N. Cal. Collection Serv. v. Pierson

1

NORTHERN CALIFORNIA COLLECTION SERVICE, INC., Plaintiff and Respondent, v. RAYMOND H. PIERSON III, Defendant and Appellant;

GERALD MCINTYRE et al., Respondents.

C089972

California Court of Appeals, Third District, Amador

August 30, 2023

NOT TO BE PUBLISHED

Super Ct. No. 17CVC10112

Duarte, J.

Plaintiff Northern California Collection Service, Inc. (NCCS) brought a debt collection action against defendant Raymond H. Pierson III, M.D., to collect unpaid rent due under a commercial lease agreement for office space. Dr. Pierson, proceeding in propria persona, filed a cross-complaint against NCCS and others, including the owners of the office building, alleging numerous claims (e.g. negligence, breach of contract, fraud, defamation). Dr. Pierson appeals from the judgments of dismissal entered in favor of the cross-defendants after the trial court declared him to be a vexatious litigant within the meaning of Code of Civil Procedure section 391, subdivision (b)(1),^[1] ordered him to furnish security to avoid dismissal of his cross-complaint (§ 391.3, subd. (a)), and imposed a prefiling order prohibiting him from filing any new litigation in propria persona without first obtaining leave of the presiding justice or judge (§ 391.7, subd. (a)).

Dr. Pierson argues that the judgments of dismissal, which were entered after he failed to furnish the court-ordered security (§ 391.4), must be reversed because the trial court's vexatious litigant finding is not supported by substantial evidence. We agree and reverse.

FACTUAL AND PROCEDURAL BACKGROUND

We summarize the pertinent facts and procedural history. Additional background information relevant to the resolution of this appeal is set forth in the Discussion, post.

Prior Federal Litigation Commenced in Florida

Dr Pierson is an orthopedic surgeon. In 1993, he moved to Orlando, Florida. Thereafter, he was granted medical staff privileges and performed surgeries at hospitals that were part of a non-profit private health care network serving central Florida--Orlando Regional Healthcare System (ORHS). Dr. Pierson's privileges included placement on the trauma and emergency call list.

In mid-1996, an investigation was initiated after complaints were received regarding Dr. Pierson's emergency room usage from nurses, technicians, and physicians at ORHS's hospitals. The complaints consisted of concerns that Dr. Pierson (1) took an excessive length of time completing his surgeries, (2) scheduled surgeries at inappropriate times, (3) delayed dictating operative notes, and (4) treated elective surgeries as urgent or semi-urgent cases.

In early 2004, following the investigation and administrative disciplinary proceedings that took more than seven years to complete, the ORHS board found that some of the complaints against Dr. Pierson's were valid and filed an adverse action report with the National Practitioner Data Bank, as required under the Health Care Quality Improvement Act of 1986 (HCQIA) (42 U.S.C. § 11101 et seq.). ORHS told Dr. Pierson that it would restore him to the trauma and emergency call list (from which he had been removed after a preliminary review of the complaints against him) if he was willing to comply with the standard policies and protocols that applied to all orthopedic surgeons on staff at ORHS's hospitals. Dr. Pierson refused to do so and instead moved to California in mid-2004 and opened a medical practice in Amador County.

Almost four years later, Dr. Pierson commenced a federal action in Florida. In January 2008, represented by counsel, he brought suit in the United States District Court for the Middle District of Florida, against ORHS, numerous physicians, the United States of America, and various federal and state agencies. The complaint, which arose out of the suspension of Dr. Pierson's trauma and emergency call and consulting privileges at ORHS's hospitals, alleged 22 claims, including breach of contract, intentional and unjustifiable interference with contractual relations, defamation, fraud, civil conspiracy, and multiple claims involving HCQIA.^[2] In October 2010, the district court entered judgment against Dr. Pierson after it dismissed most of his claims and granted summary judgment on those remaining. Dr. Pierson, represented by counsel, appealed. In January 2012, the Eleventh Circuit Court of Appeals affirmed the judgment. In June 2012, the Eleventh Circuit denied Dr. Pierson's in propria persona petition for rehearing.^[3] In January 2013, the United States Supreme Court denied Dr. Pierson's in propria persona petition for writ of certiorari.

Prior Federal Litigation Commenced in California

In late January 2014, Dr. Pierson, proceeding in propria persona, filed a legal malpractice action in the United States District Court, Eastern District of California, against two attorneys who had represented him in the federal litigation in Florida. The claims alleged in this action arose out of the "grossly deficient legal advocacy provided by [the attorneys] in all stages of their representation of Dr. Pierson before the 11th Circuit Appellate Court." As a basis for subject matter jurisdiction, Dr. Pierson alleged diversity of citizenship.

In early February 2014, the California district court sua sponte transferred the action to the United States District Court, Southern District of Florida based on improper venue under 28 U.S.C. section 1406.^[4] The next day, the Florida district court sua sponte dismissed the action without prejudice due to Dr. Pierson's failure to sufficiently allege subject matter jurisdiction.

In April 2014, the Florida district court struck Dr. Pierson's first amended complaint because the action had not been "reopened following its dismissal." The court noted the dismissal was without prejudice to Dr. Pierson's "right to refile th[e] action." Less than two weeks later, he refiled the action and it was assigned a new case number.

In May 2014, the California district court denied Dr. Pierson's in propria persona motion to vacate the transfer order. In July 2014, the Ninth Circuit dismissed his in propria persona appeal of the transfer order and the order denying his motion to vacate the transfer order, explaining that it lacked subject matter jurisdiction because the challenged orders were not final or directly appealable. In February 2015, the United States Supreme Court denied Dr. Pierson's in propria persona petition for a writ of certiorari.

In July 2015, the Florida district court dismissed the "refiled" legal malpractice action. This dismissal occurred after Dr. Pierson informed the district court of his desire to prosecute the complaint he filed in a related action in the same district, which although unclear, was apparently filed in propria persona at some point in 2015.

Present Action

In 2016, Dr. Pierson maintained an orthopedic surgery practice at the Amador Professional Center, an office building owned by Gerald and Betty McIntyre (collectively McIntyres) and managed by Colliers International Real Estate Management Services, Inc. (Colliers International). He leased one of the office suites in the building, located in Jackson, California. On October 10, 2016, the office building was damaged when a woman crashed her car into the area near the "front office operations section" of Dr. Pierson's office. Thereafter, Dr. Pierson claimed that he could no longer evaluate and treat patients at his office due to the "negligent handling" of the repairs. As a consequence of the "exceptional financial disruption" caused by the "negligent and prolonged repairs," Dr. Pierson stopped paying rent and vacated his office on November 30, 2016.

In May 2017, NCCS filed a debt collection action against Dr. Pierson to collect the unpaid rent due under the terms of his commercial lease agreement.

In February 2018, Dr. Pierson, proceeding in propria persona, filed a "response" to the complaint and a cross-complaint against NCCS and others.^[5] The operative crosscomplaint, filed in October 2018, asserted numerous claims against NCCS, the McIntyres, Colliers International, and one other party.^[6] Among other things, Dr. Pierson alleged that the "negligent demolition and repairs" rendered his office "completely uninhabitable" due to a "toxic combination of dust, debris and other unknown inhalants," and that, due to the excessive amount of time it took to complete the repairs, he suffered financial loss and the temporary closure of his medical practice was "necessary to avoid complete financial insolvency." He further alleged that he and his staff sustained "permanent pulmonary injury" from their exposure to the contaminated office space, and that the "unlawful and fraudulent lawsuit" brought by NCCS "defamed [his] good name and caused exceptional emotional distress." Dr. Pierson claimed that "legal representatives" from NCCS filed a lawsuit which "advanced their demands on the basis of an invalid and expired lease," and noted that NCCS's complaint failed to inform the trial court about the damage caused by the "motor vehicle accident," which resulted in his office "being completely unacceptable for patient care for an extended period."

Vexatious Litigant Motions Filed in the Present Action

In early December 2018, NCCS moved for an order declaring Dr Pierson to be a vexatious litigant within the meaning of section 391, subdivision (b)(1), requiring him to furnish security as a condition of prosecuting his cross-complaint (§ 391.3, subd. (a)), and imposing a prefiling order prohibiting him from filing any new litigation in propria persona without first obtaining leave of the presiding justice or judge (§ 391.7, subd. (a)). NCCS argued that such relief was warranted because Dr. Pierson had filed seven...