Tuesday, July 26, 2016

Alter Ego Doctrine Is Not a Recipe to End-Around MICRA

Gopal v. Kaiser Foundation Health Plan, No. B259808 (D2d1 Jun. 23, 2016)

The court here upholds a granted summary judgment motion where an insurance plan was dismissed from a med-mal case due to lack of evidence that it was the alter ego of the principal defendants. Plaintiffs claimed a “single-enterprise” theory. I.e., that the various defendants, even if not in a clean vertical relationship, seriously abused the corporate form to perpetrate a fraud or accomplish an inequitable result. Plaintiffs didn’t show that here. Instead, they were using the alter ego theory to end around MICRA’s limitation on med-mal damages against heath care providers. The court notes that MICRA’s limits are not an “injustice” that can or should be remedied by ignoring the corporate form. They are, instead, a public policy determination by the California legislature, which courts must honor.

Affirmed.

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