Carroll v. Arthroscopic & Laser Surgery Center of San Diego CA4/1 ( 2014 )


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  • Filed 2/25/14 Carroll v. Arthroscopic & Laser Surgery Center of San diego CA4/1
    NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
    COURT OF APPEAL, FOURTH APPELLATE DISTRICT
    DIVISION ONE
    STATE OF CALIFORNIA
    TIM CARROLL et al.,                                                 D063081
    Plaintiffs and Appellants,
    v.                                                         (Super. Ct. No. GIC806902,
    GIC806908)
    ARTHROSCOPIC & LASER SURGERY
    CENTER OF SAN DIEGO et al.,
    Defendants and Respondents.
    APPEAL from an order of dismissal of the Superior Court of San Diego County,
    Ronald L. Styn, Judge. Affirmed.
    Law Office of Marc O. Stern, Marc O. Stern; Boudreau Williams and Jon R.
    Williams for Plaintiffs and Appellants.
    Higgs, Fletcher & Mack, John Morris, William A. Miller and Jason C. Ross for
    Defendants and Respondents Arthroscopic & Laser Surgery Center of San Diego, SHC
    San Diego, Inc. and HealthSouth Corporation.
    Lewis Brisbois Bisgaard & Smith, Marilyn R. Moriarty and Julie R. Dann for
    Defendant and Respondent Gary Losse.
    Davis, Grass, Goldstein, Housouer, Finlay & Brigham, Ben Housouer and Jeffery
    W. Grass for Defendants and Respondents Bryon King and Paul Murphy.
    Edleson & Rezzo, L.B. Chip Edleson and Joann Rezzo for Defendants and
    Respondents Oasis MSO, Inc., David Chao and Oasis Sports Medical Group, Inc.
    This appeal by plaintiffs and appellants Tim Carroll, Anna Goode and Paula
    Hamma (Appellants) arises from the trial court's order striking all class allegations in this
    action seeking recovery of restitutionary relief against a number of health care providers,
    based on payments Appellants made for surgical and medical treatments performed or
    prescribed for them by defendant and respondent Dr. Gary Losse, M.D. During the 1997-
    1999 time frame in which Appellants' surgeries were performed by Dr. Losse, he was the
    medical director of certain defendant and respondent health care facilities, and was
    allegedly known by colleagues to be "sufficiently addiction-impaired during all relevant
    times that he was not qualified to practice medicine." In the two amended, consolidated
    complaints (the operative pleadings), Appellants generally alleged that "none of them
    would have paid Dr. Losse anything to have him perform surgeries on them in such a
    state," and thus they are entitled to recover individually for financial injury incurred for
    the "valueless" services rendered, received and remunerated. They assert individual,
    representative, and class causes of action for rescission based on fraud, damages based on
    2
    breaches of fiduciary duty, and relief under the unfair competition law (the UCL, Bus. &
    Prof. Code, § 17200 et seq.).1
    The trial court's order sustained demurrers and motions to strike brought by former
    professional associates of Dr. Losse, Arthroscopic & Laser Surgery Center of San Diego,
    L.P. (or "ALSCSD"), SHC San Diego, Inc. ("SHC") and HealthSouth Corporation
    (sometimes together Respondents). These demurrers and motions attacking the class
    allegations were joined in by other defendants and respondents, Dr. Losse and his former
    professional associates Bryon King, M.D., Paul Murphy, M.D., David Chao, M.D., and
    his corporate entity Oasis Sports Medical Group, Inc., and Oasis MSO, Inc. (again,
    sometimes all together Respondents). The trial court's ruling resolved the demurrers to
    Appellants' class allegations as presenting only questions of law, sustained them without
    leave to amend, and struck all the class claims.
    In the portion of this action that is not affected by this appeal (since the appeal is
    directed only to the class allegations), Appellants individually and on a representative
    basis seek monetary recovery against Respondents on claims for reimbursement of
    professional fees they paid, related to Dr. Losse's surgeries on each of them. These same
    motions and demurrers were denied and overruled as to Appellants' individual and UCL
    representative claims. The trial court's ruling therefore allows Appellants to pursue their
    individual tort claims, and also their UCL representative cause of action. Here, we
    1      All statutory references are to the Business & Professions Code unless otherwise
    indicated.
    3
    review only the dismissal of the class allegations on Appellants' tort and UCL
    representative claims, on the grounds stated in the demurrers and motions to strike.
    Appellants contend the trial court erred as a matter of law in ruling that their class
    claims cannot be stated on the theories of fraud, breach of fiduciary duty, or entitlement
    to UCL relief. According to Appellants, each potential class member undergoing surgery
    and treatment, during the relevant time periods, was placed in the same legal position by
    the failure of all Respondents to disclose Dr. Losse's addiction impairment, and the risks
    it posed to the treatment process. Although Appellants expressly assert that they are not
    contending in this lawsuit that they sustained bodily injury as a result of the surgeries
    performed by Dr. Losse, they claim they have pleaded all required elements for recovery
    of classwide relief for financial and consumer fraud injuries they incurred in the form of
    (1) repayment of their treatment expenses due to fraud in the inducement, (2) restitution
    of payments they made while under ignorance of necessary facts to allow any fully
    informed consent to be made for their surgeries (i.e., due to breaches of a doctor's
    fiduciary duties), and (3) awards of restitution and injunction under the UCL cause of
    action.
    Appellants mainly rely on the operation of section 2280, which forbids the
    practice of medicine while one is impaired by the influence of any narcotic drug or
    alcohol, as a common thread to be utilized "on a classwide basis to demonstrate that Dr.
    Losse was sufficiently impaired during the fairly discrete class period such that his
    practice of medicine was forbidden by law, as were the concomitant and substantial
    4
    charges he generated (to all of the Respondents' benefit) for that unlawful treatment."2
    Appellants also claim that even if they have not now shown a prima facie community of
    interest among all class members, the trial court should have deferred decision on the
    propriety of a class action "until an evidentiary hearing has been held on the
    appropriateness of class litigation." (Rose v. Medtronics, Inc. (1980) 
    107 Cal.App.3d 150
    , 154 [medical products liability class action]; Vasquez v. Superior Court (1971) 
    4 Cal.3d 800
    , 813 (Vasquez) [consumer fraud class action allowed to address overcharges
    for meat and freezer sales].) Appellants did not, however, suggest to the trial court or to
    this court any possibilities for discovery that would lead to a more successful allegation
    of these tort and statutory class claims, within the parameters of the UCL or otherwise.
    " 'The ultimate question in every case of this type is whether, given an
    ascertainable class, the issues which may be jointly tried, when compared with those
    requiring separate adjudication, are so numerous or substantial that the maintenance of a
    class action would be advantageous to the judicial process and to the litigants.' " (Brown
    v. Regents of University of California (1984) 
    151 Cal.App.3d 982
    , 988-989 (Brown)
    [disallowing proposed class action on fraud and other theories to challenge the adequacy
    of medical treatment rendered at a cardiology center].) Thus, "where there are diverse
    factual issues to be resolved, even though there may be many common questions of law"
    (ibid.), and where "the ability of each member of the class to recover clearly depends on a
    2      Section 2280 reads: "No licensee shall practice medicine while under the
    influence of any narcotic drug or alcohol to such an extent as to impair his or her ability
    to conduct the practice of medicine with safety to the public and his or her patients.
    Violation of this section constitutes unprofessional conduct and is a misdemeanor."
    5
    separate set of facts applicable only to [one], then all of the policy considerations which
    justify class actions equally compel the dismissal of such inappropriate actions at the
    pleading stage." (Id. at p. 989.)
    The operative pleadings reveal as a matter of law that this is not an appropriate
    class action, because individual issues on the effect of any misrepresentations arguably
    made to induce agreements for treatments, and any consequent financial injury,
    substantially predominate over any common questions. "[T]he difference between what
    the plaintiff paid and the value of what the plaintiff receives is a proper measure of
    restitution. [Citation.] In order to recover under this measure, there must be evidence of
    the actual value of what the plaintiff received." (In re Vioxx Class Cases (2009) 
    180 Cal.App.4th 116
    , 131.) Appellants contradictorily allege they, as a class, received
    medical services that did not injure them, and that Dr. Losse was still a licensed medical
    provider when those surgeries took place, but that they nevertheless should not have been
    held responsible to pay for those "valueless" surgeries. Appellants' allegations that Dr.
    Losse was known by some Respondents to be under a legal disability that should have
    voided their consents to contracts for medical care are only legal conclusions and not
    allegations of ultimate fact, and properly were found not to survive demurrer. (Kennedy
    v. Baxter Healthcare Corp. (1996) 
    43 Cal.App.4th 799
    , 807 (Kennedy) [" ' "We treat the
    demurrer as admitting all material facts properly pleaded, but not contentions, deductions
    or conclusions of fact or law." ' "].)
    Rather, these operative pleadings reveal that the ability of each potential member
    of the class to recover restitutionary relief or damages depends not upon common issues
    6
    of fact and law, but upon individual analysis and proof of separate sets of facts about
    whether Dr. Losse was addiction-impaired at the time of each surgery or treatment, and
    whether he or other Respondents caused each Appellant to incur compensable harm or
    damage, by not receiving the value of the services as charged and paid. As a class,
    Appellants cannot successfully divorce the factual and legal issues of whether each of
    them sustained any bodily injury from the surgeries, in order to claim as a matter of law
    that the surgeries were valueless, solely because of Dr. Losse's alleged addiction-
    impairment status and consequent potential trouble with his licensing status during the
    relevant time periods. Instead, proof of each class member's individual medical
    condition, before and after treatment, would be necessary to obtain rescission due to
    fraud, or to demonstrate that each class member did not receive the actual value of what
    they paid, as opposed to what they received. (Civ. Code, § 3343, subd. (a).) Likewise,
    Appellants' class claims do not allege any community of interest in the pleading and
    proof of the claimed recovery for financial injury from " 'all surgical and rehabilitation
    fees and costs associated with each of the Plaintiffs' treatments,' " based on any lack of
    informed consent.
    Due to the unavoidable contradictions within the pleadings regarding the types of
    injuries sustained or not sustained, no class treatment would be appropriate for the
    determinations of liability and causation, to enable an award of restitutionary redress for
    financial injuries on the theories advanced. We agree with the trial court's statement that
    class treatment of these claims would not be appropriate, because "individualized
    questions predominate these proof requirements. As stated in Brown, the class claims
    7
    pled present 'a veritable quagmire of tough factual questions which can only be resolved
    by individual proof.' (Brown[, supra], 151 Cal.App.3d at [p.] 989.)" Moreover, no
    realistic possibility of amendment has been offered, and we affirm the ruling dismissing
    the class allegations.
    FACTUAL AND PROCEDURAL BACKGROUND
    A. Background of Pleadings
    For purposes of analyzing the demurrer ruling, we take the facts properly pleaded
    to assess whether they may state a cause of action as a matter of law. (Blank v. Kirwan
    (1985) 
    39 Cal.3d 311
    , 318.) This rule is subject to the qualification that a demurrer does
    not admit as true " 'contentions, deductions or conclusions of fact or law.' " (Ibid.;
    Kennedy, supra, 
    43 Cal.App.4th 799
    , 807.)
    In 2003, Appellants filed two separate class and UCL representative actions: First,
    against Oasis and its shareholder physicians (then Drs. Losse, Murphy, King, and Chao;
    now the fourth amended complaint); and second, against the ALSCSD/HealthSouth
    rehabilitation entities associated with Dr. Losse (now the second amended complaint).
    Appellants state that between August 1997 and November 1999, "well over 500 patients
    per year" underwent surgery by Dr. Losse while he was purportedly "addiction-impaired"
    from narcotics abuse, but was nevertheless practicing medicine in violation of California
    law. In 1999, the California Medical Board intervened, and subsequently Dr. Losse
    began treatment for his addiction.
    The operative pleadings were filed May 30, 2012, after a series of preliminary
    proceedings and rulings that need not be summarized here. Generally, Appellants pled
    8
    that at all relevant times, Dr. Losse was sufficiently addiction-impaired that "his surgical
    judgment and skills were affected to a degree that substantially increased the risk of
    injury to his patients." Appellants' class representation requests seek to act for thousands
    of potential patient class members. However, Appellants expressly excluded from the
    class any persons seeking recovery for bodily injury or any general damages.
    In the class claims, Appellants seek restitution for financial injury on a consumer
    fraud basis. They claim Dr. Losse was sufficiently impaired at all relevant times such
    that his practice of medicine would have been against the law when he performed surgery
    on them, and these were common circumstances giving rise to a community of interest
    for their claims. They argue that "the practice of medicine as a valuable service
    presupposes that physicians providing those services have baseline competency. Where
    they do not, they cannot practice medicine and receive a fee for their services."
    Appellants assert there is no threshold question to be settled about the "value" of those
    services, since they had no market value. Appellants claim they could not have given any
    informed consent for Dr. Losse to perform their surgeries, while they remained ignorant
    of the risks they ran from his drug addiction and impairment during the treatments with
    Respondents.
    Appellants further claim that all other Respondents ratified, authorized, and
    approved of Dr. Losse's misconduct, in contravention of the duties of disclosure that they
    owed to Appellants, who were patients of ALSCSD and the Rehabilitation Center. Based
    on Respondents' ownership interests in Oasis, ALSCSD, and the Rehabilitation Center,
    Appellants contend that Respondents each had, but breached, nondelegable duties to
    9
    disclose all material facts to Appellants before obtaining consents to treatment, and
    Appellants relied upon the expectation that Respondents would disclose all such material
    facts to them. However, Respondents withheld those material facts concerning Dr.
    Losse's addiction-impairment condition, and gained revenue from the more than 500
    surgeries per year performed by Dr. Losse at ALSCSD while he was addiction-impaired,
    as well as revenue from the follow-up rehabilitation care. Those facts were alleged to
    support class recovery through rescission for fraud, restitution and equitable relief
    through a constructive trust under the UCL.
    B. Motions to Strike; Demurrers; Rulings
    On June 29, 2012, ALSCSD brought its motions to strike and demurrers, asserting
    the class action was defective on its face, because it alleged "mass-tort" claims, and could
    not be resolved as a simple "consumer fraud" case. Even though Appellants were not
    seeking any personal injury damages, their financial injuries still required individualized
    proof of below standard medical care and lack of informed consent. Thus, each putative
    class plaintiff "would have to show liability (impairment), causation, and damages (the
    difference between what each bargained for and what they received)." Respondents
    contended the proposed class definition was fatally nonascertainable, because it included
    persons whose surgeries and physical rehabilitation were successful, who would thus not
    be entitled to restitution of amounts paid. All other Respondents joined in those motions.
    In opposition, Appellants argued the facts of this case are remarkably similar to
    those in other consumer class action cases that were allowed to survive demurrers and
    motions to strike. (E.g., Vasquez, supra, 
    4 Cal.3d 800
    , 813, 821-822; Daar v. Yellow Cab
    10
    Co. (1967) 
    67 Cal.2d 695
    , 713-714 (Daar).)3 They contended there was "no fair market
    value" associated with a surgery to be performed by a drug-impaired surgeon in
    contravention of California law, such that they should be entitled to void the illegal
    contracts they entered into for such surgery. Appellants citied to Birbrower, Montalbano,
    Condon & Frank v. Superior Court (1998) 
    17 Cal.4th 119
     (Birbrower), for the
    proposition that attorneys who were not members of the California Bar could not recover
    contract fees for services provided in California, since their fees agreement was illegal.4
    Appellants explained why they were not seeking recovery for personal injuries, since any
    such claims would be barred by the applicable limitations period, Code of Civil
    Procedure section 340.5. Thus, only financial or economic injury was alleged, for all
    class members who were sold one thing but received something quite different.
    As the predicate violations for their UCL claim, Appellants pointed to statutes
    allegedly violated by Dr. Losse's previous practice while impaired, and Respondents'
    alleged violation of the same statutes through their "policy/practice of allowing the
    3      In Daar, supra, 
    67 Cal.2d 695
    , a class was certified of taxicab users seeking
    recovery of alleged overcharges by a taxi company, because their class allegations
    established a well-defined community of interest in questions of law and fact affecting
    the class; i.e., each class member was known to defendant and the exact amount of
    overcharges could be ascertained from defendant's books and records and from
    information within defendant's knowledge. (Id. at pp. 713-714.)
    4      In Birbrower, 
    supra,
     
    17 Cal.4th 119
    , 135-140, the New York attorneys who were
    representing a California client while practicing without California licenses could not
    recover contract fees for their "illegal local service," but if the illegal portion of the
    contract were severable, they could pursue a claim for quantum meruit for services
    validly rendered in New York.
    11
    practice of medicine by" an impaired physician. (§§ 2280, 2239, 2241; Health & Saf.
    Code, § 11170 et seq., Pen. Code, § 377.) Reply papers were filed.
    In opposition, counsel for Appellants suggested that more discovery might reveal a
    basis to identify the class members and their damages, which were items of proof.
    However, at the court's inquiry, Appellants could not suggest any proposed amendments
    to the legal theories of the operative pleadings. The trial court stated, "I think I
    understand your case. Your claim is that everybody didn't get what they paid for. They
    thought they were getting a competent doctor and instead they got this drugged-out
    doctor and what they want is the difference in value . . . not personal injury."
    In its order, the court construed the motions as demurrers, and ruled that
    Appellants' operative pleadings failed to state any of the class claims. As previously
    noted, the court had overruled Respondents' demurrers to all the individualized or UCL
    representative claims of Appellants. In that context, the trial court ruled it was
    sufficiently alleged that members of the public were likely to be deceived, within the
    meaning of the UCL, by Respondents' alleged conduct of allowing and facilitating Dr.
    Losse's continuing practice of medicine and surgeries, despite his addiction-impaired
    status.
    However, on the class claims for restitution or damages based on fraud,
    concealment, or breach of fiduciary duty related to Dr. Losse' s addiction-impaired
    condition, the court ruled Appellants as a class had shown no reasonable possibility they
    could state or amend to sufficiently allege class claims. Rather, individualized questions
    predominated on any entitlement to restitution or reimbursement "of all surgical and
    12
    rehabilitation fees and costs associated with each of the Plaintiffs' treatments." The court
    noted: "To prove their case, each Plaintiff will have to establish that Dr. Losse was
    addiction-impaired at the time of their particular treatment or surgery . . . and that they
    did not receive the value of the services they paid for each of these treatments (i.e., that
    Dr. Losse's addiction impairment caused them harm)." Further, the court ruled:
    "Proof of each Plaintiff's individual medical condition both before
    and after treatment will also be necessary to prove that Plaintiff did
    not receive the 'benefit of the bargain.' Individualized questions
    predominate in these proof requirements. As stated in Brown, the
    class claims pled present 'a veritable quagmire of tough, factual
    questions which can only be resolved by individual proof.'
    (Brown[, supra], 151 Cal.App.3d at [p.] 989.)"
    On Appellants' UCL claims, the court distinguished the classic consumer fraud
    authorities relied on by Appellants, and stated:
    "The court is not persuaded by Plaintiffs' reliance on Vasquez v.
    Superior Court (1971) 
    4 Cal.3d 800
    . The court finds this case more
    analogous [to] Brown than to Vasquez. As explained in Brown (in
    distinguishing Vasquez): What may be appropriate to a
    determination of common issues in a relatively simple consumer
    fraud action, however, is entirely inappropriate when the alleged
    fraud relates to the decision to obtain heart surgery. Rather than
    dealing with straightforward issues such as the price of meat and life
    expectancy of freezers, the court must grapple with complex issues
    relating to a patient's medical condition prior to surgery, the need for
    medical care and the extent of such care required by his condition,
    the variable nature of the dialogue between physician and patient,
    the surgical process itself, and postsurgical complications and care.
    [Brown, supra, 151 Cal.App.3d at 990.] Likewise, even though
    Plaintiffs' claims do not sound in medical malpractice, the medical
    issues which must be resolved in this case distinguish this case from
    the straightforward issues in Vasquez."
    Accordingly, the action was dismissed as to all its class allegations, and the notice
    of appeal was filed.
    13
    DISCUSSION
    After setting forth the applicable legal principles for review, we will analyze the
    class claims for relief based on alleged breach of fiduciary duty or fraud (pt. III), then
    turn to the UCL claims (pt. IV). We are required to determine the analytical suitability of
    each theory for class treatment. (Sav-on Drug Stores, Inc. v. Superior Court (2004) 
    34 Cal.4th 319
    , 327-328 (Sav-on Drug Stores).)
    I
    DEMURRERS IN CLASS ACTION CONTEXT
    The trial court treated the motion to strike as a demurrer for analyzing the
    sufficiency of the class allegations. Sustaining a demurrer to a class action is proper
    "[w]here a complaint, on its face, fails to allege facts sufficient to establish a community
    of interest as to the elements of the class claims." (Kennedy, supra, 
    43 Cal.App.4th 799
    ,
    808, fn. 4.) Code of Civil Procedure section 436, subdivision (b) allows the court, in its
    discretion and on proper terms, to "[s]trike out all or any part of any pleading not drawn
    or filed in conformity with the laws of this state. . . ." As noted in Caliber Bodyworks,
    Inc. v. Superior Court (2005) 
    134 Cal.App.4th 365
    , 385, a motion to strike can be granted
    if a substantive defect is clear from the face of a complaint (e.g., "a purported claim of
    right which is legally invalid"), or if a portion of a cause of action seeks an improper
    remedy.
    In determining class certification questions, the courts do not decide the merits of
    the case, but instead focus on whether common or individual questions are likely to arise
    in the action. (Sav-on Drug Stores, supra, 34 Cal.4th at pp. 327-328.) We examine
    14
    whether the complaint, on its face, alleges theories that could properly be handled in a
    class format by setting forth sufficient facts to establish a community of interest as to all
    elements of the class claims. (Kennedy, supra, 43 Cal.App.4th at p. 808.)
    Demurrers are routinely used for deciding the issue of class certification, where it
    is clear that there is "no reasonable possibility" that the plaintiffs could establish a
    community of interest among the potential class members, and it can be determined that
    individual issues predominate over common questions of law and fact. (Kennedy, supra,
    
    43 Cal.App.4th 799
    , 808, fn. 4; Silva v. Block (1996) 
    49 Cal.App.4th 345
    , 349.) There is
    no need to require a full evidentiary hearing at a class certification motion, where issues
    of law exist that allow pleadings analysis to be dispositive. (Brown, supra, 
    151 Cal.App.3d 982
    , 989; Newell v. State Farm Gen. Ins. Co. (2004) 
    118 Cal.App.4th 1094
    ,
    1101-1102 (Newell).)
    Well-established rules of review for testing the legal sufficiency of the operative
    pleadings apply: "[W]e review the complaint de novo to determine whether it contains
    sufficient facts to state a cause of action. [Citation.] 'We treat the demurrer as admitting
    all material facts properly pleaded, but not contentions, deductions or conclusions of fact
    or law.' [Citation.] The trial court exercises its discretion in declining to grant leave to
    amend. [Citation.] . . . The plaintiff has the burden of proving the possibility of cure by
    amendment." (Grinzi v. San Diego Hospice Corp. (2004) 
    120 Cal.App.4th 72
    , 78
    (Grinzi), italics added; Kennedy, supra, 43 Cal.App.4th at p. 808.)
    15
    II
    ESTABLISHING ELEMENTS OF CLASS CLAIMS
    A. Legal Principles
    The criteria for class certification are well established. " 'Section 382 of the Code
    of Civil Procedure authorizes class suits in California when "the question is one of a
    common or general interest, of many persons, or when the parties are numerous, and it is
    impracticable to bring them all before the court." The burden is on the party seeking
    certification to establish the existence of both an ascertainable class and a well-defined
    community of interest among the class members.' [Citation.]" (Lockheed Martin Corp.
    v. Superior Court (2003) 
    29 Cal.4th 1096
    , 1103-1104.)
    The primary focus of the trial court's ruling and of this appeal is whether the
    community of interest requirement has been successfully alleged. As outlined in
    Lockheed Martin: " 'The community of interest requirement [for class certification]
    embodies three factors: (1) predominant common questions of law or fact; (2) class
    representatives with claims or defenses typical of the class; and (3) class representatives
    who can adequately represent the class.' [Citation.] Plaintiffs acknowledge it is their
    burden to establish the requisite community of interest and that 'the proponent of
    certification must show, inter alia, that questions of law or fact common to the class
    predominate over the questions affecting the individual members.' [Citation.]"
    (Lockheed Martin, supra, 29 Cal.4th at p. 1104.)
    A class action must be the superior means of resolving the litigation, for both the
    parties and the court. (Newell, supra, 
    118 Cal.App.4th 1094
    , 1101.) Group action has
    16
    the potential to create injustice, and therefore trial courts must " ' "carefully weigh
    respective benefits and burdens and [may] allow maintenance of the class action only
    where substantial benefits accrue both to litigants and the courts." ' " (Ibid.) " 'The
    ultimate question in every case of this type is whether . . . the issues which may be jointly
    tried, when compared with those requiring separate adjudication, are so numerous or
    substantial that the maintenance of a class action would be advantageous to the judicial
    process and to the litigants.' " (In re Cipro Cases I & II (2004) 
    121 Cal.App.4th 402
    ,
    410.) "Individual issues do not render class certification inappropriate so long as such
    issues may effectively be managed." (Sav-On Drug Stores, 
    supra,
     34 Cal.4th at p. 334.)
    B. Class Certification Motions
    The parties seek to attach different labels to the operative pleadings, and claim
    these characterizations should be dispositive of how the class issues should be litigated.
    Appellants argue this is a standard consumer fraud class action, similar to the fraudulent
    business practices giving rise to Vasquez, supra, 
    4 Cal.3d 800
    , while Respondents
    characterize it as a mass tort action, similar to a personal injury case such as Kennedy,
    supra, 
    43 Cal.App.4th 799
    .5 (See Gutierrez v. California Commerce Club Inc. (2010)
    
    187 Cal.App.4th 969
    , 979 [demurrer rulings to resolve mass tort actions are appropriate,
    where a need for predominantly individualized inquiries can be identified as matters of
    5      Vasquez, supra, 
    4 Cal.3d 800
    , 809, noted in the consumer fraud class action
    context that "the fact that each member of the class must prove his separate claim to a
    portion of any recovery . . . is only one factor to be considered in determining whether a
    class action is proper." The key factors are whether the class claims do not present
    numerous and substantial questions on any individual right to recover.
    17
    law; but compare wage and hour/compensation class actions, or classic consumer fraud
    cases, in which an evidentiary showing of commonality may be required for class
    certification].)
    Here, both tort and statutory claims are alleged, and labels alone are not
    dispositive for analyzing class claims. Appellants have not persuasively shown there is
    any significant rule or policy being followed among the different California appellate
    districts on which types of class claims may properly be dismissed on demurrer, as
    opposed to imposing a requirement for an evidentiary record to be considered at a class
    certification motion proceeding. The case before us does not resemble a wage and hour
    case that would ordinarily be suitable for class treatment. We think it is a "stretch" to
    make it out to be a classic class action consumer fraud case; the delivery of professional
    medical services is a more individualized endeavor than the mass delivery of a given
    product or commercial service.
    True, " '[r]eviewing courts consistently look to the allegations of the complaint and
    the declarations of attorneys representing the plaintiff class to resolve this [community of
    interest] question.' " (Sav-on Drug Stores, supra, 34 Cal.4th at p. 327.) Appellant's
    opposing papers claimed that full discovery had not yet been allowed, and included a
    declaration from Dr. Losse, admitting that from 1992, he took opioids from Respondents'
    supplies, until the year 2000 when he underwent treatment for addiction. The trial court's
    ruling declined to consider such extrinsic evidence at the pleadings and demurrer stage.
    When asked, Appellants' counsel did not suggest potential amendments to cure the
    defects in the pleading, nor have Appellants shown how any declarations to be obtained
    18
    might show greater suitability for class treatment. They have not shown any justification
    for proceeding beyond demurrer, to an evidentiary hearing on class certification.
    III
    CLASS CLAIMS FOR FRAUD AND BREACH OF FIDUCIARY DUTY
    A. Elements: Fraud and Breach of Fiduciary Duty
    The required elements of a fraud or concealment theory are: " ' "(a) a
    misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of
    falsity (or 'scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance;
    and (e) resulting damage." [Citations.]' [Citation.] " (Estate of Young (2008) 
    160 Cal.App.4th 62
    , 79.) These fraud claims could be interpreted as seeking tort damages, or
    rescission and restitution based upon fraud in the inducement of the medical care
    agreements.
    In the health care context, a patient may allege against a provider a claim of breach
    of fiduciary duty, based on the ground that the provider-physician allegedly obtained the
    patient's consent to a medical procedure, but without properly disclosing all information
    material to the patient's decision in that respect. (Moore v. Regents of University of
    California (1990) 
    51 Cal.3d 120
    , 129; Jameson v. Desta (2013) 
    215 Cal.App.4th 1144
    ,
    1164.) The plaintiff-patient must allege (1) the existence of a fiduciary duty; (2) breach
    of the fiduciary duty; and (3) damage proximately caused by the breach. (Ibid.; Pierce v.
    Lyman (1991) 
    1 Cal.App.4th 1093
    , 1101.)
    Appellants do not allege their surgeries were poorly performed nor created bodily
    injury, but claim that Dr. Losse, as well as all Respondents, failed to make appropriate
    19
    disclosures to them about Dr. Losse's personal status (i.e., his drug addiction problems)
    that may have raised the risk level of their surgical procedures. (See Truman v. Thomas
    (1980) 
    27 Cal.3d 285
    , 291; Cobbs v. Grant (1972) 
    8 Cal.3d 229
    , 244-245 [skilled
    medical practitioner in good standing must provide disclosures to patients of risks of
    death or serious harm].) Damages are sought in the form of reimbursement of surgical
    and rehabilitation fees and costs.
    B. Class Treatment of Tort Claims
    In its ruling, the trial court relied on Brown to evaluate if there were predominant
    common questions of law and fact regarding the requested class relief. In Brown, a group
    of plaintiffs sought to establish a community of interest as potential class members, by
    alleging battery as personal injury from medical treatment received. They also claimed
    related fraud damages from intentional factual concealments about the quality and level
    of care provided by a cardiology facility. (Brown, supra, 151 Cal.App.3d at p. 989.) As
    potential class plaintiffs, they alleged they were "induced to receive coronary care" by
    "certain affirmative misrepresentations or the failure to disclose certain facts" by the
    medical facility defendants. (Ibid.) The reviewing court held that the trial court properly
    sustained a demurrer without leave to amend as to those class action allegations, on the
    basis that individual issues predominated over common questions of law and fact. (Id. at
    p. 991.)
    In Brown, the appellate court acknowledged that some of the preliminary elements
    of a fraud cause of action could lend themselves to a class action method of proof (e.g.,
    representation, falsity, and intent to induce reliance). However, the remaining "tough
    20
    factual questions" could only be resolved through individual proof, such as
    reasonableness of reliance, causation, and damages. (Brown, supra, 151 Cal.App.3d at
    p. 989.) Specifically, a potential class member's "particular medical condition and
    method of treatment must be examined in order to determine the proximate cause of any
    claimed damage and the actual extent of such damage." (Ibid.) It was not reasonably
    possible that those plaintiffs would be able to establish a sufficient community of interest
    to warrant class action, in light of the "numerous and substantial individual questions of
    fact" raised in the pleadings, concerning their relevant medical circumstances, and the
    importance of the individual's decision to obtain heart surgery, which was not a strictly
    business decision but was constrained by individual factors. (Ibid.)
    Damages for a successful fraud cause of action would be measured by the
    difference between the value parted with and the actual value received. (Colgan v.
    Leatherman Tool Group, Inc. (2006) 
    135 Cal.App.4th 663
    , 675 (Colgan); see Persson v.
    Smart Inventions, Inc. (2005) 
    125 Cal.App.4th 1141
    , 1165.) Proof of a class's damages
    for fraud would be made more difficult in the case before us, by the exclusion from the
    class of anyone seeking general damages for personal injury. Appellants are seeking only
    economic reimbursement for elective surgeries that they do not allege were harmful.
    Those treatments were not known to be unlawful when performed, and in hindsight, the
    fact that Dr. Losse placed his own license in jeopardy, through alleged drug abuse, did
    not create separately cognizable forms of fraud damages to Appellants as a class, that
    could be uniformly measured by the difference between the professional fees charged,
    21
    and hypothetically the zero fees that an unlicensed practitioner could receive for
    performing surgeries.
    Likewise in Brown, supra, 151 Cal.App.3d at pages 990 to 991, the reviewing
    court disallowed class treatment of battery issues that involved an alleged nondisclosure
    of desired medical information. Although the plaintiffs had alleged the health care
    provider had intentionally concealed material information on its morbidity and mortality
    statistics, prior to their decision to obtain medical care, and therefore their consent to
    medical care was not an informed one, such a cause of action for battery based on
    nondisclosure of risk was deemed inappropriate for class treatment. (Id. at pp. 987, 990.)
    As support, the court in Brown, supra, 151 Cal.App.3d at pages 990 to 991
    observed that informed consent concepts presuppose there are communications between
    doctor and patient, and the plaintiffs were putting into issue their exact communications
    between the providers and patients, which varied from case to case. (Ibid.) Class
    treatment of the informed consent claims was not appropriate, since individual issues
    predominated over common questions. (Id. at p. 991.) For example, it could not be
    determined on a classwide basis whether each plaintiff had unique medical concerns that
    were inadequately addressed. (Id. at pp. 990-991.)
    Appellants contend that Brown is distinguishable on its facts, because these were
    elective surgeries, not cardiology procedures essential to maintain life. Appellants argue
    they successfully alleged class entitlement to relief, subject to later proof, simply because
    they claim Dr. Losse's practice of medicine at the time would have been against the law,
    due to his drug addiction. They also claim on a classwide basis that they uniformly
    22
    would not have paid for treatment, if they had known about Dr. Losse's impairment by
    drugs. However, Appellants cannot properly characterize those allegations as ultimate
    facts, and they instead appear to be in the nature of legal conclusions on causation and
    damages. (Brown, supra, 151 Cal.App.3d at p. 989.)
    Under the standards of section 2280, it would be unprofessional conduct if Dr.
    Losse were impaired during the time of the particular treatment, to the extent that he
    could not safely practice medicine despite having allegedly consumed narcotics. This
    impairment level over two years presumably varied with individual patients. (See
    Watson v. Superior Court (2009) 
    176 Cal.App.4th 1407
    , 1424 [holding that professional
    discipline of a physician for "unprofessional conduct" (statutorily defined as including
    the use of alcohol "to the extent, or in such a manner as to be dangerous or injurious" to
    the physician or others) was in line with constitutional due process principles, even if the
    conduct did not result in a criminal conviction, citing § 2239, subd. (a)]; 36 Cal.Jur.3d
    (2013 supp.) Healing Arts, § 254, p. 81.) For purposes of a civil right of action for
    monetary recovery under a breach of fiduciary duty theory, there must be a nexus shown
    between Dr. Losse's purported addiction to narcotics and his fitness to practice medicine,
    at the time of each patient's individualized care and treatment, as well as knowledge of
    each Respondent about that status.
    In determining class certification questions, the courts do not decide the merits of
    the case, but instead focus on whether common or individual questions are likely to arise
    in the action. (Sav-on Drug Stores, supra, 34 Cal.4th at pp. 327-328.) These fraud and
    breach of fiduciary duty allegations require fact intensive, individualized inquiries
    23
    regarding the representations made to various patients, such as allegedly false
    communications about the risks involved in treatment or nondisclosures of the same, and
    the effect of the representations on them. Appellants are keeping the results of the
    surgeries performed and are not complaining about those results, so they will need to
    make individualized showings of liability and causation of loss that leads to any
    entitlement to restitution of medical fee amounts. These claims are not properly subject
    to class treatment, for proof of tort damages or of a right to rescission and restitution
    based upon fraud in the inducement of the medical care agreements.
    IV
    UCL CLASS CLAIMS; REMAINING ISSUES
    A. Elements: Representative v. Class Claims
    Pursuant to the trial court's ruling, Appellants may separately pursue a
    representative action under the UCL to obtain relief that is similar to that which could be
    pursued in a class action: "There is no inherent incompatibility between the unfair
    competition law and class actions. 'Both consumer class actions and representative UCL
    actions serve important roles in the enforcement of consumers' rights.' [Citation.]"
    (Feitelberg v. Credit Suisse First Boston, LLC (2005) 
    134 Cal.App.4th 997
    , 1014-1015
    (Feitelberg); see Twain Harte Homeowners Assn. v. Patterson (1987) 
    193 Cal.App.3d 184
    , 187-188 (Twain Harte).)
    In reviewing this demurrer and motion to strike ruling, we inquire whether
    Appellants can demonstrate under Code of Civil Procedure section 382 that their UCL
    claims raise class questions " 'of a common or general interest, of many persons, or when
    24
    the parties are numerous, and it is impracticable to bring them all before the court.' "
    (Davis-Miller v. Automobile Club of Southern California (2011) 
    201 Cal.App.4th 106
    ,
    120 (Davis-Miller); Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 
    178 Cal.App.4th 830
    , 843.)
    Class actions cannot proceed under the UCL to remedy a fraudulent business
    practice "when it cannot be established that the defendant engaged in uniform conduct
    likely to mislead the entire class. [Citations.] Specifically, when the class action is based
    on alleged misrepresentations, a class certification denial will be upheld when individual
    evidence will be required to determine whether the representations at issue were actually
    made to each member of the class." (Davis-Miller, supra, 
    201 Cal.App.4th 106
    , 121; In
    re Tobacco II Cases (2009) 
    46 Cal.4th 298
    , 325 & fn. 17 [class representative pursuing a
    UCL fraud theory must be capable of demonstrating traditional standing in terms of
    alleging actual injury and causation, including actual reliance on acts of unlawful or
    fraudulent competition].)
    Appellants claim they successfully pled the fraudulent, unfair and unlawful prongs
    of their UCL cause of action, based on the alleged predicate violations of statutes
    governing discipline for impaired physicians. (E.g., § 2280; Health & Saf. Code, § 11170
    et seq.)
    B. UCL Relief Allowable
    The appropriate remedies in UCL actions are limited to injunctive relief and
    restitution. (Feitelberg, supra, 
    134 Cal.App.4th 997
    , 1007; citing Korea Supply Co. v.
    Lockheed Martin Corp. (2003) 
    29 Cal.4th 1134
     at pp. 1147, 1152 [an action by an
    25
    individual plaintiff].) The "remedy of nonrestitutionary disgorgement is not available in
    statutory unfair competition cases, even those brought as class actions." (Feitelberg,
    supra, at p. 1007.)
    In re Vioxx Class Cases, 
    supra,
     
    180 Cal.App.4th 116
    , explains that "in order to
    obtain class wide restitution under the UCL, plaintiffs need establish not only a
    misrepresentation that was likely to deceive [citation] but also the existence of a
    'measurable amount' of restitution, supported by the evidence [citation]." (Id. at p. 136.)
    To measure restitution due for expenses paid for a bad medication, for example, the cost
    of a valid comparator medication is necessary to calculate loss. (Ibid.)
    Appellants allege that they as a class are entitled to recover all professional fees
    they paid to Respondents, as restitution for "valueless" services. Essentially, Appellants
    claim each medical service agreement was void or voidable, regardless of whether the
    individual surgeries were beneficial or not.
    It is instructive to look at the nature of restitution in the UCL context. Restitution
    must be consistent with the purpose of restoring to the plaintiff those amounts that the
    defendant wrongfully acquired. (Colgan, supra, 
    135 Cal.App.4th 663
    , 694-696 &
    fn. 22.) "Where restitution is ordered as a means of redressing a statutory violation, the
    courts are not concerned with restoring the violator to the status quo ante. The focus
    instead is on the victim. 'The status quo ante to be achieved by the restitution order was
    to again place the victim in possession of that money.' [Citation.] 'The object of
    [statutory] restitution is to restore the status quo by returning to the plaintiff funds in
    which he or she has an ownership interest.' [Citation.] 'The purpose of the civil remedy
    26
    is to allow recovery of the excess paid and to prohibit the seller from receiving and
    keeping such excess.' [Citation.]" (People ex rel. Kennedy v. Beaumont Investment, Ltd.
    (2003) 
    111 Cal.App.4th 102
    , 134-135, italics in original [relief can include requiring
    mobile home park owners to disgorge unauthorized rents and to restore that money to the
    affected tenants].)
    C. Analysis of Class UCL Allegations
    To seek monetary relief in restitution, Appellants as a class allege that Dr. Losse's
    professional conduct fell below the expected level of skill, as provided in section 2280. It
    is unprofessional conduct for a physician to practice medicine while under the influence
    of any narcotic drug or alcohol "to such an extent as to impair his or her ability to
    conduct" the safe practice of medicine. As a matter of law, for disciplinary purposes, the
    courts accept there is a nexus between the excessive use of intoxicating substances and a
    physician's general fitness to practice medicine. (See Watson v. Superior Court, supra,
    
    176 Cal.App.4th 1407
    , 1424.)
    However, these operative pleadings do not establish that Dr. Losse's use of drugs
    had an actual and uniform impact upon the class members by undermining his ability to
    practice medicine, by making it dangerous or injurious to Appellants or others. Although
    section 2280 makes it "unprofessional conduct" to practice medicine while impaired, it
    does not per se prevent recovery of the reasonable value of services. (Compare
    Birbrower, supra, 
    17 Cal.4th 119
     [attorneys practicing without license in California
    cannot recover fees for their "illegal local service," but quantum meruit claim for
    severable portion of legal services not foreclosed].)
    27
    Since Appellants exclude in their definition of their proposed class any persons
    who suffered bodily injury from the surgeries, this factor suggests that Appellants cannot
    successfully plead entitlement to classwide nonrestitutionary disgorgement of allegedly
    unfairly obtained fees, merely because Dr. Losse should have been subject to professional
    discipline at the time the fees were obtained. (Feitelberg, supra, 134 Cal.App.4th at pp.
    1016-1017.) If the fees for services were properly calculated and collected at the time,
    the UCL should not provide a remedy for alleged misleading business practices. (Day v.
    AT&T Corp. (1998) 
    63 Cal.App.4th 325
    , 339-340.) Whether the treatments were
    unlawfully rendered and resulted in harm would require individualized showings by each
    class member, before any relief could be awarded. For any "measurable amount" of
    restitution that is supported by the evidence to be ordered, Appellants would have to
    show on a classwide basis how they were harmed and to what extent, but each appellant
    has a unique set of medical and financial circumstances both before and after the elective
    surgeries. (In re Vioxx Class Cases, 
    supra,
     
    180 Cal.App.4th 116
    , 136.)
    The result sought by the class would erroneously place the focus on punishing or
    restoring the violators (Dr. Losse and Respondents) to the status quo ante, but instead, the
    proper focus should be on making the victim or class whole. (People ex rel. Kennedy v.
    Beaumont Inv., Ltd., supra, 
    111 Cal.App.4th 102
    , 134-135.) Although the circumstances
    of these surgeries and treatments were certainly regrettable, Appellants have not
    successfully pled that it can be determined on a class basis that objectively, each class
    member did not get the level of service that was paid for at the time, despite their
    subjective knowledge of some level of increased risk, as obtained in hindsight.
    28
    Appellants further claim each Respondent (the colleagues or the corporations and
    surgery center) participated in the alleged wrongful acts, and should be subject to direct
    or vicarious liability to the class for unfair business practices. However, the underlying
    rationale for such recovery fails, since Dr. Losse remained licensed during the proposed
    class period, and there is no class claim for bodily injury. It is a legal conclusion, not a
    material fact, to plead that the medical services were valueless, and to allege that
    Respondents facilitated obtaining consent for surgeries and treatment by an
    "incompetent" supervising surgeon. These UCL class claims fail to state a cognizable
    cause of action.
    D. Conclusion; Remaining Issues
    Although the threshold ascertainable class requirement of Code of Civil Procedure
    section 382 was generally disputed, it was not expressly ruled on by the trial court. A
    properly identified class must be "ascertainable," meaning that the class must comprise a
    "group that was [actually] harmed by the defendants." (See Akkerman v. Mecta Corp.,
    Inc. (2007) 
    152 Cal.App.4th 1094
    , 1100; Code Civ. Proc., § 382.) A class definition that
    includes unharmed persons is overbroad and nonascertainable, because it would grant
    those persons a windfall. (See Akkerman, supra, at p. 1101 [dismissing class claims
    where there would be a "windfall award of restitution" to all who received shock
    treatments "even if the procedures were successful and beneficial"].) Appellants have not
    successfully defined this class, by seeking to avoid any recognition that they sustained no
    alleged particular bodily injury from the surgeries for which they paid.
    29
    In any event, under the ruling of the trial court, Appellants may continue to pursue
    their individual and representative causes of action that allege fraud, lack of informed
    consent and relief under the UCL. (See Twain Harte, supra, 
    193 Cal.App.3d 184
    , 187-
    188.) This record does not allow us to opine upon the eventual success on the merits of
    any of the causes of action adequately pled. (Sav-On Drug Stores, 
    supra,
     34 Cal.4th at
    pp. 327-328.) We address only the class action and agree with the trial court that
    Appellants have demonstrated no reasonable possibility of pleading the required prima
    facie community of interest among class members. (Brown, supra, 151 Cal.App.3d at
    p. 988.)
    DISPOSITION
    The order of dismissal of the class allegations is affirmed. Costs are awarded to
    Respondents.
    HUFFMAN, Acting P. J.
    WE CONCUR:
    NARES, J.
    O'ROURKE, J.
    30