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WILKE FLEURY LLP
DANIEL L. EGAN (SBN 142631)
degan@wilkeflew .com Superior Court of California
DANIEL J. FOSTER (SBN 238012) County of Butte
dfoster@wilkeflew .com
BIANCA S. SAMUEL (SBN 278231) 5/6/2020
bsamuel@wilkefleury.com
400 Capitol Mall, Twenty-Second Floor
Sacramento, California 95814 i lerk
Telephone: (916) 441-2430 By Deputy
Facsimile: (916) 442-6664 hectronically FILED
Attorneys for Respondent
F. PAUL SAJBEN, M.D. and F. PAUL SAJBEN,
M.D. A PROFESSIONAL CORPORATION
SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF BUTTE
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12 OMAR JAY ON and BARBARA ON, Case No. 19CV03856
13 Petitioners, DECLARATION OF F. PAUL SAJBEN,
M.D. IN SUPPORT OF OPPOSITION TO
14 Vv MOTION TO AMEND JUDGMENT
15 STEPHEN A. VANNUCCI, M.D., INC. and Filed Concurrently with Opposition to Motion
NORTH VALLEY DERMATOLOGY to Amend Judgment
16 CENTER,
17 Respondents.
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19
20 I, F. Paul Sajben, M.D., declare as follows:
21 1 Iam a party in the above-entitled action. I have personal knowledge of the matters
22 stated and, if called to do so, could and would competently testify thereto. I make this declaration
23 in support of the Opposition to Motion to Amend Judgment.
24 2 I am a dermatologist who has served patients in the Chico area since July 2011.
25 Through my professional corporation, FPSI, I initially provided these services in facilities shared
26 with Drs. Richey and Vannucci. Under the original arrangement, each professional corporation
27 hired its own employees and physician’s assistants in shared space. In February 2002 the legal
28 relationship was modified and Drs. Richey and Vannucci and Mr. On created an expense sharing
Witke Fieury LLP
Avronweys at LAW 25865471 -l-
SACRAMENTO
DECLARATION OF F. PAUL SAJBEN, M.D.
agreement. FPSI was formed on September 18, 2002 and it began sharing expenses as outlined in
that document.
3 On September 13, 2010 NVDC was created as a partnership between FPSI, SAVI
and Donald Richey, M.D., Inc. (“DRI’.) Under the new arrangement, NVDC directly employed
staff and physician assistants, and contracted with FPSI, DRI and SAVI for the services of Drs.
Richey, Vannucci and Sajben. Dr. Hodari’s professional corporation joined NVDC on November
8, 2012. By 2019, NVDC employed 52 people and served approximately 44,000 patients.
4. Physician assistants are medical professionals with less training than doctors. A
four-year degree is not required. Physician assistants can only practice medicine under the
10 supervision of a licensed doctor. Nevertheless, physician assistants operate with substantial
11 autonomy, and many have their own patient base. Physician assistants are typically paid under a
12 formula which provides the physician assistant with a percentage of receipts. Overhead is generally
13 paid by the employer and allocated to the supervising physician.
14 5 Although NVDC received revenues and paid the expenses of the operations of the
15 clinics, compensation for the doctors’ corporations continued to be allocated based on the
16 production of the individual doctors. Costs attributable to individual practices were allocated to that
17 particular practice. Common overhead charges were shared by all practices. Net revenues from
18 physicians’ assistants were allocated between overhead and costs, the physician assistant, and the
19 supervising dermatologist. Each professional corporation was essentially its own profit center.
20 Since Plaintiff On was supervised by Dr. Richey, and later Dr. Vannucci, I was neither allocated,
21 nor did I receive, any of Mr. On’s revenues.
22 6. Mr. On originally had an employment agreement with SAVI. That agreement was
23 never formally assumed by NVDC, but NVDC paid Mr. On all compensation owed to Mr. On under
24 the employment agreement between SAVI and Mr. On.
7
25 In 2013 Mr. On complained to Dr. Vannucci and the then office manager, Ronnie
26 Boongaling, that he was not making enough money. Mr. Boongaling then conducted an
27 investigation and found that Mr. On was being compensated according to his agreement with SAVI.
28 Mr. On then terminated his employment. NVDC conducted an additional investigation, using an
Witke Fieury LLP
Avronweys at LAW 25865471 -2-
SACRAMENTO
DECLARATION OF F. PAUL SAJBEN, M.D.
outside accountant. While the second investigation was not driven by On’s complaints about his
pay, the investigation also showed that Mr. On has been paid according to the contract. Mr. On later
sued NVDC. NVDC elected to resolve the dispute in an arbitration. Neither I, nor FPSI, was a
party to the arbitration.
8 On June 3, 2019, the arbitrator issued a tentative award. NVDC’s insurer declined
to provide coverage for the award.
9 Shortly after the arbitration award was issued, Dr. Hodari decided to leave NVDC.
Dr. Hodari stopped providing services to NVDC in August 2019 and took his practice with him.
When it became clear that NVDC would not be able to pay FPSI and SAVI for my and Dr.
10 Vannucci’s services, we became direct employees of NVDC, at greatly reduced compensation.
11 Even then, NVDC was unable to pay me even the reduced amount of compensation it owed under
12 the new employment agreement. Between September 6, 2019 and January 28, 2020, I was paid
13 $49,724 per month or $596,688 per year.
14 10. By December 2019 I decided to close my practice and discontinue my work as a
15 dermatologist. However, a medical clinic cannot simply close its doors and abandon its patients. In
16 early December 2019, I sent a letter to my patients indicating that I was closing my practice as of
17 March 31, 2020 and advising them to locate new doctors for their medical care. The letter gave
18 patients referrals to other dermatology providers. I chose the date of March 31, 2019 because I was
19 advised by my insurer that patients should be given at least three months’ advance notice of the
20 closing.
21 11. On December 19, 2019, NVDC, the doctors, and Mr. On held a mediation in an
22 attempt to settle Mr. On’s claims. The mediation was unsuccessful, and Mr. On sought entry of
23 judgment against NVDC. This action forced NVDC to close. However, to ensure patient care and
24 continuity, NVDC could not just shut its doors without giving its patients time to locate alternate
25 providers. NVDC commenced a Chapter 11 bankruptcy case on January 28, 2020 to provide time
26 for an orderly closing for its patients and its employees. My compensation along with Dr.
27 Vannucci’s was reduced to $10,000 per month. NVDC ultimately closed its doors and terminated
28 its final employees on March 29, 2020.
Witke Fieury LLP
Avronweys at LAW 25865471 -3-
SACRAMENTO
DECLARATION OF F. PAUL SAJBEN, M.D.
1 is true and correct.
2 Executed May ©, 2020, at City <2>__, California.
aS} n, M.D.
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WitKe FLEURY LLP.
ATTonMRYS AT LAW 2586547.1 -4-
Sacmastento
DECLARATION OF F. PAUL SAJBEN, M.D.
PROOF OF SERVICE
On vy. Vannucci
Case No. 19CV03856
STATE OF CALIFORNIA, COUNTY OF SACRAMENTO
At the time of service, I was over 18 years of age and not a party to this action. | am
employed in the County of Sacramento, State of California. My business address is 400 Capitol
Mall, Twenty-Second Floor, Sacramento, CA 95814.
On May 6, 2020, I served true copies of the following document(s) described as
DECLARATION OF F. PAUL SAJBEN, M.D. IN SUPPORT OF OPPOSITION TO
MOTION TO AMEND JUDGMENT on the interested parties in this action as follows:
SEE ATTACHED SERVICE LIST
BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an
10 agreement of the parties to accept service by e-mail or electronic transmission, I caused the
document(s) to be sent from e-mail address sbrazell@wilkefleury.com to the persons at the
11 e-mail addresses listed in the Service List. I did not receive, within a reasonable time after
the transmission, any electronic message or other indication that the transmission was
12 unsuccessful.
13 I declare under penalty of perjury under the laws of the State of California that the foregoing
is true and correct.
14
Executed on May 6, 2020, at Sacramento, California.
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/s/ Sharon R. Brazell
17 Sharon R. Brazell
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Witke Fieury LLP
Avronweys at LAW 25865471 5-
SACRAMENTO
DECLARATION OF F. PAUL SAJBEN, M.D.
SERVICE LIST
On v. Vannucci
Case No. 19CV03856
James J. Banks Attorneys for Plaintiffs
W. David Corrick
BANKS & WATSON
901 F Street, Suite 200
Sacramento, CA 95814-0733
Tel: (916) 325-1000
Fax: (916) 325-1004
Email: jbanks@bw-firm.com
Email: dcorrick@bw-firm.com
Patricia A. Savage Attorneys for Plaintiffs
LAW OFFICES OF PATRICIA A. SAVAGE
1550 Humboldt Road, Suite 4
Chico, CA 95928
Tel: (530) 809-1851
Fax: (530) 592-3865
Email: psavesq@gmail.com
Mark A. Serlin Attorneys for Plaintiffs
SERLIN & WHITEFORD, LLP
701 E Street
Sacramento, CA 95814-1208
Tel: (916) 446-0790
Fax: (916) 446-0791
Email: ms@swllplaw.com
Serena Warner Attorneys for Stephen A. Vannucci, M.D.,
John A. Whitesides Inc. and North Valley Dermatology Center
ANGELO, KILDAY & KILDUFF, LLP
601 University Avenue, Suite 150
Sacramento, CA 95825
Tel: (916) 564-6100, ex. 201
Fax: (916) 564-6263
Email: swarner@akk-law.com
jwhitesides@akk-law.com
Doug Jacobs Attorneys for Stephen A. Vannucci
JACOBS, ANDERSON, POTTER &
CHAPLIN, LLP
20 Independence Circle
Chico, CA 95973
Tel: (530) 342-6144
Email: djacobs@japc-law.com)
Michael T. Shepherd Attorneys for Donald F. Richey, M.D
LAW OFFICES OF MICHAEL T. SHEPHERD
1074 East Avenue, Suite O
Chico, CA 95926
Tel: (530) 893-3700
Fax: (530) 893-1579
Email: michael@shepherdlaw.com
John S. Knowlton Attorney for Stephen A. Vannucci
THE BURTON LAW FIRM
400 Capitol Mall, Suite 1850
Sacramento, CA 95814
Tel: (916) 822-8700
Email: jknowlton@lawburton.com
Jason E. Rios Attorney for Stephen A. Vannucci
FELDERSTEIN, FITZGERALD,
WILLOUGHBY, PASCUZZI & RIOS, LLP
500 Capitol Mall, Suite 2250
Sacramento, CA 95814
Tel: (916) 431-7046 direct
Email: jrios@ffwplaw.com
David Ongaro Attorney for F. Paul Sajben, M.D.
ONGARO PC
50 California Street, Suite 3325
San Francisco, CA 94111
Tel: (415) 433-3900
Email: dongaro@ongaropce.com
Mark Habib Attorneys for F. Paul Sajben, M.D.
HABIB, MCKENNA, JUHL-RHODES &
CARDOZA, LLP
414 Salem Street
Chico, CA 95928
Tel: (530) 342-3593
Email: mhabib@peterslawchico.com
Clement L. Glynn Attorney for Stephen A. Vannucci
GLYNN & FINLEY, LLP
One Walnut CreekCenter
100 Pringle Avenue, Suite 500
Walnut Creek, CA 94596
Tel: (925) 210-2800
Email: cglynn@glynnfinley.com
Daniel M. Poniatowski Attorney for Hodari
Richard F.Munzinger
SHARTSIS FRIESE
One Maritime Plaza, 18" Floor
San Francisco, CA 94111
Tel: (415) 773-7387
Email: dponiatowski@sflaw.com
J. Russell Cunningham Attorney for Bankruptcy Trustee
DESMOND, NOLAN, LIVAICH &
CUNNINGHAM
15" & S Building
1830 15" Street
Sacramento, CA 95811
Tel: (916) 443-2051; (916) 389-8501 direct;
(916) 501-2051 cell
Email: rcunningham@dnlc.net
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WILKE FLEURY LLP DANIEL L. EGAN (SBN 142631) degan@wilkeflew .com Superior Court of California DANIEL J. FOSTER (SBN 238012) County of Butte dfoster@wilkeflew .com BIANCA S. SAMUEL (SBN 278231) 5/6/2020 bsamuel@wilkefleury.com 400 Capitol Mall, Twenty-Second Floor Sacramento, California 95814 i lerk Telephone: (916) 441-2430 By Deputy Facsimile: (916) 442-6664 hectronically FILED Attorneys for Respondent F. PAUL SAJBEN, M.D. and F. PAUL SAJBEN, M.D. A PROFESSIONAL CORPORATION SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF BUTTE 11 12 OMAR JAY ON and BARBARA ON, Case No. 19CV03856 13 Petitioners, DECLARATION OF F. PAUL SAJBEN, M.D. IN SUPPORT OF OPPOSITION TO 14 Vv MOTION TO AMEND JUDGMENT 15 STEPHEN A. VANNUCCI, M.D., INC. and Filed Concurrently with Opposition to Motion NORTH VALLEY DERMATOLOGY to Amend Judgment 16 CENTER, 17 Respondents. 18 19 20 I, F. Paul Sajben, M.D., declare as follows: 21 1 Iam a party in the above-entitled action. I have personal knowledge of the matters 22 stated and, if called to do so, could and would competently testify thereto. I make this declaration 23 in support of the Opposition to Motion to Amend Judgment. 24 2 I am a dermatologist who has served patients in the Chico area since July 2011. 25 Through my professional corporation, FPSI, I initially provided these services in facilities shared 26 with Drs. Richey and Vannucci. Under the original arrangement, each professional corporation 27 hired its own employees and physician’s assistants in shared space. In February 2002 the legal 28 relationship was modified and Drs. Richey and Vannucci and Mr. On created an expense sharing Witke Fieury LLP Avronweys at LAW 25865471 -l- SACRAMENTO DECLARATION OF F. PAUL SAJBEN, M.D. agreement. FPSI was formed on September 18, 2002 and it began sharing expenses as outlined in that document. 3 On September 13, 2010 NVDC was created as a partnership between FPSI, SAVI and Donald Richey, M.D., Inc. (“DRI’.) Under the new arrangement, NVDC directly employed staff and physician assistants, and contracted with FPSI, DRI and SAVI for the services of Drs. Richey, Vannucci and Sajben. Dr. Hodari’s professional corporation joined NVDC on November 8, 2012. By 2019, NVDC employed 52 people and served approximately 44,000 patients. 4. Physician assistants are medical professionals with less training than doctors. A four-year degree is not required. Physician assistants can only practice medicine under the 10 supervision of a licensed doctor. Nevertheless, physician assistants operate with substantial 11 autonomy, and many have their own patient base. Physician assistants are typically paid under a 12 formula which provides the physician assistant with a percentage of receipts. Overhead is generally 13 paid by the employer and allocated to the supervising physician. 14 5 Although NVDC received revenues and paid the expenses of the operations of the 15 clinics, compensation for the doctors’ corporations continued to be allocated based on the 16 production of the individual doctors. Costs attributable to individual practices were allocated to that 17 particular practice. Common overhead charges were shared by all practices. Net revenues from 18 physicians’ assistants were allocated between overhead and costs, the physician assistant, and the 19 supervising dermatologist. Each professional corporation was essentially its own profit center. 20 Since Plaintiff On was supervised by Dr. Richey, and later Dr. Vannucci, I was neither allocated, 21 nor did I receive, any of Mr. On’s revenues. 22 6. Mr. On originally had an employment agreement with SAVI. That agreement was 23 never formally assumed by NVDC, but NVDC paid Mr. On all compensation owed to Mr. On under 24 the employment agreement between SAVI and Mr. On. 7 25 In 2013 Mr. On complained to Dr. Vannucci and the then office manager, Ronnie 26 Boongaling, that he was not making enough money. Mr. Boongaling then conducted an 27 investigation and found that Mr. On was being compensated according to his agreement with SAVI. 28 Mr. On then terminated his employment. NVDC conducted an additional investigation, using an Witke Fieury LLP Avronweys at LAW 25865471 -2- SACRAMENTO DECLARATION OF F. PAUL SAJBEN, M.D. outside accountant. While the second investigation was not driven by On’s complaints about his pay, the investigation also showed that Mr. On has been paid according to the contract. Mr. On later sued NVDC. NVDC elected to resolve the dispute in an arbitration. Neither I, nor FPSI, was a party to the arbitration. 8 On June 3, 2019, the arbitrator issued a tentative award. NVDC’s insurer declined to provide coverage for the award. 9 Shortly after the arbitration award was issued, Dr. Hodari decided to leave NVDC. Dr. Hodari stopped providing services to NVDC in August 2019 and took his practice with him. When it became clear that NVDC would not be able to pay FPSI and SAVI for my and Dr. 10 Vannucci’s services, we became direct employees of NVDC, at greatly reduced compensation. 11 Even then, NVDC was unable to pay me even the reduced amount of compensation it owed under 12 the new employment agreement. Between September 6, 2019 and January 28, 2020, I was paid 13 $49,724 per month or $596,688 per year. 14 10. By December 2019 I decided to close my practice and discontinue my work as a 15 dermatologist. However, a medical clinic cannot simply close its doors and abandon its patients. In 16 early December 2019, I sent a letter to my patients indicating that I was closing my practice as of 17 March 31, 2020 and advising them to locate new doctors for their medical care. The letter gave 18 patients referrals to other dermatology providers. I chose the date of March 31, 2019 because I was 19 advised by my insurer that patients should be given at least three months’ advance notice of the 20 closing. 21 11. On December 19, 2019, NVDC, the doctors, and Mr. On held a mediation in an 22 attempt to settle Mr. On’s claims. The mediation was unsuccessful, and Mr. On sought entry of 23 judgment against NVDC. This action forced NVDC to close. However, to ensure patient care and 24 continuity, NVDC could not just shut its doors without giving its patients time to locate alternate 25 providers. NVDC commenced a Chapter 11 bankruptcy case on January 28, 2020 to provide time 26 for an orderly closing for its patients and its employees. My compensation along with Dr. 27 Vannucci’s was reduced to $10,000 per month. NVDC ultimately closed its doors and terminated 28 its final employees on March 29, 2020. Witke Fieury LLP Avronweys at LAW 25865471 -3- SACRAMENTO DECLARATION OF F. PAUL SAJBEN, M.D. 1 is true and correct. 2 Executed May ©, 2020, at City <2>__, California. aS} n, M.D. sil 9 10 11 12] 13 14 15 16 17] i8| 19] 20) 21 22 23 24 25 26 27 28 WitKe FLEURY LLP. ATTonMRYS AT LAW 2586547.1 -4- Sacmastento DECLARATION OF F. PAUL SAJBEN, M.D. PROOF OF SERVICE On vy. Vannucci Case No. 19CV03856 STATE OF CALIFORNIA, COUNTY OF SACRAMENTO At the time of service, I was over 18 years of age and not a party to this action. | am employed in the County of Sacramento, State of California. My business address is 400 Capitol Mall, Twenty-Second Floor, Sacramento, CA 95814. On May 6, 2020, I served true copies of the following document(s) described as DECLARATION OF F. PAUL SAJBEN, M.D. IN SUPPORT OF OPPOSITION TO MOTION TO AMEND JUDGMENT on the interested parties in this action as follows: SEE ATTACHED SERVICE LIST BY E-MAIL OR ELECTRONIC TRANSMISSION: Based on a court order or an 10 agreement of the parties to accept service by e-mail or electronic transmission, I caused the document(s) to be sent from e-mail address sbrazell@wilkefleury.com to the persons at the 11 e-mail addresses listed in the Service List. I did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was 12 unsuccessful. 13 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 14 Executed on May 6, 2020, at Sacramento, California. 15 16 /s/ Sharon R. Brazell 17 Sharon R. Brazell 18 19 20 21 22 23 24 25 26 27 28 Witke Fieury LLP Avronweys at LAW 25865471 5- SACRAMENTO DECLARATION OF F. PAUL SAJBEN, M.D. SERVICE LIST On v. Vannucci Case No. 19CV03856 James J. Banks Attorneys for Plaintiffs W. David Corrick BANKS & WATSON 901 F Street, Suite 200 Sacramento, CA 95814-0733 Tel: (916) 325-1000 Fax: (916) 325-1004 Email: jbanks@bw-firm.com Email: dcorrick@bw-firm.com Patricia A. Savage Attorneys for Plaintiffs LAW OFFICES OF PATRICIA A. SAVAGE 1550 Humboldt Road, Suite 4 Chico, CA 95928 Tel: (530) 809-1851 Fax: (530) 592-3865 Email: psavesq@gmail.com Mark A. Serlin Attorneys for Plaintiffs SERLIN & WHITEFORD, LLP 701 E Street Sacramento, CA 95814-1208 Tel: (916) 446-0790 Fax: (916) 446-0791 Email: ms@swllplaw.com Serena Warner Attorneys for Stephen A. Vannucci, M.D., John A. Whitesides Inc. and North Valley Dermatology Center ANGELO, KILDAY & KILDUFF, LLP 601 University Avenue, Suite 150 Sacramento, CA 95825 Tel: (916) 564-6100, ex. 201 Fax: (916) 564-6263 Email: swarner@akk-law.com jwhitesides@akk-law.com Doug Jacobs Attorneys for Stephen A. Vannucci JACOBS, ANDERSON, POTTER & CHAPLIN, LLP 20 Independence Circle Chico, CA 95973 Tel: (530) 342-6144 Email: djacobs@japc-law.com) Michael T. Shepherd Attorneys for Donald F. Richey, M.D LAW OFFICES OF MICHAEL T. SHEPHERD 1074 East Avenue, Suite O Chico, CA 95926 Tel: (530) 893-3700 Fax: (530) 893-1579 Email: michael@shepherdlaw.com John S. Knowlton Attorney for Stephen A. Vannucci THE BURTON LAW FIRM 400 Capitol Mall, Suite 1850 Sacramento, CA 95814 Tel: (916) 822-8700 Email: jknowlton@lawburton.com Jason E. Rios Attorney for Stephen A. Vannucci FELDERSTEIN, FITZGERALD, WILLOUGHBY, PASCUZZI & RIOS, LLP 500 Capitol Mall, Suite 2250 Sacramento, CA 95814 Tel: (916) 431-7046 direct Email: jrios@ffwplaw.com David Ongaro Attorney for F. Paul Sajben, M.D. ONGARO PC 50 California Street, Suite 3325 San Francisco, CA 94111 Tel: (415) 433-3900 Email: dongaro@ongaropce.com Mark Habib Attorneys for F. Paul Sajben, M.D. HABIB, MCKENNA, JUHL-RHODES & CARDOZA, LLP 414 Salem Street Chico, CA 95928 Tel: (530) 342-3593 Email: mhabib@peterslawchico.com Clement L. Glynn Attorney for Stephen A. Vannucci GLYNN & FINLEY, LLP One Walnut CreekCenter 100 Pringle Avenue, Suite 500 Walnut Creek, CA 94596 Tel: (925) 210-2800 Email: cglynn@glynnfinley.com Daniel M. Poniatowski Attorney for Hodari Richard F.Munzinger SHARTSIS FRIESE One Maritime Plaza, 18" Floor San Francisco, CA 94111 Tel: (415) 773-7387 Email: dponiatowski@sflaw.com J. Russell Cunningham Attorney for Bankruptcy Trustee DESMOND, NOLAN, LIVAICH & CUNNINGHAM 15" & S Building 1830 15" Street Sacramento, CA 95811 Tel: (916) 443-2051; (916) 389-8501 direct; (916) 501-2051 cell Email: rcunningham@dnlc.net