Court Opinion

ID: 2646683
Source: CourtListenerOpinion
Date Created: 2013-12-19 01:07:16.471006+00
Date Added: 2024-06-11T08:36:30.753790
License: Public Domain

Filed 12/18/13 Levy v. Allergan USA CA2/4
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 FOUR

MAURICE LEVY, M.D.,                                                  B243941

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                      Super. Ct. No. BC469584)
         v.

ALLERGAN USA, INC.,

         Defendant and Respondent.

         APPEAL from a judgment of the Superior Court for Los Angeles County,
Holly E. Kendig, Judge. Affirmed.
         Jance M. Weberman for Plaintiff and Appellant.
         Gibson, Dunn & Crutcher, Jeffrey H. Reeves and Jeffrey T. Thomas for
Defendant and Respondent.
       Plaintiff Maurice Levy, M.D., appeals from a judgment of dismissal in favor
of defendant Allergan USA, Inc. following the sustaining of a demurrer without
leave to amend.1 We affirm the judgment.

                                    BACKGROUND
       This appeal arises in a lawsuit Dr. Levy filed against Allergan, Ariel Peretz,2
and several companies owned and/or operated by Peretz. Viewed in a light most
favorable to Dr. Levy, the allegations of the operative first amended complaint boil
down to this: without Dr. Levy’s knowledge or consent, Peretz used Dr. Levy’s
medical license over the course of several years to purchase large quantities of
prescription medications from Allergan, which Peretz then sold at a profit, and
Allergan, which knew or should have known that Dr. Levy did not authorize the
purchases, conspired with Peretz so it could make a profit from the sales.
       The complaint purports to set out eight causes of action against Allergan
based on those allegations, for breach of contract, constructive fraud, fraud,
conspiracy to commit fraud and violate state regulations for sale of prescription
medications, unfair business practices, unjust enrichment, negligence, and
accounting. We need not describe each of the causes of action in detail for the
purpose of this appeal. Suffice to say that, as to each cause of action (except the
claim for an accounting), the complaint does not describe the injury Dr. Levy
suffered as a result of the alleged wrongdoing, but appears to allege that he is

1
       Allergan also filed a motion in this court to correct an error in the reporter’s
transcript. Counsel for Allergan withdrew the motion at oral argument.
2
      This defendant’s name is spelled two different ways in the first amended
complaint. We use the spelling found in the caption.

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entitled to recover the profits Allergan and the other defendants earned as a result
of the sales.3
       Allergan filed a demurrer to each cause of action alleged in the complaint.
       As to the breach of contract, constructive fraud, fraud, conspiracy, and
negligence claims, Allergan asserted that the complaint fails to state a cause of
action because it does not plead facts supporting an inference of damage to Dr.
Levy caused by Allergan’s alleged conduct.4 Similarly, Allergan argued that the
unfair business practices claim was subject to demurrer because the complaint fails
to allege facts showing that Dr. Levy suffered injury in fact as a result of
Allergan’s alleged conduct, and therefore Dr. Levy does not have standing to bring
a claim under Business and Professions Code sections 17200 and 17500.
Likewise, Allergan argued that the unjust enrichment claim fails because the
complaint does not allege facts to show that Allergan benefitted at the expense of
Dr. Levy. Finally, Allergan asserted that the accounting claim fails because the
complaint fails to state any other cause of action requiring an accounting.
       In his opposition to the demurrer, Dr. Levy did not directly address
Allergan’s argument that the complaint fails to allege facts showing how Dr. Levy
was damaged, or suffered injury in fact, or how Allergan benefitted at Dr. Levy’s
expense. Instead, Dr. Levy asserted that Allergan made profits through its alleged
unauthorized use of Dr. Levy’s medical license.

3
     The last cause of action seeks an accounting in order to ascertain the amount of
damages Dr. Levy asserts he is entitled to recover under the other causes of action.
4
        As to those claims, Allergan also argued that the complaint fails to properly allege
(1) for breach of contract, the existence of a contract to which Dr. Levy was a party;
(2) for constructive fraud, facts showing a fiduciary relationship between Allergan and
Dr. Levy, and Allergan’s intent to deceive; (3) for fraud, facts showing Allergan’s duty to
disclose or Dr. Levy’s justifiable reliance on any failure to disclose; (4) for conspiracy,
acts by Allergan sufficient to show the formation and operation of a conspiracy; and
(5) for negligence, facts showing that Allergan owed a duty to Dr. Levy.

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      At the hearing on the demurrer, the trial court announced its tentative
decision was to sustain the demurrer as to all of the causes of action alleged against
Allergan. The court then addressed each cause of action, giving its reasons for
sustaining the demurrer. Although the court provided multiple grounds as to some
of the causes of action, one ground common to all was that the complaint does not
allege that Dr. Levy was damaged or suffered injury, or that Allergan benefitted at
Dr. Levy’s expense. As the court noted, “There’s no allegation that Allergan
refused to sell [Dr. Levy] any products because Peret[z] was ordering or that he
suffered any damages. . . . He only alleges that the defendants profited.” After
hearing argument from counsel for Dr. Levy, the court determined the defects
could not be cured by amendment, sustained the demurrer without leave to amend,
and granted Allergan’s motion to dismiss. Dr. Levy timely filed a notice of appeal
from the judgment of dismissal.

                                    DISCUSSION
      “On appeal from a judgment of dismissal entered after a general demurrer is
sustained, our review is de novo. [Citation.] We examine the allegations of the
complaint to determine whether it states a cause of action, and if not, we determine
whether there is a reasonable possibility that it could be amended to do so.
[Citation.] ‘In the construction of a pleading, for the purpose of determining its
effect, its allegations must be liberally construed, with a view to substantial justice
between the parties.’ [Citation.] ‘“We treat the demurrer as admitting all material
facts properly pleaded, but not contentions, deductions or conclusions of fact or
law. . . .” [W]e give the complaint a reasonable interpretation, reading it as a
whole and its parts in their context. [Citation]’ [Citation.]” (Berkley v. Dowds
(2007) 152 Cal.App.4th 518, 525.)

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      There is no question that a plaintiff alleging a cause of action for breach of
contract, constructive fraud, fraud, conspiracy, or negligence must allege that he or
she suffered damages caused by the defendant’s wrongful conduct. (See, e.g.,
Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821 [elements of
breach of contract are “(1) the existence of the contract, (2) plaintiff’s performance
or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting
damages to the plaintiff”]; Younan v. Equifax Inc. (1980) 111 Cal.App.3d 498,
516, fn. 14 [elements of constructive fraud are “(1) fiduciary relationship; (2)
nondisclosure (breach of fiduciary duty); (3) intent to deceive; and (4) reliance and
resulting injury (causation)”]; Bank of America Corp. v. Superior Court (2011) 198
Cal.App.4th 862, 870 [elements of fraud based on concealment are (1) defendant
concealed a material fact; (2) defendant had a duty to disclose the fact to plaintiff;
(3) defendant intentionally concealed the fact with the intent to defraud plaintiff;
(4) plaintiff was unaware of the fact and would not have acted as he did had he
known of the fact; and (5) plaintiff sustained damage as a result of the concealment
of the fact]; Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1062 [“The elements of an
action for civil conspiracy are (1) formation and operation of the conspiracy and
(2) damage resulting to plaintiff (3) from a wrongful act done in furtherance of the
common design”]; Berkley v. Dowds, supra, 152 Cal.App.4th at p. 526 [“‘[T]he
well-known elements of any negligence cause of action [are] duty, breach of duty,
proximate cause and damages’”].) Nor is there any question that to have standing
to bring an unfair business practices claim under Business and Professions Code
sections 17200 or 17500, the plaintiff must have suffered an injury in fact and have
lost money or property as a result of the defendant’s wrongful conduct. (Bus. &
Prof. Code, §§ 17204, 17535.) Finally, to allege a claim of unjust enrichment, the
plaintiff must allege the defendant received and retained a benefit at the expense of
another, i.e., the plaintiff. (Peterson v. Cellco Partnership (2008) 164 Cal.App.4th

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1583, 1593; Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 726.)
Conclusory allegations that the defendant’s conduct caused the plaintiff damage or
injury in fact, or that the defendant profited at the plaintiff’s expense are not
sufficient to survive a demurrer. “Allegations of damages without allegations of
fact to support them are but conclusions of law, which are not admitted by
demurrer.” (Zumbrun v. University of Southern California (1972) 25 Cal.App.3d
1, 12.)
        Dr. Levy contends on appeal that he adequately alleged the damages he
sustained as a result of defendants’ conduct. Citing CTC Real Estate Services v.
Lepe (2006) 140 Cal.App.4th 856 (CTC Real Estate), he argues that Peretz’s use of
his medical license without permission constituted theft (i.e., identity theft), and
therefore he is entitled to recover any goods and/or money that was obtained
through that theft. His analysis of CTC Real Estate, however, misses a crucial
step.
        In CTC Real Estate, the plaintiff established that someone used her personal
identification information to engage in various transactions and that she suffered
injuries caused by the identity theft: her credit record was damaged, she was
required to spend considerable time dealing with the consequences, a bankruptcy
proceeding was filed in her name without her knowledge, her credit card accounts
had been closed, and she was unable to borrow money for a home she intended to
purchase as a result of the identity theft. (CTC Real Estate, supra, 140
Cal.App.4th at pp. 858-859.) Moreover, the proceeds the plaintiff sought to
recover in that case were the surplus proceeds from a trustee sale of a property the
perpetrator purchased by obtaining a loan using the plaintiff’s personal information
and credit, which loan was secured by a personal deed of trust under the plaintiff’s
name. (Id. at p. 858.) The appellate court held that, because the perpetrator
injured the plaintiff by taking and misusing her personal assets -- her identifying

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information and credit -- the plaintiff was entitled to recover anything the
perpetrator acquired with the stolen assets, i.e., the surplus proceeds from a trustee
sale following foreclosure. (Id. at p. 860.)
      In contrast, in this case, there is no allegation that Peretz, let alone Allergan,
incurred debt in Dr. Levy’s name, caused any foreclosure or collections actions to
be instituted against Dr. Levy, or damaged Dr. Levy’s credit in any way. Nor is
there any allegation that Dr. Levy was prevented from ordering medications from
Allergan due to Peretz’s large orders. Indeed, it appears there are no facts Dr.
Levy could allege to show damage caused by Allergan’s alleged conduct. At the
hearing on the demurrer, the trial court asked Dr. Levy’s counsel how he could
amend the complaint to fix the defects. Counsel responded, “Allergan is using the
license of the plaintiff to make money, the plaintiff never gave him permission to
do that. What right do they have to do that? . . . You’ve been damaged. How
have you been damaged? Someone else is making money on your license. You
earned that license. That doesn’t belong to Allergan.”
      While we do not condone the conduct alleged in this case (which we assume
to be true for purposes of the demurrer), the mere fact that others made money
through the misuse of Dr. Levy’s medical license does not demonstrate that Dr.
Levy suffered an injury by that misuse. Therefore, we conclude the trial court
properly sustained Allergan’s demurrer without leave to amend and dismissed the
lawsuit against it.

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                    DISPOSITION
The judgment is affirmed. Allergan shall recover its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                WILLHITE, J.

We concur:

EPSTEIN, P. J.

SUZUKAWA, J.

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