Opinion
E075275
06-13-2022
HARRY LIFSCHUTZ, Plaintiff and Appellant, v. MEDICAL STAFF OF JOHN F. KENNEDY MEMORIAL HOSPITAL et al., Defendants and Respondents.
Knapp, Petersen & Clarke, Mitchell B. Ludwig; Eanet, Matthew Leo Eanet, Laine Mervis; Benedon & Serlin, Wendy S. Albers and Judith E. Posner, for Plaintiff and Appellant. Latham & Watkins, Katherine A. Lauer, Jason M. Ohta, and Nathan M. Saper, for Defendant and Respondent Desert Regional Medical Center, Inc. Arent Fox, Debra J. Albin-Riley and Diane Roldan, for Defendants and Respondents Medical Staff of John F. Kennedy Memorial Hospital, Aaron Bean, M.D., Rufus Gore, M.D., Samuel Ibrahim, M.D., David Johnson, M.D., John Lee, M.D., Pushpinder Sivia, M.D., and Ben Wehrli, M.D. Gresham Savage Nolan & Tilden and Paige H. Gosney, for Defendants and Respondents Premier Surgical Associates, Inc., Premier Surgical Associates Palm Springs, Inc., and Dr. Samuel Ibrahim M.D., Inc. Greer & Associates, C. Keith Greer and C. Tyler Greer, for Defendant and Respondent Coachella Valley Foot and Ankle Institute Inc.
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. PSC1900671 Kira L. Klatchko, Judge. Affirmed.
Knapp, Petersen & Clarke, Mitchell B. Ludwig; Eanet, Matthew Leo Eanet, Laine Mervis; Benedon & Serlin, Wendy S. Albers and Judith E. Posner, for Plaintiff and Appellant.
Latham & Watkins, Katherine A. Lauer, Jason M. Ohta, and Nathan M. Saper, for Defendant and Respondent Desert Regional Medical Center, Inc.
Arent Fox, Debra J. Albin-Riley and Diane Roldan, for Defendants and Respondents Medical Staff of John F. Kennedy Memorial Hospital, Aaron Bean, M.D., Rufus Gore, M.D., Samuel Ibrahim, M.D., David Johnson, M.D., John Lee, M.D., Pushpinder Sivia, M.D., and Ben Wehrli, M.D.
Gresham Savage Nolan & Tilden and Paige H. Gosney, for Defendants and Respondents Premier Surgical Associates, Inc., Premier Surgical Associates Palm Springs, Inc., and Dr. Samuel Ibrahim M.D., Inc.
Greer & Associates, C. Keith Greer and C. Tyler Greer, for Defendant and Respondent Coachella Valley Foot and Ankle Institute Inc.
OPINION
MENETREZ, J.
Plaintiff Harry Lifschutz appeals from the judgment of dismissal entered after the trial court sustained defendants' demurrers to his third amended complaint without leave to amend. We affirm.
BACKGROUND
A. The Settlement Agreement
John F. Kennedy Memorial Hospital (JFK) and Desert Regional Medical Center (Desert Regional) are hospitals in the Coachella Valley region of Riverside County, California. Tenet Healthcare Corporation (Tenet) owns and operates both hospitals.
Lifschutz worked for 14 years as a surgeon at JFK as a member of JFK's medical staff (the medical staff). In August 2015, Lifschutz entered into a confidential settlement agreement with JFK. Lifschutz agreed to resign from the hospital's medical practice, to move his practice, and to cease practicing at the hospital or "at any affiliated facility." In exchange for Lifschutz's resignation, JFK paid Lifschutz an undisclosed, confidential sum.
According to the recitals in the agreement, the settlement was reached because Lifschutz alleged "that JFK acted improperly by, among other things, taking him off of the Emergency Department call panel schedule at JFK during a period of time in or around July of 2015," and Lifschutz had "threatened litigation against JFK seeking damages in connection with that and other alleged action by JFK resulting in emotional damages and distress to" Lifschutz. Those allegations and threatened litigation constituted "the 'Dispute.'"
Lifschutz and JFK entered into the settlement agreement to avoid the expense of litigation without any admission of liability and "to resolve fully and finally any and all Claims, as defined herein, known and unknown, that [Lifschutz] may have against JFK." Lifschutz and JFK also were "agreeable, subject to the terms and conditions in [the settlement agreement], to release each other from any claims which either Party may have related to the Dispute."
In addition, the settlement agreement included a provision generally releasing other specified parties from any claims related to or arising from the dispute. JFK and Lifschutz also waived the protections of section 1542 of the Civil Code. The settlement agreement includes a confidentiality clause that describes the circumstances under which JFK and Lifschutz are permitted to disclose the agreement's existence or any of its terms.
B. The Allegations
Nearly four years after entering the settlement agreement with JFK, Lifschutz filed the instant lawsuit against these five groups of defendants: (1) Desert Regional, (2) JFK's chief of staff (Rufus Gore), (3) the medical staff, (4) numerous medical groups- Desert Vein & Vascular Institute, Coachella Valley Foot and Ankle Institute, Premier Surgical Associates, Inc., Premier Surgical Association Palm Springs, Inc., and Samuel Ibrahim, M.D., Inc. (collectively, the medical group defendants), and (5) six individual medical doctors who relocated to the Coachella Valley (collectively, the individual defendants).
The complaint alleges that at Tenet's direction, JFK and Desert Regional entered into agreements with out-of-town physicians to have those physicians relocate to the area serviced by JFK and Desert Regional. Those allegedly unlawful agreements caused the hospitals' service areas to be "flooded with these unnecessary physicians who were financially beholden to" JFK, Desert Regional, and Tenet and "resulted in illegal self-referrals by allowing Tenet, which controlled three of the four hospitals in Coachella Valley, to direct patient care away from [JFK] to [Desert Regional] where Tenet enjoyed higher revenues for the same services." Lifschutz claims that he did not learn of the alleged illegal referral scheme until around March 2018.
Lifschutz alleges that as a result of the alleged illegal recruitment and referral scheme vascular surgeons were relocated into the area in which he practiced. JFK's chief executive officer informed Gore that Tenet and/or JFK needed to make room for those new surgeons "by getting rid of" Lifschutz. As a result of that alleged plan, Lifschutz claims that he "was informed that if he refused to resign his vascular surgery privileges at [JFK], they would start a process that could have resulted in the loss of his medical license." Lifschutz then reluctantly withdrew his privileges for vascular surgery at JFK, and he alleges that he would not have done so but for the illegal recruitment and referral scheme.
The operative pleading includes the following nine causes of action: (1) breach of contract against the medical staff, (2) breach of the covenant of good faith and fair dealing against the medical staff, (3) breach of fiduciary duty against the medical staff and Gore, (4) wrongful interference with hospital/surgery privileges against the medical staff and Gore, (5) intentional interference with contractual relations against all defendants, (6) intentional interference with prospective economic relations against all defendants, (7) negligent interference with prospective economic relations against all defendants, (8) violation of the Cartwright Act (Bus. & Prof. Code, § 16720 et seq.) against all defendants, and (9) violation of California's unfair competition law (Bus. & Prof. Code, § 17200 et. seq.) against all defendants. Lifschutz alleges that defendants acted as "agents, employees, partners, servants, joint venturers, co-conspirators, aider and abettors of the other [d]efendants and were acting within their individual capacity as well as within the course and scope of said agency, employment, partnership, joint venture, or conspiracy."
C. The Initial Proceedings
Most defendants filed demurrers to the original complaint. Lifschutz filed a first amended complaint before the court ruled on those demurrers. The medical staff, Gore, the individual defendants, and the medical group defendants demurred to the first amended complaint. The trial court sustained those defendants' demurrers to the first amended complaint, finding the allegations insufficient to state a cause of action.
Desert Regional filed a cross-complaint against Lifschutz, alleging that the lawsuit against Desert Regional breached Lifschutz's settlement agreement with JFK. A copy of the settlement agreement was attached to the cross-complaint. Lifschutz moved to strike Desert Regional's cross-complaint as a strategic lawsuit against public participation (SLAPP). In support of the anti-SLAPP motion, Lifschutz requested that the trial court judicially notice a redacted copy of the settlement agreement. The trial court granted the anti-SLAPP motion.
A couple of weeks after Lifschutz filed the anti-SLAPP motion and the accompanying request for judicial notice, Lifschutz filed a second amended complaint. The following month, the medical staff and the individual defendants demurred to the second amended complaint, arguing that the complaint was barred because Lifschutz failed to exhaust his administrative and judicial remedies and failed to state facts sufficient to state any claim of relief. The other defendants joined in those arguments.
The trial court issued a tentative ruling indicating that it was inclined to sustain the demurrers with leave to amend, and the court then held a hearing on the demurrers. At the beginning of the hearing, the court indicated that it was "very difficult to understand how amendment is going to be possible" and invited all parties to argue the issue. The court later told Lifschutz's counsel: "You have nine causes of action. You haven't completed the elements of those nine causes of action. What facts are you going to add? [¶] Also, it's inexplicable to the Court that there is a settlement on this issue. No one has raised that in this motion. So the Court is not going to address it. You all know each other. I mean, this is not news to anybody." Lifschutz's counsel responded that he did not believe that the settlement agreement applied to any of the named defendants because they were not parties to the agreement. The court reiterated that it would not address the applicability of the settlement agreement because defendants had not made that argument. The court sustained defendants' demurrers on the ground that the pleading failed to allege sufficient facts to state any claim for relief and granted Lifschutz leave to file a third amended complaint.
D. The Third Amended Complaint
Lifschutz then filed a third amended complaint alleging the same nine causes of action as in his previous complaints. Defendants demurred, arguing that the action was barred in its entirety by the settlement agreement between Lifschutz and JFK. They also argued in the alternative that Lifschutz again had failed to allege facts sufficient to state any claim for relief. Defendants requested that the court take judicial notice of the settlement agreement.
In opposition to the demurrers, Lifschutz argued that defendants were barred under Code of Civil Procedure section 430.41 from making any argument about the settlement agreement because they could have made the argument previously. (Undesignated statutory references are to the Code of Civil Procedure.) He also argued that the agreement should not be considered at the demurrer stage. Lifschutz opposed defendants' request for judicial notice, arguing that the settlement agreement was not the proper subject of judicial notice as a disputed document.
The trial court sustained defendants' demurrers to the third amended complaint without leave to amend. The court concluded that the settlement with JFK barred the present action.
Desert Regional asks us to take judicial notice of the settlement agreement between Lifschutz and JFK and a July 2019 stipulated settlement and disciplinary order from the California Medical Board concerning Lifschutz. We deny the request. The trial court took judicial notice of the settlement agreement and Lifschutz does not challenge that ruling on appeal, so the agreement is already part of the record before us. In addition, Desert Regional has failed to demonstrate the relevance of the matter concerning Lifschutz and the medical board to the issues on appeal. (See Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 544, fn. 4 [denying request to take judicial notice of documents concerning irrelevant matters].)
A. Standard of Review
On review of an order sustaining a demurrer, "we accept the truth of material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law. We may also consider matters subject to judicial notice." (State Dept. of State Hospitals v. Superior Court (2015) 61 Cal.4th 339, 346; Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 (Schifando).) "We review a ruling sustaining a demurrer de novo, exercising independent judgment as to whether the complaint states a cause of action as a matter of law." (Abatti v. Imperial Irrigation District (2020) 52 Cal.App.5th 236, 294.)
We review for abuse of discretion the trial court's denial of leave to amend. (Schifando, supra, 31 Cal.4th at p. 1081.) We determine whether there is a reasonable probability that the defect could be cured by amendment. (Ibid.) The trial court abuses its discretion if an amendment would cure the defect. (Ibid.) The plaintiff bears "the burden of proving that an amendment would cure the defect." (Ibid.) B. Section 430.41
Lifschutz argues that the trial court erred by considering defendants' argument about the settlement agreement, because defendants did not raise the issue when they demurred to prior versions of the complaint. We agree but conclude that the error was harmless.
Section 430.41, subdivision (b), provides: "A party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint, cross-complaint, or answer on grounds that could have been raised by demurrer to the earlier version of the complaint, cross-complaint, or answer."
Defendants do not contend that they made the argument earlier or that they could not have made it earlier. We agree that defendants could have made the argument in a previous demurrer. When the settlement agreement was introduced as part of Desert Regional's cross-complaint, it became known to all defendants. Thus, regardless of whether any defendants knew of it before then (other than Desert Regional who introduced it), defendants knew of the agreement when they demurred to the second amended complaint.
Because defendants could have made the argument in their demurrers to the second amended complaint, subdivision (b) of section 430.41 prohibited defendants from arguing in their demurrers to the third amended complaint that the settlement agreement applied to bar the claims in this lawsuit. Because defendants were statutorily prohibited from raising the argument in their demurrers, the trial court erred by considering it and sustaining the demurrers on that ground.
We do not agree with Lifschutz, however, that the error "mandates reversal." Procedural errors like this one warrant reversal "only if there has been a miscarriage of justice-that is, an error causing a less favorable result to the appealing party." (Prickett v. Bonnier Corp. (2020) 55 Cal.App.5th 891, 897.)
Defendants argue that the error is not prejudicial because regardless of arguments made in prior demurrers, they could have made the argument about the effect of the settlement agreement in a motion for judgment on the pleadings (§ 438, subds. (b)(1), (c)(1)(B)(ii)), or the trial court could have considered the argument in a sua sponte motion for judgment on the pleadings (id., subds. (b)(2), (c)(3)(B)(ii)). We agree. A motion for judgment on the pleadings can be made when a "moving party did not demur to the complaint or answer, as the case may be, on the same grounds as is the basis for the motion provided for in this section." (Id., subd. (g)(2).) "Like a demurrer, a motion for judgment on the pleadings attacks defects disclosed on the face of the pleadings or by matters that may be judicially noticed." (Alameda County Waste Management Authority v. Waste Connections US, Inc. (2021) 67 Cal.App.5th 1162, 1174.) Because the trial court could have considered the argument on a motion for judgment on the pleadings, the court's error in considering it on defendants' demurrers to the third amended complaint was not prejudicial.
C. Settlement Agreement
Lifschutz argues that the trial court erred by concluding that his settlement agreement with JFK covered the claims in this lawsuit brought against defendants who were not parties to or intended beneficiaries of the agreement. Looking to several provisions of the agreement-the definition of the dispute in the recitals, the general release, and the confidentiality clause-Lifschutz argues that the settlement agreement "as a whole does not unambiguously express an intent to apply to" defendants and thus can only be interpreted by looking at extrinsic evidence at a later stage in the proceeding. (Italics omitted.) We are not persuaded.
When the plain language of a settlement agreement bars the asserted claims, a trial court may sustain a demurrer on that ground. (Vaillette v. Fireman's Fund Ins. Co. (1993) 18 Cal.App.4th 680, 691.) Settlement agreements are contracts subject to the ordinary rules of contract interpretation. (General Motors Corp. v. Superior Court (1993) 12 Cal.App.4th 435, 439.) "Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs interpretation. (Civ. Code, § 1636.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. (Id., § 1639.)" (AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 821-822.)
When the parties dispute the meaning of contractual language, we determine "whether the language is 'reasonably susceptible' to the interpretations urged by the parties." (Badie v. Bank of America (1988) 67 Cal.App.4th 779, 798.) We can make this determination "from the language of the contract itself." (Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 848.) When "words have a definite legal meaning, we presume the parties intended them to have their ordinary legal meaning, unless a contrary intent appears in the instrument." (Grande v. Eisenhower Medical Center (2020) 44 Cal.App.5th 1147, 1165 (Grande).) A contract is ambiguous when the language is susceptible to two reasonable interpretations. (Edison, supra, at p. 848.)
With these principles in mind, we analyze the release and related provisions to determine whether the settlement agreement covers the claims brought against defendants. We start by ascertaining the nature of the dispute covered by the agreement.
The introductory recitals provide: Lifschutz "alleges that JFK acted improperly by, among other things, taking him off of the Emergency Department call panel schedule at JFK during a period of time in or around July of 2015, and [Lifschutz] has threatened litigation against JFK seeking damages in connection with that and other alleged action by JFK resulting in emotional damages and distress to [Lifschutz] (the 'Dispute')." "JFK understands that [Lifschutz] presently intends to cease practicing at JFK or at any affiliated facility, move his practice, and resign from the JFK Medical Staff." Additionally, the parties agreed that the settlement agreement would "be a full settlement and release of all claims or causes of action relating to or arising from the Dispute, and/or the transactions contemplated by this Agreement."
The language of the agreement thus expresses the parties' intent to resolve any and all claims arising from the events that led to Lifschutz's resignation, including but not limited to the removal of Lifschutz from the emergency department call panel. In other words, the parties intended the agreement to cover all of JFK's conduct that led Lifschutz to threaten to sue JFK for damages.
Lifschutz argues that without resorting to extrinsic evidence we cannot ascertain anything definite about what the settlement covered beyond Lifschutz's removal from the emergency department call panel, because of the inclusion of the terms "among other things" and "other alleged action" in the definition of the dispute. We do not agree. The phrase "among other things" indicates that Lifschutz allegedly was aggrieved by and suffered distress as result of similar unspecified conduct by JFK in addition to the removal from the emergency department call panel. Likewise, the phrase "other alleged action by JFK" means that the dispute encompasses more than the specific example of alleged wrongdoing provided. Those terms do not render the settlement agreement ambiguous. When the recitals are read in the context of Lifschutz's agreement to resign from the medical staff in exchange for payment of an undisclosed amount by JFK, it is clear that the mutual intent of the parties when they entered the agreement was to resolve all of Lifschutz's grievances with JFK that led to his alleged distress, his threat of litigation, and his ultimate resignation. The terms "among other things" and "other alleged action" demonstrate that the breadth of the dispute between him and JFK involved more than just his removal from the emergency department call panel. That the parties did not list each and every grievance does not render the agreement ambiguous or unclear. Rather, by including the terms "among other things" and "other alleged action by JFK" the parties signaled that the dispute resolved by the agreement involved more than the removal from the emergency department call panel.
Moreover, it would be unreasonable to infer that the parties used the terms "among other things" and "other alleged action by JFK" to define the dispute with the intent that those terms have no meaning until interpreted by a court resorting to extrinsic evidence. Such an interpretation would undermine the parties' intent to fully resolve all the disputes between Lifschutz and JFK and to avoid the expense of litigation. We interpret contracts "to try to give effect to every clause and harmonize the various parts with each other." (Friedman Prof. Management Co. v. Norcal Mutual Ins. Co. (2004) 120 Cal.App.4th 17, 33 (Friedman).) Considering the contract as a whole, as we must (Civ. Code, § 1641; Zalkind v. Ceradyne, Inc. (2011) 194 Cal.App.4th 1010, 1027), we conclude that JFK and Lifschutz entered the settlement agreement to fully and finally resolve any and all claims that led Lifschutz to threaten litigation against JFK and to resign from JFK, including but not limited to the removal of Lifschutz from the emergency department call panel.
We next analyze whether the claims in this lawsuit relate to or arise from JFK's conduct that led to Lifschutz's resignation. We conclude that they do.
At the heart of the lawsuit are Lifschutz's allegations that Tenet and JFK conspired to illegally recruit nonlocal physicians to work in JFK's service area so that the relocated physicians could be used to direct patients away from JFK to Desert Regional, a more profitable Tenet-owned facility than JFK. To effectuate the alleged scheme to generate greater profits, Tenet allegedly had to force JFK's local physicians out of the service area "through pretextual, false, and fraudulent claims about their respective practices," such as when JFK "suddenly claimed that" Lifschutz was "a menace to the public and had to be summarily removed from the" medical staff despite evidence that the allegations against Lifschutz were false. Among the physicians who were relocated pursuant to the alleged scheme were vascular surgeons, so JFK "needed to make room for them by getting rid of" Lifschutz.
In furtherance of the alleged scheme, JFK at the direction of Tenet allegedly "orchestrated to deny, disrupt and interfere with [Lifschutz's] hospital privileges by, among other things, refusing and failing, to schedule hospital facilities for surgical procedures, notwithstanding that [Lifschutz] held privileges to admit patients to, and perform surgery at, the hospital." In addition, pursuant to the alleged plan, "Lifschutz was informed that if he refused to resign his vascular surgery privileges at the hospital, they would start a process that could have resulted in the loss of his medical license. [Lifschutz] reluctantly agreed to withdraw his privileges for vascular surgery subject to maintaining his general surgery privileges." But for the alleged illegal plan to get rid of Lifschutz to make room for relocated vascular surgeons, Lifschutz claims he "would not have resigned any of his privileges at" JFK.
Thus, the alleged illegal recruitment and referral scheme orchestrated by Tenet and JFK purportedly harmed Lifschutz by causing him to resign from JFK. The settlement agreement resolved Lifschutz's grievances with JFK that resulted in his resignation. Because the claims in this lawsuit directly arise from and are related to the events and conduct engaged in by and at the direction of Tenet and JFK that led to Lifschutz's resignation from JFK, they are part of the dispute covered by settlement agreement.
We reject Lifschutz's argument that the dispute cannot be so broadly construed as to cover the alleged illegal recruitment and referral scheme because he was not aware of the scheme when he resigned. The argument is undermined by Lifschutz's express waiver in the agreement of the protection afforded under Civil Code section 1542, which provides that general releases do not extend to unknown claims. Moreover, the agreement specifically provides that it "shall operate as a release of and bar to future claims that may arise from the facts, disputes and transactions recited above, whether such claims are currently known, unknown or unforeseen relating to or arising from the Dispute, and/or the transactions contemplated by this Agreement." In light of those provisions expressly addressing the agreement's application to unknown claims related to the covered dispute, Lifschutz cannot now claim that he did not intend the settlement agreement to cover claims related to the underlying dispute of which he was unaware. (See San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048, 1053-1054; Winet v. Price (1992) 4 Cal.App.4th 1159, 1167-1169.)
As a further indication that the dispute resolved by the settlement agreement is the same dispute at issue in this lawsuit, Lifschutz did not name Tenet or JFK as defendants even though he alleges they are the main wrongdoers in the alleged illegal recruitment and referral scheme. At the hearing on the demurrers to the third amended complaint, Lifschutz's counsel explained that Lifschutz did not sue JFK and Tenet for their part in the alleged illegal recruitment and referral scheme because "[h]e released them."
We next analyze the scope of the release to determine whether defendants are covered among the released parties in the agreement. Consistent with the broadly defined dispute resolved by the settlement agreement, the agreement also includes a broadly worded release: "[T]he Parties, on behalf of themselves and their successors, assigns, and any other person or entity who may assert a claim by or through either Party, shall release, discharge, and forever hold each Party and its legal representatives, administrators, receivers, trustees, directors, officers, members, managers, employees, agents, consultants, owners, shareholders, principals, attorneys, partners, limited partners, joint venturers, sureties, insurers, subrogees, subsidiaries, parent and affiliate entities, predecessors, successors, and assigns harmless from any and all Claims (as defined below) related to the Dispute."
Lifschutz argues that the trial court erred by concluding that defendants are included within the terms of the general release. We disagree for several reasons. First, all defendants fall within the scope of the release as agents of JFK. Lifschutz alleges among other things that defendants were acting as agents of each other and were acting within the scope of that agency. Lifschutz does not also directly allege that defendants were acting as agents of JFK or Tenet, but the omission of such an allegation is of no consequence, given Lifschutz's other allegations. Tenet and JFK were not named as defendants only because of Lifschutz's belief that the settlement agreement covered any claims he had against them arising from the illegal recruitment and referral scheme. But Lifschutz's entire theory of the case is that JFK and Tenet orchestrated the alleged illegal recruitment and referral scheme and that defendants' allegedly wrongful conduct was undertaken in furtherance of that scheme. Thus, defendants' alleged liability is based on the assertion that they were carrying out JFK's illegal scheme, which constitutes an allegation that they were JFK's agents. Indeed, it is not clear what the release of all of JFK's agents in connection with the recruitment and referral scheme would apply to if it did not apply to the individuals and entities alleged to have carried out that scheme.
Second, Desert Regional is affiliated with JFK and thus also is covered by the release as an affiliated entity. "A corporation is an 'affiliate' of, or a corporation is 'affiliated' with, another specified corporation if it directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the other specified corporation." (Corp. Code, § 150.) According to the allegations in the third amended complaint, Desert Regional and JFK are both owned and operated by Tenet, which makes them affiliated entities by law. (Ibid.; Grande, supra, 44 Cal.App.5th at p. 1165.) There is no indication in the agreement that the parties intended the term "affiliate entities" to have anything other than its ordinary legal meaning. (Grande, at p. 1165.) Lifschutz does not contend otherwise, and in his reply brief he concedes that the release covers entities that "are related to JFK through common ownership." Because Desert Regional is affiliated with JFK through their common ownership by Tenet, Desert Regional is among the parties expressly covered by the release as an affiliated entity.
Third, the settlement agreement specifically identifies the medical staff as an affiliated entity, so the medical staff is also covered by the release as an affiliate of JFK. The agreement's confidentiality provision provides that Lifschutz "will not disclose the fact, terms, and amount of this Agreement to any current or former employee, officer, or agent of JFK, or of any entity affiliated with JFK, including (but not limited to) the JFK Medical Staff and each of its members." (Italics added.) The agreement thus specifically identifies the medical staff as an affiliated entity of JFK's. Lifschutz does not deny that the medical staff is defined as an entity affiliated with JFK in the confidentiality provision. The "'same meaning rule'" of contract interpretation dictates that "an identical phrase or word used in a contract be given the same meaning throughout the contract in the absence of anything in the contract suggesting otherwise." (People ex rel. Lockyer v. RJ Reynolds Tobacco Co. (2003) 107 Cal.App.4th 516, 527.) Nothing in the agreement suggests that the terms "entit[ies] affiliated with JFK" in the confidentiality provision and "affiliate entities" in the release provision are meant to have different meanings. Lifschutz does not argue to the contrary.
Lifschutz argues that as a matter of law a medical staff and a hospital are separate and independent legal entities, and he concludes that as a matter of law a medical staff cannot be affiliated with a hospital. Regardless of the legal relationship between a hospital and its medical staff, however, the parties to an agreement can define a term as having a meaning that differs in some respects from its ordinary definition. (Grande, supra, 44 Cal.App.5th at p. 1165.) The confidentiality provision expressly identifies the medical staff as among JFK's affiliate entities, but it does not limit the term "entit[ies] affiliated with JFK" to the medical staff. It therefore appears that the term "affiliate entities" in the list of releasees has its ordinary legal meaning (Corp. Code, § 150) but also includes the medical staff regardless of whether they would otherwise be covered by that ordinary legal meaning.
Lifschutz also argues that because the confidentiality provision precludes the medical staff from knowing about the agreement it is incompatible with construing the agreement as conferring any benefit on the medical staff. As we explain in the analysis of the confidentiality provision below, we read the confidentiality provision differently from Lifschutz.
Having determined that defendants are all covered as released parties in the agreement, we next address Lifschutz's argument concerning the agreement's confidentiality provision. Relying on Iqbal v. Ziadeh (2017) 10 Cal.App.5th 1 (Iqbal), Lifschutz argues that because the confidentiality provision prohibits JFK from disclosing the settlement agreement to anyone except JFK's governing board, tax and legal advisers, and Tenet, the parties to the agreement could not have intended that the agreement confer any benefit on defendants, who are prohibited from even learning of the agreement's existence. We reject the argument for two reasons.
First, the language of the provision does not support Lifschutz's interpretation. The provision prohibits Lifschutz from disclosing the agreement to "anyone" other than his attorney and tax adviser, including "any current or former employee, officer, or agent of JFK or of any entity affiliated with JFK, including (but not limited to) the JFK Medical Staff and each of its members," unless compelled by legal authority, but the provision does not impose the same restrictions on JFK. The portion of the confidentiality provision pertaining to JFK reads: "JFK and its administrative personnel will not disclose or discuss the existence of this Agreement, any of its terms, and [Lifschutz's] departure from JFK with anyone outside of JFK's Governing Board, parent company, tax or legal advisers and other individuals or entities unless required to do so by law . . . ." The possessive "JFK's" precedes the list of entities and individuals to whom JFK is permitted to disclose the terms of the agreement even if not required to do so by law. That is, the provision allows JFK to disclose or discuss the agreement or its terms with JFK's "other individuals or entities," which include defendants. Moreover, Iqbal is distinguishable because the confidentiality provision in that case prohibited the parties from disclosing the terms of the agreement to anyone. (Iqbal, supra, 10 Cal.App.5th at p. 11.)
Because under the plain language of the confidentiality provision JFK was not prohibited from disclosing the agreement to other entities, Lifschutz's argument that JFK was prohibited from disclosing the agreement's terms to the medical staff fails.
Second, it would be unreasonable to read the confidentiality agreement in the manner suggested by Lifschutz because doing so would in large part nullify the release. Putting aside the parties' disagreement about whether defendants are covered under the release, there can be no dispute that the release is broadly worded to encompass a wide array of individuals and entities. If the parties' confidentiality obligation under the agreement had the effect that Lifschutz claims-prohibiting everyone other than Lifschutz, JFK, Tenet, and JFK's governing board and tax and legal advisers from benefitting from the agreement-then the broad language in the release-extending coverage to "administrators, receivers, trustees, directors, officers, members, managers, employees, agents, consultants, owners, shareholders, principals, attorneys, partners, limited partners, joint venturers, sureties, insurers, subrogees, subsidiaries, parent and affiliate entities, predecessors, successors"-would be rendered superfluous. In other words, hardly any of the individuals or entities listed in the release would be able to benefit from the release in which they were expressly identified. Such an interpretation runs contrary to our goal of giving effect to every clause of an agreement and harmonizing the various provisions with each other. (Friedman, supra, 120 Cal.App.4th at p. 33.) Moreover, Lifschutz's interpretation would run contrary to the parties' manifest intention to enter a broad general release. We construe contracts to avoid absurd results. (County of Humboldt v. McKee (2008) 165 Cal.App.4th 1476, 1498.)
For all of these reasons, we conclude that the trial court did not err by sustaining defendants' demurrers on the ground that the settlement agreement between Lifschutz and JFK covered all of the claims against defendants in this lawsuit.
D. Leave to Amend
Section 430.41 mandates that a complaint "shall not be amended more than three times, absent an offer to the trial court as to such additional facts to be pleaded that there is a reasonable possibility the defect can be cured to state a cause of action." (Id., subd. (e)(1).)
Lifschutz argues that the trial court abused its discretion by failing to grant him leave to file a fourth amended complaint. We disagree. At the hearing on defendants' demurrers to the third amended complaint, Lifschutz's counsel requested leave to amend to clarify that the allegations in the third amended complaint included conduct that occurred after the parties entered into the settlement agreement. Counsel did not make any offer of proof to the trial court identifying the alleged conduct that occurred after Lifschutz entered the settlement agreement. Lifschutz therefore failed to carry his burden under section 430.41 of demonstrating that there was a reasonable probability that he would be able to cure the defects by amending his pleading a fourth time. (§ 430.41, subd. (e)(1).)
Lifschutz fares no better in this regard on appeal. He claims that he "could amend the complaint to show that the defendants' conduct in participating in the illegal recruitment and referral scheme continued to harm his practice after he resigned his privileges at JFK." Lifschutz goes on to detail the alleged harm that he suffered after resigning (and thus after entering the settlement agreement) as a result of the alleged illegal referral and recruitment scheme. But he does not proffer any additional facts that he could allege concerning postresignation conduct by defendants.
The settlement agreement covered the released individuals' and entities' conduct leading up to Lifschutz's resignation. Thus, in order for a claim not to be covered by settlement agreement, it would have to be based on alleged conduct that occurred after the settlement agreement. Lifschutz has not proffered any alleged facts that he could add concerning any postagreement conduct. Lifschutz has therefore failed to carry his burden of demonstrating that he could cure the defects in the third amended complaint through amendment. (Schifando, supra, 31 Cal.4th at p. 1081.)
Moreover, we also reject Lifschutz's argument that he has not been provided any opportunity to amend his pleading to address the settlement agreement. At the hearing on the demurrers to the second amended complaint, the trial judge indicated that it was "inexplicable" to her that there existed a settlement agreement that covered the alleged conduct in the lawsuit. The court, however, did not address whether the settlement agreement applied because no defendant had raised the issue.
Thus, based on the trial court's remarks at that hearing, Lifschutz had notice that the court believed the settlement agreement covered the claims in the second amended complaint. The causes of action in the second amended complaint and the third amended complaint are identical. Lifschutz therefore had notice that the court would consider the settlement agreement at the pleading stage if defendants made the argument, and he thus should have crafted the allegations in the third amended complaint with that in mind.
For all of these reasons, we conclude that Lifschutz has failed to carry his burden of demonstrating that he could amend the complaint to cure its defects. We consequently conclude that the trial court did not abuse its discretion by not granting Lifschutz leave to amend.
DISPOSITION
The judgment is affirmed. Defendants shall recover their costs of appeal.
We concur: SLOUGH Acting P. J., RAPHAEL J.