Court Opinion

ID: 5133742
Source: CourtListenerOpinion
Date Created: 2021-12-09 19:02:28.792822+00
Date Added: 2024-06-11T08:23:39.567324
License: Public Domain

Filed 12/9/21 Premier Health Partners v. EGO CA2/5
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION FIVE

PREMIER HEALTH                                               B309628
PARTNERS, INC. et al.,
                                                             (Los Angeles County
     Cross-Defendants and                                    Super. Ct. No.
Appellants,                                                  20STCV11326)

         v.

EGO, INC.,

     Cross-Complainant and
Respondent.

     APPEAL from orders of the Superior Court of Los Angeles
County, Patricia D. Nieto, Judge. Affirmed.
     Venable, Alex M. Weingarten, Matthew M. Gurvitz, and
Bryan J. Weintrop, for Cross-Defendant and Appellant Premier
Health Partners, Inc.
     O’Hagan Meyer, Samuel Y. Edgerton, III and Johnny L.
Antwiler for Cross-Defendant and Appellant Anthony Cardillo,
M.D.
    Hahn & Hahn, D. Jason Lyon and Todd R. Moore for Cross-
Complainant and Respondent.

               ________________________________

                      I. INTRODUCTION

      Cross-complainant EGO, Inc., dba Brault (EGO), filed a
cross-complaint against cross-defendants Premier Health
Partners, Inc. (Premier) and Dr. Anthony Cardillo alleging
various causes of action. In response, Premier and Cardillo filed
special motions to strike under Code of Civil Procedure section
425.16, the anti-SLAPP statute.1 The trial court denied the
motions, finding that EGO’s claims did not arise from protected
petitioning activity. Premier and Castillo appeal. We affirm.

                      II. BACKGROUND

A.    The Parties’ Business Relationship

     Premier was a company that managed emergency medicine
departments. Cardillo was Premier’s president and chief
executive officer (CEO). He was also the chief financial officer

1     Further statutory references are to the Code of Civil
Procedure.
      “A ‘SLAPP’ is a ‘“strategic lawsuit against public
participation”’ [citation], and special motions to strike under
section 425.16 are commonly referred to as ‘[a]nti-SLAPP
motions’ [citation].” (Bonni v. St. John Health System (2021) 11
Cal.5th 995, 1007, fn. 1 (Bonni).)

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(CFO) and managing partner of Glendale Adventist Emergency
Physicians, Inc. (Glendale Adventist), another company that
managed emergency medicine departments. EGO was a
company that provided medical billing and insurance
reimbursement services for medical facilities, including those
managed by Premier and Glendale Adventist.
      On April 20, 2014, EGO entered into a written agreement
with Glendale Adventist, in which EGO agreed, for
compensation, to perform certain services at Glendale Adventist
(the Glendale Adventist billing services agreement).
      On January 1, 2016, EGO entered into a written agreement
with Premier, in which EGO agreed, for compensation, to perform
services at several emergency departments that Premier
managed (the Premier billing services agreement). That
agreement included a paragraph that defined certain information
as confidential (Confidential Information), and provide that a
party in receipt of Confidential Information “shall not use the
Confidential Information . . . for any purpose whatsoever, except
as contemplated under this Agreement” (confidentiality
provision).
      On October 1, 2016, EGO and Premier entered into a
written addendum to the Premier billing services agreement,
pursuant to which EGO agreed to provide services to Premier at
two additional facilities.
      Premier and EGO’s business relationship eventually
deteriorated, resulting in the complaint and cross-complaint at
issue on appeal.
      Meanwhile, on January 14, 2020, Cardillo, on behalf of
Glendale Adventist, advised EGO that Glendale Adventist was
terminating its billing services agreement with EGO.

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B.    Premier’s Complaint

       On March 19, 2020, Premier filed a complaint against EGO
alleging causes of action for: (1) breach of contract; (2) breach of
the covenant of good faith and fair dealing; (3) intentional
interference with prospective economic relations; (4) negligent
interference with prospective economic relations; (5) breach of
fiduciary duties; (6) negligence; (7) extortion; and (8) violations of
Business and Professions Code section 17200.
       We summarize here the factual allegations in the
complaint. On November 19, 2018, Cardillo provided notice to
EGO that in December 2018, Premier would be terminating its
affiliation with Lompoc Valley Medical Center, at which EGO
had previously provided services to Premier. EGO nonetheless
continued to provide billing services at Lompoc Valley Medical
Center, on Premier’s behalf. Premier thereby became obligated
to return erroneous reimbursements to insurers and
governmental entities, which caused Premier to experience cash
flow issues. Because of these cash flow issues, Premier fell
behind in paying EGO, which threatened that if Premier did not
pay the outstanding invoice, EGO would report Premier to the
Department of Justice and other regulatory agencies and
terminate EGO’s services. In October 2019, EGO terminated the
Premier billing services agreement.
       Premier then transitioned the billing services
responsibilities at Palo Verde Hospital, at which EGO had
previously provided services, to LogixHealth, another billing
services provider. When LogixHealth assumed coding and billing
responsibilities at Palo Verde Hospital, it discovered and
highlighted significant and detrimental errors by EGO.

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Specifically, LogixHealth discovered that EGO had not filed
certain applications to satisfy the requirements for Arizona
Medicaid reimbursement and failed to re-enroll numerous
Premier physicians for reimbursement by a Riverside county
services fund.

C.    EGO’s Cross-Complaint

      On June 17, 2020, EGO filed a cross-complaint against
Premier, Cardillo, and Glendale Adventist. In its introductory
paragraphs, EGO alleged that Premier had been in arrears on its
account with EGO and “[r]ather than paying the debt [Premier]
owes, [ ] Cardillo had undertaken a coordinated campaign to
retaliate against [EGO] and gain leverage to reduce its debt,
including by filing its meritless Complaint in this matter and
causing [Glendale Adventist], which he also controls, to
terminate its contract with [EGO].”2 The cross-complaint alleged
the following causes of action: (1) breach of contract against
Premier; (2) account stated against Premier; (3) quantum meruit
against Premier; (4) intentional interference with contractual
relations against Cardillo; and (5) breach of the implied covenant
of good faith and fair dealing against Glendale Adventist. Only
the first and fourth causes of action were the subjects of Premier
and Cardillo’s anti-SLAPP motions.

2     EGO’s reference to the “meritless” complaint did not
otherwise support a claim for relief and is the type of “merely
incidental” or “collateral” allegation that is not subject to an anti-
SLAPP motion. (Baral v. Schnitt (2016) 1 Cal.5th 376, 394
(Baral).)

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       In its breach of contract cause of action, EGO alleged that
Premier breached the Premier billing services agreement in three
ways. The third alleged breach (breach of confidentiality cause of
action) is the only one relevant for purposes of this appeal. EGO
alleged that “based on the allegations of its Complaint in this
matter, [Premier] appears to have disclosed Confidential
Information acquired from [EGO] to a third party, its current
billing services provider, without authorization and for a purpose
not contemplated by the parties’ agreement. Such Confidential
Information may include [EGO’s] methods, data, formulae, trade
secrets, and/or other intellectual property, financial statements,
records and information, pricing strategies, and other business
information.”
       In its intentional interference with contractual relations
cause of action, EGO alleged that Cardillo, who knew of the
Glendale Adventist billing services agreement, “interfered with
[EGO’s] contractual relations with Glendale Adventist to
retaliate and punish [EGO] for terminating [the Premier billing
services agreement] and gain leverage regarding the debt owed to
[EGO].”

D.    Special Motions to Strike

       Premier and Cardillo responded to the cross-complaint by
filing special motions to strike pursuant to section 425.16.
Premier moved to strike the breach of confidentiality cause of
action contending that it arose from Premier’s filing of its
complaint in this matter and thus was protected activity within
the meaning of section 425.16, subdivision (e)(2) and (e)(4).
Premier noted that a prevailing party is entitled to attorney fees

                                  6
and costs and advised the court that it “will seek its attorneys’
fees and costs by separate motion if its motion is granted.”
      Cardillo’s motion sought to strike the entirety of the cross-
complaint’s cause of action for intentional interference with
contractual relations. In support of that motion, Cardillo
submitted a declaration stating, among other things, that in or
around January 2020, he was “anticipating legal action” by
Premier against EGO. Based on his roles as the CFO and
managing partner at Glendale Adventist, he “believed that [he]
had a fiduciary obligation to [his] partners to inform them of the
impending legal action against EGO and to discuss with them
how such legal action might affect [Glendale Adventist].
Accordingly, [he] discussed with other [Glendale Adventist]
managing partners the issues [he] had been experiencing with
EGO’s services in connection with [his] role as CEO and
President of Premier, among other general business
considerations surrounding the [Glendale Adventist billing
agreement].” He added, “[u]ltimately, [Glendale Adventist]
decided, by vote of all partners, not to renew its agreement with
EGO for an additional term.” In Cardillo’s view, the intentional
interference with contractual relations cause of action therefore
arose from protected activity within the meaning of section
425.16, subdivisions (e)(2) and (e)(4). Finally, Cardillo advised
the court that he “will seek his attorneys’ fees and costs by
separate motion if his motion is granted.”
      EGO opposed both motions, disputing that the challenged
causes of action arose from protected activity and contending that
both had minimal merit.

                                7
E.    Trial Court’s Ruling

       On December 10, 2020, the trial court conducted a hearing
on the anti-SLAPP motions. Although a court reporter was
present, the record on appeal does not include a reporter’s
transcript of the hearing. Following the hearing, the court issued
a written minute order denying the motions to strike. The court
concluded that Premier and Cardillo had failed to demonstrate
that the causes of action arose from protected conduct. Thus, the
court did not consider whether the causes of action had minimal
merit. The court neither discussed nor awarded any attorney
fees in connection with the motion.
       Premier and Cardillo timely filed their notices of appeal.

                       III. DISCUSSION

      Premier and Cardillo contend that the trial court erred in
denying their anti-SLAPP motions because they each met their
prima facie burden of demonstrating that the relevant causes of
action arose from protected activity. We disagree.

A.    Applicable Law

      “A SLAPP suit—a strategic lawsuit against public
participation—seeks to chill or punish a party’s exercise of
constitutional rights to free speech and to petition the
government for redress of grievances. [Citation.] The
Legislature enacted . . . section 425.16—known as the anti-
SLAPP statute—to provide a procedural remedy to dispose of
lawsuits that are brought to chill the valid exercise of

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constitutional rights.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048,
1055–1056; § 425.16, subd. (b)(1).) “Resolution of an anti-SLAPP
motion involves two steps. First, the defendant must establish
that the challenged claim arises from activity protected by section
425.16. [Citation.] If the defendant makes the required showing,
the burden shifts to the plaintiff to demonstrate the merit of the
claim by establishing a probability of success.” (Baral, supra, 1
Cal.5th at p. 384.)
       At the first step, “[t]he moving defendant’s burden is to
demonstrate that the act or acts of which the plaintiff complains
were taken ‘in furtherance of the [defendant]’s right of petition or
free speech under the United States or California Constitution in
connection with a public issue,’ as defined in the statute.
(§ 425.16, subd. (b)(1).)” (Equilon Enterprises v. Consumer Cause,
Inc. (2002) 29 Cal.4th 53, 67.) The anti-SLAPP statute identifies
four categories of protected activity: “(1) any written or oral
statement or writing made before a legislative, executive, or
judicial proceeding, or any other official proceeding authorized by
law, (2) any written or oral statement or writing made in
connection with an issue under consideration or review by a
legislative, executive, or judicial body, or any other official
proceeding authorized by law, (3) any written or oral statement
or writing made in a place open to the public or a public forum in
connection with an issue of public interest, or (4) any other
conduct in furtherance of the exercise of the constitutional right
of petition or the constitutional right of free speech in connection
with a public issue or an issue of public interest.” (§ 425.16,
subd. (e).)
       “‘The right to petition for redress of grievances is the right
to complain about and complain to the government.’ [Citation.]

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‘The right includes the right to petition the executive or
legislative branches directly’ and also encompasses ‘the right to
petition the judicial branch for resolution of legal disputes.’
[Citation.]” (Chorn v. Workers’ Comp. Appeals Bd. (2016) 245
Cal.App.4th 1370, 1385.) “The constitutional right of petition
encompasses ‘“‘the basic act of filing litigation.’”’ [Citation.]”
(Navellier v. Sletten (2002) 29 Cal.4th 82, 90.)
       “We determine de novo whether any of the acts from which
challenged claims arise are protected under these provisions.
(Wilson[ v. Cable News Network, Inc. (2019)] 7 Cal.5th [871,]
884.)” (Bonni, supra, 11 Cal.5th at p. 1009.) “In addition to the
pleadings, we may consider affidavits concerning the facts upon
which liability is based. [Citations.]” (Park v. Board of Trustees
of California State University (2017) 2 Cal.5th 1057, 1067 (Park).)

B.    Breach of Contract Claim Against Premier

       We first consider whether EGO’s breach of confidentiality
cause of action arose from petitioning activity. Premier
interprets EGO’s allegation that “‘based on the allegations of its
[c]omplaint in this matter, [Premier] appears to have disclosed
Confidential Information acquired from [EGO] to a third party”
to mean that the complaint “supposedly ‘disclosed Confidential
Information acquired from [EGO] to a third party, its current
billing services provider.’” (Original italics omitted.) That,
however, is an unreasonable interpretation of the cross-
complaint. If EGO had intended to allege that Premier disclosed
confidential information in the complaint, it would have said so
directly without adding the otherwise unnecessary allegation
that the disclosure was specifically “’to a third party, its current

                                 10
billing services provider.’” Further, Premier’s complaint does not
reference any confidential information such as “[EGO’s] methods,
data, formulae, trade secrets, and/or other intellectual property,
financial statements, records and information, pricing strategies,
and other business information.” Thus, the only reasonable
interpretation of EGO’s breach of confidentiality cause of action
is that the term “based on” means “from” rather than “through”
such that the allegation should properly be read to state: “[From]
the allegations of its Complaint in this matter, [Premier] appears
to have disclosed Confidential Information acquired from [EGO]
to a third party, its current billing services provider . . . .” We
thus agree with the trial court that the conduct at issue in the
breach of confidentiality cause of action is not the type protected
by the anti-SLAPP statute.

C.    Intentional Interference with Contractual Relations Against
      Cardillo

       Cardillo contends that EGO’s intentional interference with
contractual relations cause of action “‘arises from’” conduct that
is “protected activity” under section 425.16, subdivision (e)(2) and
(e)(4). In Cardillo’s view, his “communications with other
[Glendale Adventist] partners and directors regarding the
impending legal action [he] planned to file on behalf of Premier
against EGO and the bases for that pending litigation are what
led to the [Glendale Adventist] partners’ decision to not renew
the [Glendale Adventist billing services agreement]. . . . But for
those communications, EGO would not have a basis for its claim.”
       As an initial matter, Cardillo’s declaration does not
expressly state that he advised his partners about Premier’s

                                11
plans to file the complaint against EGO. Rather, Cardillo
declared that he “believed” that he had a fiduciary obligation to
inform his partners about Premier’s impending legal action
against EGO and how such legal action might affect Glendale
Adventist. Cardillo did not declare that he actually advised the
managing partners of Glendale Adventist about the pending
lawsuit or how the lawsuit would affect Glendale Adventist. He
declared only that: “Accordingly, [he] discussed with other
[Glendale Adventist] managing partners the issues [he] had been
experiencing with EGO’s services in connection with [his] role as
CEO and President of Premier, among other general business
considerations surrounding the [Glendale Adventist billing
services agreement].” This discussion preceded Glendale
Adventist’s vote to not renew its agreement with EGO.
        Even assuming, however, that we construe Cardillo’s
declaration as stating that he advised Glendale Adventist’s other
managing partners about Premier’s plans to file a complaint
against EGO, “a claim is not subject to a motion to strike simply
because it contests an action or decision that was arrived at
following speech or petitioning activity, or that was thereafter
communicated by means of speech or petitioning activity.
Rather, a claim may be struck only if the speech or petitioning
activity itself is the wrong complained of, and not just evidence of
liability or a step leading to some different act for which liability
is asserted.” (Park, supra, 2 Cal.5th at p. 1060.)
        Here, the act for which liability is asserted is not Cardillo’s
advising his fellow managing partners about Premier’s plans to
file a lawsuit, but Cardillo’s conduct in “us[ing] his authority as
Managing Partner to terminate the [Glendale Adventist billing
services agreement].” Thus, the conduct alleged to give rise to

                                  12
liability in this case is not protected speech or petitioning activity
and is not protected by the anti-SLAPP statute.

D.    Attorney Fees

      Premier and Cardillo both contend that they are entitled to
attorney fees because they should have prevailed on their anti-
SLAPP motions. Not only did the trial court not err in denying
the anti-SLAPP motions, but the record before us does not
include any request for attorney fees or ruling on such a request.
Premier and Cardillo’s arguments are meritless.

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                      IV. DISPOSITION

     The orders denying the anti-SLAPP motions are affirmed.
EGO, Inc. is entitled to recover its costs on appeal.

     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                       KIM, J.

We concur:

             RUBIN, P. J.

             BAKER, J.

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