Robert Amster, M.D. v. Hoag Mem. Hosp. Presbyterian ( 2022 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 17 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: HOAG URGENT CARE-TUSTIN, No. 21-55452
INC.,
D.C. Nos. 8:19-cv-02343-MWF
Debtor, 8:20-cv-00510-MWF
______________________________ 8:20-cv-00511-MWF
8:20-cv-00512-MWF
ROBERT AMSTER, M.D.; et al.,
Appellants, MEMORANDUM*
v.
HOAG MEMORIAL HOSPITAL
PRESBYTERIAN; NEWPORT
HEALTHCARE CENTER, LLC,
Appellees.
Appeal from the United States District Court
for the Central District of California
Michael W. Fitzgerald, District Judge, Presiding
Submitted February 15, 2022**
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: BRESS and BUMATAY, Circuit Judges, and BENITEZ,*** District
Judge.
Dr. Robert Amster, Robert Amster, M.D., Inc., and Your Neighborhood
Urgent Care, LLC (collectively, “Amster”), appeal a district court order affirming a
bankruptcy court’s orders granting Hoag Memorial Hospital Presbyterian and
Newport Healthcare Center, LLC (collectively, “Hoag”) summary judgment. We
review de novo a district court’s decision to affirm a bankruptcy court’s grant of
summary judgment. Um v. Spokane Rock I, LLC, 904 F.3d 815, 818 (9th Cir. 2018).
We affirm.
1. A joint venture was not created between Amster and Hoag. Under
California law, a joint venture is “an undertaking by two or more persons jointly to
carry out a single business enterprise for profit.” Weiner v. Fleischman, 816 P.2d
892, 895 (Cal. 1991) (simplified). Generally, three elements must be established:
“(1) joint interest in a common business; (2) with an understanding to share profits
and losses; and (3) a right to joint control.” 580 Folsom Assocs. v. Prometheus Dev.
Co., 272 Cal. Rptr. 227, 234 (Cal. Ct. App. 1990) (simplified). The touchstone for
determining the existence of a joint venture is “the intention of the parties.” Apr.
Enters., Inc. v. KTTV, 195 Cal. Rptr. 421, 427 (Cal. Ct. App. 1983). Amster cannot
***
The Honorable Roger T. Benitez, United States District Judge for the
Southern District of California, sitting by designation.
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show a genuine dispute as to at least two elements. And it is clear that the parties
did not intend to become joint venturers in the clinics.
First, Hoag had no ownership interest in any entity dealing with the clinics.
The parties initially discussed a joint venture arrangement, but that idea was
abandoned. They then executed the Master Urgent Care Development Agreement
(“MUCDA”). Amster agreed to be the 100% owner and operator of the urgent care
facilities. Hoag only agreed to be in a licensor-licensee, landlord-tenant, and
creditor-debtor relationship with Amster.
Second, Hoag and Amster did not share profits and losses. Generally, joint
venturers “must share the profits of the undertaking.” Unruh-Haxton v. Regents of
Univ. of Cal., 76 Cal. Rptr. 3d 146, 168 (Cal. Ct. App. 2008) (emphasis added); 9
Witkin, Summary 11th Partnership § 14 (“Sharing profits and losses . . . is usually
an indispensable feature of a joint venture[.]” (emphasis added)). But no part of the
MUCDA or licensing agreement provided Hoag with any share in the profits or
losses of the clinics.
This case is also unlike Krantz v. BT Visual Images, L.L.C., which found a
dispute on profit sharing when a plaintiff agreed to sell equipment incorporating a
defendant’s components for a commission on sales. 107 Cal. Rptr. 2d 209, 211–13
(Cal. Ct. App. 2001). Unlike in Krantz, the fee arrangement here did not involve
any potential profit sharing. Hoag was not entitled to a percentage of sales; it was
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only entitled to receive flat rent and lease payments, trademark license fees, and loan
payments. And any incidental benefits Hoag may have received from patient
referrals and brand enhancement is not comparable to a direct commission, as in
Krantz.
The record also confirms that the parties did not intend to form a joint venture.
The parties initially contemplated jointly owning the urgent care centers, but Hoag
retreated from that arrangement. It told Amster that a joint venture was not
“feasible.” Hoag and Amster then executed the MUCDA, declaring Amster the sole
owner of the urgent care centers. Later, in subsequent loan and sublease
restructuring agreements, the parties stipulated that Hoag “has [not] agreed or
consented to being an agent, principal, participant, joint venturer, partner or alter
ego of” Amster. And while an express disclaimer is not itself dispositive of the
creation of a joint venture, see Apr. Enters., Inc., 195 Cal. Rptr. at 428, it adds to the
weight of evidence showing that the parties did not intend to become joint venturers.
2. Amster cannot invoke the sham guaranty defense against Hoag’s
counterclaim for breach of guaranties. The defense derives from California
antideficiency laws, which provide that a lender cannot “obtain[] a deficiency
judgment from a borrower following a nonjudicial foreclosure of real property.”
LSREF2 Clover Prop. 4, LLC v. Festival Retail Fund 1, LP, 208 Cal. Rptr. 3d 200,
206 (Cal. Ct. App. 2016); see Cal. Civ. Proc. Code §§ 580(a)–(e), 726. But Amster
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has not cited authority suggesting that the defense applies outside the context of the
foreclosure of real property. See Cadle Co. II v. Harvey, 100 Cal. Rptr. 2d 150, 154
(Cal. Ct. App. 2000) (explaining that the antideficiency laws “reflect a legislative
policy that strictly limits the right to recover deficiency judgments for the amount
the debt exceeds the value of the security”); see also Festival Retail Fund 1, LP, 208
Cal. Rptr. 3d at 206; Torrey Pines Bank v. Hoffman, 282 Cal. Rptr. 354, 359–60
(Cal. Ct. App. 1991). And here, the guaranties only involve lease payments and
other obligations owed to Hoag. The district court thus properly affirmed the order
granting summary judgment for Hoag.
3. Amster also appeals the bankruptcy court’s order striking the jury
demand. The district court declined to reach the issue because it affirmed the grants
of summary judgment against Amster. For the same reason, we also do not reach
the issue.
AFFIRMED.
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