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Saint Agnes Medical Center v. Dogali

January 15, 2010

SAINT AGNES MEDICAL CENTER, PLAINTIFF,
v.
MICHAEL DOGALI, M.D., DEFENDANT.



The opinion of the court was delivered by: Dennis L. Beck United States Magistrate Judge

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND ACTION

(Document 9)

Plaintiff Saint Agnes Medical Center ("Plaintiff") filed the instant motion to remand this action to the Fresno County Superior Court on December 3, 2009. The motion was heard on January 8, 2010, before the Honorable Dennis L. Beck, United States Magistrate Judge. Steven McGee and Amanda Hebesha appeared on behalf of Plaintiff. Judith Harless appeared on behalf of Defendant Michael Dogali, M.D. ("Defendant").

BACKGROUND

Plaintiff filed the instant breach of contract action against Defendant on September 21, 2009, in Fresno County Superior Court. Defendant removed the action to this Court on November 4, 2009, pursuant to this Court's federal question jurisdiction. Defendant filed an answer and counter-claim on November 12, 2009.

On December 3, 2009, Plaintiff filed a motion to remand the action along with an application for right to attach order and writ of attachment.*fn1 Defendant opposed the motions on December 22, 2009, and Plaintiff filed its replies on December 31, 2009.

ALLEGATIONS IN THE COMPLAINT

According to the complaint, in September 2006, Plaintiff and Defendant entered into a written Physician Recruitment Agreement ("PRA") pursuant to which Plaintiff agreed to provide Defendant with certain financial support to move to the Fresno area and establish and maintain a medical practice specializing in neurosurgery in the Fresno community. The PRA provided that Plaintiff would provide two lines of credit- the Practice Expense Line of Credit ("PEL") and the Gross Receipts Line of Credit ("GRL"). Defendant executed promissory notes for each line of credit.

Under the PEL, Plaintiff provided Defendant with a $500,000 line of credit. Defendant was entitled to receive advances from the line of credit for a period of two years beginning in October 2006. In October 2008, the PEL was to be repaid by Defendant over a period of 24 months, with interest. Between October 2006 and September 15, 2009, Defendant had fully withdrawn the PEL in the principal amount of $500,000. Defendant has failed to make payments despite a June 30, 2009, demand letter, or comply with the other conditions of the PEL. Plaintiff alleges it has been damaged in the principal sum of $500,000, together with interest in the amount of $89,293 as of September 15, 2009, for a total balance as of September 15, 2009, of $589,293.

Under the GRL, Plaintiff agreed to advance up to $650,000 to Defendant. Plaintiff acknowledged and agreed that it was, and is, willing to cancel certain specified obligations of Defendant under the GRL. However, any amounts advanced in excess of the $650,000 cap required immediate repayment upon demand. To date, Plaintiff has advanced $272,644 over the $650,000 cap. Defendant has failed to repay the amount despite a June 30, 2009, demand letter. Plaintiff alleges it has been damaged in the principal sum of $272,644, together with $41,805 in interest, for a total balance of $312,449.

In October 2007, Plaintiff and Defendant entered into an Income Guarantee and Repayable Loan Agreement ("Income Agreement"). In connection with the Income Agreement, Defendant executed a promissory note in favor of Plaintiff in the amount of $650,000. The note was to be repaid monthly in 12 equal installments commencing October 1, 2008, until principal and interest were repaid. In October 2007, Plaintiff began making advances under the terms of the Income Agreement. On November 12, 2007, the parties amended the Income Agreement. The parties entered into a second amendment on October 23, 2008. Under the terms of the second amendment, Defendant was to commence making payments on January 1, 2009. Defendant breached the Income Agreement and October 2007 Note by failing to make any payments despite a June 30, 2009, demand letter. Plaintiff alleges that the principal sum of $622,101 is now due an owing, with interest.

In addition to failing to repay the loans, Plaintiff alleges that Defendant breached the PRA by failing to accurately report financial information and failing to provide Plaintiff with full and complete access to financial information and records.

Based on these facts, Plaintiff alleges causes of action for breach of contract and promissory notes, breach of Income Guarantee and Repayable Loan Agreement, and common counts for money lent under each of the three loans (PEL, GRL and Income Agreement).

Defendant's counter-claim alleges that despite the terms of the PEL, based on representations by Plaintiff, he expected that no repayment would be required. Instead, he alleges that Plaintiff said it would structure the arrangement with the academic institution that was to hire Defendant so that the institution would repay any sums due on the note. In addition to his full-time practice, Defendant assumed a Medical Directorship with Plaintiff for which he was paid on an hourly basis. He also agreed to provide some coverage for Plaintiff's emergency department for ...


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