California Court of Appeal, Second District, Third Division
[DEPUBLISHED BY ORDER]
APPEAL from an order of the Superior Court of Los Angeles County, Phrasel L. Shelton, Judge. (Retired Judge of the L.A. Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Reversed. (Super. Ct. No. YC066746).
[Copyrighted Material Omitted]
Horwitz & Levy, Robert H. Wright, Daniel J. Gonzalez, Julie L. Woods, Encino; Calendo, Puckett, Sheedy & DiCorrado and Richard A. DiCorrado, Glendale, for Defendant and Appellant.
Knapp, Petersen & Clarke, Mitchell B. Ludwig and Barbara Ciolino, Glendale, for Movant and Respondent.
Michael D. Waks, Long Beach; Alderlaw, C. Michael Alder and Stephen K. McElroy, for Plaintiff and Respondent.
In this personal injury case, a third party, known as a " factor," purchased from a health care provider a medical lien on the plaintiff's recovery, if any, against the defendant. We must decide whether the defendant is entitled to obtain documents through the discovery process relating to the factor's contractual relationship with the health care provider, including documents disclosing what the factor paid for the lien.
The parties to this appeal are appellant and defendant Maria Francesca Cruz, respondent and plaintiff Barry Dodd, and third party witness and respondent Medical Finance LLC (MedFi). Cruz appeals an order granting MedFi's motion to quash Cruz's subpoena and awarding MedFi $5,600 in monetary sanctions. Dodd joined MedFi's motion. We conclude the superior court abused its discretion in granting the motion and awarding the sanctions.
Dodd and Cruz were involved in a motor vehicle accident. In his complaint, Dodd alleged that Cruz's negligent operation of a motor vehicle proximately caused Dodd to sustain personal injuries.
Dodd contends he sustained a shoulder injury, specifically a torn rotator cuff. He received treatment for this injury at a medical center operated by Kaiser Permanente. Subsequently, a physician at Coast Surgery Center of
South Bay (Coast) performed a shoulder surgery on Dodd. Cruz contends Dodd's attorney, Michael Waks, referred Dodd to Coast.
[167 Cal.Rptr.3d 604] Before the surgery, Dodd did not know what Coast's charges for the procedure would be. He did know, however, it would be on a " lien basis." Dodd later learned Coast's bill was between $40,000 and $50,000.
On the same day as Dodd's surgery, Coast sold to MedFi its account receivable and lien against Dodd for payment of its charges. MedFi claims that it is in the business of purchasing accounts receivable from businesses, including health care providers, " at a discount." According to MedFi's vice president William Simon, MedFi " expects to be paid" by Dodd (and other patients) for 100 percent of the " book value" of the health care provider's charges " regardless of what the court or jury decides is the reasonable costs" of Dodd's ...