use of process, not merely a request for or initiation of process - and

13 second, the act complained of must involve_use of process. II Adams. 2 Cal. App. 4th at 528. As to

14 the "process" requirement, Adams cour explaied: "Process is action taken pursuant to judicial

15 authority. It is not action taen without reference to tht power of the cour. Thus, servng upon

16 . plaintiff a false notice that a bench warrant had been issued -is not process, becuse in makng

the false stteIIe~t, defendant took no action pursuat to -cour authority." Id at 530. Thus, even

acceptig Pl~tiffs' allegations as tre and assuming Sutter Heath served invalict hospita liens on. ,them, Plaintiffs have failed to state a tause of acti~n for abuse of process because they have not

pleaded a court action. Again, hospital liens .are not filed- with the cour and are not judicial

proceedings. Cal. Civ. Code § 3045.3. AS,to the element oflrabuse,11 ;theAdàms cour instrcted:

Merely obtaining or seeking process is not enough; there mus be subsequent abuse,by a misuse of the judicial process for a purose other than that which it was intendedto serve. ... The gist of the tort is the improper use of the proces afer it is issued.

Here an that is described is a motion to prevent reuction of felonies tomisdemeanors. That motion did not result in the issuance of aIy proces of the courwhich was then abused. It produced no act of judicial authority, no writ or orderwhich wa then misused. .Privileged or not, such activity falls short of the tort ofabuse of process, which most generally consists. of acts exterior to the lawsUit such asattempted extortion or pressure on a debtor by misuse of court orders. .... (Ajlthougbabuse of process may consist of a theat that proces will be invoked, and therefore

could also consist of an attempt to invoke such process, process mus in fact issue atthe defendant's behest.~~-~ 7

Sutter Health's Reply In Support ofDemulTer to First Amended Complaint 894350v7 0950/0502


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¡d. at 530-53 I. Thus, because Plaintiffs here do not allege process they cannot allege any. misuse of

a process.

In any event, as Adams also establishes, the litigation privilege bars Plaintiffs' abuse of

process claim. The Adams court went on to hold, unequivocally, that_abuse of process claims in that

case were barred by the broad litigation privilege, under Civil Code section 47 (b)(2). ¡d. at 530-32.

Plaintiffs argue that their complaint alleges a "course of conduc.t" which they say is not

protected communication. However, the only conduct alleged in Plaintiffs' complaint is Sutter

Health's assertion of hospital liens. See AI. Compo ~s 2, 3, 4, 5, 7, 12,21, 23, 24, 25, 28. This

Cour has aleady decided that the communcative act of asserting a hospital liens is protected by the

litigation privilege; Order on Dem. p. 1; See also Swanson, 97 CaI. App. 4th at 249; Olszewski v.

Scripps Health, 30 Cat. 4th 798, 832 (2003) (both holding assertion of liens privileged). This Court

stated: 'The Cour is, however, bound by the decisions of the Cour of Appeal regarding this issue.

(Swanson) states IlLien notices authorize by law are protected by the litigation-privilegel and holds

that the fiing of-lien notices und~r the HLA is protected litigation aotivity." This. issue is also

resolved by Olszewski: "(Wle reject plaintiffs contention that defendant's practice of using these

statutorily authorized liens lito seize fuds" in violation offederal law is noncommunicative conduct

falling outside the Jitigation privilege. The only tortous acts alleged by plaintiff were defendantts

asserton ofliens ...... Olszewski, 30 Cal. 4th at 831.

Plaitiffs also reargue that Limandri V. Jenkins, 52 Cal. App. 4th 326 (1997) saves their case.

TIs time, however, they argue that IiplaItiff has alleged an entire unawfl coure of conduct by

Defendant: Defendant asserts these Hens despite the fact that its (sic) knows or should know that it

is.owed no debt ... (and then) continues to asert, pursue and collect on its liens. despite ths

knowledge." Opp. i 1:2 I - I 2:2. This is' not noncommunicative conduct distinct from the assertion of

the lien. It is not even a tlcourse of conduct. ti It is simply another way of saying that Sutter Health

asserted liens until they were paid. In contrast, in Limandri, an attorney entered into a fee

agreement with his client that gave the attorney a percentage of the. client's recovery. in an

environmental contarnation cae and then the" abuse of proce defendant allegedly interfered with

this agreement by seeking and obtaining a securty interest in the Siie recovery. ¡d. at 345, The--L:_oc 8Sutter Health's Reply In Support of Demurrer to First Amended Complaint 8943S0 0950/052


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notice of lien came later, and was merely incidental- to the creation of the offending security interest

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and other conduct and therefore not protected by the litigation privilege. ¡d. at pp. 342, 346. Here,

the assertion of hospital liens are not alleged to be incidental to Sutter Health's conduct, but to be .

precisely the conduct plaintiffs allege is wrongfuL.

Furthermore, the privilege applies even if the assertion is considered conduct because ¡twas

necessar to the communication of the lien. See, e.g. "Rubin v. Green, 4 Cal. 4th 1187, 1195-1196

(1993) (fact that defendant's communication unecessarîly involved relatèd actslldoes not destroy

privilege); O'Keefe v. Kampa, 84 Cal. App, 4th 130, 134 (2000) ("(TJhe scope of publication or

broadcast include.s noncommunicative conduct like the filing- of a motion for" writ of sale (citation),

the filng of assessment liens (citation), or the fiing ora mechanc's lien (citation) ,")

Plaintiffs also argue again that "liens not authorized by the HLA are no( protected by the

litigation privilege." Opp. 13:7-10 (emphasis in original.). Ths Cour has also rejected this

arguent. Order on' Dem. p. 1. The litigation privilege applies even when the conuunIcation

constitUtes an oútrghf violation of Jaw and regardless of equity, malice or intent to han. See, e.g.,

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Silberg v. Anderson, 50 Cal. 3d 205, 218 (1990); Brown v. Kennard, 94.Cal. App, 4th 40, 46-51

(2001); O'Keefe v. Kampa; 84 Cal. App. 4th at 133-34; Meriel v. Rizzo, 64 Cal. App. 4th 53, 64-66

(1998).

As a last ditch i?ffort, Plaintiffs question the law of pnvil.ege, "arguing that the litigation

19 . privilege should not apply'to abuse of process claims. Plaintiffs want the Cour to believe tbat theSupreme Cour has recognze that the 'extension of the Htigation privilege to abuse of proces. .clais could-lIlarEely eliminate the"entire abuse of process tort.1I Opp:12:10~12, citing Oren Royal

Oaks Venture v. Greenberg, Bernhard, Weiss & Karma, Inc., 42 Ca. 3d 1157, 1166-1167 (1987).

But the Supreme Court rejected this -argument. ld The Cour was recounting an arguent made

by the aDpellant. JO The Cöur expressly refused to decide the cae on this gromid, intead deciding

the cae "much more- narowly," an~ holding that the litigation privilege does not prevent the

admission in evidence ,of statèments made during a settement conferen~e as evidence that a paI

10 Plaintiff plucked the senteRce frgment from the. following sentence in the opinion: "Indeed, "(appellant) maintain

that if the absolute privilege of seion 47(2) were applied in the abuse of pros context in .the sae manner as itapplies to other tort, the privilege would larely eliminate the entire abuse .ofprocs tort." ¡d" ,~~_.. 9Sutter Health's Reply In Support of Demurrer to First Amended Complaint 89435Ov7095/0502


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had the requisite intent to supp-urt an abuse of process claim. /d That issue is not before the Court

here. The applicabilty of the litigation privilege to HLA liens is at issue, arid the law is settled that

the litigation privilege applies to bar abuse of process claims. See Pacifc Gas & Electric Co. v.

4Bear Stearns & Co., 50 Cal. 3d 1 I 18, 1132 (1990).

F. Plaintiffs HayeNot Saved Their Remaining Causes Of Action ByPleading Malicio~s Prosecution And Abuse Of Process.

This Court already ruled that Plaintiffs' claims for conversion and fraud are barred by the

litigation privilege. Order on Dem. p. 2. Trying to overcome this, Plaintiffs assert the novel

proposition that they have resurrected their conversion and fraud claims by adding claims for

mal.Icious prosecution and abuse or-process. Opp. 14:19-21. This argument fails for at least ,two

reasons. First, Plaintiffs have not, in fact, suffciently pleaded malicious prosecution and abuse of

process, as set fort above. Second, the elements of conversion and fraud are different from those of

malicious proseci.tion and abuse of proces, and th~re is no authority for the proposition that

malicious prosecution or a~use ofprol?e:ss ca support conversion or fraud.

Similarly, Plaintiffs' Unfai Competition clai is bared by the litigation privilege unless

Plaintiffs state claims that IIborrow from or are tethered to the law of malicious prosécution. It Order

on Dem. 1. As set fort above, Plaintiffs fail to state a claim for malicious prosecution.

Accordingly; their UCL claim is bared by tbe litigation pnvilege.

II. CONCLUSION

For the reasons stated herein, Sutter Health respectflly requests the Cour susta its

demurrer without leave to amend.

DATED: Februar 2, 2006 McDONOUGH HOLLAND & ALLEN PCAttorneys at Law

BY:~(l~MACIA (I A GSBURGER

Attorneys for Defendant Sutter Healtb

~i:-" 10Suner Heallh's Reply In Support of Demurrer to Firs Amended Complaint 894350v7 09504/0502


02/02/06 14:30 FAX 916 444 8989 MilA ~002

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CASE TITLE:

COURT/CASE NO:

Melinda Campbell, el al. v. Sutter Health, el al.

Alameda County Superior Court No. RG05221764

PROOF OF SERVICE

I am employed in the County of Sacramento; my business address is 555 Capitol Mall.. 9thFloor, Sacraento, Californa 95814. I am over the age of eighteen years and not a pary to theforegoing action.

I am readiÌy failar with the business pracce at my place of business for collection andprocessig of correspondence for maing with the United States Post Service. Correspondence so

collecte ánd proceed is deposited wi the United States Postal Servce that same day in theordiar coure ofbusIness. .On Februy 2, 2006, I served the withn:

D

D~D

(1) SUTR HEALTH'S REPLY BRIF IN SUPPORT OF DEMUR TOTH FIRT AMNDED CLASS ACTION COMPLAT;

(2) SUITHRHEALTllS REPLY TO PLAITIFFS' OPPOSITON TO REQUEST

FOR JuICIA NOTICE; AN,

(3) (pROPOSED) ORDER GRAG SUTR HEALTH'S DEMR TOPLAFS' FIRT AMED COMPLAIT FOR MAICIOUSPROSECUON, ABUSE OF PROCESS, UNAI BUSINS PRACTICES,AN DECLARTORY RELIEF.

by. mai ò" the followig par(ies) in said action, in acrdance with Code of CiviProceur § i 013a(3), by'placin a tre copy thereof encIosed in a seaed enVelope in a

designat. ar for outgoin mal, addresse as' set fort below. At McDonoug. Holland & Alen PC, mai placd in tht designated ar is given the correct amount ofposte and is depoi;ite th sae day, in.the ordi course of business. in a UnitedStates.mailbox in the City of Sacraento, Caorna

by personally deliverig a tre copy thereof, in acrdance with 'Coe of CiviPrceur § 1011, to the peon(s) and at the addrees) set fort below.

by overnight deliery on the followi pa(ies) in sald action,ln accrdance withCodò of Civi Prceur §1013(c), by placi a tre copy thereof enclosed in a seedenvelope, with deliver fee paid or provided for, and deliverg tht envelOpe to an

overght expre serce caer as defied in Code of Civil Procedur § i 013( c)..

by facsime trnsmision, in accordace with Code of Civil Procedure § I013(e),.tothe followi par(ies) at the facsimle numbers) indicated:

iProof of Servce 889827v2 0950/050


02/02/06 14: 31 FAX 916 444 8989

.¡

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MilA ~003

Todd M. SchneiderJoshua KoneckyW.H. "Han" Wilson

SCHNER & WALLACEi 80 Montgomery Street, Su\te 2000San Fracisco, CA 94104Telephone: (415) 421-7100Facsimie: (415) 421-7105

Counsel for Plaintiffs

Courtes Copv to: Co-counsel for Plaintiffs

Linda RossLAW OFFICE OF LINDA ROSS2204 Union Strt

San Fracisco, CA 94123Telephone: (415) 563-2400Facsime: (415) 931-9981

Scott Ka 'ROBOOSTOFF & KAKl, PLC369 Pine Strt, Suite 610,

San Fracisco, CA 94104Telephone:. (415) 732-0282Facsile: (415) 732-0287

16 I declare under Penaty ofpeijur under the laws of the State ofCalorua tht the foregoing istr and corrct aid th ths document wa executed on Februar 2,.2006. .

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. .M---_.._.~ 2Proof of Serce '889827..09504502


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/ £(11)00 .1:1 A ::,. rIS:.-O

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"'t,.~ -2 I'/f '". 0..0.... 2:1'0

ill' . "~ ~C!~'" . "'~. "'!./o,:?,'-...~. (,Vf!"r'- '..~.

. I McDONOUGH HOLLAND & ALLEN PCAttorneys at Law

2 RICHA E. BRAT (44893)MACIA L. AUGSBURGER (145686)

3 JOHN C.J. BARES (216694)555 Capitol Mall, 9th Floor

4 Sacramento, CA 95814 .Phone: 916.444.3900

5 Fax: 916.444.8989

6 Attrneys for Defendat Sutter Heath

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II MELINA CAMBELL, on her own behalf,ard on behaf of all others simlarly situted,


COUNTY OF ALAMEDA

Case No. Rc;5221764))) SUITER HEALTHS REPLY TO) . PLATIFFS' OPPOSITION TO) REQUET FOR JUICIAL NOTICE)))))))

12

l3Plaintiff, .

v.1.4 Dat: Febru 9, 2006

Time: .1:30 p.m.-'Plac: Deparent 22HonoI'bJe Ronad M. Sabraw

SUTR HEALTH and DOES I thougb 24,15' inclusive,

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Defendants.

This Cour is permitted under Evidence Code section 4S2(e)(I) to tae judicial no:tce of$e

18rerds of any court of this state. Plaintiffs do not stat~ sucient grounds for this Cour t~ abstan .

.19frm tang judicial notice of the recrds of the Superior çour ofCaIifonia, County of Sacrento,

20

. 21CaSe No. 03AS03039, Arnold Tweedy, et 01.. v. NCO Financial Systems, Inc., et 01. ("Tweey").

First, Plaintiffs ar incorrt that Tweedy involved unelated pares. Sutter H~tI was' a22. .defendat. in the matter. See Suttr Health's Request for Judicial Notice in Support of Demurr

23("RFJN"), Exhbit A.

Second, llauitis are incorrct, that Tweedy involved umJated issues. The plaintiff in

Tweedy was a Health Net member who chalenged ahospita lien asered under Civil Code section

3045;1 et seq. See RFJN, Exhbit A. That is precisely the issue in ths mattr."

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MlThird. Plaitifs misstate the effect of Californa Rules or Court 977. R,ule of Cour 977, .

prevents a par from c~ting an tipubJished opinion as support for a proposition of law. Sutter-=~_oc 1Sutter Healtb's Reply to Plaintiff' Opposition to Request for Judicial Notice

895623,,1 0950fæ¡02

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i. Heálth does not cite Tweedy for its precedential value, but rather as support for its position that the

2 asserton of liens prior to Parnell v. Adventist Health Systems, 35 Cal.4th 595 (2005) was. at the

3 time. arguably proper. If it was arguably prope~.' Sutter.Heath had probable cause t¿ assert the liens,

4 and Plaintiffs canot sustan an action for malicia,us prosecution. Zamos v. StrOu, 32 Cat. 4th 958,

5 965 (2004).

. 6 Finally, Plaitlffs' critique of.the superor cour's reaonig in Tweedy is irrelevant. The

..7 issue is not whether the cpur was correct. The issue is whether the cour's decision made it at least

8 ar~able that Sutter Health was permitted to assert liens agait insuÌed patients prior to Parnell.

9 For all of these reasons, Sutter He3th respectfully reuests the Cour grant its Request for

10 .Judicial Notice.

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DATED: February 2, 2006

McDONOUGH HOLLAND & ALLEN PC.Attorneys at Law

By: ~Jf¡fwÆ--GMA L. AUGSBURGER

Attorneys for Deftndant Sutter Heath

~.:-'" 2Sutter Health's Reply to Plaintiffs' Opposition to Request Jor Judicial Notice 895623,,1 09504/0502 .


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CASE TITLE:

COURT/CASE NO:

Melinda Campbell, et at. v. Sutter Health, et at.

Alameda County Superior Court No. RG0522 I 764

PROOF OF SERVICE.'

4

5

I am employed in the County of Sacramento; my business address is 555 Capitol Mall, 9thFloor. Sacramento, Californa 95814. I am over the age of eighteen years and not a pary tq theforegoing action.

I am readily famliar with the business practice at my place of business for collection and

processing of correspondence for mailing with the United States Postal Service. Correspondence socollected and processed is deposited with the United States Postal Service that same day in theordinar coure of business.

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DLJ

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On Febru 2, 2006, I served the within:

(I) SUTTER HEALTH'S REPLY BRIEF IN SUPPORT OF DEMURRR TOTHE FIRST AMNDED CLASS ACTION COMPLAINT;

SUTTER HEALTH'S REPLY TO PLAINTIFFS' OPPOSITON TO REQUESTFOR JUDICIAL NOTICE; AN,

(PROPOSED) ORDER GRATING SUTTER HEALTH'S DEMURRR TOPLAINTIFFS' FIRST AMNDED COMPLAIT FOR MAICIOUSPROSECUTION, ABUSE OF PROCESS, UNAIR BUSINESS PRACTICES,AND DECLARATORY RELIEF.

(2)

(3)

by mail on the following par(ies) in said action, in accordance with Code of Civil

Procedure § lO13a(3), by placing a tre copy thereof enclosed in a sealed envelope in adesignated area for outgoing mail, addressed as set fort below. At McDonoughHolland & Allen PC, mail placed in that designated area is given the correct amount ofpostage and is deposited that same day, in the ordinar course of business, in a UnitedStates mailbox in the City of Sacramento, Californa.

by personally delivering a trt: copy thereof, in accordace' with Code of Civil

Procedure § 101 I, to the person(s) and at the addressees) set fort below.

by overnight delivery on the following par(ies) in said action, in accordance withCode of Civil Procedure § 1013(c), by placing a true copy thereof enclosed in a sealedenvelope, with delivery fees- paid or provided for, and delivering that envelope to anovernght express service carier as defined in Code of Civil Procedure § l013(c)..

by facsimile transmission, in accordance with Code of Civil Procedure § l013(e), toth~ following part(ies) at the facsimile-number(s) indicated:

i

889827v209504/0502Proof of Service


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SCHNEIDER & WALLACE180 Montgomery Street, Suite 2000San Francisco, CA 94104Telephone: (415) 421-7100Facsimile: (415) 421-7105


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Courlesv COfJV 10: Co-counsel for Plaintiffs

Linda RossLAW OFFICE OF LINA ROSS2204 Union StreetSan Francisco, CA 94123Telephone: (415) 563-2400Facsimile: (415) 931-9981

Scott KalkinROBOOSTOFF & KALKIN, PLC369 Pine Street, Suite 610San Francisco, CA 94104Telephone: (4i5) 732-0282Facsimile: (415) 732-0287

I -declare under penalty of perjur under the laws of the State of California that the foregoing istrue and correct and that this document was executed on Februar 2, 2006.

, ?""'1lN~ifýr-

2

Proof of Service 889827v2 09504/0502


41


McDONOUGH HOLLAND & ALLEN PCF:- Attorneys at Law\ 2 RICHARD E. BRANDT (44893)

MARCIA L. AUGSBURGER (145686)3 JOHN CJ. BARNES (2 I 6694)

555 Capitol Mall, 9th Floor4 Sacraento, CA 95814

Phone: 916.444.39005 Fax: 916.444.8989

t!t(f~eirr Sutter Health

FEB 2 200~

OA COUNTY SUPERiOR COURT

MELINA CAMBELL, on her own behalf,and on behalf of all othe,s similarly situated,

SUPERJOR COURT OF CALIFORNIA

COUN OF ALAMDA

Plaintiffs,

v.

SUIR HEALTH and DOES 1 though 24,incliiive,

Defendants.

) Case No. RG05221764)))))))))))))))

(PROPOSED) ORDER GRAINGSUTR HEALTH'S DEMUR TOPLAINTIFFS' FIT AMNDEDCOMPLAI FOR MALICIOUSPROSECUON, ABUSE OF PROCESS,UNAI BUSINSS PRACTCES, ANDECLARTORY RELIEF(Submitted pursuat to Alameda CountySupenor Cour Local Rule 5.1)

Date: Februar 9, 2006Time: I :30 p.m.'Place: Deparent 22Judge: Honorable Ronald M. Sabraw

TO ALL PARTIES AN THEIR ATTORNYS OF RECORDc

Defendant Sutter Health's Demurer to Plaintiffs' Firt Amended Class Action Complaint for

Malicious Prosecution, Abuse of Process, Unfair Business Practices, and Declaratory Relief

("Amended Complait") came on for heang in ths Deparent on Febru 9, 2006, at I :30 p.m.

The matter waS argued and submitted, and good- cause appeang therefor,

IT iS HEREBY ORDERED that:

Sutter Health's Demurer is sustained without leave to amend, on the following grounds:

Demurrer to Entie Complaint

The Amended Complaint, as each cause of action, fails to stt~ facts suff~ient to constitute a

cause of action.

t

(Proposed) Order Granting Sutter Health's Demu.rrer to Plaintiffs. Amended Complaint 889341vl095010502


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Demurrer to First Cause of Action

2 The First Cause of Action, for malicious prosecution, fails to state facts suffcient toi.

3 constitute, a cause of action because the assertíon of a lien under the Hospital Lien Act, CivíI Code

4 section 3045.1 .et seq. C1HLA"), is not a prior action suffcient to support a malicious .prosecution

5 claim.

6 The First Cause of Action fails to state facts suffcient to constitute a cause of action2.

because the Amended Complaint fails to allege any action that legally tennInated in Plaintiffs' faýor.

3. The First Cause of Action fails to state facts sufcient to constitute a cause of action

because Sutter Health had prob~bie cause to assert HLA liens.

4. The First Cause of Action fails to state facts suffcient to constitute a cause of action

because the Amended Complaint fails to suffciently allege Sutter Health asserted HLA liens with

malice.

Demurrer to Second Caus"e of Action

5. The Second Cause of Action, for ¡'abuse of process." i~ improper and "must be strcken

"bec"ause tls Cour did "not -grt Plaintiffs leave to amend to state a cause öf action for abuse of

process.

6. The Secnd Cause of Action is bar by the litigation privilege set fort in Civil

Code § 47(b) and therefore fails to-state facts suffcient to constitute a cause ofacton.

19 Demurrer to Third Cause of Action

20 The TId Cause of Action, for "conversion and trespass to chattels, n is" bar by the7.

21 litigation privilege set fort in Civil Code § 47(b) and therefore fails to stte facts sufcient to

22 constitute a cause of action.

23 Demurrer to Fourth Cause 'of Action

24 8. The Four Cause of Action, for -frud and negligent misrepresentation, is bared by

25 the litigation privilege set fort in Civil Code § 47(b) and therefore fails to state facts. suffcient to

26 constitute a cause of action.

( .ìi 27 /ii"-.-..28 iii

.MH .____PC_01- 2(Proposedl Order Granting Sutler Health's Demurrer to Plaintiffs' Amended Complaint 889341v1091050


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Demurrer to Fifth Cause of Action

9. The Fift Cause of Actibn, based on Business & Professions Code sections 17200 et

3 seg., is barred by the litigation privilege set forth in Civil Code.§ 47(b) and therefore fails to slate

4 facts sufficient to constitute a cause of action.

10. The'Fifth Cause of Action fails to state facts suffcient to constitute a cause of action

because it does not allege that Sutter Health violated a discrete federal or state law.

Demurrer to Sixth Cause of Action

11. The Sixth Cause of Action, for declaratory relief, fails to. state facts suffcient to

constitute a cause of action because it seeks a declartion concerning communications 'that occurred

in the past.

12. The Sixth Cause of Action fails to state facts suffcient to constitute a cause of action

because it seeks an advisory opinion on a question-aleady answered by Parnell v. Adventist Health

Systems/West, 35 CalAth 595 (2005).

13. The Sixth Cause of Action fails to state facts suffcie.nt to constitute a cause ofactioD

beause it does not seek resolution of an actual controversy betveen the pares.

14. The Sixth. Cause of Action faiJs to state facts sufcient to constitute a cause of action

becauSe it is based on communcations that are protected by the litigation pnvilege.

IT is FUTHR ORDERED that Sutter Health be dismissed from ths action, and that Sutter Heath

is awadèd its costs of suit and attorneys fees pursuant to CiVil Code § i 780( d).

DATED:Honorable Ronad M. SabrawJudge of the Superior Cour

3

(Propòsedl Order Granting Sutter Health's Demurrer to Plaintiffs' Amended Complaint 88934lvl 095010%


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I i-lJ-UJ-i:uuo~rlu, 10; 1 U UNC LCUNL UN~LNNU tiL1NU

_~~!O;:OB J.5;14 FAX iiiii 11114 Sf- Mlfi:

t. McDONOUGH flOLLAND & ALLEN PCAttomi:ys at Lnw

2 RICHARD E. BRANDT ('14893)MACIA L. AUGSBURGER (145686)

3 J011N CJ. BARS (216694)555 Capitol Mall, 9di I'loor

4 Sacraento, CA 95814Phone: 916.444.3900

5 F..x: 916.44.8989

6 AtlOrneys for Defendant Sutler Heath

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\ tHA)J I U öjJ ~unn I- UUi:UU¿1901i;i

E!'D(Jl~SEDFILED

AL;",T\.iED,J. COUNTY

FEB - 3 1006

CLERK 1)!'TliE sl.i¡'Ei~I:Jj~ COURT

By CY..!T: 11 \ S g(jla Frkl'lIli.

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.9


COUNTY OF ALDA

10 MELINDA CAMBELL, 00 her own behal,and on behriofnl Otßèrs silarly situated._

11

.12PllUtiI"

v.13

SIlRHEALTHundDOES 1 thougl24,14 inclusve, I

!

IS DefL-ndants.

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))))))))))))

Cao No. RG05221764

SUITER HEALTH'S CASEMAAGEM!NT STATEM!NT

Date: Februar 9,2006TIme: I :30 p.m.Place: Deparenl22Judge: Honorale Rooald M. SabrawTril Date: None:

BY FAX17 In anticipation of the: Case: Management Confc~cncc to be: held in th Deparent on

18 Februar 9, 2006, Defendi Sutter Heath respectly submlts tlio followig Case Munugomcnt

19 StatemeaL

I. STATEM!NT OF ISSUES PRESENTED20

21 A. Plaintiffs' Claims:

22 P1lUti Melinda CumpbeU, on behalf of herelf iid ii aleged clas or aggreved person'

23 (hereaer colleetively "PIlUtls"), hii sued Sutter HeaU~ Plainiif allege tht Sutter Heath

24 improperly asertcö hospita lien notices agains thei tort n:çoverics .fom thd-pnr torteaors.

2S See First Amended Clas Action Complaint for MoJicious Prosection, et seq. (hereafer "Amended

26 Complaii"). ~ 2, PI"iniis allege thai by assertg liens Sutter Head, has comittcc malicious

27 prosecution and abused legal proces¡ co.itti: conversion and tresilS to chatels; commtted

28 fraud and negligent roisepesi:ntation; and v1ol~.ted Busines and Profesions Cede s(!ction 17200 er

MH-_........_.~loi~5170.IiI-mr.~lWoMSutter Heilth':e Ciiiie Mllßugcnicni::"ttcmi:iil H!lS?49vJ 0%04/0502


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'Mf-_.....-...i-

1 seq. Amended Complaint, ils 32-76. Plaintiffs seek declaratory, injunctive, equitable, restitutionar,

2 and compensatory relief, civil penalties, and attorneys fees and costs. Amended Complaint, Prayer

3 for Relief, ~s 1-11.

4 B. Sutter Health's Position:

5 Sutter Health has filed a Demurer to Plaintiffs' Amended Complaint. The demurrer is set to

6 be heard in this Deparent on February 9, 2006, at 1:30 p.m. The outcome of the demurer may

7 limit or eliminate Plaintiffs' case.

8 C. Facts Supporting Each Position:

9 Sutter Health maintains that no facts can support a cause of action against it relating to the

i 0 assertion of hospital lien notices under the Hospital Lien Act, Civil Code section 3045.1, et seq.

11 D. Status of Relevant Discovery:

i 2 Discovery has not yet begun.

13 II. THE PARTIES AND REPRESENTATION

14 Plaintiff Melinda CaIphell is allegedly a resident of San Jose. Californa, who received

15 healthcare services from a Sutter Health-affiiated hospitaL. Amended Complaint, ~s 8, 10. Ms.

16 Campbell purPorts to represent a class of simlarly aggrieved persons. Amended Complaint, ir 30.

17 Schneider & Wallace is lead counsel for Plaitiffs.

18 Sutter Health is a community-based, not-for-profit. healthcare delivery system. Sutter Health

19 serves more than 100 communties in Nortern Californa though a system of28 locally governed,

20 not-for-profit hospitas. McDonough Holland & AlIen PC represents Sutter Health in ths litigation.

21 II. PROPOSED DEADLINS AND LIMITS ON JOINER

22 None at ths time.

23iV.' CLASS DISCOVERY AND CLASS CERTIFICATION

24 Sutter Health disputes that the putative class is suitable for class treatment. Sutter Health will

25 oppose certification oftle class described in the Amended Complait at ii 30.

26 V. PROPOSED LITIGATION SCHEDULE

27 Ifthis case goes forward, Sutter Health proposes the following schedule:

. Class discovery: Winter - Spring 2006

2Sutter Health's Case Management Statement 895749vl 0950410502


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. Class certification motion: June 2006

. Discovery regarding liability and damages: Sumer 2006

. Dispositive motion(s): Fall R Winter 2006

. Trial: Winter 2006 - Spring 2007

VI. POTENTIAL EVIENTIARY/CONFIDENTIAITY ISSUES

6 Sutter Health anticipates Plaintiffs wil seek patient medical records and other private

7 inormation during discovery. These records may be subject to state and federal privacy protections.

8 VII. DESCRIPTION OF.PROCEDURA POSTURE OF THE CASE

9 1. Unserved Partes:

10 Sutter Health has been properly served.

11 2. UnservedlUnfiled Cross-Complaints:

12 None at this time.

13 3. Related Actions/Potential for Coordination or Consolidation:

14 None known.

15 4. Possible Jurisdictional or Venue Issues:


17 5. Status of Discovery:

18 Discovery has not yet begun.

19 6. Unresolved Law and Motion:

20 Sutter Health's demurer to the Amended Complait is set to be heard in this Deparent on

21 February 9, 2006. If the case goes forward, Sutter Health will oppose class certification and wil fie

22 a dispositive motion.

23 7. Requests for, or Opposition to, any ADR Proceedings:


25 8. Severance of Issues for Trial:

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26 Unkown at ths time.

9. Caleudar Conflcts:

Ml28 None at this time.

_"'_"_.oc_.~ 3Sutter Health's Case Management Statement 895749v109504/050i


,

VII. STREAMLINING THE LITIGA nON

2 1. Master fie:

3 Sutter Health believes the parties would benefit from an electronic document repository.

4 2. Lead counsel:

5 Schneider & Wallace is lead counsel for Plaintiffs. McDonough Holland & Allen PC is

6 counsel for Sutter Health.

7 3. e-filing:

8 Sutter Health believes that all filings with the Court should be e-fied, and that service

9 between the paries may be accomplished by e-mail ofPDF documents.

10 4. Web page:

1 i Sutter Health is open to the concept of a web page.

i 2 DATED: February 3, 2006

13 McDONOUGH HOLLAND & ALLEN PCAttorneys at Law

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By:

Attorueys jj Defendant Sutter Health

-_............i- 4Sutter Health's Case Management State~ent 895749vl 09504/0502


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CASE TITLE:

COURT/CASE NO:

Melinda Campbell, el al. v. Sutter Health, el a/.

Alameda County Superior Court No. RG05221764

PROOF OF SERVICE

I am employed in the County of Sacramento; my business address is 555 Capitol Mall, 9thFloor, Sacramento, California 95814. I am over the age of eighteen years and not a party to theforegoing action.

I am readily famliar with the business practice at my place of business for collection and

processing of correspondence for mailng with the United States Postal Service. Correspondence socollected and processed is deposited with the United States Postal Service that same day in theordinary course of business.

~

DD

D

On February 3, 2006, I served the within:

(1) SUTTER HEALTH'S CASE MANAGEMENT STATEMENT


Procedure § 10 13a(3), by placing a tre copy thereof enclosed in a sealed envelope in a

designated area for outgoing mail, addressed as set fort below. At McDonoughHolland & Allen PC, mail placed in that designated area is given the correct amount ofpostage and is deposited that same day, in the ordinar course of business, in a UnitedStates mailbox in the City of Sacramento, California.

by personally delivering a tre copy thereof, in accordance with Code of CivilProcedure § 1011, to tbe person(s) and at the addressees) set fort below.

by overnight delivery on the following par(ies) in said action, in accordance with

Code of Civil Procedure § I013(c), by placing a tre copy thereof enclosed in a sealedenvelope, with delivery fees paid or provided for, and deliverig that envelope to anovernight express service carer as defined in Code of Civil Procedure § l013(c)..

by facsimile transmission, in accordance with Code of Civil Procedure § ioI3(e), tothe followig par(ies) at the facsimile number(s) indicated:

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889827v309504/0502Proof óf Service


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SCHNEIDER & WALLACE180 Montgomery Street, Suite 2000San Francisco, CA 94104Telephone: (415) 421-7100Facsimile: (415) 421-7105


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Coiirtesv CODV to: Co-counsel for Plaintiffs

Linda RossLAW OFFICE OF LINDA ROSS2204 Union StreetSan Francisco, CA 94123Telephone: (415) 563-2400Facsimile: (415) 931-9981

Scott KalkinROBOOSTOFF & KALKIN, PLC369 Pine Street, Suite 610San Francisco, CA 94104Telephone: (415) 732-0282Facsimle: (415) 732-0287

I declare under penalty of perjury under the laws of the State of Calforna that the foregoing istrue and correct and that this document was executed on February 3, 2006.

-'irÊkæi/A-

2

Proof of Service 889827v309504/0502


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I TODD M. SCHNEIDER (State Bar #158253)JOSHUA KONECKY (State Bar #182897)W.H. "HANK" WILLSON (State Bar #233321)SCHNEIDER & WALLACE180 Montgomery Street, Suite 2000San Francisco, California 94104Tel: (415) 421-7100Fax: (415) 421-7105TTY: (415) 421-1665


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Plaintiffs,

vs.

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LINDA ROSS (State Bar #85563)LAW OFFICE OF LINDA ROSS2204 Union StreetSan Francisco, Californa 94123Tel: (415) 563-2400

SCOTT KALKIN (State Bar # 120791)ROBOOSTOFF & KALKl, PLC369 Pine Street, Suite 610San Francisco, California 94104Tel: (415) 732-0282Fax: (415) 732-0287

Attorneys for Phiintiffs

COUNTY OF ALAMEDA

SUTER HEALTH, and DOES I thougb 25,23 inclusive,

24 Defendants.

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19 MELINDA CAMBELL, on her own behalf, Case No. RG05221764and on behalf of all others similarly situated,

SOlEIDER& WALLACE

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PLAINTIFF'S COMPLEX CASEMANAGEMENT CONFERENCESTATEMENT

Date: February 9, 2006Time: 1 :30 pmDeparent: 22

Judge: The Hon. Ronald M. Sabraw

PLAINTIFF'S COMPLEX CASE MANAGEMENT CONFERENCE STATEMENTCampbell v. Sutter Health, et aT., Case No. RG05221764


1 1. INTRODUCTION

2 This action challenges Sutter Health's policy and practice of asserting liens against persons

3 who do not owe Sutter Health any debt, and asserting the liens even though Sutter Health is well

4 aware that it is not owed anyting. Sutter Health's conduct is unlawful and against public policy,

5 and Plaintiffs complaint seeks appropriate redress.

6 As alleged in Plaintiffs First Amended Complaint, Sutter Health unlawfully engages in a

7 policy and practice called "balance biling." Under this policy and practice, Sutter Health collects

8 payments for medical services provided to people who are injured by a tortious act (the amount

9 owed to Sutter Health is often agreed upon by contract between Sutter Health and the injured

10 persons' insurance carer), but then asserts liens against the subsequent tort recoveries of the

11 injured persons when those recoveres-which include items such as emotional distress and lost

12 earngs-exceed the amount owed to Sutter Health. The injured person's debt to Sutter Health

13 could be extinguished by contract, banptcy, or some other mean, but Sutter Health assert

14 these liens even though it is aware that no debt exists. The amount of the lien is generally the

15 difference between the debt actually owed and already paid to Sutter Health, and an inapplicable

16 "customary rate" which Sutter Health exploits in order to exact fuer payment.

17 II. STATEMENT OF THE CASE

18 In Parnell v, Adventist Health System/Wesr (2005) 35 Ca1.4'" 595, the Californa Supreme

19 Cour held that any attempt by health care providers, such as Sutter Health, to recoup their so-

20 called "customary" charges, absent an underlying debt, is unlawfL.

21 Defendant's Demurer attempts to undermine the class action process and render Plaintiff

22 and the class incapable of responding to Defendant's unlawful business practices in any

23 meaningful way. If Defendant's Demurrer is to be believed, Plaintiff and the class have no redress

24 against Defendant's unlawful liens, except to brig thousands of :fl-fledged judicial actions to

25 expunge each and every single lien that Defendant assers. Such piecemeal enforcement is not a

26 realistic option. Without the ability to challenge Defendant's conduct on a classwide basis,

27 Defendant can continue to harass its customers and use judicial tools to compel them to pay offtle

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PLAINTIFF'S COMPLEX CASE MANAGEMENT CONFERECE STATEENTCampbell v. Sutter Health. et al., Case No. RG05221764

1

SCHIDER&WALLACE


1 liens, despite the fact that Defendant is fully aware that it is not owed any money, and despite the

2 fact that the California Supreme Court has found this practice to be unlawfuL. Sutter Health's

3 arguents would render Parnell a nullty, by allowing Sutter Health to continue to prosecute its

4 unlawful liens in the very same way that was outlawed by Parnell; Sutter Health is attempting to

5 use the litigation privilege as a shield from redress for its unlawful practices. However, the

6 litigation privilege applies only to communications, not a course of conduct or the practice of

7 misusing legal procedures, such as subpoenas, default judgments, and debt collection practices.

8 Sutter Health's continuing asserton of liens against persons who owe Sutter Health no debt

9 constitutes malicious prosecution. Malicious prosecution requires an action taken without

i 0 probable cause, with malice, which is terminated in the favor ofthe plaintiff. Plaintiffs allegations

11 that Sutter Health asserts and continues to press the liens though the improper use of the judicial

12 process, even though it knows that no debts are owed, satisfy the malice and lack of probable cause

13 elements. In tur, the allegation that the liens were rendered null and void by the extinguishment

14 of the underlying debt shown that they have been terminated in favor of Plaintiff and the class.

15 Sutter Health's assertion of liens despite the lack of any underlying debts also constitutes

16 abuse of process. Abuse of process requires the wilful use of the judicial process for ar improper

17 purose. By asserting and using varous methods to attempt to enforce its impermissible liens

18 against Plaintiff and the Class to collect monies it is not entitled to under California law, Sutter

19" Health has made wilful use of the judicial process and all of its tools for an improper purose.

20 As a result of Sutter Health's malicious prosecution and abuse of process, Sutter Health is

21 liable for conversion and/or trespass to the chattel of Plaitiff and the class, and Sutter Health has

22 engaged in fraud and/or negligent misrepresentation regarding whether Plaintiff and the members

23 of the class owed Sutter Health any money. In addition, Sutter Health's malicious prosecution and

24 abuse of process are unfair, unlawfl, and fraudulent business acts and practices, in violation of the

25 California Business and Professions Code §§ 17200, et seg. ("UCL").

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27

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PLAINTIFF'S COMPLEX CASE MANAGEMENT CONFERENCE STATEMENT

Campbell v. Sutter Health, et al., Case No. RG052217642

SæNlDER& WALLACE


I II. REPRESENTATION

2 Plaintiff is represented by Todd Schneider, Joshua Konecky, and W.H. '"Hank" Wilson of

3 Schneider & Wallace, Linda Ross of the Law Office orLinda Ross, and Scott Kalkin of

4 Roboostoff & Kalkin, PLC. Schneider & Wallace wil be lead counsel for Plaintiff.

5 iv. DISCOVERY

6 Neither side has issued formal discover. PlaIntiffwil issue her first round of discovery

7 within the next few weeks. This wil include requests for production and other written discovery,

8 as well as a notice of a deposition for the person most knowledgeable regarding the policies and

9 practices at issue. In addition to exploring the policies and practices at issue, the written discovery

10 wil seek a class list though an opt-out procedure similar to those previously approved by this

11 Court. Because there is substantial overlap for discovery purposes between the facts going to the

12 merits of class liability and the facts going to class certification, Plaintiff does not believe that

13 bifurcation of discovery along these lines would be waranted.

14 V. CLASS CERTIFCATION

15 Plaintiff anticipates filing a Motion for Class Certification in approximately September

16 2006. Plaitiff may also file a môtion to bifurcate class liabilty and injunctive relief from the

17 calculation of class member damages and wages due.

18 vi. OTHER MOTION PRACTICE

19 Defendant has filed a Demurrer to Plaintiffs First Amended Complaint, which is scheduled

20 for hearg on Februar 9, 2006, at 1:30 pm-the same time as this Case Management Conference.

21 In addition to a Motion for Class Certification, Plaitiff anticipates filing a Motion for Sumar

22 Judgment.

23 VII. PROPOSED TRIAL AN PRETRI SCHEDULE

24 Plaintiff anticipates that the tral of ths action would take approximately two to three weeks,

25 and proposes that a trial occur in late Sumer 2007. Working backwards from that trial date,

26 Plaintiff proposes the following dates:

27 Last day for hearing on law and motion: June 15,2007;

28


Campbell v. Sutter Heal/h, el al., Case No. RG052217643

SCHEIDER&WALLACE


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SCHIDER&WAllACE

1 Last day to conduct expert discovery: May 15, 2007;

2 Last day for rebuttal expert disclosure: March 15, 2007;

3 Last day to complete non-exper discovery (including to have all motions to compel heard):

4 February 15, 2006;

5 Last day to disclose expert witnesses: January 15, 2006.

6 VII. ALTERNATIVE DISPUTE RESOLUTION (ADR)

7 Plaintiff is amenable to mediation of the individual and class claims. Plaintiff would

8 propose private mediation.

9 IX. CALENDAR CONFLICTS

10 Plaintiff and her counsel are not aware of any calendar conflcts at ths time.

11

12 Respectfully Submitted,

13 Date: Februar 7, 2006

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SCHNEIDER & WALLACELAW OFFICE OF LINDA ROSSROBOOSTOFF & KALKl, PLC

~ll:niA~ ~Counsel for Plaintiff

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Campbell v. Sutter Health et al., Case No. RG05221764

4


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PROOF OF SERVICE

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Sections 10I3(a), 2015.5 C.C.P.

Campbel et at. v. Sutter Health,Alameda Superior Court Case No.: RG05221764

I am a citizen of the United States and am employed in the County of San Francisco. I am

ver the age of eighteen years and not a pary to the within entitled action. My business address is

7 180 Montgomery Street, Suite 2000, San Francisco, CA 94104.

On Februar 7, 2006, I served the following:

i. Plaintiff's Complex Case Management Conference Statement

n the paries by placing tre copies thereof for facsimile transmission to the number listed below

d in a sealed envelope, postage fully prepaid, for deposit in the United States Mail at San

rancisco, California, addressed as follows:

Marcia AugsburgerMcDonough Holland & AJlen PC

555 Capitol Mall, 9th FloorSacramento, CA 94814-4692

Facsimile: (916) 444-8334

I declare under penalty of peijur under the laws of the State of Californa that the foregoing

19 's tre and correct and that ths Declaration is executed on Februar 7, 2006, at San Francisco,

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SCHNIDER& WALLACE

alifomIa.

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PROOF OF SERVICE


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liæ!IIII"~IWI~lill*4244697*

SUPERJOR COURT OF THE STATE OF CALIFORN EN D 0 R SEDFILEDIN AN FOR THE COUNY OF ALAMDA ALAMEDA COUNTY

APR 1 8 Z006

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LINDA CAMBELL, on her own behalf,6 d on behalf of all others similarly situated,

7 Plaitiffs,8 v.9

UTfR HEALTH, and DOES 1 though 24,10 nelusive.

11 Defendats.

12

13

No. RG05-221764 CLERK OF THE SUPERIOR COURT

By E. Opelski.Erickson, Deputy

ORDER (1) OVERRULING IN PART ANSUSTA1G WITHOUT LEAVE TOAMND IN PART TH DEMUR TOTHE FIRST AMNDED COMPLAIT AN(2) FINDING ORDER SUIABLE FORINTERLOCUTORY REVIEW UNDERC.C.P.166.1.

Date: Febru 9, 2006

Time: I :30 p.m.Dept.: 22

14

15

16 The demurer of Defendant Sutter Health to the First Amended Complaint came on for

17 hearng on Febru 9, 2006, in Departent 22 of ths Cour the Honorable Ronad M. Sabraw

18presiding. Counel appeared on bebalf of Plaitiff and on behalf of Defendant. Afer

19consideration of the points and authorities and the evidence, as well as the oral arguent of

20

21

counel, IT is ORDERED: Demurrer of Sutter Health to First Amended Complaint is

OVERRULED IN PART and SUSTAID WITHOUT LEAVE TO AMND IN PART. The

22

23 Cour also finds ths order suitable for interlocutory review under C.C.P. 166.1.

24 Plaintiff asserts that Sutter Health engages in a practice called "balance biling" by

25 improperly fùing liens under the Hospital Lien Act, Civil Code 3045.1 et seq (the "HLA").

26


PlaitÌffasserts that the improper filing of the HLA liens is unawfl, even ifno money is

2 collected on the liens.

3

4WHT is A LllN UNER THE HOSPITAL LllN ACT?

5It is unclear whether the delivery and/or filing of notice ofaHLA lien is in the natue of

litigation activity. The answer to this question determines what claims Plaintiffs can purue.

If providing notice of a HLA lien is simply providing notice, then provision of the notice

would not be protected by the litigation privilege. This is suggested by the plaiD language of

Civil Code 3045.3, which makes clear that notice of a lien can be served by mail and that there is

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10no requirement that a notice of lien be filed in a cour file in a pending civil action. If

notice ofa

IIHLA lien is not litigation activity, then the litigation privilege would not apply. Under ths

12approach, Plaintiffs should frame their claims as ones for interference with contract, violation of

13the CLRA, and violations of the UCL. i

14If providing notice of a HLA lien is legal action equivalent to intiatig legal proceedings,

then providing notice of a lien would be protected by the litigation privilege. The Cour taes

judicial notice that liens are customarily filed in cour files. Presumably based on ths common

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17practice, the Cour in Swanson v. St. John's Reg'l Medical Ctr. (2002) 97 Cal. App. 4th 245, 249

(disapproved of on other grounds in Parnell), held that "Lien notices authorized by law are

protected by the litigation privilege." If notice ofa RiA lien is litigation activity,.then Plaitiffs

should frame their clais as ones for malicious prosecution and abuse of process. 2

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21The Cour is guided by the rationale of Wilton v. Mountain Wood Homeowners Assn., Inc.

22 (1993) 18 Cal. App. 4th 565. Wilton concerned whether or not the filing ofa lien by a

23

24i This is the route taken by Plaintiff in the original Complaint. By order dated November 6, 2005, the

Court sustained a demurrer to the original complaint, held that a HLA lien is in the nature of

litigation

activity and granted leave to allege a claim for malicious prosecution and/or claims for unlawfl or unfaircompetition that borrow from or are tethered to the law of malicious prosecution.

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262 This is the route taen by Plaintiff in the First Amended Complaint that is the subject of this demurrer.

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homeowner's association with the county recorder under Civil Code 1367 was protected by the

2 litigation privilege. The Cour held that even though the filing of a lien with the county recorder

3 is not "in" judicial proceedings, it is a prerequisite to judicial proceedings and is covered by the

4 litigation privilege. The Court stated that although mechancs' liens and homeowners'

5 assessment liens are not actual litigation, they are "pennitted by law to achieve the object of

6 litigation" and are closely related to judicial proceedings because they must be filed as a fist step

7 in foreclosure actions to remedy defaults. The Cour held the litigation privilege applies even

8 though the liens can be enforced by either judicial foreclosure or by private power of sale.

9 HLA liens are similar to homeowner's association liens in that they are not filed with

10 cour to intiate or prosecute civil litigation, but are prerequisites to judicial proceedings and

II designed to achieve the object of litigation. Civil Code 1367(e); Civil Code 3045.4. Therefore,

12 the Cour concludes that giving notice of a HLA lien under Civil Code 3045.3. is equivalent to

13 filig a complaint in a civil action.

14

15 MAICIOUS PROSECUTION.

16 Demurer is OVERRULED.

17 To establish a cause of action for the malicious prosecution of a civil proceeding, a

is plaitiff must plead and prove that the prior action (1) was conuenced by or at the direction of

19 the defendat and was pursued,to a legal tennination in his, plaintiffs, favor; (2) was brought or

20 contiued without probable cause (citations); and (3) was initiated or continued with malice.

21 Zamos v. Stroud (2004) 32 CaL. 4th 958, 965-66.

22 The complaint adequately alleges that the prior action (the notice of a lien) was in the

23 natue of a civil action commenced by or at the direction of the defendant.

24 The complaint adequately alleges that under Parnell v. Adventist Health System/est

25 (2005) 35 Cal. 4th 595, the Court can find that all HLA liens that have been fied in cases where

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the Hospita has been paid in full are without merit as a matter of law and that the

2 patient/plaitiff is the prevailing part. 3

3 The complaint adequately alleges that the fITA liens were fied or maintained without

4 probable cause and were initiated or continued with malice and/or a conscÌous disregard for the

5 law.

6 The Cour notes that in future motions it may be appropnate to address issues of

probable

7 cause, malice, and conscious disregard based on the state of the law in relevant time periods.

8 The state of the law might be divided into thee time periods: (I) before Swanson (3/5/02); (2)

9 afer Swanson and before Parnell (4/4/05); and (3) afer Parnell. Tbe analysis migbt also be

10 afected by the facts of what Defendant knew and what it was told by its lawyers and any relevant

11 trade groups. These appear to be fact issues that canot be resolved on demurer.

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13 ABUSE OF PROCESS.

14 Demurer is SUSTAID WITHOUT LEAVE TO AMND. The elements of abuse or

is process are (1) an ulterior motive in using the process and (2) the use of

the process in a wrongfl

16 maner. Abraham v. Lancaster Community Hosp. (1990) 217 Cal. App. 3d 796, 826.

17 Consistent with the discussion regarding the natue of a HLA lien, the Cour presumes

IS that serving notice of a HLA lien is the use of

the Cour's process. . This is a stretch given tht a

19 person can serve a HLA notice by mail and never file it with any Cour, much less obtai aCour

20 order.

21 The complaint alleges that Defendant was using the HLA lien process to do exactly what

22 liens are supposed to do - to notify someone that a debt is allegedly owed and that money should

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25 i Given that a HLA lien can be established through service by mail and might never involve a filing with

any Court, the "prevailng part" analysis might need to be adapted to concern a claim for money rather

than to concern a civil action.26

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be paid to the person with the lien and not to some other person. Therefore, Plaitiffs canot

2 prove that Defendant was using of the process in a wrongfl maner.

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4 CONVRSIONrrRESPASS and FRAUD.

5 Demurers are SUSTAIND WITHOUT LEAVE TO AMND. These claims are baned

6 by the litigation privilege.

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8 UCL.

9 Demurer is OVERRULED. The UCL claim borrows from and/or is tethered to the

10 claims for malicious prosecution. The demurrer to this cause of action is treated the same as the

i i demurer to the malicious prosecution claim.

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13 SUITABILITY FOR APPELLATE REVIEW.

14 The natue of a HLA lien is a novel issue that is suitable for interlocutory review under

i5 C.C.P. 166.1. There is a substatial ground for difference of

opinion on this issue given the

16 apparent confict between (1) the plain language of Civil Code 3045.3 that notice can be served

17 by mail and need not be fied in any civil action and (2) the statement in Swanson that "Lien

IS notices authorized by law are protected by the litigation privilege." There also appears to be

19 some tension between Wilon, which suggests that actions short of

liigation are covered by the

20 litigation privilege, and Adams v. Superior Court (1992) 2 Cal. App. 4th 521,528, wbicb balds

21 that only the initiation of full-blown actions wil support a claim for malicious prosecution.

22 It would seem wrong to hold that serving notice of a HLA lien is suffciently like

23 litigation to be covered by the litigation privilege (bafng all claims except malicious

24 prosecution and ab\lse of process), Swanson, supra, but falls short of

being actual litigation so

25 Plaintiffs canot pursue or prevail on claims of

malicious prosecution and abuse of process,

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Adams, supra. The alternative, that filing or serving notice of a HLA lien is not litigation, would

2 solve ths problem, but would run contrary to holdig in Swanson and the rationale of Wilton.

3 Appellate resolution of this matter wil materially advance the resolution of

the case

4 because if the Cour is wrong on this issue, then the rest of

the case will also be wrong. The

5 Cour fids that ths issue is appropriate for interlocutory review.

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7 FURTHER PROCEEDINGS.

8 Defendant must fie an answer on or before May 4, 2006.

,

~/J~Judge Ronald M. Sabraw

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Dated: April I 8',200611

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Case TltlefNo.: Campbell vs. Sutter Health RG05221764

CLERK'S CERTIFCATE OF MAILING

I certify that the following is tre and correct: I am the clerk of the Alameda County Superior Courand not a par to tbis cause. I served this ORDER (I) OVERRULING IN PART ANDSUSTA1G WITHOUT LEAVE TO AMND IN PART THE DEMUR TO THE FIRSTAMNDED COMPLAIT AND (2) FINING ORDER SUITABLE FOR INTERLOCUTORYREVIW UNER CCP 166.1 by placing copies in envelopes addressed as shown below and thenby sealing and placing them for collection, stamping or meterig with prepaid postage, and mailingon the date stated below, in the United States mail at Alameda County, California, followingstandard cour practices.


SCHNIDER & WALLACE180 Montgomery Street, Suite 2000San Francisco, CA 94104

/ Marcia Augsburger

MCDONOUGH HOLLAND & ALLEN PC555 Capitol Mall, 9il FloorSacramento, CA 94814-4692

Linda RossLAW OFFICE OF LINA ROSS2204 Union StreetSan Fracisco, CA 94123

Scott KalknROBOOSTOFF & KAKl, PLC369 Pine Street, Suite 610San Fracisco, CA 94104

Dated: Apri119, 2006 Executive Offcer/Clerk of tbe Superior Cour

ByElizabeth Opelski-E 'c erk


45


,06/02106 10:04 FAX 916 r .89 MilA


2 RICHA E. BRADT (44893) .MACIA L. AUGSBURGER (145686)

3 JOHN C.J. BARS (216694)555 Capitol Mall, 9th Floor

4 Sacrento, CA 95814Phone: 916.444.3900

5 Fax: 916.444.8989

6 Attorneys fOT Defendant Sutter Health

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COUN OF ALAMEDA

10 MELINDA CAMPBELL, on her own behaf, )and on behalf of all others similarly situted, )11 )Plaitiffs, )12 )~ )13 )SUTRHEALTH and DOES 1 thougl24, )14 inclusive. )

)15 Defendants. ))16 ))

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Case No. RG0522¡764

DEFENDANT SUTER HEALTH'SANSWER TO FIST AMNDED CLASSACTION COMPLAI

HESPONSE TO UNRID COMPLAI(General Denial)

Defendant Sutter Health ("Sutr Health") denies, generaly and spcificaly. each an every

alegation in the complait Suttr Health denes generaly and specifically, each purorted cause of

acton contaned in the complaint and fuer dewes that Plaintiff and aU other similarly situted22 ,. C1Plaintift') is entitled to recovery or any relief or remedy as requested or in any other form

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24whatsoever against ths answering defendant

FIT AFFITIV DEFENSE25 (Failure to State a Cause of Action)2611e complait, and each purorted cause of action therein contained: fails to stte facts

27 sufcient to state a cause of action against Sutter Health,

)-(U

)a28

MT-..-....."'-"'" Defendant Sutter Bealtb's Answer to

1054S621.1ii-6It:iimNded Clas Action Complaint 91SZ40 0950410501

?Lbb.


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2 RICHARD E. BRAT (44893)MACIA L. AUGSBURGER (145686)

3 JOHN C.J. BARES (216694)555 Capitol Mall, 9th Floor

4 Sacramento, CA 95814Phone: 916.444.3900

5 Fax: 916.444.8989

6 Attorneys for Defendant Sutter Health

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SUPERIOR COURT OF CALIFORNA

COUNTY OF ALAMDA

10 MELINA CAMPBELL, on her own behalf,and on behalf of all òthers similarly situated,

) Case No. RG05221764)) DEFENDANT SUTTER HEALTH'S). ANSWER TO FIRST AMENDED CLASS) ACTION COMPLAINT)))))))))

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Plaintiffs,

v.

SUTTER HEALTH and DOES 1 though 24,14 inclusive,

15 Defendants.16

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RESPONSE TO UNRIIED COMPLAIT(General Denial)

Defendant Sutter Health ("Sutter Health") denies, generally and specifically, each and every

allegation in the complaint. Sutter Health denies generally and specifically, each purorted cause of

action contained in the complaint and fuer denies that Plaintiff and all others simlarly situated22

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("Plaintiff!) is entitled to recovery or any relief or remedy as requested or in any other form

whatsoever against this answerig defendant.

FIRT AFFIRTIVE DEFENSE25 (Failure to State a Cause of Action)26 The complaint, and each purorted cause of action therein contained, fails to state facts

27 suffcient to state a cause of action against Sutter Health.

i__.....ocAuoii- Defendant Sutter Health's Answer to

First Amended Class Action Complaint 928240v209504/0502


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i SECOND AFFIRTIVE DEFENSE(Defect or Misjoinder of Parties)

Plaintiff and any class she purports to represent are not entitled to any relief against Sutter

Health by reason ora defect or misjoinder of paries, pursuant to section 430.10(d) of the California

Code of Civil Procedure.

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5THI AFFIRTIV DEFENSE6 (privilege and Justification)

7 Both by statute and by common law, Sutter Health was privileged and justified in acting as it

8 did, and acted in accordance with law, and therefore canot be liable for Plaintiffs damages, if any

9 there be.

10 FOURTH AFFIRATIV DEFENSE

(Improper "Class Action")11

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Plaitiffs class allegations fail to satisfy the required prerequisites to brig a class action

under California Code of Civil Procedure section 382 and/or Business and Professions Code section

17200.

FIFTH AFFIRTIVE DEFENSE15 (Lack of Capacity or Standing to Sue)

16 Plaintiff lacks capacity or standing to sue, in her own right, as a class representative, and/or

17 as a representative of the general public.

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SIXTH AFFIRTIVE DEFENSE(Res Judicata, Collateral Estoppel, and Stare Decisis)

As a result of prior judgments, the claims asserted by Plaintiff and any class she purorts to

represent are bared by the doctrines of res judicata, collateral estoppel and stare decisis, by

principles of fairness and equity which authorize a litigant to rely on a cour judgment and not be

penalized for doing so, by the unconscionabilty of the application of different judgments requiring

different conduct, and by related concepts.24

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26SEVENTH AFFIRMTIV DEFENSE

(Judicial Estoppel)

Plaintiff is bared from any recovery against Sutter Health by reason of the doctrine of

judicial estoppel.

2-_....~""--.... Defendant Sutter Health's Answer to

First Amended Class Action Complaint 928240\'09504/0502


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EIGHTH AFFIRMATIVE DEFENSE(Settlement and Release)

The matters alleged in the complaint are encompassed within and barred by settlement and

release agreements, which operate as a merger and bar against any fuer litigation on matters raised

or potentially raised in connection with the settlements and releases.5

NITH AFFIRTIVE DEFENSE6 (prematurity and Failure to Exhaust Remedies)

7 Plaintiff and the members of any class she purports to represent have failed to exhaust

8 available remedies and this lawsuit is premature.

9 TENTH AFFIRTIVE DEFENSE(Waiver and Estoppel)

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By conduct, representations and omissions, Plaitiff has waived, relinquished and/or

abandoned, and is equitably estopped to assert, any claim for relief against Sutter Health respecting

the matters which are the subject of the complaint.

ELEVENTH AFFIRTIVE DEFENSE(Unjust Enrichment)

Plaintiff would be unjustly enriched if allowed to recover on ths complait.

TWELFTH AFFIRATIV DEFENSE(Due Process)

Requirg Sutter Health to litigate in ths case whether it maliciously prosecuted claims that it

did not pursue in a prior action, and/or that did not result in a judgment in Plaintiffs favor, but rather

are being litigated for the first time in ths lawsuit, is contrary to law and would violate Sutter

Health's right to due process.

THITEENT AFFIRTIV DEFENSE(Failure to Comply With Statutory Prerequisites)

The cause of action for unai competition is bared by Plaitiffs failures to comply with

Business and Professions Code sections 17200 et seq.

FOURTEENTH AFFIRMATIV DEFENSE(Business and Professions Code section 17204)

The complaint is bared under Californa Business aId Professions Code section i 7204.

3_.....'".-.... Defendant Sutter Health's Answer to

First Amcndcd Class ActÎon Complaint 928240v209504/0502


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1 FIFTEENTH AFFIRMATIVE DEFENSE(Due Process and Equal Protection)

Any finding of liability pursuant to California Business and Professions Code sections

17200, 17203 and 17204 would violate the Due Process and Equal Protection Clauses of the United.

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4States and Californa Constitutions because the standards of liability under those statutes are unduly

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vague and subjective, and permt retroactive, random, arbitrar and caprici~us punishment that

serves no legitimate governental interest.

SIXTEENTH AFFIRMATIV DEFENSE8 (Failure to Do Equity)9 No relief

may be obtained under the complaInt by reason of the Plaintiffs failure to do equity

ioin the matters alleged in the complaint. This complait was not commenced and has not been

i 1 prosecuted in good faith and for a proper purpose.

i2 SEVENTEENTH AFFIRMTIVE DEFENSE(Estoppel by Improper Purpose)

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This litigation is bared because it was commenced and is prosecuted to obtai attorneys'

fees for the benefit of counel for the Plaintiff and not for any legitiate or cognizable purose

recogned in Californa law; Plaitiff and the class she purorts to represent and her counsel are

bared and estopped from proceeding in this action by reason of their improper purose and violation

of applicable principles of ethcs, equity and law.

EIGHTEENTH AFFIRMATIV DEFENSE(Unclean Hands)

No relief may be obtained under the complaint by r~ason of the doctre of unclean hands

and by reason of the unconscionability of the Plaintiffs acts and claims.

NITEENTH AFFIRTIVE DEFENSE(Setoff and Reeoupment)

Without conceding that any act of the defendant caused damage to Plaintiff or any other

person in any respect, Sutter Health alleges tht it is entitled to offset and recoup againt any

judgment that may be entered against it all obligations of Plaintiff owig to Sutter Health.

III

III

4-..-"..""_.... Defendant Sutter Health's Answer to

First Amended Class Action Complaint 928240v2 09504/0502


1

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TWENTIETH AFFIRMTIVE DEFENSE(Failure to Mitigate)

Plaintiff has failed to mitigate or attempt to mitigate damages, if in fact any damages have

been or wil be sustained, and any recovery by Plaintiff must be diminished or barred by reason3

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thereof.

TWENTY-FIRST AFFIRTIVE DEFENSE6 (Damage, if any, Caused by Others)

7 Sutter Health is informed and believes and thereon alleges that any injur or damage

8 sustained by Plaintiff was proximately caused by the acts or omissions of persons or entities other

9 than Sutter Health.

10 TWENTY-SECOND AFFIRTIV DEFENSE(Failure to Exercise Due Care)

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Plaintiff did not exercise ordinar care, caution and prudence in connection with the

transactions and events alleged within the complaint, and plaintiff is therefore bared entirely from

recoverY' against Sutter Health or alternatively, plaitiff should have th~ recovery, if any,

proportionately reduced. Moreover, Plaintiff directed, ordered, approved and/or ratified the alleged

wrongful acts set fort in the complaint. Plaintiff is therefore bared from recovery against Sutter

Health, or, alternatively, Plaintiff should have any recovery proportionately reduced.17

TWENTY-THI AFFIRATIV DEFENSE18 (Statute of Limitations)19 The complait and its causes of

action are bared by sections 335.1 of the Californa Code of

20 Civil Procedure and 17208 of the Business and Professions Code.

21 TWENTY-FOURTH AFFITIV DEFENSE(Laches)

22Plaintiff is bared from any recovery against Sutter Health by reason of the doctre of laches

23and undue delay in giving notice to Sutter Health of the matters alleged in the complaint and in

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25commencing this litigation.

TWENTY-FIFTH AFFIRMATIV DEFENSE26 (Abstention)27 The Cour should abstain from takg action in these areas, which are within the primar

28 jurisdiction of legislative and/or regulatory bodies.MH 5_i-...'"-..,i. Defendant Sutter Health's Ans\ver to

First Amended Class Action Complaint 928240v209504/0502


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MH

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TWENTY-SIXTH AFFIRMATIVE DEFENSE(Adequate Legal Remedy)

Plaintiffs injury or damage, which Sutter Health denies exists, would be adequately

compensated in an action at law for damages. Accordingly, plaintiffs and- their class have a

complete and adequate remedy at law, if any is available, and are not entitled to seek injunctive and5

other equitable relief.

WHREFORE, Defendant Sutter Health prays for judgment as follows:6

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1. That Plaintiff take nothing by the complaint;

2. That Sutter Health receive an award of costs of suit herein; and

3. That Sutter Health reccIve an award of such other and further relief asthis Court deems proper.10

Ii DATED: Thursday, June 1, 2006

12 Respectfully submitted,13 McDONOUGH HOLLAND & ALLEN PC

Attorneys at Law

'.

GSBURGEBy:

Attorneys for Defendant Sutter Health

6-_...'"....Lo Defendant Sutter Health's Answer to

First Amended Class Action Complaint 928240v2 09504/0502


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Mt-_......._.~

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CASE TITLE:

COURT/CASE NO:

Melinda Campbell, el al. v. Sutter Health, el al.

Alameda County Superior Cour No. RG05221764

I am employed in the County of Sacramento; my business address is 555 Capitol Mall, 9thFloor, Sacramento, California 95814. I am over the age of eighteen years and not a par to the

foregoing action.

I am readily familar with the business practice at my place of business for collection and

processing of correspondence for mailing with the. United States Postal Service. Correspondence socollected and processed is deposited with the United States Postal Service that same day in theordinary course of business.

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PROOF OF SERVICE

On June 2, 2006, 1 served the withn:

(1) Defendant Sutter Health's Answer to First Amended Class Action Complaint

DD

D


Procedure § 1013a(3), by placing a tre copy thereof enclosed in a sealed envelope in adesignated area for outgoing mail, addressed as set forth below. At McDonoughHolland & Allen PC, mail placed in that designated area is given the correct amount ofpostage and is deposited that same day, in the ordinar course of business, in a United

States mailbox in the City of Sacramento, California.

by personally delivering a tre copy thereof, in accordance with Code of CivilProcedure § lOi 1, to the person(s) and at the addressees) set fort below.

by overnight delivery on the following pary(ies) in said action, in accordance withCode of Civil Procedure § 1013(c), by placing a true copy thereof enclosed in a sealedenvelope, with delivery fees paid or provided for, and delivering that envelope- to anovernight express service carier as defined in Code of Civil Procedure § l013(c)..

by facsimile transmission, in accordance with Code of Civil Procedure § I013(e), tothe followig part(ies) at the facsimle number(s) indicated:

1

889827v309504/050ZProof of Service


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SCHNEIDER & WALLACE180 Montgomery Street, Suite 2000San Francisco, CA 94104Telephone: (415) 42i-7100Facsimle: (415) 421-7105

Counsel for PlaIntiffs

7Courtesv Copv to: Co-counsel for Plaintiffs

Linda RossLAW OFFICE OF LINDA ROSS2204 Union StreetSan Francisco, CA 94123Telephone: (415) 563-2400Facsimile: (415) 931-9981

Scott Ka1kinROBOOSTOFF & KALKIN, PLC369 Pine Street, Suite 610.San Francisco, CA 94104Telephone: (415) 732-0282Facsimile: (415) 732-0287

I declare under penalty of perjur under the laws of the State of California that the foregoing istre and correct and that this docwnent was executed on June 2, 2006.

dßø/n' g~RENEE REEVE

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Proof of Service 889827v309504/0502


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