Preview
2015 —1 — CV — 277582
. nEcsup
Denlaraflon: ln Support
.
““‘Ii‘mumu
mu mum
MARCIE ISOM FITZSIMMONS (SBN: 226906)
HIEU T. WILLIAMS (SBN: 280585)
GORDON REES SCULLY MANSUKHANI, LLP
275 Battery Street, Suite 2000
San Francisco, CA 941 1 1
Telephone: (415) 986-5900
Facsimile: (415) 986-8054
MIsom@grsm.com
HWilliams@grsm.com
Omflamhww—
Attorneys for Defendant
PALO ALTO FOUNDATION MEDICAL GROUP, INC.
SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA
DIANA P. BLUM, M.D., ) CASE NO. 115CV277582
)
2000
Plaintiff,
)
DECLARATION 0F
94111
)
MARCIE I. FITZSHVIMONS
LLI’
Suite vs. IN SUPPORT OF DEFENDANT
)
CA PALO ALTO FOUNDATION
Rem
Street,
SUTTER HEALTH, a California corporation; )
MEDICAL GROUP, INC.’S MOTION
& PALO ALTO FOUNDATION MEDICAL )
FOR NON-SUIT, 0R IN THE
GROUP, INC., a California corporation; ALTERNATIVE, PARTIAL NON-SUIT
Francisco,
)
Gordon
Battery PALO ALTO MEDICAL FOUNDATION, a )
California corporation; and DOES 1 through ) Accompanying Documents:
San
275
20, ) 1. Notice of Motion;
) 2. Memorandum ofPoints & Authorities
Defendants. )
NNNMNNNNNH—np—p—nw_.—_p‘,—
)
Trial Date: January 8, 201 8
)
Honorable Judge Drew C. Takaichi
Dept. 16
OOQGUIkLoJN—‘OOOONQM-PWN—‘O
)
l. lam an attorney at law licensed to practice before all courts of the State of
California and am a partner in the law firm of Gordon Rees Scully Mansukhani, attorneys for the
defendant PALO ALTO FOUNDATION MEDICAL GROUP, INC. (“the Physician Group”). 1
have personal knowledge of the matters contained in this declaration and if called no testify to
them could and would do so competently.
///
///
-1-
DECLARATION OFrMARCIEI. FITZSIMMONS 1N SUPPORT OF
DEFENDANT PAEO. ALTO FDUNDATION MEDICAL GROUP INC. ’S MOTION FOR NON-SUIT, OR 1N
Lift
r,
,IJWAT'FFDNwam DADTIAI mnmst TIT
2. Attached hereto as Exhibit A is a true and correct copy of excerpts fiom the
Court Reporter’s Rough Draft of the Transcript 0f Proceedings from January 9, 20] 8, which I
received from the Stipulated Court Reporter via email.
Ln-kww
31 Attached hereto as Exhibit B is a true and correct copy of excerpts from the Court
Reporter’s Rough Drafi of the Transcript of Proceedings from January 18. 2018, which I
received from the Stipulated Court Reporter Via email.
4. Attached hereto as Exhibit C is a true and correct copy of excerpts from the
Court Reporter’s Rough Draft ofthe Transcript of Proceedings
\DOOVQ
from January l9, 2018, which l
received from the Stipulated Court Reporter Via email.
10 5. Attached hereto as Exhibit D isa true and correct copy of excerpts from the
11 Court Reporter’s Transcript of Proceedings from January 22, 201 8, which I received from the
2000
12 Stipulated Court Reporter via email.
94111
LLP
Suite 13 6. Attached hereto as Exhibit E is a true and correct copy 0f excerpts from the Court
CA
Rees
14 Reporter’s Final Draft of the Transcript of Proceedings from January 24, 201 8, which Ireceived
Street,
&
from the Stipulated Court Repoxter via email.
Francisco,
15
Gordon
Battery
16 7. Attached hereto as Exhibit F is a true and correct copy of excerpts from the Court
San
275
17 Reporter’s Rough Draft of the Transcript of Proceedings from January 25, 201 8, which I
18 received from the Stipulated Court Reporter via email.
19 8. Attached hereto as Exhibit G Exhibit
is Plaintiff” s 15 that was entered into
20 evidence during Plaintiff’s case in chief.
21 9. Attached hereto as Exhibit H isPlaintiff‘s Exhibit 22 that was entered into
22 evidence during Plaintiff’s case in chief.
23 10. Attached hereto as Exhibit I is Plaintiff’sExhibit 25 that was entered into
24 evidence during Plaintifl‘s ease in chief.
25 1 1. Attached hereto as Exhibit J isDefendants’ Exhibit 578-579 that was entered into
26 evidence during Plaintiff‘s case in chief.
27 ///
28
-2-
DECLARATION OF MARCIE I. FITZSIMMONS IN SUPPORT 0F
Tm: AI TFDN ATTVIT DADTI A1 q
DEFENDANT PALO ALTO FOUNDATION MEDICAL GROUP, INC.’S MOTION FOR NON-SUIT,OR IN
ust TIT
I2. Attached hereto as Exhibit K is Defendant’s Exhibit 581 that was entered into
evidence during Plaintiffs case in chief.
13. Attached hereto as Exhibit L is Defendants’ Exhibit 579 that was entered into
UI-PLHN
evidence during Plaintiff” s case in chief.
l4. Attached hereto as Exhibit M is Plaintiff’s Exhibit 6 that was entered into
evidence during Plaintiff’s case in chief.
Ideclare, under penalty of perjury under the laws of the State 0f California, the foregoing
KDOOVQ
is true and correct.
Executed on this 26th day of January 201 8 atSan Francisco, California.
10
11 '
fl. i:
arcie I.Fitzsimmons
2000
11
l
LLP 94
Suite 13
CA
Rees
Street,
l4
& Francisco,
15
Gordon
Battery
16
San
27S
17
18
19
20
21
22
23
24
25
26
27
28
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DECLARATION 0F MARCIE I.FITZSIMMONS IN SUPPORT OF
Tm: A1 'nzmqn’nvr: DADTI Ar q
DEFENDANT PALO ALTO FOUNDATION MEDICAL GROUT’, INC.’S MOTION FOR NON-SUIT,OR
usr HT
1N
EXHIBIT A
10039044 ROUGH DRAFT - BLUM v. SUTTER HEALTH — 1—9-18
denied on the issue of relevance. The witness may
testify subject to the Court first finding that she's
wk)
qualified to issue an opinion on the subject. Once
again, as with the other challenged experts, there will
be a short 402 hearing prior to the jury hearing any
mdmmfi testimony if I make the necessary finding that a person
can testify within the scope of their expertise.
Given the number of experts so far, I've lost
count. Maybe it's four now that we're doing this with.
10 We're going to have to think about scheduling. How
ll we're going to do this. How much time is going to be
12 needed for that. Some of the witnesses, I believe the
13 testimony will be pretty brief. Others it will be a
l4 little bit more extensive. I'll make a more particular
15 assessment of that when I return and review the rulings
16 with the particular experts.
17 That will take us to Motion in Limine No. 7.
18 This is opposition to testimony of the plaintiff's
19 expert Mr. Zengler. He is the economist, I believe.
20 Just take a look at this. Yes. And as with the other
21 experts, there's a challenge based on a number of
22 grounds, including qualifications for the opinion. This
23 is on a more focused issue that the defendants
24 characterize as fair rental value as opposed to
25 plaintiff‘s characterization that it's just an opinion
26 as to reasonableness. Kind of sounds like the same
27 thing. Maybe just a different point of view.
28 So what precisely is his testimony on that
106
UNCERTIFIED TRANSCRIPT
EXHIBIT B
6
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18
San Jose, California
Thursday, January 18, 2018
9:02 a.m.
THE COURT: Good morning, ladies and
gentlemen. Welcome back to Department 16.
Thejury is not present this morning.
The court will hear the plaintiff'srequest
for reconsideration of the court's prior
10 ruling on Defense Motion in Limine. l
11 believe it‘sNumber 1 of 16 having to do
12 with exclusion of matters deemed outside the
13 first amended complaint.
14 The court had previously ruled that
--
15 defendant would be prohibited excuse
16 me -— plaintiff would be prohibited from
17 presenting evidence or argument on the issue
18 of continuity of care, whether or not there
19 was compliance with the statute, A so
20 provisions for that as itapplied to all
21 defendants in connections with the fifth and
22 sixth causes of action for intentional
23 and/or negligent interference with economic
24 prospects of plaintiff with prospective
25 patients.
7
UNEDlTED ROUGH DRAFT - TRIAL TESTIMONY — 1/18/18
1 So in that regard, I read very
2 carefully both the papers submitted in
3 opposition of continuing with the court's
4 ruling in granting the defendants' motion,
5 as well as defenses' opposition to the
6 reconsideration of the motion brought by the
7 plaintiff.
--
8 So l have my overview of the issue
9 seems to be that each side has a different
10 approach in assessing the issue and what the
11 applicable law and considerations to be for
12 the court.
13 Just having reviewed everything, I
14 have a couple questions, and lguess I'll
15 start with the plaintiff.
16 So, Counsel, do you agree that the
17 relevant statutes for the continuity of care
18 issue are the two statutes cited by defense,
19 specifically as Health and Safety Code
20 Sections 1373.65 and 1373.96?
21 MS. BARTA: I believe so, yes, Your
22 Honon
23 THE COURT: Okay.
-- and
24 Now, in reading those statutes
25 Imade additional copies — itappears to
8
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY — 1/18/18
1 address a situation where a contract between
2 a healthcare plan and a provider group
3 terminates, and, therefore, enrollees,
4 patients under the plan are to be provided
5 with certain types of notice, and then the
6 enrollee may request a plan to provide
7 completion of covered services which shall
8 be provided by the plan ‘rftheenrollee
9 meets certain defined health-related
10 conditions specified inthe statute.
11 So the question Ihave for plaintiff
12 inthat regard is:The who
plaintiff, isa
l3 physician of the group, how does that
14 physician have standing to assert the
15 provisions of these sections which seem to
16 really provide enrollees with entitlements
17 to notice and their right to request
18 coverage services?
19 MS. BARTA: Your Honor, 1373.65
—-the health plan to give
20 requires that
21 advanced notice of a provider termination,
22 and so that's --the provider being Dr. Blum
23 in thiscase. That notice, the preapproved
24 notice, the standing goes to the point of
25 the continuity of care.
9
UNEDITED ROUGH DRAFT - TRlAL TESTIMONY - 1/18/18
THE COURT: Well, letme ask you on
that question: Isn'tthat somewhat
different than what the statute indicates?
Am lnot reading itcorrectly that it
sounds likethe entire provider group isno
longer contractually obligated to provide
certain care services to certain affected
enrollees, as opposed to an individual
physician leaving employment or being
10 terminated, that the patients theoretically
11 are patients of the
still group which still
12 provides the covered service?
13 MS. BARTA: But the group then has the
14 obligation to notify the patients, which
15 would be the letter at issue here,the
16 notification letter to patients.
17 The group has the obligation to inform
18 those patients under certain criteriaof the
19 patients' conditions that they have the
20 them on
ability —— puts notice. Itgives
21 them the to request continuity of
abil'rty
22 care and either stay with the doctor who’s
23 leaving the group or stay with the group.
24 THE COURT: So does the defense agree
25 with that assertion?
10
UNEDITED ROUGH DRAFI' -TR|AL TESTIMONY -
1/18/18
MS. NAKARAl-KANIVAS: We do not,Your
Honon
As Your Honor noted, Section 1373.65
talksabout the obligations of health plans.
We are not the health plan; we are the
provider group.
And as Your Honor noted, the contract
isnot between Dr. Blum and the health plan.
The contracts were actually held with PAMF,
10 so this whole thing is inapplicable.
11 ln addition, nothing in here says that
12 we need to provide contact information for
13 the provider, which isthe issue that isat
14 issue underneath the interference claim
15 whether or not we provided that contact
16 claim.
17 THE COURT: Before we get into the
18 substance of the notice itself,lhave
19 another follow-up question for plaintiff.
20 So let'smake an assumption, just for
21 argument sake, that the statutes apply to
22 the present facts.
23 How would an alleged violation of
24 those statutes support the plaintiff's fifth
25 and sixth causes of action as they relate to
11
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY — 1/18/18
1 intentional or negligent interference with
2 economic relationships between the plaint'rf-f
3 and the patients?
4 MS. BARTA: So the plaintiffand the
5 patients would have a perspective. They
6 have an economic relationship.
7 The failure or the violation of the
8 law that requires notice be provided to the
9 patients would disrupt the relationship
10 because the patient did not know or would
11 have no notice that they could continue to
12 care with Dr. Blum, with their insurance
13 continuing to pay for it. There was no
14 notice to the patient, so the patient would
15 never have made that request.
16 So the wrongful conduct isthe
17 violation of the law, and that law relates
18 directly towhether or not the patients
19 would have made an attempt to continue their
20 care.
21 The defendants make an issue that
22 Dr. Blum does not take insurance.
23 Under these provisions, ifyou get
24 further into it.what happens is on an
25 individual-by-individual basis, ifa patient
12
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18
1 makes a request and says I'm under the care
2 of Dr. Blum for a chronic condition and
3 makes application to their health planand
4 that's approved, then the health plan
5 continues to pay for that regardless of
6 whether Dr. Blum takes insurance in her new
7 practice.
8 for a fin'rte period of time, but
It's
9 itat least allows the patient to continue
10 with the doctor.
11 Let me note that the definition of
12 health plan isnot an insurance company.
13 Idon't have it readily in front of
14 me, but the definition of health plan
15 includes those organizations that make
16 arrangements for the provision of healthcare
17 to enrollees or members.
18 I know I'veseen something
19 specifically that PAMF and Sutter Health,
20 through itscontracts with allof the major
21 insurance companies, qualify as a health
22 plan.
23 THE COURT: So let me understand this.
24 Do you contend that Sutter Health or
25 PAMF is a healthcare service plan?
13
UNEDITED ROUGH DRAFT — TRIAL TESTIMONY- 1/18/18
MS. BARTA: Correct.
THE COURT: Okay.
So their contract would then,
therefore, be between themselves and in this
case Physician's Group?
MS. BARTA: The contract ~
THE COURT: The contract at issue that
would relate towhether or not 1373.65
applies would relate to the contract between
10 Sutter Health, PAMF, and A physicians'
11 group?
12 MS. BARTA: Very technical inthe law.
13 I'm not sure that contract or the
if it's
l4 contract with the insurance companies.
15 It‘sthe fact that they‘ve agreed to
16 provide or make arrangements forthe
17 provision of healthcare to enrollees or
18 members of the insurance plan.
19 So I'm not sure ifthrough their
20 contract with the insurance companies that
21 happens, or both, the contract with the
22 insurance company and then they've arranged
23 for the provision of care through the PSA.
24 THE COURT: All right.
25 MS. BARTA: I'm assuming it‘sprobably
14
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18
1 both, but that‘s a very technical — and I‘m
2 not able to --
3 THE COURT: Likewise, as to the cause
4 of action for breach of contract, |believe
5 that's probably Iim‘rted just to physicians'
6 group, that cause of action?
7 MS. BARTA: Yes. And they pointed
-—
8 out
9 THE COURT: But -—so in that regard,
10 once again, assuming these Heafth and Safety
11 Code statutes apply to the present acts and
12 assuming there was some finding of a breach
13 of the statute, can you tellme how that
14 particular breach would const‘rtute a breach
15 ofthe contract between the plaintiffand
16 physicians‘ group?
17 MS. BARTA: InSection 1.1 of the
18 shareholder agreement -—and [tried to
19 bring this out yesterday with Dr. Smith --
20 ittalks about the medical group employee,
21 the shareholder employee, and that the
22 shareholder employee agrees to render
23 professional services in accordance with
24 policies and in accordance ina manner
25 permitted by the laws of the State of
15
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18
1 California.
2 So that's the reference to the doctors
3 and the group are required in this,
4 providing --
5 THE COU RT: So far l‘m hearing that's
6 the doctors' obligation.
7 But where that
is it ifthe
8 physicians‘ group allegedly did not provide
9 this notice and compliance with this Health
10 and Safety Code section, that would also
11 constitute a breach of the particular
12 contract between the physician and
13 physicians' group?
--
14 MS. BARTA: Ithink thisis not
15 this provision isnot underthe section
16 which iswhat the shareholders’ duties are,
17 which is 1.2. Thisis saying employment.
l8 The medical group employs shareholder
19 employee, and shareholder employee accepts
20 employment with the medical group to render
21 professional services on behalf of the
22 medical group, comma.
23 So it‘sgoing both ways. It'ssaying
24 we‘re employing you, and the doctor is
25 saying Iaccept employment, and that
16
UNEDITED ROUGH DRAFT — TRIAL TESTIMONY — 1/18/18
1 relationship then isinaccordance with the
2 policiesdetermined by the medical group and
3 inthe manner permitted by the laws of
4 California and the applicable Canons of
5 Professional Ethics.
6 This goes both ways. The doctor is
7 agreeing to com ply with the laws and the
8 policies;likewise, the medical group is
9 doing that.
10 That's a contractual interpretation.
11 That‘s the way iread and
it, Ithink it‘s
12 intended that way.
13 Ifyou look at Section 1.2, itthen
14 lays out shareholder employees‘ duties shall
15 be responsible for, and they start to list:
16 Comply with the Articles of Incorporation in
17 A 1.223. Shall remain licensed.
18 But the fact that that's in a
19 different section relates solely to the
20 shareholder employees.
21 So Ithink 1.1 —~ and it'sjust
22 entitled Employment -— is
laying out the
23 relationship between the parties.
24 THE COURT: And what about the
25 argument Iheard — I'm sort of switching
17
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18
1 gears.
2 I'm addressing some ofthe prejudice
3 that defendants had addressed inthe
4 response, that there‘s over 1,000,
5 potentially, patients involved.
6 Defendants would know because they are
7 the ones that sent out the notice.
8 What about the time necessary to see
9 which patients met the criteriaof the
10 Health and Safety Code section for those
11 certain — lbelieve there's like six
12 different categories of specified conditions
13 that enrollee would qualify for those rights
14 under those code sections? What about the
15 time necessary?
16 MS. BARTA: Well, with respect to this
17 case, lwould limit thatscope. l don't
18 believe the maternity issue — although
19 maybe some of the patients have maternity
20 issues,but we waive and stipulate.
21 lthink an inquiry into whether or not
22 Dr.Blum treated patients that under the
23 definition of a chronic condition, whether
24 any of the patients that she was treating or
25 that were on that list
--l don‘t even know
18
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18
1 ifyou need to go to that but
list, inthe
2 last two years, which is when they were
3 required to send out the letter, didshe
4 treat any patients that qualified or had the
5 conditions that qualify as a chronic
6 condition?
7 Idon’t think you need to go
8 individually patient-by-patient, because
9 chronic conditions isdefined more broadly
10 underthe statute, and iteasily includes
11 ailments likeParkinson's.
12 Now, the quantity, you know, I'm
13 not — l
don‘t know and lwon't argue how
14 many of those letters.
15 The same thing, migraine headaches,
16 she did treat patient with migraine
17 headaches. That would not be A.
18 But she certainly treated patients
19 with Alzheimer's, Parkinson‘s disease. l
20 think those would be the two main.
21 There's probably other conditions, but
22 not wanting to expand, lwould A.
23 THE COURT: Thank you.
24 Ialready know defense's argument
25 regarding -—and both sides'argument
19
UNEDITED ROUGH DRAFT — TRIAL TESTIMONY v 1/18/18
regarding notice and prejudice in connection
with the case that was cited by the
and
plaintiff, that‘s the Rosenfeld case.
But, you know, the prejudice applies
equally to the issue of a 352, contention
that defense essentially has asserted in
their response. That's how I'm reading it,
anyway.
As far as relevancy, lthink inthe
10 352 analysis, with respect to the fifth and
11 sixth causes of action and the other cause
12 of action - itmight be the first cause of
-~defense
13 action for breach of contract
14 want to be heard on whether or not you‘ve —
15 Iknow you believe that statutes don‘t
16 apply, but 'rfthere's something pertinent
17 that you want the court to consider inthat
18 regard, now is the time to let me know,
19 unless it'sotherwise specified inyour
20 pleadings.
21 MS. NAKARAl-KANIVAS: Thank you, Your
22 Honon
23 let
l‘ll
my co—defendants address the
24 breach of contract claim because that's not
25 alleged against us.
20
UNEDITED ROUGH DRAFT — TRIAL TESTIMONY- 1/18/18
1 The one point I wouldjust liketo
2 highlight is: counsel's
Plaintiff's
3 argument just highlighted for us the lack of
4 discovery that's been conducted on this
5 case.
6 We have not been able to conduct
7 discovery on whether any of the patients on
8 the 1,100 patient listhad chronic
9 conditions, whether they were inan HMO
10 plan, whether that HMO plan would have
11 covered those services had they wanted to
12 continue treatment with Dr. Blum.
13 It‘sour understanding that the law
14 does not guarantee coverage underthat
15 particular provider; itjust guarantees
16 continued treatment. We have other
17 neurologists who have been able to treat
18 those conditions.
19 But, again, we have not conducted any
20 discovery on this issue because itwas not
21 our understanding that that was the wrongful
22 conduct underlying the interference claims.
23 In addition, there isthis kind of
24 foundational issue rightnow as to whether
25 PAMF qualifies asan insurance company.
21
UNEDITED ROUGH DRAFT —TRIAL TESTIMONY - 1/18/18
1 My understanding isthat insurance
2 companies need a license underthe
3 Knox-Keene law, and we don‘t have one.
4 None of these issues have been flushed
5 out, Your Honor, because itjust has not
6 been an issue in this case,and that should
7 not provide ambush. We would waste a
8 tremendous amount of time essentially
9 conducting discovery A ifone of the jurors
10 willbe confused by allthe evidence and how
11 fits into this case.
it
12 THE COURT: Let me ask you: Wouldn't
13 one of the defendants, at least certainly
"
14 physicians‘ group, know about their
15 patients, about whethertheir patients have
16 these kind of conditions, their patients of
l7 the group?
18 MS. FITZSIMMONS: address
I‘ll this,
19 Your Honor.
20 THE COURT: Yes.
21 MS. FITZSIMMONS: not quite a5
It is
22 simple as Your Honor poses.
23 THE COURT: That’s why I'm asking.
24 MS. FITZSIMMONS: So we have a listof
25 over 1,100 patients who are at issue here.
22
UNEDITED ROUGH DRAFT - TRIAL TESTIMONY -
1/18/18
1 ln order for discovery to have been
2 conducted on this particular issue, itwould
3 require having somebody essentially work
4 q
u-time to go into each and every one of
5 those patients' medical records t0 assess,
6 determine what isappropriate to produce or
7 not from each of those particular patients,
8 The firstpart of the analysis would
9 be are they an HMO patient.
10 THE COURT: "Let me ask you this: The
11 core information you would have inyour
12 position, you don't have to conduct
13 discovery to get that information.
14 MS. FITZSIMMONS: We", we would have
15
Preview
2015 —1 — CV — 277582 . nEcsup Denlaraflon: ln Support . ““‘Ii‘mumu mu mum MARCIE ISOM FITZSIMMONS (SBN: 226906) HIEU T. WILLIAMS (SBN: 280585) GORDON REES SCULLY MANSUKHANI, LLP 275 Battery Street, Suite 2000 San Francisco, CA 941 1 1 Telephone: (415) 986-5900 Facsimile: (415) 986-8054 MIsom@grsm.com HWilliams@grsm.com Omflamhww— Attorneys for Defendant PALO ALTO FOUNDATION MEDICAL GROUP, INC. SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA DIANA P. BLUM, M.D., ) CASE NO. 115CV277582 ) 2000 Plaintiff, ) DECLARATION 0F 94111 ) MARCIE I. FITZSHVIMONS LLI’ Suite vs. IN SUPPORT OF DEFENDANT ) CA PALO ALTO FOUNDATION Rem Street, SUTTER HEALTH, a California corporation; ) MEDICAL GROUP, INC.’S MOTION & PALO ALTO FOUNDATION MEDICAL ) FOR NON-SUIT, 0R IN THE GROUP, INC., a California corporation; ALTERNATIVE, PARTIAL NON-SUIT Francisco, ) Gordon Battery PALO ALTO MEDICAL FOUNDATION, a ) California corporation; and DOES 1 through ) Accompanying Documents: San 275 20, ) 1. Notice of Motion; ) 2. Memorandum ofPoints & Authorities Defendants. ) NNNMNNNNNH—np—p—nw_.—_p‘,— ) Trial Date: January 8, 201 8 ) Honorable Judge Drew C. Takaichi Dept. 16 OOQGUIkLoJN—‘OOOONQM-PWN—‘O ) l. lam an attorney at law licensed to practice before all courts of the State of California and am a partner in the law firm of Gordon Rees Scully Mansukhani, attorneys for the defendant PALO ALTO FOUNDATION MEDICAL GROUP, INC. (“the Physician Group”). 1 have personal knowledge of the matters contained in this declaration and if called no testify to them could and would do so competently. /// /// -1- DECLARATION OFrMARCIEI. FITZSIMMONS 1N SUPPORT OF DEFENDANT PAEO. ALTO FDUNDATION MEDICAL GROUP INC. ’S MOTION FOR NON-SUIT, OR 1N Lift r, ,IJWAT'FFDNwam DADTIAI mnmst TIT 2. Attached hereto as Exhibit A is a true and correct copy of excerpts fiom the Court Reporter’s Rough Draft of the Transcript 0f Proceedings from January 9, 20] 8, which I received from the Stipulated Court Reporter via email. Ln-kww 31 Attached hereto as Exhibit B is a true and correct copy of excerpts from the Court Reporter’s Rough Drafi of the Transcript of Proceedings from January 18. 2018, which I received from the Stipulated Court Reporter Via email. 4. Attached hereto as Exhibit C is a true and correct copy of excerpts from the Court Reporter’s Rough Draft ofthe Transcript of Proceedings \DOOVQ from January l9, 2018, which l received from the Stipulated Court Reporter Via email. 10 5. Attached hereto as Exhibit D isa true and correct copy of excerpts from the 11 Court Reporter’s Transcript of Proceedings from January 22, 201 8, which I received from the 2000 12 Stipulated Court Reporter via email. 94111 LLP Suite 13 6. Attached hereto as Exhibit E is a true and correct copy 0f excerpts from the Court CA Rees 14 Reporter’s Final Draft of the Transcript of Proceedings from January 24, 201 8, which Ireceived Street, & from the Stipulated Court Repoxter via email. Francisco, 15 Gordon Battery 16 7. Attached hereto as Exhibit F is a true and correct copy of excerpts from the Court San 275 17 Reporter’s Rough Draft of the Transcript of Proceedings from January 25, 201 8, which I 18 received from the Stipulated Court Reporter via email. 19 8. Attached hereto as Exhibit G Exhibit is Plaintiff” s 15 that was entered into 20 evidence during Plaintiff’s case in chief. 21 9. Attached hereto as Exhibit H isPlaintiff‘s Exhibit 22 that was entered into 22 evidence during Plaintiff’s case in chief. 23 10. Attached hereto as Exhibit I is Plaintiff’sExhibit 25 that was entered into 24 evidence during Plaintifl‘s ease in chief. 25 1 1. Attached hereto as Exhibit J isDefendants’ Exhibit 578-579 that was entered into 26 evidence during Plaintiff‘s case in chief. 27 /// 28 -2- DECLARATION OF MARCIE I. FITZSIMMONS IN SUPPORT 0F Tm: AI TFDN ATTVIT DADTI A1 q DEFENDANT PALO ALTO FOUNDATION MEDICAL GROUP, INC.’S MOTION FOR NON-SUIT,OR IN ust TIT I2. Attached hereto as Exhibit K is Defendant’s Exhibit 581 that was entered into evidence during Plaintiffs case in chief. 13. Attached hereto as Exhibit L is Defendants’ Exhibit 579 that was entered into UI-PLHN evidence during Plaintiff” s case in chief. l4. Attached hereto as Exhibit M is Plaintiff’s Exhibit 6 that was entered into evidence during Plaintiff’s case in chief. Ideclare, under penalty of perjury under the laws of the State 0f California, the foregoing KDOOVQ is true and correct. Executed on this 26th day of January 201 8 atSan Francisco, California. 10 11 ' fl. i: arcie I.Fitzsimmons 2000 11 l LLP 94 Suite 13 CA Rees Street, l4 & Francisco, 15 Gordon Battery 16 San 27S 17 18 19 20 21 22 23 24 25 26 27 28 1105 BxO/EMOOGTSV l -3- DECLARATION 0F MARCIE I.FITZSIMMONS IN SUPPORT OF Tm: A1 'nzmqn’nvr: DADTI Ar q DEFENDANT PALO ALTO FOUNDATION MEDICAL GROUT’, INC.’S MOTION FOR NON-SUIT,OR usr HT 1N EXHIBIT A 10039044 ROUGH DRAFT - BLUM v. SUTTER HEALTH — 1—9-18 denied on the issue of relevance. The witness may testify subject to the Court first finding that she's wk) qualified to issue an opinion on the subject. Once again, as with the other challenged experts, there will be a short 402 hearing prior to the jury hearing any mdmmfi testimony if I make the necessary finding that a person can testify within the scope of their expertise. Given the number of experts so far, I've lost count. Maybe it's four now that we're doing this with. 10 We're going to have to think about scheduling. How ll we're going to do this. How much time is going to be 12 needed for that. Some of the witnesses, I believe the 13 testimony will be pretty brief. Others it will be a l4 little bit more extensive. I'll make a more particular 15 assessment of that when I return and review the rulings 16 with the particular experts. 17 That will take us to Motion in Limine No. 7. 18 This is opposition to testimony of the plaintiff's 19 expert Mr. Zengler. He is the economist, I believe. 20 Just take a look at this. Yes. And as with the other 21 experts, there's a challenge based on a number of 22 grounds, including qualifications for the opinion. This 23 is on a more focused issue that the defendants 24 characterize as fair rental value as opposed to 25 plaintiff‘s characterization that it's just an opinion 26 as to reasonableness. Kind of sounds like the same 27 thing. Maybe just a different point of view. 28 So what precisely is his testimony on that 106 UNCERTIFIED TRANSCRIPT EXHIBIT B 6 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18 San Jose, California Thursday, January 18, 2018 9:02 a.m. THE COURT: Good morning, ladies and gentlemen. Welcome back to Department 16. Thejury is not present this morning. The court will hear the plaintiff'srequest for reconsideration of the court's prior 10 ruling on Defense Motion in Limine. l 11 believe it‘sNumber 1 of 16 having to do 12 with exclusion of matters deemed outside the 13 first amended complaint. 14 The court had previously ruled that -- 15 defendant would be prohibited excuse 16 me -— plaintiff would be prohibited from 17 presenting evidence or argument on the issue 18 of continuity of care, whether or not there 19 was compliance with the statute, A so 20 provisions for that as itapplied to all 21 defendants in connections with the fifth and 22 sixth causes of action for intentional 23 and/or negligent interference with economic 24 prospects of plaintiff with prospective 25 patients. 7 UNEDlTED ROUGH DRAFT - TRIAL TESTIMONY — 1/18/18 1 So in that regard, I read very 2 carefully both the papers submitted in 3 opposition of continuing with the court's 4 ruling in granting the defendants' motion, 5 as well as defenses' opposition to the 6 reconsideration of the motion brought by the 7 plaintiff. -- 8 So l have my overview of the issue 9 seems to be that each side has a different 10 approach in assessing the issue and what the 11 applicable law and considerations to be for 12 the court. 13 Just having reviewed everything, I 14 have a couple questions, and lguess I'll 15 start with the plaintiff. 16 So, Counsel, do you agree that the 17 relevant statutes for the continuity of care 18 issue are the two statutes cited by defense, 19 specifically as Health and Safety Code 20 Sections 1373.65 and 1373.96? 21 MS. BARTA: I believe so, yes, Your 22 Honon 23 THE COURT: Okay. -- and 24 Now, in reading those statutes 25 Imade additional copies — itappears to 8 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY — 1/18/18 1 address a situation where a contract between 2 a healthcare plan and a provider group 3 terminates, and, therefore, enrollees, 4 patients under the plan are to be provided 5 with certain types of notice, and then the 6 enrollee may request a plan to provide 7 completion of covered services which shall 8 be provided by the plan ‘rftheenrollee 9 meets certain defined health-related 10 conditions specified inthe statute. 11 So the question Ihave for plaintiff 12 inthat regard is:The who plaintiff, isa l3 physician of the group, how does that 14 physician have standing to assert the 15 provisions of these sections which seem to 16 really provide enrollees with entitlements 17 to notice and their right to request 18 coverage services? 19 MS. BARTA: Your Honor, 1373.65 —-the health plan to give 20 requires that 21 advanced notice of a provider termination, 22 and so that's --the provider being Dr. Blum 23 in thiscase. That notice, the preapproved 24 notice, the standing goes to the point of 25 the continuity of care. 9 UNEDITED ROUGH DRAFT - TRlAL TESTIMONY - 1/18/18 THE COURT: Well, letme ask you on that question: Isn'tthat somewhat different than what the statute indicates? Am lnot reading itcorrectly that it sounds likethe entire provider group isno longer contractually obligated to provide certain care services to certain affected enrollees, as opposed to an individual physician leaving employment or being 10 terminated, that the patients theoretically 11 are patients of the still group which still 12 provides the covered service? 13 MS. BARTA: But the group then has the 14 obligation to notify the patients, which 15 would be the letter at issue here,the 16 notification letter to patients. 17 The group has the obligation to inform 18 those patients under certain criteriaof the 19 patients' conditions that they have the 20 them on ability —— puts notice. Itgives 21 them the to request continuity of abil'rty 22 care and either stay with the doctor who’s 23 leaving the group or stay with the group. 24 THE COURT: So does the defense agree 25 with that assertion? 10 UNEDITED ROUGH DRAFI' -TR|AL TESTIMONY - 1/18/18 MS. NAKARAl-KANIVAS: We do not,Your Honon As Your Honor noted, Section 1373.65 talksabout the obligations of health plans. We are not the health plan; we are the provider group. And as Your Honor noted, the contract isnot between Dr. Blum and the health plan. The contracts were actually held with PAMF, 10 so this whole thing is inapplicable. 11 ln addition, nothing in here says that 12 we need to provide contact information for 13 the provider, which isthe issue that isat 14 issue underneath the interference claim 15 whether or not we provided that contact 16 claim. 17 THE COURT: Before we get into the 18 substance of the notice itself,lhave 19 another follow-up question for plaintiff. 20 So let'smake an assumption, just for 21 argument sake, that the statutes apply to 22 the present facts. 23 How would an alleged violation of 24 those statutes support the plaintiff's fifth 25 and sixth causes of action as they relate to 11 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY — 1/18/18 1 intentional or negligent interference with 2 economic relationships between the plaint'rf-f 3 and the patients? 4 MS. BARTA: So the plaintiffand the 5 patients would have a perspective. They 6 have an economic relationship. 7 The failure or the violation of the 8 law that requires notice be provided to the 9 patients would disrupt the relationship 10 because the patient did not know or would 11 have no notice that they could continue to 12 care with Dr. Blum, with their insurance 13 continuing to pay for it. There was no 14 notice to the patient, so the patient would 15 never have made that request. 16 So the wrongful conduct isthe 17 violation of the law, and that law relates 18 directly towhether or not the patients 19 would have made an attempt to continue their 20 care. 21 The defendants make an issue that 22 Dr. Blum does not take insurance. 23 Under these provisions, ifyou get 24 further into it.what happens is on an 25 individual-by-individual basis, ifa patient 12 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18 1 makes a request and says I'm under the care 2 of Dr. Blum for a chronic condition and 3 makes application to their health planand 4 that's approved, then the health plan 5 continues to pay for that regardless of 6 whether Dr. Blum takes insurance in her new 7 practice. 8 for a fin'rte period of time, but It's 9 itat least allows the patient to continue 10 with the doctor. 11 Let me note that the definition of 12 health plan isnot an insurance company. 13 Idon't have it readily in front of 14 me, but the definition of health plan 15 includes those organizations that make 16 arrangements for the provision of healthcare 17 to enrollees or members. 18 I know I'veseen something 19 specifically that PAMF and Sutter Health, 20 through itscontracts with allof the major 21 insurance companies, qualify as a health 22 plan. 23 THE COURT: So let me understand this. 24 Do you contend that Sutter Health or 25 PAMF is a healthcare service plan? 13 UNEDITED ROUGH DRAFT — TRIAL TESTIMONY- 1/18/18 MS. BARTA: Correct. THE COURT: Okay. So their contract would then, therefore, be between themselves and in this case Physician's Group? MS. BARTA: The contract ~ THE COURT: The contract at issue that would relate towhether or not 1373.65 applies would relate to the contract between 10 Sutter Health, PAMF, and A physicians' 11 group? 12 MS. BARTA: Very technical inthe law. 13 I'm not sure that contract or the if it's l4 contract with the insurance companies. 15 It‘sthe fact that they‘ve agreed to 16 provide or make arrangements forthe 17 provision of healthcare to enrollees or 18 members of the insurance plan. 19 So I'm not sure ifthrough their 20 contract with the insurance companies that 21 happens, or both, the contract with the 22 insurance company and then they've arranged 23 for the provision of care through the PSA. 24 THE COURT: All right. 25 MS. BARTA: I'm assuming it‘sprobably 14 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18 1 both, but that‘s a very technical — and I‘m 2 not able to -- 3 THE COURT: Likewise, as to the cause 4 of action for breach of contract, |believe 5 that's probably Iim‘rted just to physicians' 6 group, that cause of action? 7 MS. BARTA: Yes. And they pointed -— 8 out 9 THE COURT: But -—so in that regard, 10 once again, assuming these Heafth and Safety 11 Code statutes apply to the present acts and 12 assuming there was some finding of a breach 13 of the statute, can you tellme how that 14 particular breach would const‘rtute a breach 15 ofthe contract between the plaintiffand 16 physicians‘ group? 17 MS. BARTA: InSection 1.1 of the 18 shareholder agreement -—and [tried to 19 bring this out yesterday with Dr. Smith -- 20 ittalks about the medical group employee, 21 the shareholder employee, and that the 22 shareholder employee agrees to render 23 professional services in accordance with 24 policies and in accordance ina manner 25 permitted by the laws of the State of 15 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18 1 California. 2 So that's the reference to the doctors 3 and the group are required in this, 4 providing -- 5 THE COU RT: So far l‘m hearing that's 6 the doctors' obligation. 7 But where that is it ifthe 8 physicians‘ group allegedly did not provide 9 this notice and compliance with this Health 10 and Safety Code section, that would also 11 constitute a breach of the particular 12 contract between the physician and 13 physicians' group? -- 14 MS. BARTA: Ithink thisis not 15 this provision isnot underthe section 16 which iswhat the shareholders’ duties are, 17 which is 1.2. Thisis saying employment. l8 The medical group employs shareholder 19 employee, and shareholder employee accepts 20 employment with the medical group to render 21 professional services on behalf of the 22 medical group, comma. 23 So it‘sgoing both ways. It'ssaying 24 we‘re employing you, and the doctor is 25 saying Iaccept employment, and that 16 UNEDITED ROUGH DRAFT — TRIAL TESTIMONY — 1/18/18 1 relationship then isinaccordance with the 2 policiesdetermined by the medical group and 3 inthe manner permitted by the laws of 4 California and the applicable Canons of 5 Professional Ethics. 6 This goes both ways. The doctor is 7 agreeing to com ply with the laws and the 8 policies;likewise, the medical group is 9 doing that. 10 That's a contractual interpretation. 11 That‘s the way iread and it, Ithink it‘s 12 intended that way. 13 Ifyou look at Section 1.2, itthen 14 lays out shareholder employees‘ duties shall 15 be responsible for, and they start to list: 16 Comply with the Articles of Incorporation in 17 A 1.223. Shall remain licensed. 18 But the fact that that's in a 19 different section relates solely to the 20 shareholder employees. 21 So Ithink 1.1 —~ and it'sjust 22 entitled Employment -— is laying out the 23 relationship between the parties. 24 THE COURT: And what about the 25 argument Iheard — I'm sort of switching 17 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18 1 gears. 2 I'm addressing some ofthe prejudice 3 that defendants had addressed inthe 4 response, that there‘s over 1,000, 5 potentially, patients involved. 6 Defendants would know because they are 7 the ones that sent out the notice. 8 What about the time necessary to see 9 which patients met the criteriaof the 10 Health and Safety Code section for those 11 certain — lbelieve there's like six 12 different categories of specified conditions 13 that enrollee would qualify for those rights 14 under those code sections? What about the 15 time necessary? 16 MS. BARTA: Well, with respect to this 17 case, lwould limit thatscope. l don't 18 believe the maternity issue — although 19 maybe some of the patients have maternity 20 issues,but we waive and stipulate. 21 lthink an inquiry into whether or not 22 Dr.Blum treated patients that under the 23 definition of a chronic condition, whether 24 any of the patients that she was treating or 25 that were on that list --l don‘t even know 18 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18 1 ifyou need to go to that but list, inthe 2 last two years, which is when they were 3 required to send out the letter, didshe 4 treat any patients that qualified or had the 5 conditions that qualify as a chronic 6 condition? 7 Idon’t think you need to go 8 individually patient-by-patient, because 9 chronic conditions isdefined more broadly 10 underthe statute, and iteasily includes 11 ailments likeParkinson's. 12 Now, the quantity, you know, I'm 13 not — l don‘t know and lwon't argue how 14 many of those letters. 15 The same thing, migraine headaches, 16 she did treat patient with migraine 17 headaches. That would not be A. 18 But she certainly treated patients 19 with Alzheimer's, Parkinson‘s disease. l 20 think those would be the two main. 21 There's probably other conditions, but 22 not wanting to expand, lwould A. 23 THE COURT: Thank you. 24 Ialready know defense's argument 25 regarding -—and both sides'argument 19 UNEDITED ROUGH DRAFT — TRIAL TESTIMONY v 1/18/18 regarding notice and prejudice in connection with the case that was cited by the and plaintiff, that‘s the Rosenfeld case. But, you know, the prejudice applies equally to the issue of a 352, contention that defense essentially has asserted in their response. That's how I'm reading it, anyway. As far as relevancy, lthink inthe 10 352 analysis, with respect to the fifth and 11 sixth causes of action and the other cause 12 of action - itmight be the first cause of -~defense 13 action for breach of contract 14 want to be heard on whether or not you‘ve — 15 Iknow you believe that statutes don‘t 16 apply, but 'rfthere's something pertinent 17 that you want the court to consider inthat 18 regard, now is the time to let me know, 19 unless it'sotherwise specified inyour 20 pleadings. 21 MS. NAKARAl-KANIVAS: Thank you, Your 22 Honon 23 let l‘ll my co—defendants address the 24 breach of contract claim because that's not 25 alleged against us. 20 UNEDITED ROUGH DRAFT — TRIAL TESTIMONY- 1/18/18 1 The one point I wouldjust liketo 2 highlight is: counsel's Plaintiff's 3 argument just highlighted for us the lack of 4 discovery that's been conducted on this 5 case. 6 We have not been able to conduct 7 discovery on whether any of the patients on 8 the 1,100 patient listhad chronic 9 conditions, whether they were inan HMO 10 plan, whether that HMO plan would have 11 covered those services had they wanted to 12 continue treatment with Dr. Blum. 13 It‘sour understanding that the law 14 does not guarantee coverage underthat 15 particular provider; itjust guarantees 16 continued treatment. We have other 17 neurologists who have been able to treat 18 those conditions. 19 But, again, we have not conducted any 20 discovery on this issue because itwas not 21 our understanding that that was the wrongful 22 conduct underlying the interference claims. 23 In addition, there isthis kind of 24 foundational issue rightnow as to whether 25 PAMF qualifies asan insurance company. 21 UNEDITED ROUGH DRAFT —TRIAL TESTIMONY - 1/18/18 1 My understanding isthat insurance 2 companies need a license underthe 3 Knox-Keene law, and we don‘t have one. 4 None of these issues have been flushed 5 out, Your Honor, because itjust has not 6 been an issue in this case,and that should 7 not provide ambush. We would waste a 8 tremendous amount of time essentially 9 conducting discovery A ifone of the jurors 10 willbe confused by allthe evidence and how 11 fits into this case. it 12 THE COURT: Let me ask you: Wouldn't 13 one of the defendants, at least certainly " 14 physicians‘ group, know about their 15 patients, about whethertheir patients have 16 these kind of conditions, their patients of l7 the group? 18 MS. FITZSIMMONS: address I‘ll this, 19 Your Honor. 20 THE COURT: Yes. 21 MS. FITZSIMMONS: not quite a5 It is 22 simple as Your Honor poses. 23 THE COURT: That’s why I'm asking. 24 MS. FITZSIMMONS: So we have a listof 25 over 1,100 patients who are at issue here. 22 UNEDITED ROUGH DRAFT - TRIAL TESTIMONY - 1/18/18 1 ln order for discovery to have been 2 conducted on this particular issue, itwould 3 require having somebody essentially work 4 q u-time to go into each and every one of 5 those patients' medical records t0 assess, 6 determine what isappropriate to produce or 7 not from each of those particular patients, 8 The firstpart of the analysis would 9 be are they an HMO patient. 10 THE COURT: "Let me ask you this: The 11 core information you would have inyour 12 position, you don't have to conduct 13 discovery to get that information. 14 MS. FITZSIMMONS: We", we would have 15