Demurrer to First Amended Complaint (Judge Ross Klein)

Los Angeles County Superior Court – GGD Courthouse

Case Number: NC060114??? Hearing Date: April 26, 2016??? Dept: S27

Defendant Dr. Michael Cogan demurs to Causes of Action 4, 5, and 6 in Plaintiff?s First Amended Complaint (?FAC?) alleging:
1. Breach of Fiduciary Duty;
2. Breach of Loyalty/Agency;
3. Breach of Contract;
4. Intentional Interference with Prospective Economic Advantage;
5. Unfair Competition; and
6. Declaratory Relief.

Dr. Cogan is not charged in Causes of Action 1, 2 and 3.

Dr. Cogan also moves to strike portions of the FAC pertaining to breach of the duty of loyalty, the prayers for injunctive relief and for attorney fees.

The facts alleged in the FAC primarily concern Co-Defendant and Cross-Complainant Dr. Leilani Woodson. In order to understand the allegations against Dr. Cogan the allegations against Dr. Woodson must be set forth. Both Dr. Cogan and Dr. Woodson were previously employed by Plaintiff as physicians. Dr. Woodson was a shareholder in Plaintiff?s practice which focused on Obstetrics and Gynecology.

A second entity, Complete Care Surgical Center, is a surgical and emergency medicine facility which is ?not directly related to Plaintiff Complete Women Care, Inc. (?CWC?) except in the fact that Dr. Mackovic (founder of CWC) is a member in the surgical center and a shareholder in CWC.? Plaintiff alleges CWC refers business to the surgical center. Member physicians signed a written agreement to perform three surgeries per month.

Dr. Woodson was one of the principals in the surgery center which opened in 2013. The purpose was to ?benefit the patients of CWC with a surgical practice staffed by their own OB/GYN physicians.? Dr. Woodson did not meet the three monthly surgeries requirement thereby violating the agreement. She was terminated from the surgical practice.

Dr. Woodson was ?furious? and threatened to destroy the practice if she was terminated.

She began a campaign against CWC which allegedly included urging physician employees to leave and join her new practice, refusing to return calls from physicians seeking employment, and falsely telling employees she was leaving because the practice was falling apart. This was done while she was still a CWC shareholder.

She resigned and set up a competing practice. She ?diverted? CWC applicants to her new practice.

Dr. Cogan allegedly conspired with Dr. Woodson in setting up the new competing practice. Dr. Cogan?s demurrer to the initial complaint was sustained with leave to amend because there were insufficient facts of his affirmative conduct in furtherance of a conspiracy.

The FAC adds new allegations as to Dr. Cogan in paragraphs 27 through 28. Plaintiff alleges that Dr. Cogan ?figures prominently in some of the e-mail communications CWC discovered as a result of its forensic review of its servers.? Although the e-mails are not quoted, Plaintiff characterizes them as assisting Dr. Woodson in setting up a competing practice. The only details are that one such communication was dated April 13, 2015. Dr. Cogan allegedly agreed in this communication to set up a competing practice and that he didn?t want another named physician (not a party) to be involved, and that Dr. Woodson should be silent about the details of the deal by using the code word ?crickets.?

The demurrer to Causes of Action 4 and 5 are sustained with one final opportunity to amend within 10 days. Conspiracy is not adequately pled. An agreement to set up a competing practice is not by itself an affirmative act in furtherance of a conspiracy. The alleged e-mails are not set forth and the characterizations of its contents are contentions and are conclusions of law. There are no facts establishing wrongful conduct which interfered with prospective advantage. The third parties are not even named, much less what the ?badmouthing? consisted of.

The demurrer to Cause of Action 6 is sustained without leave to amend. There is no present controversy with respect to Dr. Cogan by virtue of the fact that he might participate in a practice in concert with Dr. Woodson.

The Motion to Strike is granted as to the prayer for injunctive relief. Dr. Woodson, not Dr. Cogan, can be enjoined with respect to a non-competition agreement. The balance of Motion to Strike is placed off-calendar as moot.

Plaintiff is granted one final opportunity to amend within 10 days.