Preview
8/21/2020
BANKS & WATSON
AT TORNI YS
BANKS F STREET, SUF 20
In scory SAC AEN
AVID CORRICK le 325.1 D4
FIRA OM
\ N he TS¢ RET August 21, 2020
JAMES J. BANKS
VIA FILING THROUGH ONE LEGAL
Hon. Sandra L. McLean
Butte County Superior Court
1 Court Street
Oroville, CA 95965
Re: On, et al. v. Vannucci, et al.
Butte County Superior Court Case No. 19CV03856
Dear Your Honor:
As counsel to Petitioners Omar Jay On and Barbara On (collectively
Petitioners”), we write to interpose our objection to the entry of the proposed judgment
styled, “[Proposed] Judgment Denying Petitioners’ Motion to Amend Judgment to Add F.
Paul Sajben M.D., A Professional Corporation, As a Judgment Debtor” (“Proposed
Judgment”) counsel for medical corporation (hereinafter “FPSI”) forwarded via email for
our review and comment on August 14, 2020. I learned late this afternoon the Court
entered the Proposed Judgment on August 17, 2020. The quick turnaround between the
date the Proposed Judgment was submitted to the court, August 14, 2020, and entry of
that judgment on August 17, 2020 has prevented the parties from expressing their views
as to whether FPSI is entitled to a judgment. With the greatest of respect, I ask the Court
to vacate entry of judgment sua sponte, and set a briefing schedule to permit the parties to
weigh in on this important issue. The Petitioners strongly believe the Court’s order
denying the Motion to Amend Judgment was interlocutory and does not permit entry of
judgment because, for the reasons discussed infra, the Court’s order did not finally
resolve all of the issues between the Petitioners and FPSI.
Upon receipt of the Proposed Judgment, I immediately emailed FPSI’s counsel,
Daniel Egan, asking to meet and confer and stating we saw no legal basis for entry of the
Proposed Judgment. (See Exhibit A.) The Court’s denial of that portion of Petitioners’
Motion to Amend Judgment (“Motion”) requesting an order to add FPSI as an additional
judgment debtor under section 187 of the Code of Civil Procedure (“Section 187”), to the
judgment entered by this Court on February 13, 2020, in favor of Petitioners and against
Stephen A. Vannucci, M.D., INC. (“SAVI’), does not preclude Petitioners from filing an
original action against FPSI to add it to that judgment in either state court or in
bankruptcy court.
Mr. Egan did not respond. On August 18, 2020, another attorney in his office,
Daniel Foster, sent me an email asserting the “Proposed Judgment” was appropriate
under Code of Civil Procedure section 577 because, in his view, the Court’s denial of
{00098211.DOCX; 1 }
Electronically Filed
Hon. Sandra L. McLean
August 21, 2020
Page 2
Petitioners’ request to add FPSI as an additional judgment debtor constituted “a final
determination of the rights of the parties in an action or proceeding.” Mr. Foster
suggested we discuss the issue on August 20 or 21. (See, Exhibit B.) I responded by
telling him I would be happy to discuss the issue and asked him to advise as to a time for
acall. (/d.) Mr. Foster did not respond to my invitation; he and I have not met and
conferred on the Proposed Judgment.
In his email, Mr. Foster claims the Court’s order made a “final determination” that
FPSI could not be added as an additional judgment debtor. Mr. Foster’s position is not
well-founded. The Court did not determine FPSI could not be made a debtor to the
judgment — only that FPSI could not be added to the judgment pursuant to the equitable
authority conferred by Section 187.
In brief summation of the underlying facts, on December 16, 2019, Petitioners
obtained a final arbitration award (“Final Award”) against SAVI and North Valley
Dermatology Center (“NVDC”), a general partnership, of which SAVI is a general
partner. On December 31, 2019, Petitioners filed a petition to confirm the award and
enter judgment thereon. The day before the hearing on the petition, NWDC filed for
voluntary bankruptcy thereby obtaining a stay of proceedings in this Court. On February
13, 2020, this Court — “having confirmed the Final Award in all respects” — entered
judgment in conformity therewith in favor of Petitioners and against SAVI. Solely by
reason of the automatic stay, the Court did not enter judgment against NVDC.
Based on the confirmation of the Final Award — which established, in effect, a
liquidated obligation in favor of Petitioner and against NVDC, Petitioners filed the
subject Motion under Section 187 seeking, inter alia, an order to add NVDC’s general
partners, including FPSI, as additional judgment debtors, based upon their status as
general partners of NVDC at the time the partnership’s obligation to Petitioners arose.
The Court granted the Motion in part, and denied the Motion in part. As to the request
for an order adding the general partners as additional judgment debtors under Section
187, the Court denied that request with prejudice on two grounds: (1) there was no
judgment against NVDC at that time, and Petitioners had not provided authority showing
it was appropriate to add the general partners as judgment debtors under Section 187 in
light of that fact, and (2) adding the general partners as additional judgment debtors under
section 187 would violate their due process rights.
The Court’s order is very specific that the denial of Petitioners’ request to add
NVDC’s general partners to the SAVI judgment was limited to a motion under Section
187. The very terms of the Court’s order — entered on July 9, 2020 — demonstrate it does
not constitute a “final determination” of the rights between Petitioners and any of
NVDC’s general partners, including FPSI: “To the extent Petitioners are required to seek
{0009821 1.DOCX; 1 }
Hon. Sandra L. McLean
August 21, 2020
Page 3
relief from the automatic bankruptcy stay in order to pursue the general partners’ assets,
Petitioners have failed to seek such relief.” As of the date the order was entered the
bankruptcy stay was still in effect. That changed on July 16, 2020, when Bankruptcy
Court judge, the Honorable Christopher M. Klein (“Judge Klein”), issued an order
modifying the automatic stay to permit Petitioners to seek entry of judgment against
NVDC in this Court. On August 11, 2020, a stipulation for entry of judgment against
NVDC in conformity with the Final Award was filed in this Court, and on August 13,
2020, this court entered judgment against NVDC pursuant to that stipulation.
Judgment has now been entered against NVDC in this Court. Petitioners are free
to seek legal recourse to attach FPSI, and the other NVDC partners, to that judgment —
whether in state court or bankruptcy court — with the single exception of a motion under
Section 187 pursuant to the Court’s July 9, 2020, order. Corporations Code section
16307 specifically provides that the joint and several liability of all general partners for
partnership obligations codified at Corporations Code section 16306(a), may be sought in
the same action or a separate action. It bears noting that the NVDC obligation to
Petitioners — and that of its general partners — will not be extinguished through the
Chapter 7 bankruptcy process because under 11 U.S.C. section 727(a)(1) a partnership
may not receive a discharge of its liabilities. In other words, the judgment NVDC and its
partners owe Petitioners —will live on in perpetuity or until it is satisfied. Moreover, 11
U.S.C. section 723, subdivision (a) permits the Chapter 7 trustee to pursue the partners,
individually, if NVDC’s assets are insufficient to meet its obligations. We expect that
will be the case.
Entering judgment on August 17, 2020, without an opportunity to hear from the
parties, will likely interfere with Petitioners’ right to bring an original action in this court
under sections 16307 and 16306(a) and/or the bankruptcy trustee’s obligation to file
adversary proceedings in bankruptcy court under 11 U.S.C. section 723. I expect that
FPSI will assert the August 17, 2020 judgment constitutes a res judicata defense and bar
to those actions when they are filed.
In sum, Petitioners may raise the Corporations Code section 16307 issue in this
Court in this or an independent action and separately allege the individual physicians are
“alter-egos” of their professional corporations. The bankruptcy trustee may seek similar
relief in bankruptcy court under 11 U.S.C. sections 727(a)(1) and 723(a)(1). The ruling
denying Petitioners’ motion to amend the judgment under Section 187 did not impact
Petitioners’ ability to initiate those actions here or the trustee in bankruptcy court. For
those reasons, that ruling did not finally resolve all issues between Petitioners and FPSI.
We respectfully ask that you sua sponte vacate the judgment entered on August
17, 2020, and set a briefing schedule to permit those parties who oppose entry of
{00098211.DOCX; 1 }
Hon. Sandra L. McLean
August 21, 2020
Page 4
judgment in favor of FPSI to present their oppositions to you. FPSI should be given an
opportunity to reply to those oppositions.
The denial of Petitioners’ Section 187 Motion was at most an intermediate
determination and did not finally resolve all of the issues between the parties. (See, e.g.,
Greenfield v. Mather (1939) 14 Cal.2d 228, 231 [invalid partial judgments, neither a
complete determination, were not res judicata]; Erlick v. Superior Court (1965) 63 Cal.2d
551, 557 [determination of motion, not on the merits]; also see 7 Witkin, California
Procedure (Sth ed. 2008) Judgment, § 363 at p. 985.) Those issues will be finally
resolved either in an original action filed in this court by the Petitioners or, more likely,
adversary actions filed by the Chapter 7 trustee in bankruptcy court.
Your Honor, your courtesy and attention are greatly appreciated.
Yours very truly,
mieten
JJB:eep
ce: (via e-service through One Legal)
Ms. Patricia A. Savage, Counsel to Petitioners
Mr. Daniel L. Egan, Counsel to FPSI
Mr. Clement L. Glynn, Counsel to SAVI
Mr. Doug Jacobs, Counsel to SAVI
Mr. Michael to Shepherd, Counsel to DRI
Mr. Daniel M. Poniatowski, Counsel to KTHI,
Mr. J. Russell Cunningham, Counsel to NVDC Bankruptcy Trustee
{0009821 1.DOCX; | }
EXHIBIT A
David Corrick
From: James J. Banks
Sent: Tuesday, August 18, 2020 10:58 AM
To: David Corrick
Subject: Fwd: On v. NVDC
Sent from my iPhone
Begin forwarded message:
From: “Danny J. Foster"
Date: August 18, 2020 at 10:15:50 AM PDT
To: "James J. Banks"
Subject: RE: On v. NVDC
Dear James,
Dan asked me to reach out to you on this matter. Are you available to discuss the proposed judgment
either Thursday or Friday this week? Briefly, our position is that the proposed judgment fits cleanly
under CCP section 577, which defines a judgment as “the final determination of the rights of the parties
in an action or proceeding.” While our client may not have been a party to the underlying lawsuit, it
certainly was a party to the most recent proceeding, in which the Ons sought to add FPSI to the
judgment as a judgment debtor. In connection with this proceeding , the court’s order certainly qualified
as a final determination as to whether FPSI should be added as a judgment debtor. Had the Ons
prevailed, wouldn’t the court’s order have constituted a judgment—at least as between the Ons and
FPSI?
At any rate, if you would like to discuss further, | am available Thursday or Friday if either date works for
you. Just let me know.
Sincerely,
Danny Foster
From: James J. Banks
Sent: Friday, August 14, 2020 11:00 AM
To: Melissa M. Eaton ; David Corrick ;
psavesq@gmail.com; ms@swllplaw.com; michael@shepherdlaw.com; jknowlton@lawburton.com;
jrios@ffwplaw.com; dongaro@ongaropc.com; mhabib@peterslawchico.com; cglynn@glynnfinley.com;
dponiatowski@sflaw.com; rcunningham@dnic.net
Cc: Danny J. Foster
Subject: RE: On v. NVDC
Dan, can you give me a call about this to meet and confer. Your client isn’t
a party to the litigation, the court’s order is interlocutory only, and certainly
without prejudice to our filing an original action in state or bankruptcy court. |
see no legal basis to enter a judgment under those circumstances. Let’s
chat. Best, jjb
James J. Banks
BANKS & WATSON
901 F Street, Suite 200
Sacramento, California 95814-2403
(916) 325-1000
(916) 325-1004 (facsimile)
http://www.bw-firm.com
CONFIDENTIALITY NOTICE ~ PRIVILEGED AND CONFIDENTIAL,
This communication constitutes an electronic communication within the meaning of the Electronic Communication Privacy Act, 18 US.C
2510. This communication and any accompanying document(s) are confidential and privileged. They are intended for the sole use of the
addressee. If you receive this transmission in error, you are advised that any disclosure, copying, distribution, or the taking of any action in
reliance upon the communication is strictly prohibited. Moreover, any such inadvertent disclosure shall not compromise or waive the
attorney-client privilege as to this communication or otherwise. If you have received this communication in error, please contact me at the
above Internet address or telephone number. Thank you.
From: Melissa M. Eaton
Sent: Friday, August 14, 2020 10:35 AM
To: James J. Banks ; David Corrick ;
psavesq@gmail.com; ms@swllplaw.com; michael@shepherdlaw.com; jknowlton@lawburton.com;
irios@ffwplaw.com; dongaro@ongaropc.com; mhabib@peterslawchico.com; cglynn@glynnfinley.com;
dponiatowski@sflaw.com; rcunningham@dnic.net
Cc: Danny J. Foster
Subject: On v. NVDC
Importance: High
All,
Attached please find the proposed judgment in the above referenced matter. Please contact our office
with any questions or concerns. Thank you.
sa MM ston
aralegal
W Wilke Fleury
Wilke Fleury LLP
400 Capitol Mall, Twenty-Second Floc [si mento, California 95814
Main Telephone: 916.441.2430 | Facsir le: 916. 6664
cow 1D eal r ail av iiss on ‘uments, (les or previous mi es iched to
may contain conf atiat infor that is G yp 4. Thy 2 nat¢ inte Fe oF a person respon:
for delivering it to the intended recipient, you are heret ied at ny clos con) ng, cistribut on or usa of ny of
the information con ¢ in oF attached to this transm| i prohibited. If y : ave cei nis tr ssion in
error,p in tel us by for ding the me 32 to wilkefleury.com or ty talephon 918)
441-2430 and destroy the ai transmission and its att ments without reading or saving in any manner.
Our firm is proud to be associated with the following organizations:
AY PREEMINENT 2 ns
ee Pri merus
=a
James J. Banks
To: Danny J. Foster
Subject: RE: On v. NVDC
From: James J. Banks
Sent: Tuesday, August 18, 2020 9:03 PM
To: Danny J. Foster
Subject: Re: On v. NVDC
Danny happy to discuss. What works for a call?
Sent from my iPhone
On Aug 18, 2020, at 10:15 AM, Danny J. Foster wrote:
Dear James,
judgment
Dan asked me to reach out to you on this matter. Are you available to discuss the proposed
fits cleanly
either Thursday or Friday this week? Briefly, our position is that the proposed judgment
under CCP section 577, which defines a judgment as “the final determinat ion of the rights of the parties
lawsuit, it
in an action or proceeding.” While our client may not have been a party to the underlying
certainly was a party to the most recent proceeding, in which the Ons sought to add FPSI to the
qualified
judgment as a judgment debtor. In connection with this proceeding , the court’s order certainly
as a final determination as to whether FPSI should be added as a judgment debtor. Had the Ons
and
prevailed, wouldn't the court’s order have constituted a judgment—at least as between the Ons
FPSI?
works for
At any rate, if you would like to discuss further, | am available Thursday or Friday if either date
you. Just let me know.
Sincerely,
Danny Foster
From: James J. Banks
Sent: Friday, August 14, 2020 11:00 AM
com>;
To: Melissa M. Eaton ; David Corrick
Subject: RE: On v. NVDC
Dan, can you give me a call about this to meet and confer. Your client isn’t
a party to the litigation, the court’s order is interlocutory only, and certainly
without prejudice to our filing an original action in state or bankruptcy court. |
see no legal basis to enter a judgment under those circumstances. Let’s
chat. Best, jjb
James J. Banks
BANKS & WATSON
901 F Street, Suite 200
Sacramento, California 95814-2403
(916) 325-1000
(916) 325-1004 (facsimile)
http://www.bw-firm.com
CONFIDENTIALITY NOTICE -- PRIVILEGED AND CONFIDENTIAL
This communication constitutes an electronic communication within the meaning of the Electronic Communication Privacy Act, 18 U.S.C.
2510. This communication and any accompanying document(s) are confidential and privileged. They are intended for the sole use of the
addressee. If you receive this transmission in error, you are advised that any disclosure, copying, distribution, or the taking of any action in
reliance upon the communication is strictly prohibited. Moreover, any such inadvertent disclosure shall not compromise or waive the
attorney-client privilege as to this communication or otherwise. If you have received this communication in error, please contact me at the
above Internet address or telephone number. Thank you.
From: Melissa M. Eaton
Sent: Friday, August 14, 2020 10:35 AM
To: James J. Banks ; David Corrick ;
psavesq@gmail.com; ms@swllplaw.com; michael@shepherdlaw.com; jknowlton@lawburton.com;
jrios@ffwplaw.com; dongaro@ongaropc.com; mhabib@peterslawchico.com; cglynn@glynnfinley.com;
dponiatowski@sflaw.com; rcunningham@dnic.net
Cc: Danny J. Foster
Subject: On v. NVDC
Importance: High
All,
Attached please find the proposed judgment in the above referenced matter. Please contact our office
with any questions or concerns. Thank you.
Melissa M. Eaton
Paralegal
Wilke Fleury LLP
400 Capitol Mall, Twenty-Second Floor | Sacramento, California 95814
Main Telephone: 916.441.2430 | Facsimile: 916.442.6664
CONFIDENTIALITY NOTICE: This email transmission and any decuments, files or previous email messages attached to
It may contain confidential information that is legally privileged. If you are not the intended recipient or a person
responsible for delivering it to the intended recipient, you are hereby notified that any disclosure, copying,
distribution or use of any of the information contained in or attached to this transmission is strictly prohibited. If you
2