Robert Amster, M.D. v. Hoag Mem. Hosp. Presbyterian

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 17, 2022
• Docket: 21-55452
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 17 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT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.

2 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

3 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

4 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.