Filed 10/15/Case 16-10015 6 HAGOP T. BEDOYAN, CSB NO. 131285 KLEIN, DENATALE, GOLDNER, COOPER, ROSENLIEB KIMBALL, LLP 5260 N. Palm Avenue, Suite 205 Fresno, California 93704 Telephone: (559) 438-4374 Facsimile: (661) 326-0418 Email: hbedoyan@kleinlaw.com; Brandon N. Krueger, Esq. (SBN 221432)(Admission Pending) bkrueger@sallspencer.com Lara A.S. Callas, Esq. (SBN l74260)(Admission Pending) SALL SPENCER CALLAS KRUEGER A Law Corporation 3235] Coast Highway Laguna Beach, CA Telephone: (949) 499-2942 Facsimile: (949) 499-7403 Attorneys for Healthcare Conglomerate Associates, LLC and Vi Healthcare Finance, Inc. UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF CALIFORNIA, FRESNO DIVISION In re: Case No.: l6-l0015-A-9 SOUTHERN INYO HEALTHCARE Chapter 9 DISTRICT, DC No.: KDG-4 Debtor. Date: November 14, 2018 Time: 1:30 pm. Place: United States Bankruptcy Court 2500 Tulare Street, Fifth Floor Department A, Courtroom 1 1 Fresno, California Judge: Honorable Fredrick E. Clement DECLARATION OF YORAI BENZEEVI, M.D. IN SUPPORT OF MOTION TO DISQUALIFY ASHLEY M. MCDOW AND FOLEY .52 LARDNER AS ATTORNEYS 00 488 3N08358 DECLARATION Filed 10/15/18 Case 16-10015 I, YORAI (BENNY) BENZEEVI, M.D., declare as follows: I. I am an adult over the age of 18. 2. I make this declaration based on my own personal knowledge. If called upon to do so, I could and would testify competently to the matters stated in this declaration. 3. I make this declaration in support of the Motion of Healthcare Conglomerate Associates, LLC and Vi Healthcare Finance, Inc. to disqualify the law ?rm of Foley Lardner and Ashley McDow ?'om representation of Debtor in the above entitled Chapter 9 case. 4. I am the Managing Member of HCCA. HCCA is a California Limited Liability Company with its principal place of business in Los Angeles and was the Manager of debtor Southern Inyo I-Iealthcare District (?Inyo? or ?Debtor?). I have overall responsibility for the management of HCCA. I am also the President of Vi, a ?nance company which extended a line of credit to Debtor in July 20l7. I received my medical degree at the University of California, Davis and I am board certi?ed by the American Board of Emergency Medicine and I hold the status of Fellow of the American College of Emergency Medicine. Based on the foregoing positions, I have extensive knowledge of contracts and the performance thereunder, the relationship between HCCA, and its af?liate entities, and the law ?rm of Baker Hostetler, the relationship between Inyo and HCCA, and the relationship between Inyo and Vi. 5. In 2009, I retained the ?rm of Baker Hostetler (?Baker?) to advise and assist me in the formation of a professional corporation. Between 2009 and 2017, Baker?s engagement expanded far beyond the initial engagement to the formation of, and legal services to several other health?care related entities, including HCCA, Med?ow, PC, Vi, and Tulare Asset Management (collectively, the ?Benzeevi Group"). In 20l3 and 2014, Baker advised HCCA concerning the drafting and negotiation of a Management Services Agreement (?Tulare with Tulare Local Healthcare District and then continued to advise HCCA concerning the management of TLHD while it also undertook to advise TLI-ID. In 20 3, Baker assisted and advised me in forming Med?ow, PC. Baker also provided legal services relating 00 488 3N08358 2 DECLARATION Filed 10/15/18 Case 16-10015 to trademark and personnel issues, including drafting numerous employment and independent contractor agreements for physicians and other professionals af?liated with my businesses. Baker essentially functioned as outside general counsel for all of the businesses 1 was forming and operating between 2009 and 20l7, and communicated with them frequently, and at certain times, multiple times per day. Bruce Greene was my primary contact at Baker, but Ashley McDow and Fahim Farivar also worked on HCCA matters. I communicated signi?cant amounts of con?dential information to Baker concerning all aspects of the business of the Benzeevi Group, including financial information and business strategies and goals. Throughout Baker?s representation, the Benzeevi Group paid Baker at least hundreds of thousands of dollars for its legal services. 6. In December 2015 and January 20l6, Baker advised HCCA in negotiating and drafting a Management Services Agreement with lnyo (the ?lnyo A true and correct c0py of the lnyo MSA is attached hereto as Exhibit A. Ashley McDow, a partner at Baker, was heavily involved, along with Mr. Greene, in these negotiations and dra?ing, with particular emphasis on advising HCCA concerning how the contemplated Chapter 9 proceedings, to be initiated by lnyo, would affect rights under the lnyo MSA. 1 spoke multiple times per day during this period with both Mr. Greene and Ms. McDow concerning the lnyo MSA and shared substantial con?dential information with them concerning strategies and goals with respect to the lnyo MSA. Ms. McDow was the attorney representing HCCA who appeared on behalf of HCCA at the January 2, 2016 meeting of the lnyo Board where the lnyo MSA, the January 2, 2016 purported ?Waiver of Con?ict? and the retainer agreement between Baker and lnyo letter (Exhibits and C, discussed in paragraph 7) were all approved. The lnyo Board was represented by separate counsel Scott Nave in negotiating the lnyo MSA. 7. Following execution of the lnyo MSA by lnyo and myself, on behalf of HCCA, Baker began representing lnyo in commencing this Chapter 9 proceeding. In connection with this dual representation, Baker presented to HCCA and lnyo a purported ?Waiver of Con?ict? letter dated January 2, 20l6. A true and correct copy of this January 2, 2016 letter signed by pc 488 Bruce Greene, but not lnyo or HCCA, is attached hereto as Exhibit B. have been unable to 3N08358 3 DECLARATION Filed 10/15/18 Case 16-10015 locate a copy of the January 2, 2016 ?Waiver of Conflict? letter counter-signed by lnyo and HCCA in the ?les in my possession. Baker also provided to lnyo an ?Engagement of Counsel? letter to lnyo also dated January 2, 2016. A true and correct copy of the January 2, 2016 ?Engagement of Counsel Letter? is attached hereto as Exhibit C. As part of the Board approval process for the lnyo MSA, the ?Waiver of Con?ict Letter? and the ?Engagement of Counsel? Letter were posted at the lnyo facilities, as well as uploaded along with the Agenda for the January 2, 2016 Board meeting where the lnyo Board considered approval of the MSA, the retention of Baker by lnyo, and the purported ?Waiver of Con?ict.? The lnyo MSA was executed by lnyo and HCCA sometime in early January 2016. 8. The lnyo MSA required that HCCA provide a Chief Restructuring Of?cer to manage the hospital. HCCA appointed HCCA representative Alan Germany to serve as Chief Restructuring Of?cer. Between January 2016 and September 2017, Ms. McDow communicated with Mr. Germany and myself concerning Chapter 9 issues for lnyo. I understood that after Baker began representing lnyo in the Chapter 9 proceedings, Baker would continue to advise HCCA concerning the Chapter 9 proceedings and with regard to the lnyo MSA, and in fact Baker did exactly that. Baker and Ms. McDow continued to advise HCCA with regard to its duties and responsibilities as the manager of lnyo and in relation to the Chapter 9 proceedings, Baker also continued to perform legal services on other matters it continued to handle for HCCA and the Benzeevi Group. At no time was I told that if the interests of HCCA and lnyo became in con?ict, that Baker could continue to represent lnyo adverse to any member of the Benzeevi Group. To the contrary, it was my understanding that if an actual con?ict developed, Baker would terminate its representation of lnyo and continue representing the Benzeevi Group, including as to the lnyo MSA. 9. 1n the summer of 201 7, Baker undertook another project related to lnyo, the formation of Vi Healthcare Finance, Inc. Baker drafted the formation documents for Vi and the transaction documents whereby Vi extended a line of credit to lnyo, and Baker advised me concerning this entity. 1 am the President of Vi. In connection with Vi, Baker QC 488 provided another purported ?Waiver of Con?ict? Letter dated July 19, 2017. A true and correct 3N08358 4 DECLARATION Filed 10/15/18 Case 16-10015 copy of this letter, signed by Bruce Greene of Baker, as well as myself on behalf of HCCA and Vi, and lnyo Board member Richard Fedchenko, for lnyo, is attached hereto as Exhibit D. 10. In the summer of 2017, a dispute erupted between HCCA and the lnyo Board concerning the ?nancial situation oflnyo and management oflnyo. 1. On September 29, 2017, 1 received a letter from Mr. Greene at Baker stating that Baker was commencing termination of its representation of all entities of the Benzeevi Group. A true and correct copy of Baker?s September 29, 2017 letter is attached hereto as Exhibit E. Neither orally, nor in this September 29, 2017 letter, did Baker disclose to me that an actual con?ict had developed. Baker also did not seek a waiver of an actual con?ict between any entity of the Benzeevi Group and lnyo. Baker did not seek my consent to continue representing lnyo and had it requested such consent I would have declined to grant such consent. Baker?s conduct was directly contrary to my expectation and understanding that Baker would continue to represent the Benzeevi Group if a con?ict developed with lnyo. 12. Then, approximately two and a half weeks later, on October 17, 2017, Ms. McDow ?led on behalf of lnyo in the Chapter 9 proceedings an Emergency Motion seeking rejection of the lnyo MSA which was highly prejudicial to the Benzeevi Group. 1 received no advance notice that Baker intended to ?le this motion, that Ms. McDow would support the motion with her own declaration, or that Ms. McDow would appear at the hearing on this Emergency Motion and make statements adverse to the interest of the Benzeevi Group. Instead, I received an e-mail the same day the motion was ?led that a hearing would occur on the Emergency Motion that same day. 13. Prior to the problem arising with lnyo, a dispute had arisen between TLHD and HCCA. This dispute arose after a new Board was elected for TLHD in November 2016. Baker had represented HCCA with regard to the Tulare MSA both before and after execution of the Tulare MSA and also represented TLHD. However, in the summer of 2017 the TLHD claimed to have retained new counsel, the McCormick Barstow ?rm, to replace Baker. Mr. Greene of Baker disputed the TLHD Board?s authority to hire new counsel. One example ofthis position is re?ected in an e-mail from Mr. Greene to several members of the TLHD Board dated August PC 488 3N08358 5 DECLARATION Filed 10/15/18 OWN-JUNOCase 16-10015 8, 20 7 wherein he stated ?any law ?rm that the three of you may have selected will not be considered to law?illy represent the District.? A true and correct copy of Mr. Greene?s August 8, 2017 e-mail is attached hereto as Exhibit F. 14. When Ms. McDow left Baker and joined the ?rm of Foley Lardner, she did not seek my consent to have Foley Lardner or herself, represent lnyo in these proceedings. Had my consent been sought, 1 would not have granted consent for Foley or Ms. McDow to represent lnyo. I declare under penalty of perjury that the foregoing statements are true and correct and that if called as a witness herein 1 could and would competently testify thereto, and that this declaration was executed on October 1_4, 2018 at LOS Angeles California. 42.. YORAII BENZEEVI, MD. DC 488 3N08358 6 DECLARATION 1 2 3 4 ELECTRONICALLY FILED 2/19/2020 10:35 AM Kern County Superior Court By Gracie Goodson, Deputy Michael J. Lampe #82199 Michael P. Smith #206927 LAW OFFICES OF MICHAEL J. LAMPE 108 West Center Avenue Visalia, California 93291 Telephone (559) 738-5975 Facsimile (559) 738-5644 mjl@lampe-law.com 5 Attorneys for Plaintiff Exempt from filing fees Government Code §6103 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 IN AND FOR THE COUNTY OF KERN 10 11 12 TULARE LOCAL HEALTH CARE DISTRICT dba Tulare Regional Medical Center, a Public Agency 13 14 15 16 17 Plaintiff, vs. BRUCE R. GREENE; BAKER & HOSTETLER LLP, a limited liability partnership; PARMOD KUMAR, M.D., LINDA WILBOURN, RICHARD TORREZ; and Does 1 through 50, inclusive, Case No. BCV-19-103514 DECLARATION OF DENNIS A. MEDEROS RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 Date: March 20, 2020 Time: 8:30 a.m. Dept. 17 Defendants. 18 19 20 I, Dennis A. Mederos, declare: 21 1. 22 I am an attorney licensed to practice in the State of California, and became legal counsel for Senovia Gutierrez (“Gutierrez”) on or about July 21, 2017. 23 2. Gutierrez was elected to the Board of Directors of the Tulare Local Healthcare 24 District in a Special Recall Election held on July 11, 2017. 25 /// 26 /// 27 28 ____________________________________ DECLARATION OF DENNIS A. MEDEROS RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 L 1 3. The Tulare County Registrar of Voters certified Gutierrez as the winner of the 2 Special Recall Election on July 21, 2017. A true and correct copy of the Certificate of Election is 3 attached hereto as Exhibit 1. 4 4. Gutierrez was sworn into office by Tulare County Superior Court Judge Walter 5 Gorelick at a public ceremony on July 25 , 2017. A true and correct copy of the Gutierrez Oath 6 of Office is attached hereto as Exhibit 1. 7 8 9 5. The Regular Meeting Agenda for the Board meeting of July 26 , 2017, contained the following Chair Announcement: "As a result of the recent special election on July 11, 2017, Senovia Gutierrez will replace Dr. Parmod Kumar as a Board member." 10 11 12 A true and correct copy of the July 26, 2017, agenda is attached hereto as Exhibit 2. 6. I attended the July 26 , 2017, Board meeting. Prior to the commencement of the 13 meeting Board Chair Linda Wilbourn advised both myself and Gutierrez that Gutierrez would not 14 be seated as a Board member at this meeting because the item was not properly "agendized," 15 and as a result of this "agenda issue, " she would be seated at the next regularly scheduled Board 16 meeting in August. 17 18 19 20 7. The foregoing statements are within my personal knowledge and, if sworn as a witness, I can testify completely thereto . 8. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 21 22 23 24 Dated: February _ll_,2020 DENNIS A. MEDEROS 25 26 27 28 DECLARATION OF DENNIS A. MEDEROS RE : MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031 .285 -2- ipiii,iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii---iiioiiii_iii_iiiiiiiiiiiiiiiiiiiiiuiiiiiiiiiiiii.,;iiiiiiiiiitiiiiiiiiiiiiii7iiioiiiii;-~----..;i,imiiiiiiiiiiiiiiiiiiiiiiiiiiiiii.iiiiii,ii,iiiiiii,iii..;;.;;;;iiiiiiiiiiiiiiiiiiiiiiiiiiiiioiiiiiiiiiiiiiiiiiii_,;;;;iiiiiiiiiiiiiiiiiiiiiioiiiiiioi] CE'R!1UfI EXHIBIT . ., OF ELECTION 1 State of California ) ss, County of Tulare exhibitsticker.com tJlfl iJ£\) ) /, Michelle Bal dwln, Registrar of Voters qlrhe County a/Tulare, State ofCalifornia, do hereby certify that, auhe Special Recall ElecUon held on the I I th dcry of.July, 2017, Senovia Gutierrez was elected to the office of Director, of the Tulare Local Healthcare District-Area 3 in the County a/Tulare, State ofCalifornia to expire on December 7. 2018, as shown ii1 the official record ofthe results of said election on file in my office. !N fV!TNESS FVHEREOF: l have hereunto ajfu:ed my hand and official seal This 2!'1 day o/Jv.ly, 2017 Michelle Baldwin, Registrar of Voters )]llei:.Jftt ~~ OATH OF OFFICE State of California County of Tulare ) ) ss. ) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. I, Senovia Gutierrez, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States and the Constitution of the State of California against all enemies, foreign and domestic; that I will bear true faith and allegiance to the Constitution of the United States and the Constitution of the State of California; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties upon which I am about to enter. Director of the Tul care District Area-3 (Candidate Signnture) ~Ju__l Subscribed and sworn to (or affirmed) before me, this )~:;- day of- - - - - - ,L\ , 2017. .------ FILED JUL 2 6 20l7 TULARE COUNTY REGISTRAR OF VOTERS Proved to me on the basis of satisfactory evidence to be th~ person who appearedA_~fore me. . wo~c }~-l-f~ (Signature of Person Adminisle.ring Oath) Tu_ cls.;11,)= t File the ORIGINAL in the office of the Cleric or Secretary of the District, Send a copy to the following.· Tulare County Elections 0/flce, 5()5 IS Mooney Blvd, Visalia. CA 93277 FELED JUL 2 6 2m? {AL-"ail Oi? VOTERS laHCCA Tulare Local Health Care District Board of Directors Regular Meeting Agenda EXHIBIT 2 Wednesday, July 26, 2017 Board Convenes at 4:00 p.m. Evolutions Fitness & Wellness Center Conference Room 1425 E. Prosperity Ave. Tulare, CA 93274 I. CALL TO ORDER -Chair of the Board II. CHAIR ANNOUNCEMENT - As a result of the recent special election on July 11, 2017, Senovia Gutierrez will replace Dr. Parmod Kumar as a Board member. III. CITIZEN REQUESTS/PUBLIC COMMENTS IV. APPROVAL OF MINUTES - Regular Board Meeting Minutes of June 28, 2017 Proposed Action: Approval of Minutes for the June 28, 2017 Regular Board Meeting V. OPEN SESSION AGENDA A. Consent Agenda 1. Request to approve the following Medical Executive Committee Policies: None 2. Request to approve the following Tulare Local Health Care District (TLHCD) Hospital Policies: None B. Report by Administration - HCCA Management 1. Finance a. Quarterly Financial Update Board of Directors: Linda Wilbourn Chairman and President Parmod Kumar, MD Vice Chairman Richard Torrez Treasurer Michael Jamaica Secretary Kevin Northcraft Board Member Tulare Regional Medical Center is a Division of Tulare Local Health Care District exhibitsticker.com Tulare Regional Medical Center Proposed Action: Acceptance of Quarterly Financial Statement 2. Other a. Fiscal Year 2018 Budget Presentation Proposed Action: Approval of Fiscal Year 2018 Budget C. Board of Directors Discussion/Action Items 1. Board Member Reports D. Medical Staff Report – Ronald Ostrom, D.O., Chief of Medical Staff (or MEC representative) 1. MEC Recommendations to the Board and Report of Actions Proposed Action: Acceptance of MEC Recommendations VI. SUSPEND OPEN SESSION - ADJOURN TO CLOSED SESSION VII. CLOSED SESSION Location: Administration Office, 869 N. Cherry St., Tulare, CA 93274 A. Medical Executive Committee Report of Hospital Medical Audit or Quality Assurance Activities - Ronald Ostrom, D.O., Chief of Medical Staff (or MEC representative) MEC Reports relating to Peer Review, Credentialing, and Quality Assurance, pursuant to Health and Safety Code section 32155. B. Conference With Legal Counsel Significant exposure to litigation pursuant to Subdivision (d)(2) of Government Code section 54956.9: - One (1) potential action C. Conference With Legal Counsel Existing Litigation pursuant to subdivision (d)(1) of Government Code section 54956.9: Discussion regarding Ibarra v. Tulare Regional Med Center, David Smith, Douglas Middleton, Family Health Care Network, David Larios, and DOES 1 to 10 United States District Court, Eastern District of California Case No.: 1:16-cv-0039-LJO-BAM D. Conference With Legal Counsel Existing Litigation pursuant to subdivision (d)(1) of Government Code section 54956.9: Discussion regarding Opper v. Tulare Regional Medical Center, et al. Tulare County Superior Court Case No.: 263554 E. Conference With Legal Counsel Existing Litigation pursuant to subdivision (d)(1) of Government Code section 54956.9: Discussion regarding Lori Brooks v. Tulare Regional Medical Center Tulare County Superior Court Case No.: VCU266862 F. Conference With Legal Counsel Existing Litigation pursuant to subdivision (d)(1) of Government Code section 54956.9: Discussion regarding Juanita Cabrera v. Tulare Regional Medical Center Tulare County Superior Court Case No.: VCU268660 G. Conference With Legal Counsel Existing Litigation pursuant to subdivision (d)(1) of Government Code section 54956.9: Board of Directors: Linda Wilbourn Chairman and President Parmod Kumar, MD Vice Chairman Richard Torrez Treasurer Michael Jamaica Secretary Kevin Northcraft Board Member 611069561.1 Discussion regarding Graham Prewett, Inc. v. Tulare Local Healthcare District Tulare County Superior Court Case No.: VCU269517 VIII. ADJOURN CLOSED SESSION/RECONVENE OPEN SESSION Location: Evolutions Fitness & Wellness Center, Conference Room 1425 E. Prosperity Ave., Tulare, CA 93274 - Public report of action taken in closed session, pursuant to Government Code section 54957.1 IX. ADJOURNMENT NOTICE TO THE PUBLIC Tulare Regional Medical Center does not discriminate against any person on the basis of gender, religion, race, color, national origin, disability, or age in admission, treatment, or participation in its programs, services and activities, or in employment. For further information about this policy, contact: Bruce Greene of Baker & Hostetler LLP at telephone number (310) 442-8834 or by e-mail at bgreene@bakerlaw.com. PUBLIC COMMENT PERIOD FOR REGULAR MEETINGS At this time, members of the public may comment on any item of interest to the public that is within the subject matter jurisdiction of the Board (Gov’t Code, § 54954.3(a)). Provided, however, the Board shall not take action on any item not appearing on the agenda unless the action is otherwise authorized by law. Any person addressing the Board will be limited to a maximum of three (3) minutes so that all interested parties have an opportunity to speak. If any individual causes disruption of the meeting, the Chair of the Board, after warning the speaker, may declare that the speaker is disrupting, disturbing, or impeding the orderly conduct of the meeting and order the speaker to leave the meeting room. OPEN SESSION AGENDA ITEMS All writings, materials and information provided to the Board for their consideration relating to any Open Session Agenda item of the meeting are available for public inspection during regular business hours at the Administration Office of the District located at 869 Cherry Street, Tulare, California. CLOSED SESSION AGENDA ITEMS As provided in the Ralph M. Brown Act, Government Code §54950 et seq., the Board may meet in closed session with members of its staff, employees and its attorneys. These sessions are not open to the public and may not be attended by members of the public. The matters the Board will meet on in closed session are identified in the Regular Meeting agenda. Any public reports of action taken in the closed session will be made in accordance with Government Code § 54957.1. COMPLIANCE WITH ADA The agenda shall be made available upon request in alternative formats to persons with a disability, as required by the Americans with Disabilities Act of 1990 (42 U.S.C. § 12132) and the Ralph M. Brown Act (Cal. Gov’t Cod. § 54954.2). Persons requesting a disability related modification or accommodation in order to participate in the meeting should contact the Executive Office at (559) 685-3462, during regular business hours. Board of Directors: Linda Wilbourn Chairman and President Parmod Kumar, MD Vice Chairman Richard Torrez Treasurer Michael Jamaica Secretary Kevin Northcraft Board Member 611069561.1 1 2 3 4 ELECTRONICALLY FILED 2/19/2020 10:35 AM Kern County Superior Court By Gracie Goodson, Deputy Michael J. Lampe #82199 Michael P. Smith #206927 LAW OFFICES OF MICHAEL J. LAMPE 108 West Center Avenue Visalia, California 93291 Telephone (559) 738-5975 Facsimile (559) 738-5644 mjl@lampe-law.com 5 Attorneys for Plaintiff Exempt from filing fees Government Code §6103 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 IN AND FOR THE COUNTY OF KERN 10 11 12 TULARE LOCAL HEALTH CARE DISTRICT dba Tulare Regional Medical Center, a Public Agency 13 14 15 16 17 Plaintiff, vs. BRUCE R. GREENE; BAKER & HOSTETLER LLP, a limited liability partnership; PARMOD KUMAR, M.D., LINDA WILBOURN, RICHARD TORREZ; and Does 1 through 50, inclusive, Case No. BCV-19-103514 DECLARATION OF KEVIN NORTHCRAFT RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 Date: March 20, 2020 Time: 8:30 a.m. Dept. 17 Defendants. 18 19 20 I, Kevin Northcraft, declare: 21 1. 22 23 I am currently the President of the Board of Directors of the Tulare Local Healthcare District (“the District”). 2. On May 6, 2015, Defendants Bruce R. Greene (“Greene”) and Baker & Hostetler 24 LLP (“Baker”) were retained as general legal counsel for the District. At all times herein 25 mentioned, Benny Benzeevi was the CEO of the District. 26 27 28 ____________________________________ DECLARATION OF KEVIN NORTHCRAFT RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 1 3. On June 20, 2017, former Board members Parmod Kumar, Linda Wilbourn, and 2 Richard Torrez voted to adopt District Resolution 852. Directors Northcraft and Jamaica voted 3 no. A true and correct copy of Resolution 852 is attached hereto as Exhibit 3. 4 4. On July 11, 2017, Board member Kumar was recalled in a Special Recall Election 5 by 81.09% of the voters residing in his district. Senovia Gutierrez (“Gutierrez”) was elected to 6 replace Kumar, garnering 76.40% of the vote. 7 8 9 10 11 12 13 14 15 16 17 5. Gutierrez was sworn into office on July 25, 2017, by Tulare County Superior Court Judge Walter Gorelick. 6. On July 26, 2017, Board members Northcraft, Jamaica and Gutierrez noticed a Special Board Meeting for July 27, 2017. 7. At 7:58 p.m. on July 26, 2017, Greene sent an email to all District Board members which read, in part, as follows: “Mr Northcraft - I have been advised that you, Mr. Jamaica and Ms. Gutierrez have signed something purporting to be an agenda for a special meeting of the Board of Directors of the Tulare Local Healthcare District to be held at 6:30 PM tomorrow, July 27, 2017. I am also advised that you have posted and otherwise distributed the purported agenda. Any actions which you, Mr. Jamaica and Ms Gutierrez may take, should you elect to proceed with your meeting tomorrow, will be if no legal force or effect. The District has no intention of providing you with any assistance in holding this unauthorized meeting.” 18 19 20 21 A true and correct copy of Greene’s July 26 email is attached hereto as Exhibit 4. 8. On July 27, 2017, at a duly noticed Special Board Meeting, the following actions were taken by Directors Northcraft, Jamaica and Gutierrez: 22 (A) Resolution 852 was rescinded; 23 (B) The legal services of Greene and Baker were terminated; and 24 (C) The McCormick Barstow law firm was named new general counsel to the Board. 25 26 A true and correct copy of the July 27, 2017, minutes are attached hereto as Exhibit 5. 27 ____________________________________ 28 DECLARATION OF KEVIN NORTHCRAFT RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 -2- 1 9. Between July 27 and September 26, 2017, Greene and Baker refused to recognize 2 the actions taken by the Board on July 27, continued to represent themselves as legal counsel 3 for the District, and refused to turn over District records and papers to the McCormick firm. 4 5 6 7 8 10. Between July 27 and September 26, 2017, Greene and Baker were actively working with Benzeevi to sell District assets under various sale-leaseback arrangements. 11. On August 23, 2017, a regular meeting of the Board was scheduled to be held, commencing at 4:00 p.m. The August 23 agenda contained the following Item: “Declaration of Senovia Gutierrez as a Board Member pursuant to Elections Code section 15400.” 9 10 11 A true and correct copy of the August 23, 2017, agenda is attached hereto as Exhibit 6. 12. At 3:07 p.m. on August 23, 2017, Greene notified Board members by email that 12 Wilbourn had resigned from the Board effective noon that day. Greene then purported to cancel 13 the August 23 Board meeting, as follows: 14 15 16 “Attached is a letter from Linda Wilbourn resigning from the Board effective as of noon today. I have also received word from Richard Torrez that he will not be attending the Board meeting which is scheduled for this afternoon. Accordingly, there can be no quorum of the Board at the scheduled meeting, and the meeting will be cancelled. Notice of cancellation will be duly posted.” 17 18 A true and correct copy of Greene’s August 23, 2017, email transmitted at 3:07 p.m. is attached 19 hereto as Exhibit 7. 20 21 22 13. Under District bylaws, two of three acting Directors constitute a quorum of the Board, and both myself and Director Jamaica were present at the August 23, 2017, Board meeting. 14. At 4:00 p.m. on August 23, 2017, Greene notified Board members by email that 23 Director Wilbourn had “intended” her resignation to be effective as of 8:00 a.m. on August 24, as 24 follows: 25 “I was just advised by Linda that she intended her resignation to be effective tomorrow at 8AM, not today. So as of today, she is still a Board member. However, she is not able to attend the meeting this afternoon, and there is no quorum possible.” ____________________________________ 26 27 28 DECLARATION OF KEVIN NORTHCRAFT RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 -3- 1 A true and correct copy of Greene’s August 23, 2017, email transmitted at 4:00 p.m. is attached 2 hereto as Exhibit 8. 3 15. On or about August 28, 2017, Baker delivered an opinion of counsel letter to Celtic 4 Leasing Corporation, representing that Resolution 852 was “valid and binding” against the District, 5 and further representing that Benzeevi had authority to execute documents relating to a sale- 6 leaseback of District assets for $3 million. A true and correct copy of this opinion letter is attached 7 hereto as Exhibit 9. 8 9 10 11 16. On September 26, 2017, Baker “resigned” as legal counsel for the District, effective immediately. A true and correct copy of the correspondence signed by Greene is attached hereto as Exhibit 10. 17. On September 28, 2017, Benzeevi recorded a Short Form Deed of Trust with the 12 Tulare County Recorder, instrument no. 2017-0059339, encumbering District real property in the 13 amount of $10,233,950.05. A true and correct copy of this Deed of Trust is attached hereto as 14 Exhibit 11. 15 18. 16 17 On September 30, 2017, the District filed a Chapter 9 Bankruptcy petition. A true and correct copy of this petition is attached hereto as Exhibit 12. 19. On January 23, 2020, the Tulare County District Attorney served a Search Warrant 18 upon the District, seeking documents and communications relating to Greene and Baker. A true 19 and correct copy of this Search Warrant, executed by Tulare County Superior Court Judge Nathan 20 G. Leedy, is attached here as Exhibit 13. 21 20. The District’s Board has unanimously waived the attorney-client privilege with 22 respect to communications with the Baker law firm, and intends to fully comply with the Search 23 Warrant served upon the District. 24 25 21. The foregoing statements are within my personal knowledge and, if sworn as a witness, I can testify completely thereto. 26 27 28 ____________________________________ DECLARATION OF KEVIN NORTHCRAFT RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 -4- 1 2 22. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 3 4 5 6 Dated: February 18, 2020 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF KEVIN NORTHCRAFT RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 -5- 3 exhibitsticker.com EXHIBIT RESOLUTION NO. 852 OF THE BOARD-OF DIRECTORS OF . TULARE REGIONAL MEDICAL CENTER WHEREAS; the Board of Dlrectors (the "Board") of Tulare Local Healthcare District 96a Thlare Regicmal Medi¢aL CGritei'. (the "Distdcf) has detetmih.(;)d that .it is­ necessary and appropriate, ·and in the best interests of th\:i Distl'ict to bOf1'0W f1,111ds to. coyer op:erating cash flow; and _ WHEREAS, the Board has determined that.it is necessary. and ·appropriate; and in the. best 'interests o · f the Disti'ict, to· have its manager; Heiilthcai·e Conglomei:ate Associates, LLC (''HCCA'')� acting through · its Chilil'Ulart, Benny Benzeevi, M:b (''Auth.01:ized Repl'esehtative") seek to obtain a loan for the purp.oses ,of payment of op¢rating expenses of the.Hdspital, 1·t,p_ayineht of debt, payhieht To: northee ; Mike Jamaica ; senovia Cc: Linda Wilbourn ; Richard Torrez ; benny Sent: Wed, Jul 26, 2017 7:58 pm Subject: Purported Board Meeting scheduled for July 27, 2017 Mr Northcraft - I have been advised that you, Mr. Jamaica and Ms. Gutierrez have signed something purporting to be an agenda for a special meeting of the Board of Directors of the Tulare Local Healthcare District to be held at 6:30 PM tomorrow, July 27, 2017. I am also advised that you have posted and otherwise distributed the purported agenda. The District's Bylaws provide, in Article II Section 1 b, that special meetings of the Board may be called by any three Board members. California Elections Code Sect. 15400 provides as follows: The governing body shall declare elected or nominated to each office voted on at each election under its jurisdiction the person having the highest number of votes for that office, or who was elected or nominated under the exceptions noted in Section 15452. The governing board shall also declare the results of each election under its jurisdiction as to each measure voted on at the election. Until EC Sect 15400 is complied with, the person having the highest number of votes after a recall election is NOT a member of the Board. As you are well aware, the Board has not declared Ms. Gutierrez elected to the Board, and tl1erefore she is not a member of t11e Board at this time. Accordingly, her signature on the purported agenda is of no legal significance, and to the extent that the purported agenda was intended to call for a special meeting, it is likewise of no legal significance. Any actions which you, Mr. Jamaica and Ms Gutierrez may take, should you elect to proceed with your meeting tomorrow, will be if no legal force or effect. The District has no intention of providing you with any assistance in holding this unauthorized meeting. Bruce Greene Partner Bal on behalf of Greene, Bruce R. Wednesday, August 23, 2017 3:07 PM Kevin Northcraft (northee@aol.com); Mike Jamaica (mikejamaica@sbcglobal.net); Richard Torrez (tacboxing@gmail.com) . benny@healthcca.com TRMC Board Meeting Aug 23, 2017 TRMC Resignation Letter Signed.pdf Attached is a letter from Linda Wilbourn resig_ning from the Board effective as of noon today. I have also received word from Richard Torrez that he will not be attending the Board meeting which is scheduled for this afternoon. Accordingly, there can be no quorum of the Board at the scheduled meeting, and the meeting will be cancelled. Notice of cancellation will be duly posted. · BakerHostetler 11601 Wilshire Boulevard I Suite 1400 Los Angeles, CA 90025-0509 T +1.310.442.8834 M +1.310.308.1003 bgreene@bakerlaw.com bakerlaw.com 0® This email is intended only for the use of the party to which it is addressed and may contain information that is privileged, confidential, or protected by law. If you are not the intended recipient you are hereby notified that any dissemination, copying or distribution of this email or its contents is strictly prohibited. If you have received this message in error, please notify us immediately by replying to the me·ssage and deleting it from your computer. Any tax advice in this email is for information purposes only. The content of this email is limited to the matters specifically addressed herein and may not contain a full description of all relevant facts or a complete analysis of all relevant issues or authorities. Internet communications are not assured to be secure or dear of inaccuracies as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. Therefore, we do not accept responsibility for any errors or omissions that are present in this email, or any attachment; that have arisen as a result of e-mail transmission. EXHIBIT 7 exhibitsticker.com Bruce Greene Partner Linda Wilbourn 12499 Colony Ave Tulare, CA93274 August 23, 2017 12:00 noon Tulare Local Healthcare District Board of Directors Dr. Benny Benzeevi, CEO Healthcare Conglomerate Associates Bruce Greene, Baker & Hostetler LLP TRMC Legal Counsel Dear Bruce; As I now serve as the Chairman of the Tulare Local Healthcare District Board of Directors, and this letter would be normally sent to the Chairman of the Board, I am sending it to you as legal counsel for the board . As of this date, noon, I am resigning my position as Chairman and as Director of Zone 5 of the Tulare Local Healthcare District. When I was elected as Zone 5 Director, my only goal and agenda was to further the completion of the new tower project to bring our hospital into California state earthquake compliance before the 2030 state deadline. To my mind the every penny spent on or in the hospital hinges on the district finishing that tower. The very existence of the hospital is tied to the tower completion . Every day since I was elected to this board, I have worked towards that goal. Since November 2016, the board makeup has significantly changed their direction and agenda. My goals do not seem to mesh with theirs any longer. The completion of the Tower has now taken a back seat to personal agendas and egos. These agendas are not in the best interest of the District, the hospital, or the people who depend on our hospital for their healthcare, and I will not be a part of this takeover and I refuse to be caught in the quagmire of legal issues that I see coming very quickly. I will be moving out of Zone 5 by the end of this year and I think it would be best if I leave the Board at this time. Let it be known to all that EVERY and I repeat EVERY vote I have cast in both open and closed sessions have what I feel has been best for Tulare Regional Medical Center, the employees of that hospital and for all the people of Tulare Local Healthcare District. My votes have never been influenced by others, but what I felt were the best for TRMC. I have always believed that the unique partnership between the District and HCCA was an innovative solution to the success of our hospital. This could be the model for collaboration between private and public entities to save many District hospitals in California and even the US, if everyone opens their minds and starts thinking out of the box. Please accept my resignation and pass it on to whoever is necessary to receive it. I give my sincere apologies to the folks in Zone 5 for not fulfilling my commitment . I have been their neighbor and friend for 41 years and I know there are some very good and bright people who can easily take my place. I wish everyone connected with TRMC the best, especially the dedicated employee who make TRMC the wonderful hospital that it is. My family and I will always be supporters of TRMC and Tulare Hospital Foundation. My best to you also. I know with your help and the firm of Baker & Hostetler' s help, you have saved the District millions of dollars, and I personally thank you. 8 From: Sent: To: Cc: S,ubject: Attachments: Greene, Bruce R. on behalf of Greene, Bruce R. Wednesday, August 23, 2017 4:00 PM Kevin Northcraft (northee@aol.com); Mike Jamaica (mikejamaica@sbcglobal.net); Richard Torrez (tacboxing@gmail.com) benny@healthcca.com TRMC Board Meeting Aug 23, 2017 TRMC Resignation Letter Signed.pdf I was just advised by Linda that she intended her resignation to be effective tomorrow at 8AM, not today. So as of today, she is still a Board member. However, she is not able to attend the meeting this afternoon, and there is no quorum possible. I apologize for any misunderstanding . Attached is a letter from Linda Wilbourn resigning.from the Board effective as of noon today. I have also received word from Richard Torrez that he will not be attending the Board meeting which is scheduled for this afternoon. Accordingly, there can be no quorum of the Board at the scheduled meeting, and the meeting will be cancelled. Notice of cancellation will be duly posted. Bruce Greene Partner Baker Hostetler 11601 Wilshire Boulevard I Suite 1400 Los Angeles, CA 90025-0509 T +1.310.442.8834 M +i:310.308.1003 bgreene@bakerlaw.com bakerlaw.com A~ Q\ii.l This email is intended only for the use of the party to which ii is addressed and may contain information that i$ privileged, confidential, or protected by law. If you are not the intended recipient you are hereby notified that any dissemination, copying or distribution of this email or its contents is strictly prohibite.d. If you have received this message in error, please nolify us immediately by replying to the message and deleting ii from your computer. Any tax advice in this email is for inform~tion purposes only. The content of this email" is limited to the matters specifically addressed herein and may not contain a full description of all relevant facts or a complete analysis of all relevant issues or authorities. Internet communications are not assured to be secure or clear of inaccuracies as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. Therefore, we do not accept responsibility for any errors or omissions that are present in this email, or any attachment, that have arisen as a result of e-mail transmission. exhibitsticker.com EXHIBIT 9 exhibitsticker.com EXHIBIT ·BakerHostetler Baker&Hostetler LLF t 1601 Wilshire Boulevard Suite 14.00 Los AngelltS, CA 90025-0509 T 310.820.8800 F 310.820.8859 www.baketlaw.com August 28, 2017 CelUc Leasing Corp. 4 Park Plaza, Suite 300 Irvine, CA 92614 Re: Lease Schedule No. 3B26A01 (the "Schedule") to Master Lease No. 3826A (the "Lease'? by and between Celtic Leasing Corp. ("Lessor'? and Tulare L.oaal Healthcare District ("Lesseen) Ladies and Gentlemen: We have acted as special Callfomia counsel to Healthcare Conglomerate Associates, LLC, the Manager of Lessee, in connection with the. above-referenced Lease between L~ssee and Lessor. . . In. such capacity, we have reviewed the Lease and lease Schedule (including Addendum A). In rendering our opinion, we have also examined such certificates of public officials, organizational documents of Lessee, and other certificates and Instruments as we have deemed necessary for the purposes of the opinions herein expressed. As to certain questions of fact material to our opinion, we have relied upon the certificate of an officer of the Lessee (the 0plnlon Certjfl!c@te") and the representations of the Less~ contained in the Lease. As to certain matters Involving California election law, 0 we have relied upon the opinion of Michael L Allan, Esq, Allan Law Office, a copy of which Is attached hereto and made a part hereof by reference. We express no opinion with respect to the effect of any law other than the laws of the State California (the •~•), including, without limitation, the California Uniform Commercial Code (the •ucc"), and the federal law of the United States (together with the laws of the State, "Appllcable Law"). Whenever our opinion herein is qualified by the phrase "to the best of our knowledge" (or similar phrase}, it Is Intended to indicate that the current, actual A(lanta · Chicago Houston Los Ange/es 093734.000003 s, 1224182.2 Cincinnati Naw York Cleveland Orlando Columbus Philadelphia Costa Mesa Denver Saawa Washlngron, DC I I II ! I I I Celtic Leasing Corp. August28,2017_ Page 2 knowledge of the attorneys within the Los Angeles office of this firm engaged in the representation of Lessee In connection with the Lease transaction is not inconsistent with that portion of the opinion which such phrase qualifies. Except as expressed herein, we have made no Independent investigation of any such matters and we have not made any other examination of Lessee. Based on the foregoing, and subject to the qualifications and exceptions herein contained, we are of the opinion that: 1. Lessee Is a political subdivision of the State, lo wit, a local healthcare district, duly organized and existing under the laws of the State, and specifically Secllon 32000 e1 seq of the California Health & Safety Code. 2. The UCC and no other statute of the State, governs the creation, perfection, priority and enforcement of any security interest created by the Lease. 3. Within the meaning of the UCC, Lessee is an unregistered organization, having its sole place of business or its chief executive office In the ·State. Lessee's true and correct legal name Is stated above. 4. Lessee is authorized and has po1N8r un~er State law to own its properties and incur and pay Its obligations, to enter into the Lease, to lease the property described in the Lease and to carry out its obligations thereunder and the transactions contemplated thereby, Including, without limitation, payment of ~II rental payments set forth in the Lease. 5. Benny Benzeevi, M.D. is qualified and authorized to execute, on behalf of Lessee, any and all documents related to the Lease and Lease Schedule. 6. Based upon Resolution No. 852 of the Lessee, which was adopted by the Board of Directors of the Lessee on June 20, 2017 (a copy of which is attached hereto), the Lease. Including the lease of the property subject thereto and Lessee's obligations thereunder, has been duly authorized, approved, executed and delivered by and on behalf of the Lessee and is a vand and binding contract of Lessee, enforceable against Lessee in accordance with its terms. 7. To the best of our knowledge, the authorization, approval and execution of the Lease and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed In accordance with all open meeting, public bidding and other applicable laws, rules and regulations of the State. 8. The execution of the Lease and the appropriation of moneys to pay the payments coming due under the Lease do not result in the violation of any constitutional, statutory or other governmental limitation relating to the manner, form or amount of indebtedness which may be incurred by Lessee. 9. The accrual and payment by Lessee, and collection from Lessee, of the charges provided for In the Lease, including rental, Interest, late fees, attorney's fees and other charges. do not and will not violate the constitution or any law of the State. 093'1:W.000003 611224192.2 Celtic Leasing Corp. August 28, 2017 Page3 We express no opinion with respect to any documents other than the Lease and the Lease Schedule. The foregoing opinions are subject to the following qualifications, limitations and exceptions: (a) The effect of bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights. powers, privileges, remedies and interests of creditors, obligees or sureties including, without limrtation, the effect of Sections 547 and 548 of the Federal Bankruptcy Code and comparable provisions of the laws of the State; (b) The effect of the !imitations imposed by Applicable Law or rules or principles (of equity, public policy or otherwise) affecting the enforcement of obligations generally, whether considered at law, in equity or otherwise, including (without limitation) those pertaining to specific performance, injunctive relief, materiality, good faith, fair deaRng, diligence, reasonableness, unconscionabifity, impossibinty of performance, redemption or other cure, suretyship rights or defenses, waiver, !aches, estoppel, or judicial deference or other equitable remedies; (c) The enforceability of any term or provision of 1he Lease that purportedly grants to a party or authorizes or permits a party or other person to exercise or otherwise enforce or pursue specific rights, powers, privileges, remedies or interests in a manner impermissible under or otherwise inconsistent with Applicable Law or public policy of the State from time to time in effect; (d) The unenforceability under certain circumstances or provisions In the Lease to the effect that rights or remedies are not exclusive, that every right or remedy is cumulative and may be exercised In addition to or with any other right or remedy, that election of a particular remedy or remedies does not preclude recourse to one or more other remedies, and that any right or remedy may be exercised without notice or an opportunity to cure; (e) The unenforceability under certain circumstances of any tern, or provision in the Lease Indemnifying a party against liability for its own wrongful or negligent acts or where such Indemnification Is contrary to public policy or prohibited by Applicable Law; (f) The enforceability of any term or provision in the Lease purporting to assign contractual rights, to the extent such provisions are limited by requirements of notice to and consent of any third parties to such· contracts or other interested parties, or any other restrictions as to the assignabillty of such contractual rights; (g) The effect of the provisions of the UCC which require a secured party, in any disposition of personal property collateral, to act In good faith or in a commercially reasonable manner; 093734.00Cl003 611224192.2 Celtic Leasing Corp. August 28, 2017 Page4 {h) . Any rights under the Lease which are governed by the UCC are subject to the limitations and restrictions of the UCC which such statute provides cannot be waived; . (i) · We express no opinion as to the existence, validity, binding effect, enforceability, attachment, perfection or priority of any security interest or lien created or purported to be created under the Loase; 0) There may be limitations on the exercise of the Lessor's remedies arising out of any failure by the Lessor to comply with statutory requirements or judicial decisions thereunder in the actual exercise of its rights in connection with the roreclosure, sate or other enforcement of Its security Interests In any of the Equipment; {k) We express no opinion as to whether or not the Lease transaction will be treated for federal and state income tax purposes as a true lease, or as a financing transaction. (I} Our opinions in Paragraphs 5 and 6 above are based solely upon the Opinion Certificate and the Allan Law Office opinion. In our opinion, the foregoing qualifications, limitations and exceptions do not render the Lease invalid as a whole, and there exist, In the Lease or pursuant to Applicable Law, legally adequate remedies for a realization of the principal benefits and/or security intended to be provided by the Lease. We advise Lessor that circumstances can occur after the perfection of a security interest In personal property which could cause the security interest to become unperfected, including, without limitation, the fact that a financing statement lapses after five years; the UCC creates certain !imitations on the rights to proceeds; a change In the name of the debtor or the location of the debtor will result in the security interest In certain property to become unperfected unless appropriate steps are taken; and a secured party's rights are subject to the rights of certain purchasers of the collateral to acquire the collateral free of the security interest. To the extent that the obllgatlons of Lessee may be dependent upon such matters, we assume that: Lessor is duly formed, validly existing and in good standing under the laws of its jurisdiction of formation: Lessor has the requisite power and authority to execute and deliver the Lease and to perform Its obligations under the Lease; the Lease has been duly executed and delivered by Lessor, and constitutes the legally valid and binding obligation of Lessor, enforceable against Lessor in accordance with its terms; there are no other documents, understandings, or agreements {whether written or oral) between or among the parties which would expand, modify or otherwise affect the obligations of the parties under the Lease, the documents submitted to us contain therein all the terms intended by the parties. We have also assumed that: (1) The Lease transaction is not being entered into for any personal, family or household purposes. 093734.000003 611224192.2 Celtic Leasing Corp. August28,2017 Page 5 (2) Lessee has "rights" (within the meaning of Section 9203 of the UCC) in the Equipment, and value has been given by the Lessor to Lessee in connection wilh the transactions contemplated by the Lease. This opinion Is intended solely for the benefit of the Lessor and its successors and assigns in connection with the Lease transaction. No part of this opinion may be relied upon by any other person or for any other purpose, be lncorPQrated, quqted or otherwise referred to in any other document or communication or be filed with or otherwise furnished to any governmental authority or other· person without our prior written consent, except that oµr prior written consent Is not needed to furnish a copy of this opinion: (a) in connection with any proceedings relating to the Lease or the enforcement thereof; and (b) to accountants and legal counsel for the Lessor (each of whom may rely upon this opinion as though it had been addressed and delivered to them as of the date of this opinion). In all cases, reliance upon this opinion is condiHoned upon acceptance of all of the qualifications, exceptions, assumptions, definitions, exclusions and other l!mttatlons set forth herein. This opinion speaks only as of the date hereof, and to its addressees and their successors and assigns, and we have no responsibility or obligation to update this opinion, to consider its applicability or correctness to anyone other than its addressees, and their successors and assigns, or to take Into account· changes in law. facts or any other developments of which we may later become aware. ly yo~·/kkJI.-;~ & HOSTETLER LLP 093734.000003 611224192.2 10 BakerHostetler Baker&Hostetler LLP 11601 Wilshire Boulevard Suite 1400 Los Angeles, CA 90025-0509 T 310.820.8800 F 31 0 . 820 .8859 www.bakerlaw.com September 26, 201 7 Bruce R. Greene direct dial : 310.442.8834 bgreene@bakerl aw .com VIA EMAIL Board of Directors Tulare Local Healthcare District 869 North Cherry Street Tulare, CA 93274 Re: Resignation of Baker Hostetler, LLP Gentlemen: Please be advised that Baker Hostetler, LLP is resigning as legal counsel for the Tulare Local Healthcare District, effective immediately. We will commence the process of delivering the District's files to new counsel. Unless we are notified to the contrary, we will assume that the District's new counsel is the McCormick, Barstow firm. We are counsel of record to the District in one pending litigation matter entitled Firstsource Solutions USA, LLC v. Tulare Regional Medical Center, United States District Court, Eastern District of California, Case No. 1:15-CV-01136-DAD-EPG). We enclose a brief description of the case and its status. We will forward a substitution of attorney in the next few days. We will cooperate with new counsel to effectuate as smooth a transition of the work as possible. /(___ eene cc: Benny Benzeevi, M.D./HCCA Atlanta Chicago Houston Los Angeles 093734.000003 611358 685 .1 Cincinnati New York Cleveland Orlando Columbus Philadelphia Costa Mesa Denver Seattle Washington, DC exhibitsticker.com EXHIBIT Greene, Bruce R. From: Sent: To: Subject: Greene, Bruce R. Monday, September 25, 2017 11 :33 AM Greene, Bruce R. Firstsource v TRMC Firstsource Solutions USA, LLC v. Tulare Regional Medical Center, United States District Court, Eastern District of California, Case No. l:15-cv-01136-DAD-EPG On February 21, 2015, Firstsource Solutions USA LLC ("Firstsource") filed a complaint against the District alleging breach of contract involving accounts receivable management and business office services, which Firstsource agreed to render to the District. Firstsource seeks damages in excess of $724,385.08. On October 13, 2015, the District filed an Answer and Counterclaim for breach of contract. The District claims damages of at least $6,500,000.00 and an offset against Firstsource's claim, due to Firstsource's failure to adequately collect accounts receivable on behalf of the District. After the close of fact discovery, Firstsource filed a motion for summary judgment ("MSJ") on its claim and the District's counterclaim, which the District opposed. At the January 19, 2017 hearing on the MSJ, the Court took the MSJ under submission. It is unknown when the Court will rule on the MSJ, but it may be some time, as the court system in the Eastern District of California tends to be extremely overcrowded. Pending the Court's ruling on the MSJ, the trial and all other dates for the case have been vacated. Baker has identified and vetted a highly qualified expert witness on behalf of the District (Coding Continuum based in Tucson, Arizona), who may be engaged to opine on the cause and amount of all under-collections, if and when the MSJ is denied. On Sept 12, while the MSC was pending, the Court issued an OSC as to why the entire case should not be dismissed for lack of diversity jurisdiction. Briefs were filed by both sides last week and we await a determination. Bruce Greene Partner BakerHostetler 11601 Wilshire Boulevard I Suite 1400 Los Angeles, CA 90025-0509 T +1.310.442.8834 M +1.310.308.1003 bgreene@bakerlaw.com bakerlaw.com 1 f 111111111111 Ill III II Ill I IIIII II Ill 2 017-0059339 2017-0059339 Recorded Off1c1al Records Records Official RECORDING RECORDING REQUESTED REQUESTED BY: BY: Chicago Chicago Title Title Company Company Order Order No.: No.: County of of County Tulare Tulare ROLAND P. HILL HILL ROLAND P. Clerk Recorder Clerk Recorder When When Recorded Recorded Mail Mail Document Document To: To: REC FEE FEE:. II REC I 51,00 51.00 II COPY COPY -- RECORDE RECORDE 6.00 6.00 II III II JD II JD 08:01AM 20-Sep-2017 28-Sep-2017 II Page Pa~e 11 of of 44 08:01ftN Healthcare Healthcare Conglomerate Conglomerate Associates, Associates, LLC LLC 10940 Wilshire Boulevard Suite Suite 1600 1600 Los Angeles, CA 90024 SPACE ABOVE THIS LINE FOR RECORDER'S USE SPACE ABOVE THIS LINE FOR RECORDER'S USE SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS THIS Tulare Local d/b/a Tulare Tulare THIS DEED DEED OF OF TRUST, TRUST, Is is made made as as of of September September 27, 27, 2017 2017 by by Tulare Local Healthcare Healthcare District, District, d/b/a Regional Medical Center, herein called TRUSTOR, whose address is 869 N Cherry Street, Tulare, California Regional Medical Center, herein called TRUSTOR, whose address is 869 N Cherry Street, Tulare, California 93274 of Healthcare to TRUSTEE, for for the the benefit to Chicago Chicago Title Title Company, Company, a a California California corporation, corporation, herein herein called called TRUSTEE, benefit of Healthcare Conglomerate Conglomerate Associates, Associates, LLC, LLC, herein herein called called BENEFICIARY, BENEFICIARY, WITNESSETH That Truster Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to TRUSTEE IN TRUST, of Tulare, Tulare, State State of of California, commonly known WITH POWER POWER OF OF SALE, SALE, that that property property in in the the County County of California, commonly known TRUST, WITH as described as as as 1425 1425 East East Prosperrty Prosperity Avenue, Avenue, Tulare, Tulare, California, California, 93274, 93274, as as more more particularly particularly described SEE SEE EXHIBIT EXHIBIT "A" “A” ATTACHED ATTACHED HERETO HERETO AND AND MADE MADE A PART PART HEREOF HEREOF TOGETHER to the the right, and TOGETHER WITH WITH the the rents, rents, issues issues and and profits profits thereof, thereof, SUBJECT, SUBJECT, HOWEVER, HOWEVER, to right, power power and authority given to and conferred upon Beneficiary by paragraph ten (10) of the provIsIons provisions incorporated herein by reference reference to to collect collect and and apply apply such such rents, rents, issues issues and and profits profits For For the the Purpose Purpose of of Securing: Securing: 11 Performance reference or or contained contained herein Performance of of each each agreement agreement of of Truster Trustor incorporated incorporated by by reference herein 2 Payment of the indebtedness evidenced by those certain Promissory Notes dated as of 7/31/2015, 7/31/2016; 12/21/2016, 12/28/2016, 12/29/2016, 12/30/2016, 12/30/2016 B, 3/31/2017, 7/21/2017, .and and 7/31/2017, in the total original principal sum of Ten Million Two Hundred Thirty-Three Thousand Nine Hundred and Fifty Dollars And 05/100 Dollars ($10,233,950 05) executed by Trustor Truster in favor of Beneficiary or order or order 3. Payment of such further sums as the then record owner of said property hereafter may borrow from Beneficiary, when evidenced by another note (or notes) reciting Itit Is is so secured exhibitsticker.com A :rt 71EXHIBIT EXHIBIT EXHIBITJ¼.__ OHSUSA 767424224 2 OHSUSA 767424224 2 Deponen t~ DeponentJl-&C^ ---(~..:::: ig . . ,,~ ,. eo,::_fA-ffc l--=nt)"""=:.,_. , .._ . -_ - _- _-:....--:.._, ~day of :$1!:~ , 2020, at l.. : .J~ AM/~ Good cause appearing from the Affidavit accompanying this order, the Court extends the date for Return to Search Warrant to 10th day of February, 2020. Judge of the Superior Court of Californ ia, County of Tulare, Dept. TCDA Case 17-01-000407 Nathan G. ~t:::1.:.11 1 _3_. 1 2 3 4 ELECTRONICALLY FILED 2/19/2020 10:35 AM Kern County Superior Court By Gracie Goodson, Deputy Michael J. Lampe #82199 Michael P. Smith #206927 LAW OFFICES OF MICHAEL J. LAMPE 108 West Center Avenue Visalia, California 93291 Telephone (559) 738-5975 Facsimile (559) 738-5644 mjl@lampe-law.com 5 Attorneys for Plaintiff Exempt from filing fees Government Code §6103 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 IN AND FOR THE COUNTY OF KERN 10 11 12 TULARE LOCAL HEALTH CARE DISTRICT dba Tulare Regional Medical Center, a Public Agency 13 14 15 16 17 Plaintiff, vs. BRUCE R. GREENE; BAKER & HOSTETLER LLP, a limited liability partnership; PARMOD KUMAR, M.D., LINDA WILBOURN, RICHARD TORREZ; and Does 1 through 50, inclusive, Case No. BCV-19-103514 DECLARATION OF TERESA JACQUES RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 Date: March 20, 2020 Time: 8:30 a.m. Dept. 17 Defendants. 18 19 20 I, Teresa Jacques, declare: 21 1. I am the Interim Controller for Plaintiff Tulare Local Healthcare District (“the District”). 22 2. District records reflect that between December 2, 2014, and September 25, 2017, 23 Defendant Baker & Hostetler LLP (“Baker”) was paid $3,388,642.15 for legal services provided 24 to the District. A true and correct summary of these payments is attached hereto as Exhibit 14. 25 26 3. District records reflect that no payments were made to Baker between April 14, 2017, and September 9, 2017. 27 28 ____________________________________ DECLARATION OF TERESA JACQUES RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 1 2 3 4. District records reflect that on July 31, 2017, the District had an unpaid balance with the Baker firm in the amount of $814,386.00. 5. On August 31, 2017, the Celtic Leasing transaction closed with a $3 million wire 4 transfer to Tulare Asset Management, LLC, a California limited liability company owned by 5 Benzeevi. A true and correct copy of the incoming wire transfer is attached hereto as Exhibit 15. 6 6. On September 11, 2017 , Baker was paid $499,727.93 from the proceeds of the 7 Celtic Leasing transaction. A true and correct copy of the check paid to Baker is attached hereto 8 as Exhibit 16. 9 10 11 12 7. The foregoing statements are within my personal knowledge and, if sworn as a witness , I can testify completely thereto. 8. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 13 14 15 16 Dated: February 17, 2020 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF TERESA JACQUES RE: MOTION TO DETERMINE PRIVILEGE CLAIMS ASSERTED UNDER CODE OF CIVIL PROCEDURE §2031.285 -2- ACH 1126 ACH1604 Cashiers BAKER HOSTETLER PAYMENTS FROM 12/2014-9/2017 33247 33492 33758 33839 34483 34805 35967 36307 36627 38142 38324 39607 40068 40891 41038 41446 42001 42810 42926 43361 43548 44094 44351 1290 46468 46735 46843 1350 1400 1402 1403 1405 Check Date Cleared Date 12/15/2014 12/02/14 1/16/2015 12/29/14 01/16/15 1/28/2015 02/02/15 2/9/2015 3/25/2015 03/20/15 02/16/15 4/12/2015 5/13/2015 03/13/15 6/16/2015 04/10/15 06/12/15 6/17/2015 09/16/15 9/21/2015 10/5/2015 09/28/15 12/09/15 1/5/2016 01/27/16 2/1/2016 2/4/2016 02/04/16 03/14/16 3/9/2016 03/11/16 3/17/2016 04/06/16 4/12/2016 05/05/16 5/10/2016 06/20/16 6/27/2016 06/24/16 7/6/2016 07/22/16 8/1/2016 07/28/16 8/5/2016 08/30/16 5/13/2016 09/29/16 10/5/2016 12/28/16 12/28/2016 02/27/17 3/10/2017 03/16/17 3/29/2017 03/22/17 3/29/2017 04/04/17 4/4/2017 04/13/17 4/13/2017 09/10/17 9/13/2017 09/14/17 9/14/2017 09/18/17 9/18/2017 09/18/17 9/18/2017 09/25/17 9/25/2017 Amount Paid $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Total Baker Hostetler $ EXHIBIT 40,080.50 88,970.11 25,072.00 27,115.00 28,636.01 14,898.80 18,406.48 9,251.06 5,655.00 52,861.37 438,874.12 124,789.38 203,036.64 35,000.00 34,925.53 70,464.33 76,718.52 102,278.57 47,662.10 24,417.80 29,373.31 228,748.03 142,592.81 487,099.95 104,600.53 154,317.37 106,179.91 8,500.00 59,774.44 59,969.55 499,727.93 10,000.00 10,000.00 5,000.00 13,645.00 3,388,642.15 14 exhibitsticker.com Check # Page Page 11 of of 11 S23.556 73 523,556.73 S23 556.73 S23.556.73 Available Available Available Available Unco!lecle0003,t93100023~ Friday, October 18, 2019 6:16 AM Michael J. Lampe Harlan Watkins Re: Demand for Client Files Mike I am out of state but will be discussing this with Tom Lucchesi today and w ill have a response on Monday. If files have not been produced I recognize our obligation but I was also told everything had been turned over. I will get to the bottom of this. Jim On: 17 October 2019 14:48, "Michael J. Lampe" wrote: Jim: Please see the attached correspondence. mjl www.lampe-law.com Michael J. Lampe law Offices of Michael J. Lampe 108 West Center Avenue Visalia, California 93291 Telephone: 559-738-5975 Facsimile: 559-738-5644 mjl@lampe-law.com This message is intended for the individual or entity to whom it is addressed and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the intended recipient of this message you are hereby notified that any use, dissemination, distribution or copying of this communication is strictly prohibited . If you have received this message in error, please notify us immediately by replying to this message, "Received in Error," in the subject heading and then delete the message from your system. Thank you. EXHIBIT 1 ~ M URPH Y PEARSON BRADL EY & FEE NEY WWW.MPBF . COM A ProlC Wednesday, November 27, 2019 11 :13 AM 'James Mur phy' Todd Wynkoop; Jason Howard; M ike Smith Delayed Document Production 20 17 8- 24 Tim Thomson demand for District files (citing Ru le 3-31 0) (REL Doc 4540).pdf; 2017 8- 24 Tim Thomson demand fo r preservat ion of reco rds (t o Greene re Benzeevi) (REL Doc 4538).pdf Jim: I received two zip files. One file contains 1.933 gigabytes of data; the other contains 3.4 megabytes. The larger file contains 1,478 .pdf images; the smaller file contains 6 .pdf images. Both contain "production export files," which I assume will allow data to be uploaded to Relativity or another search engine. Please confirm that no other files were included in yesterday's production. With respect to your representation that, "We believe all Tulare client files have now been delivered to you and/or the District," I offer the following comments: 1. These files should have been produced over two years ago (see attached demand from Tim Thompson); 2. I remain skeptical that we have received all of the emails that can be discerned from Baker Hostetler billing records, but I have obviously not had the time to go through yesterday's production; and 3. The District renews its demand for preservation of records contained in the attached correspondence from Tim Thompson dated August 24, 2017. With this admonition, I do thank you for producing these documents. mjl www.lampe-law.com Michael J . Lampe Law Offices of Michael J. Lampe 108 West Center Avenue Visalia, California 93291 Telephone: 559-738-5975 Facsimile: 559-738-5644 mjl@lampe-law.com This message is intended for the individual or entity to whom it is addressed and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the int · i 1 EXHIBIT SW NO._ _ _ __ _ STATE of CALIFORNIA, COUNTY of TULARE, SEARCH WARRANT and AFFIDAVIT (AFFIDAVIT) Your Affiant Rodney Klassen swears under oath that the facts expressed by him in the attached and incorporated Statement of Probable Cause are true and that based thereon he has probable cause to believe and does believe that the articles, property, and persons described below are lawfully seizable pursuant to Penal Code Section 1524 et seq., as indicated below, and are now located at the locations set forth below. Wherefore, Affiant requests that this Search Warrant be issued. 2 _/___, _,,,~«:... ~/,,,t.~-~~~~z-"~i < ,,1,;~nai.tu,~e,..J ~~Affi~,an==tl~ •:::::::::::==:::::::.._ _ _ _, 0 [?.$] YES ORDER TO SEAL REQUESTED: NIGHT SEARCH REQUESTED: 0 9 YES □ NO ~ NO (SEARCH WARRANT) THE PEOPLE OF THE STATE OF CALIFORNIA TO ANY PEACE OFFICER IN THE COUNTY OF TULARE: proof by affidavit, having been this day made before me by Peace Officer Rodney Klassen that there is probable cause to believe that the property or person described herein may be found at the location(s) set forth herein and that it is lawfully seizable pursuant to Penal Code Section 1524 et seq., as indicated below by "[gl"(s), in that: D property was stolen or embezzled; 0 property or things were used as the means of committing a felony; D property or things are in the possession of any person with the intent to use them as a means of committing a public offense, or in the possession of another to whom he or she may have delivered them for the purpose of concealing them or preventing their being discovered; 0 property or things to be seized consist of any item or constitute any evidence that tends to show a felony has been committed, or tends to show that a particular person has committed a felony; You are Therefore COMMANDED to SEARCH: (premises, vehicles, persons) The Tulare Regional Medical Center located at 869 N. Cherry Street, City of Tulare, County of Tulare, CA. This hospital is further described as a multi-story community hospital facility located at the northwest corner of the intersection of Cherry Street and Merritt Avenue in Tulare. Service accepted via email: sormonde@tulareregional.org cc to Todd.Wynkoop@mccormickbarstow.com For the FOLLOWING PROPERTY, THING(s) or PERSON(s): Evidence of criminal activity related to this investigation described further in Attachment A. AND TO SEIZE IT / THEM IF FOUND and bring it I them forthwith before me, or this court, at the courthouse of this court. This Search Warrant and Affidavit -~d 1ttached and incorporated Statement of Probab_J.e: epuse were sworn to as true and subscrib~d before me ?n this~ ay of~ , - : 1 , 2020 , at '2.· S" A.M. / Wherefore, I find probable cause for the issuance of this Search Warrant and do ssue it. e..3/ ORDER TO SEAL APPROVED: SEARCH APPROVED: - - - - - - -~ =-~~~- - - - - - - -' NIGHT ~ YES 0 YES Judge of the Superior Nathan G. Leedy (Magistrate's Pm ted Name) Nathan G. leecry TCDA BOI Case 17-01-000407 Search Warrant Face Page EXHIBIT I ~ □ NO IZ] NO STATEMENT of PROBABLE CAUSE TCDA BOI case 17-01-000407 1 Attachment A 2 3 4 Items to be searched for Items to be searched for shall include, but not be limited to, evidence as it 5 relates to this investigation and the allegations of embezzlement and 6 misappropriation of funds and/or property, California Penal Code section 503 - 7 515, a felony; misappropriation of public funds, California Penal Code section 8 424(a)1, a felony; procure an unlawful loan, California Penal Code section 9 424(a)2, a felony; false account, entry, or erasure, California Penal Code section 10 424(a)3, a felony; fraudulently altering accounts, California Penal Code section 11 424(a)4, a felony; unlawful willful refusal to pay, California Penal Code section 12 424(a)5, a felony; unlawful willful refusal to transfer public funds, California Penal 13 Code section 424(a)6, a felony; unlawful willful refusal to pay or transfer public 14 funds to an officer, California Penal Code section 424(a)7, a felony; theft of 15 money/property under false pretense, California Penal Code section 487(a), a 16 felony; money laundering, California Penal Code section 186.10, a felony; 17 conspiracy to defraud, California Penal Code section 182, a felony; filing false 18 documents, California Penal Code section 115, a felony; conflict of interest GC 19 1090; knowingly present false documents for financial gain, California Penal 20 Code section 532(a), a misdemeanor; knowingly influence a government 21 decision for financial gain, Government Code section 87100, a misdemeanor. 22 23 24 Items to be searched for shall include: The Tulare Local Healthcare District (TLHCD) shall provide to the 25 investigating officer (Affiant) a complete and accurate copy of the following listed 26 documents, to the extent that the requested documents come under the 27 parameters of TLHCD's predetermined waiver of attorney/client privilege for any 28 representation of TLHCD by the law firm of Baker Hostetler and/or any attorneys 29 from this law firm who represented TLHCD in any capacity, including, but not 30 limited to, Bruce Greene (communications include any and all communications 31 involving the TLHCD board of directors or any third party and Baker l STATEMENT of PROBABLE CAUSE TCDA BO1 case 17-01-000407 1 Hostetler/Bruce Greene in their capacity as General Council representing 2 TLHCO): 3 4 1. Any records of the May 6, 2015, closed session meeting permitting Dr. 5 Benzeevi to hire General Counsel for the Board of Directors (Resolution 6 844). 7 8 9 10 11 2. Conflict of Interest Code, as required by GC 87300 a. Each conflict of interest Code in effect from May 1, 2014, through December 30, 2017. b. Any communications with Baker Hostetler regarding the conflict of interest code. 12 c. Any communications with Baker Hostetler regarding the filling of 13 Form 700 by Dr. Benzeevi, Baker Hostetler, or Bruce Greene. 14 NOTE: Baker Hostetler invoices indicate research into this issue in 15 June of 2015 (Baker Hostetler billing invoice number 50123870, 16 invoice date July 24, 2015, pages 5-6). 17 18 3. Lawsuit vs. Or. Betre VCU265230 a. Any documentation or communications regarding the Board of 19 Director's vote to fund the lawsuit on behalf of Or. Benzeevi and Dr. 20 Kumar, including any documents or communications presented to 21 the Board to aid their decisions. 22 b. Any notes, records, or other documentation that indicate Dr. 23 Benzeevi was or was not present during the closed session 24 meeting. 25 26 27 c. Communications to the Board of Directors from Baker Hostetler, regarding this lawsuit from March 25, 2016, to March 25, 2017. d. Communications from Levinson, Arshonky & Kurtz to the District 28 regarding this lawsuit, including payments and debts owed for work 29 performed. 30 e. Any communications from Baker Hostetler, or Levinson , Arshonky, 3I & Kurtz regarding the payment of the appellate bond ($78,000). 2 STATEMENT of PROBABLE CAUSE TCDABOI case 17-01-000407 f. Any closed session notes or other documentation regarding the 2 posting of the appellate bond on case VCU265230 provided to the 3 Board of Directors. If no record of Board of Director's approval 4 exists, we would like a certification that there is no record of the 5 Board of Directors approving this action . 6 4. Any documents presented to the Board regarding the loans made to 7 Southern Inyo Hospital District (SIHD) using Tulare Regional Medical 8 Center (TRMC) money. 9 a. Any and all documents or communications from Baker Hostetler or 10 11 Bruce Greene relating to loans made to SIHD using TRMC funds. 5. Any documents relating to the Calculation of the HCCA management 12 fee/employee surcharge, by Bob Wolin, of Baker Hostetler, in 2017, as 13 referenced in the Baker Hostetler billing statements on February 20, 2017. 14 a. All communications from Baker Hostetler relating to the calculation 15 16 17 18 of this fee. 6. Any and all documentation, notes or communications relating to the April, 2017, closed session presentation of the 2016 audit to the Board. 7. Any and all documents and/or commun ications regarding the June 20, 19 2017, meeting including any communications regarding the creation of the 20 agenda, conduct of the meeting and the writing of Resolution 852 by 21 Baker Hostetler. 22 8. Any and all documents and/or communications regarding debts due from 23 TRMC to Baker Hostetler from December 1, 2016, through December 1, 24 2017. 25 9. The July, 2017, memo sent to the Board of Directors prior to the July 26, 26 2017, meeting (Baker Hostetler billing invoice number 50408475, invoice 27 date August 9, 2017, page 6). 28 10.Any and all documents and/or communications with Baker Hostetler 29 regarding the election of Senovia Gutierrez and her status as a member of 30 the Board of Directors prior to December 1, 2017. 3 STATEMENT of PROBABLE CAUSE TCDA BOI case 17-0 1-000407 1 11.Any and all documents and/or communications with Baker Hostetler, Dr. 2 Benzeevi, Alan Germany, and Claudia Razo regarding the agenda for the 3 July 26, 2017, Board of Directors meeting. 4 12.Any and all documents and/or communications from Baker Hostetler 5 regarding the Board of Directors meetings held on July 27, 2017, and 6 Augu~9.2017. 7 13. Any and all documents and/or communications from Baker Hostetler and 8 Bruce Greene regarding the preparation and execution of Linda 9 Wilbourn's Resignation from the TLHCD Board of Directors on August 23, 10 2017. 11 14.Any and all documents and/or communications from Baker Hostetler and 12 Bruce Greene regarding the cancellation of the August 23 rd , 2017, Board 13 of Directors meeting. 14 15 16 15.AII communications from Baker Hostetler regarding the Celtic Leasing transaction from June 1, 2017, through December 1, 2017. a. Any and all documents and/or communications from Baker 17 Hostetler regarding the Opinion Letter submitted to Celtic Leasing 18 from June 1, 2017, through December 1, 2017. 19 b. A copy of the Celtic Leasing Opinion Certificate document signed 20 by Linda Wilbourn on the morning of August 23, 2017, prior to her 21 resignation going into effect. 22 c. All communications with attorney Michael Allan regarding the 23 Opinion Letter submitted to Celtic Leasing and the election of 24 Senovia Gutierrez to the Board of Directors. 25 26 d. Any communications from Baker Hostetler regarding payments to them or others from the proceeds of the Celtic Leasing transaction. 27 16. Any and all documents and/or communications from Baker Hostetler 28 regarding promissory notes created by Dr. Benzeevi purporting to 29 document lending funds from HCCA to TRMC. 30 17.Any and all documents and/or communications from Baker Hostetler 31 relating to the Deed of Trust filed by HCCA on September 28, 2017. 4 STATEMENT of PROBABLE CAUSE TCDA BOI case 17-01-000407 1 a. Any documents or claims provided by HCCA or Baker Hostetler 2 purporting to support the debt claimed on the Deed of Trust filed on 3 September 28, 2017. 4 5 6 7 8 18. All engagement letters with Baker Hostetler from January 1, 2014, through December 1, 2017. 19. All conflict of interest waivers signed by the Board of Directors with Baker Hostetler or Bruce Greene. 20. Documentation of any conflict of interest trainings provided by Baker 9 Hostetler to the Board of Directors from May 1, 2015 through October 1, 10 2017, and any and all working documents related to the preparation and 11 completion of the Tulare Local Healthcare District's Conflict of Interest 12 policy. 13 14 21. Detailed Accounts Receivable documents, whether reconciled or unreconciled , for Southern Inyo District Hospital, to include: 15 a. Accounts Receivable for TRMC staff working at SIHD. 16 b. Accounts Receivable for TRMC management working at SIHD. 17 c. Accounts Receivable for supplies and equipment sent from TRMC 18 19 20 21 to SIHD. d. Accounts Receivable for TRMC employee travel expense claims for travel to SIHD. 22.Any and all documents and/or communications regarding the transaction 22 and/or negotiations for the transaction between the district or HCCA acting 23 on behalf of the district and Leasing Innovations Inc. 24 23. Any and all documents/Excel spreadsheets used for calculating the 30% 25 payroll premium payable to HCCA under the MSA contract. These Excel 26 spreadsheets are known to be used as supporting documents for journal 27 entries and it is known that there are two separate calculations for this 28 30% premium. One calculation includes a deduction of all employee 29 benefits and the second calculation includes only a deduction of statutory 30 benefits. This practice would have started in late 2016. 31 5 STATEMENT of PROBABLE CAUSE TCDA BOI case 17-01-000407 1 The custodian of records shall provide a letter of certification to accompany 2 the requested documents to certify that they are true and accurate copies of the 3 original documents, to verify that they do not possess certain requested 4 documents and/or to verify that they do not wish to waive privilege on a particular 5 requested document. 6 7 The custodian of records is asked to provide requested documents in digital 8 PDF format wherever possible or in printed hard copy if the preferred format is 9 not available. 10 11 Note: In compliance with Penal Code Section 1524(c)(1) it is ordered that the 12 evidence turned over in response to this search warrant be turned over to the 13 appointed Special Master for review prior to being surrendered to the District 14 Attorney. 15 16 17 End of Attachment A 18 19 20 21 22 23 24 25 26 27 28 29 30 6 STATE of CALIFORNIA, COUNTY of TULARE, Office of the District Attorney Bureau of Investigations Order for Extension of Date for Return to Search Warrant Search warrant Information: DABOI Case 17-01-000407, original search warrant reviewed and authorized by the Honorable Nathan G. Leedy_in Department .1. of the Tulare County Superior Court on _ __ , 2020. Description of location to be searched: The Tulare Regional Medical Center located at 869 N. Cherry Street, City of Tulare, County of Tulare, CA. This hospital is further described as a multi-story community hospital facility located at the northwest corner of the intersection of Cherry Street and Merritt Avenue in Tulare. Service accepted via email: sormonde@tulareregional.org cc to Todd. Wynkoop@ mcconn ickbarstow .com Addendum Application Your Affiant, Rodney Klassen, swears under oath that the facts expressed by him in the following Statement of Probable Cause are true. Due to the large volume of documents requested from the Tulare Local Healthcare District, it is highly unlikely that the District and its legal representation will be able to provide a response to this search warrant within the normal 10 day response time. Based on the aforementioned facts, Your Affiant is asking for a 30 day extension to be granted to the existing search warrant, allowing enough time for the documents to be compiled and submitted by the Tulare Regional Medical Center. I pray that the search warrant be amended based upon the above stated facts, for the seizure of said information, or articles thereof, between the hours of 7:00 AM. and 10:00 P.M., good cause being shown thereof, and the same be brought before this magistrate pursuant to Section 1536 of the Penal Code. Good cause appearing from the Affidavit accompanying this order, the Court extends the date for Return to Search Warrant to 10th day of February, 2020. Judge of the Superior Court of California, County of Tulare, Dept. TCDACasel7-0l-000407 Nathan G. t~1:11.:.1, 1 -3_. From: To: Cc: Subject: Date: Attachments: Geoffrey Macbride Michael Lampe James Murphy; Harlan Watkins Tulare - Clawback Motion Tuesday, February 11, 2020 1:25:04 PM image001.png image002.png image003.png 19 Mr. Lampe,   In response to your question earlier today, we are standing on our privilege claims.  If you proceed with a motion on the matter, please remember that the privileged materials must be filed under seal and cannot be placed in the public court file.   Best,  Geoffrey T. Macbride       PLEASE NOTE:  As of March 2, 2020, Murphy, Pearson, Bradley & Feeney’s new San Francisco address will be: 580 California Street, Suite 1100 San Francisco, CA  94104-1032 Phone and fax numbers will remain unchanged.  Geoffrey T. Macbride Associate MURPHY PEARSON BRADLEY & FE EN EY     88 Kearny Street, 10th Floor San Francisco, CA 94108 Office:  415.788.1900 x2853  Direct:  415.962.2853  Fax: 415.393.8087 website   bio   vCard   map   email San Francisco Sacramento Los Angele-s S&atlle Voted "Best Legal Malpractice Specialty" by readers of The Recorder for the tenth consecutive year in 2019 See our published articles, presentations, events & other news CONFIDENTIALITY - This e-mail message and any attachments thereto are for the sole use of the intended recipient(s) and contains a private, confidential communication protected by the attorney client privilege and the attorney work product doctrine. Any unauthorized review, use, disclosure or distribution of this e-mail is strictly prohibited. If you are not the intended recipient, please contact the sender by reply e-mail and destroy all copies of the original message. Thank you.     exhibitsticker.com EXHIBIT From: Sent: To: Subject: Greene, Bruce R. [/O=BH/OU=DENVER/CN=RECIPIENTS/CN=BGREENE] 9/5/2017 4:25:45 PM Alan Germany [agermany@teamhcca.com] RE: Meeting/Site tours/Dinner on Wed 9/6th in Fresno CA/Tulaire Medical Center 20 exhibitsticker.com EXHIBIT Message If Celtic has funded I need to be paid today. I am not waiting for LI to fund . This is CRITICAL and I U have been promised Bruce Greene Partner BakerHostetler 11601 Wilshire Boulevard I Suite 1400 Los Angeles, CA 90025-0509 T +1.310.442.8834 M +1.310.308.1003 bgreene@bakerlaw.com bakerlaw.com ee From: Alan Germany [mailto:agermany@teamhcca .com] Sent: Tuesday, September 05, 2017 9:04 AM To: Greene, Bruce R. ; benny@healthcca.com Subject: RE: Meeting/Site tours/Dinner on Wed 9/6th in Fresno CA/Tulaire Medical Center TRMC will pay. If all goes according to plan, significant funding will be in place soon. Celtic has funded, but Leasing Innovations has not yet. From: Greene, Bruce R. [bgreene@bakerlaw.com] Sent: Tuesday, September 05, 2017 8:31 AM To: Alan Germany; ben ny@hea lthcca .com Subject: RE: Meeting/Site tours/Dinner on Wed 9/6th in Fresno CA/Tulaire Medical Center Who is going to pay for this? And please advise as to funding of either Celtic or Leasing Innovations. I have a meeting with management this morning and although I have asked several times , I am not getting straight answers. Bruce Greene Partner BakerHostetler 11601 Wilshire Boulevard I Suite 1400 Los Angeles, CA 90025-0509 T +1.310.442.8834 M +1.310.308.1003 bgreene@bakerlaw.com bakerlaw.com 8(0 From: Alan Germany [ma ilto:agerma ny@teamhcca .com ] Sent: Tuesday, September 05, 2017 8:25 AM To: Greene, Bruce R. ; benny@hea lthcca .com Subject: RE: Meeting/Site tours/Dinner on Wed 9/6th in Fresno CA/Tulaire Medical Center Importance: High Bruce: It sounds like MRT wants to move forward with this relationship which is why they are bringing their counsel in as well. They seem very serious and understand the need to get this wrapped up quickly. They have access to a large amount of capital and want to deploy it with us. From my perspective it is very important for you to be there. From a diligence perspective, they have seen everything and they are still wanting to meet and move forward. My goal in conjunction with tomorrow's meeting will be to get an immediate funding of enough to do an advance refunding of the revenue bonds. It sounds like that is their goal as well. Then we can move forward quickly to look at the next phase of the relationship, which would involve their financing to complete the Tower. I would anticipate a variety of legal questions on the agreements between HCCA and TRMC. I would think we will also see their documents on the upcoming transactions, which should use real estate as collateral. It will be much more effective if you are on site in person. Please attend, Bruce, if at all possible. Thanks, Alan From: Greene, Bruce R. [bgreene@bakerlaw.com] Sent: Tuesday, September 05, 2017 7:07 AM To: Alan Germany; benny@healthcca .com Subject: Re: Meeting/Site tours/Dinner on Wed 9/6th in Fresno CA/Tulaire Medical Center I still don't have clarity on the need for me to attend. It's a big cost for me to come up and back for this meeting. Sent from my iPhone On Sep 5, 2017, at 6:33 AM, Alan Germany wrote: That timing sounds great, Bill. Looking forward to it. Thanks, Alan From: Bill Harlan [wharlan@medequities.com ] Sent: Tuesday, September 05, 2017 4:54 AM To: benny@hea lthcca .com; Alan Germany; Greene, Bruce R. Cc: Patterson, Lorin E.; Mark Wright Subject: Re: Meeting/Site tours/Dinner on Wed 9/6th in Fresno CA/Tulaire Medical Center ... . Lorin is getting into Fresno late tonight, as are Mark and I; we three are planning to meet for breakfast tomorrow, so if your travel schedules allow, we could plan meeting at the Hospital say around 10-10:30 am, and go from there ..... we 3 will be staying overnight, so let's still plan on dinner tomorrow night as well . Thks Bill William C. Harlan President & COO MedEquities Realty Trust (NYSE:MRT) D: 615-627-4714 C: 615-943-5621 On Sep 4, 2017, at 12:48 PM, Bill Harlan wrote: Gentlemen, I wanted to have our lead hospital et al transactional counsel , Lorin Patterson (formerly w/Reed-Smith and now w/lngersoll Buchannan) from Va, join us for all of our goings-on there on Wed ... Lorin and I have worked on many transactions over the years, and he continues as one of the foremost for-profit hospital/STACH- ASC/Physician-centric facility transactional counsels in the US. I just talked to Lorin and he has agreed and is moving his schedule around to be able to attend (we'll all fly into Fresno late tomorrow night). If at all possible Bruce, I would really like to have you there as well on Wed .... you and Lorin will meld in thought-line/strategy big-time, which will help us all get this "fast-tracked". In prep for Wed, I'm going to forward Lorin all the agreements/doc's et al which Alan has forward to us thus far ..... Thks guys and we all look forward to this meeting .... Have a great rest of your Labor Day holiday ! ! ! Bill William C. Harlan President & Chief Operating Officer 3100 West EndAvenue, Suite 1000, Nashville, TN 3 7203 D 615.627.47141 C 615.943.5621 wharlan@ medeq11ities.com Legal Notice - This message contains information which may be confidential and privileged. Unless you are the addressee (or authorized to receive for the addressee), you may not use, copy or disclose to anyone the message or any information contained in the message. If you have received the message in error, please advise the sender by reply e-mail immediately and delete the message. This e-mail is a confidential transmission. Information contained herein is confidential and/or proprietary and is for the intended recipient only. It may not be distributed to any other party in any manner without the prior written consent of the sender. If you are not the intended recipient, you are directed not to read, disclose, distribute or otherwise use this transmission. If you have received this email in error, please notify the sender immediately and delete the transmission. Delivery of this message is not intended to waive any applicable privileges. This email is intended only for the use of the party to which it is addressed and may contain information that is privileged, confidential, or protected by law. If you are not the intended recipient you are hereby notified that any dissemination, copying or distribution of this email or its contents is strictly prohibited. If you have received this message in error, please notify LIS immediately by replying to the message and deleting it from your computer. Any tax advice in this email is for information purposes only. The content of this email is limited to the matters specifically addressed herein and may not contain a full description of all relevant facts or a complete analysis of all relevant issues or authorities. Internet communications are not assured to be secure or clear of inaccuracies as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. Therefore, we do not accept responsibility for any errors or omissions that are present in this email, or any attachment, that have arisen as a result of e-mail transmission. This e-mail is a confidential transmission. Information contained herein is confidential and/or proprietary and is for the intended recipient only. It may not be distributed to any other party in any manner without the prior written consent of the sender. If you are not the intended recipient, you are directed not to read, disclose, distribute or otherwise use this transmission. If you have received this email in error, please notify the sender immediately and delete the transmission. Delivery of this message is not intended to waive any applicable privileges. 21 Baker Hostetler exhibitsticker.com EXHIBIT Baker&Hostetler LLP 11 601 Wilshire Boulevard Suite 1400 Los Ang eles, CA 90025-0509 T 310.8 20 .8800 F 310 . 820 .8859 www. bakerlaw.com September 18, 2014 Bruce R. Greene direct dial: 310.442 .8834 bgreene@bakerlaw.com Tulare Local Healthcare District dba Tulare Regional Medical Center 869 North Cherry Street Tulare, CA 9327 4 Attention: Sherrie Bell , Chair HealthCare Conglomerate Associates, LLC 810 North Cherry Street Tulare, CA 9327 4 Attention: Benny Benzeevi, Manager Medflow, PC 810 North Cherry Street Tulare, CA 9327 4 Attention : Benny Benzeevi , President Yorai ("Benny") Benzeevi , M.D. 81 0 North Cherry Street Tulare, CA 9327 4 Re: Waiver of Conflict Dear Chair Bell and Benny: The Board of Directors of the Tulare Local Healthcare District dba Tulare Regional Medical Center (the "District") has requested that Baker Hostetler LLP (the "Firm") serve as its legal counsel in connection with a dispute with the Bond Trustee (U.S. National Bank, N.A.) under the Indenture of Trust dated as of November 1, 2007 regarding the issuance of $17,850,000 in Tulare Local Healthcare District Refunding Reserve Bonds Services 2007, which may result in litigation (the "Bond Dispute"). The Firm currently serves as counsel for Dr. Benzeevi personally and for HealthCare Conglomerate Associates , LLC ("HCCA") and Medflow, PC ("Medflow", and together with HCCA and Dr. Benzeevi personally, the "Benzeevi Group") both of which entities are owned by Dr. Benzeevi. HCCA presently manages the Tulare Regional Medical Center under a management contract with the District. Medflow currently operates the emergency department of the Tulare Regional Medical Center under a contract with the District. The interests of the Benzeevi Group and the District are presently aligned with respect to the Bond Dispute, and at present there are no disputes between the District and either HCCA or Medflow under the above referenced contracts . However, that is not to say that things may not Atlanta Chica go Houston Los Angeles 096608.000012 605115384.1 Cin cinnati New Yori( Cleveland Orlando Columbus Philadelphia Costa Mesa Denver Sea ttle Washington, DC September 18, 2014 Page2 change in the future, and it is possible that the interests of the Benzeevi Group and the District in connection with the Bond Dispute may no longer be aligned, and it is also possible that disputes may occur between the District, on one hand, and HCCA and/or Medflow, on the other hand, under the above-referenced contracts. The purpose of this letter is to confirm that the District and the Benzeevi Group each expressly and unconditionally waive certain conflicts of interest which may exist, or which may arise in the future, as a result of the Firm's representation of the District in the Bond Dispute. This letter confirms that: A The Firm presently represents, and expects to continue to represent, the Benzeevi Group in connection with various matters unrelated to the business of the District, and also in connection with the contracts between the District and HCCA and/or Medflow. The Firm may in the future represent the Benzeevi Group in connection with other matters, some of which may involve the business of the District. B. The Board of Directors of the District has asked the Firm to represent the District in connection with the Bond Dispute. C. In connection with its representation of the Benzeevi Group, the Firm has had access to confidential information of the Benzeevi Group. D. In connection with its representation of the District in connection with the Bond Dispute, the Firm may have access to confidential information of the District. Representation of the District in connection with the Bond Dispute may place the Firm in a conflict of interest position with the Benzeevi Group under California State Bar Rules, if such conflict is not waived. The applicable Rules of Professional Conduct (the "Rules") 1 under which the Firm operates generally discourage representing two or more clients which may have differing or directly adverse interests. Further, the Rules discourage the representation of a client where, by reason of the representation of a former client, the firm has obtained material confidential information. However, the Rules recognize that there are instances in which a law firm may properly serve multiple clients having adverse interests in matters not involved in litigation. The Rules provide that a law firm may represent two or more clients that have differing or adverse current, past or future interests if each client consents to such representation after full disclosure of the actual and reasonably foreseeable adverse consequences with respect to the representation. 1 The California Rules of Professional Conduct, specifically Rule 3-310, require that before we undertake legal representation of a client under certain circumstances, we must make certain disclosures to the client and that we obtain the client's informed written consent. These circumstances include the following: (a) When we have or had a relationship with another party interested in the representation; or (b) When we concurrently represent clients whose interests conflict; or (c) Where we undertake representation adverse to a client where, by reason of such representation, we obtained confidential information material to that representation. 096608.000012 605115384.1 September 18, 2014 Page 3 The Firm's representation of the District in connection with the Bond Dispute may present a conflict of interest due to the Firm's prior and continuing representation of the Benzeevi Group. The primary source of such conflict would be the fact that the Firm may have access to confidential information of the parties which, but for the dual representation, it would be obligated to disclose to the other party. However, the Firm hereby advises you that unless otherwise required by law, it will not disclose any confidential information of either party to the other, nor will the Firm use confidential information of one party to the benefit of the other party. With respect to the foregoing and the agreement to waive the conflicts of interest described herein, each of the District and the Benzeevi Group acknowledges the following: 1. The District has engaged the Firm to represent its interests in connection with the Bond Dispute. 2. The Firm has previously represented the constituents of the Benzeevi Group in certain matters unrelated to the business of the District, and in certain matters involving the business of the District, and may continue to represent the Benzeevi Group in the future, including matters in which the interests of constituents of the Benzeevi Group may be adverse to the interests of the District (and which might result in litigation or other forms of dispute resolution). After full disclosure of the facts and the potential adverse consequences of the dual representation as described herein, the District and the Benzeevi Group hereby waive any potential or actual conflict of interest which may now exist or which may arise in the future in connection with the Firm's accepting engagement by the District to represent the District in connection with the Bond Dispute. The District expressly acknowledges and agrees that the foregoing waiver will allow the Firm to continue to represent the interests of the Benzeevi Group in other matters, including matters which are or may be adverse to the interests of the District (including litigation or other forms of dispute resolution) and that the District will not seek to disqualify the Firm or any of its attorneys from representing the Benzeevi Group in any such matters as a result of the engagement of the Firm by the District in connection with the Bond Dispute. In the event that a material dispute and actual conflict of interest arises between the District and the constituents of the Benzeevi Group regarding the Bond Dispute, or otherwise, the Firm will then assess the circumstances to determine its ethical obligations and to determine an appropriate course of action, which may include withdrawing from representation of the District in the Bond Dispute. The Firm believes that representation of the District in connection with the Bond Dispute, and the continued representation of the Benzeevi Group in connection with matters both related to and not related to the business of the District, will not adversely affect the Firm's current or future representation of the other party, nor will the disclosure of otherwise confidential information of any party be required. However, if the Firm determines that its continued representation of the District in the Bond Dispute would require disclosure of confidential information of the Benzeevi Group to the District, or vice versa, the Firm may elect to terminate its representation of the District in the Bond Dispute. Moreover, if we are asked to represent 096608.000012 605115384.1 September 18, 2014 Page 4 either the District or the Benzeevi Group in any future matter which we determine may create an actual conflict of interest, we will then assess the circumstances to determine our ethical obligations and determine any appropriate course of action. If, after reading this letter and having the opportunity to consult with independent counsel, you are each willing to waive the Firm's conflict of interest and consent to the Firm's representation of the District and the Benzeevi Group as described herein, we request that you each sign the enclosed copy of this letter in the spaces provided below and return the same to the undersigned as soon as possible. This letter may be executed in counterparts. If you have any questions regarding anything contained herein, please feel free to call the undersigned. READ, ACCEPTED AND AGREED: TULARE LOCAL HEALTHCARE DISTRICT, dba TULARE REGIONAL MEDICAL CENTER By: Sherrie Bell, Chairman of the Board/President HEALTHCARE C 'GLOMERATE ASSOCIATES, " C By: 096608.000012 605115384.1 September 18, 2014 Page 5 MEDF LOW, PC By: erEEevi,M.D.,President I n? Yorai (?Benny") Bankemx??fmdimauauy 096608300012 605115384.1 22 Baker&Hostetler LLP 11601 Wilshire Boulevard Suite 1400 Los Angeles, CA 90025-0509 T 310.820.8800 F 310.820 .8859 www.bakerlaw.coni May 7, 2015 Bruce R. Greene direct dial: 310.442.8834 bgreene@bakerlaw.com Tulare Local Healthcare District dba Tulare Regional Medical Center 869 North Cherry Street Tulare, CA 93274 Attention: Sherrie Bell, Chair HealthCare Conglomerate Associates, LLC 810 North Cherry Street Tulare, CA 93274 Attention: Benny Benzeevi, Manager Medflow, PC 810 North Cherry Street Tulare, CA 9327 4 Attention: Benny Benzeevi, President Yorai ("Benny") Benzeevi, M.D. 810 North Cherry Street Tulare, CA 93274 Re: Waiver of Conflict Dear Chair Helf and Benny: By letter dated September 18, 2014, certain potential conflicts of interest arising from our representation of Dr. Benzeevi, personally, HealthCare Conglomerate Associates, LLC and Medflow PC, on the one hand, and the District on the other !land, as more fully described therein were waived by each of you. Since the date of that letter, our representation of the District has expanded to several other matters (all of which have been identified in modifications to our original engagement Jetter dated September 18, 2014) and we contemplate representing the District in additional matters in the future. The purpose of this letter is to confirm that the waiver of conflict of interest extends to all of the additional matters in which we may represent the District, subject of course to the limitations set forth therein as to the firm's ethical obligations . Please confirm the foregoing by signing and dating the enclosed copy of this letter and returning same to the undersigned. Atlanta Chicago Houston Los Angeles 096608.000012 606332826.1 Cincinnati New Yori< Cleveland Orlllndo Colwn/Jus r'h//ade/ph/a Costa Mesa Denver Seattle Washington, DC exhibitsticker.com EXHIBIT May 7, 2015 Page 2 lf you have any questions regarding anything contained herein, please feel free to call the undersigned. Thank yolL READ, ACCEPTED AND AGREED: TULARE LOCAL HEALTHCARE DISTRICT, dba TULARE REGIONAL MEDICAL CENTER By: Sherrie Bell, Chairman of the Board/President HEALTHCARE CONGLOMERATE ASSOCIATES, LLC By: Yorai MEDFLOW, P C ~ By: Yorai ("Benny") Banzeevi, M.D., President 096608.000012 606332826.1 May 2015 Page 3 44? . - .. x" :fP??x?l Yorai (?Benny") Bq?geevi, .D.. Indhriduany 096608.000012 6063328261 Dirk B. Paloutzian #173676 dpaloutzian@bakermanock.com 2 Peter G. Fashing #195756 pfashing@bakermanock.com 3 BAKER MANOCK & JENSEN, PC 5260 North Palm Avenue, Fourth Floor 4 Fresno, California 93704 Telephone: 559.432.5400 5 Facsimile: 559.432.5620 23 exhibitsticker.com EXHIBIT 6 Attorneys for Defendant, LINDA WILBOURN 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF TULARE 10 11 12 TULARE LOCAL HEALTH CARE DISTRICT dba TULARE REGIONAL MEDICAL CENTER, a public agency, 13 Plaintiff, 14 15 16 17 AMENDED AND VERIFIED ANSWER BY LINDA WILBOURN TO PLAINTIFF'S COMPLAINT Judge: Dept.: V. BRUCE R. GREENE; BAKER & HOSTETLER, LLP, a limited liability partnership; PARMOD KUMAR, M.D.; LINDA WILBOURN, RICHARD TORREZ; and DOES 1 through 50, inclusive, 18 Case No. VCU 278333 Hon. David Mathias 2 Assigned for All Purposes to The Hon. David Mathias, Dept. 2 Action Filed: Trial Date: April 24, 2019 Not Yet Assigned Defendants. 19 20 21 Defendant LINDA WILBOURN ("Defendant") answers the Complaint for 22 Damages ("Complaint") of Plaintiff TULARE LOCAL HEALTH CARE DISTRICT dba 23 TULARE REGIONAL MEDICAL CENTER, a Public Agency ("Plaintiff' or "District"), as 24 follows: 25 FACTUAL AND PROCEDURAL BACKGROUND ALLEGATIONS 26 Defendant admits the allegations of paragraph 1 of the Complaint. 27 Defendant admits the allegations of paragraph 2 of the Complaint. 28 Defendant admits the allegations of paragraph 3 of the Complaint. 2432951 v2 / 21905.0001 VERIFIED ANSW ER BY LINDA WILBOURN TO PLAINTIFF'S COMPLAINT Answering paragraph 51 of the Complaint, Defendant alleges, as follows: The certified 2 election results and oath of office were received from the registrar by the District Board office on 3 July 26, 2017, the day of the regularly scheduled July 2017 Board meeting. The letter 4 accompanying the results and oath contained a statement requesting that the Board place the 5 certified vote on the agenda for the next regularly scheduled meeting. Because the agenda for the 6 July 26, 2017 meeting had already been prepared and circulated, Defendant called Bruce Greene 7 to inquire as to how she should proceed. Mr. Greene indicated that because the certified vote was 8 not on the July 26, 2017 agenda, it should be placed on the August 2017 meeting agenda for 9 ratification by the Board, and that Ms. Gutierrez could not be seated until then . Before the l 0 meeting was set to start, Defendant asked to speak to Ms. Gutierrez and informed her of the advice 11 of Mr. Greene. Defendant and Ms. Gutierrez returned to the meeting room and, before the 12 meeting was called to order, Defendant, relying on the advice of Mr. Greene, made an 13 announcement to the effect that the ratification of the election results would be placed on the 14 August 2017 meeting agenda and that Ms. Gutierrez could be expected to be seated as a Board 15 member at that meeting. To Defendant's recollection, Directors Northcraft and Jamaica left the 16 meeting room before the July 26, 2017 meeting came to order. As a result, Mr. Greene declared 17 that there was no quorum. As a result, the July 26, 2017 Board meeting was cancelled. 18 Except as expressly alleged and/or admitted, Defendant denies the remaining allegations of 19 20 21 22 23 paragraph 51. Defendant lacks sufficient information upon which to admit or deny the allegations of paragraph 52 of the Complaint and, on that basis, denies the same. Defendant lacks sufficient information and belief upon which to admit or deny the allegations of paragraph 53 of the Complaint and, on that basis, denies the same. In addition, 24 Defendant hereby incorporates her response to paragraph 51 of the Complaint as though fully set 25 26 forth herein. Answer paragraph 54 of the Complaint, the allegations are a conclusion for which no 27 response is required. In addition, Defendant hereby incorporates her response to paragraph 51 of 28 the Complaint as though fully set forth herein. To the extent a response is required, Defendant 2432951 v2 / 21905.0001 7 VERIFIED ANSWER BY LINDA WILBOURN TO PLAINTIFF'S COMPLAINT Answering paragraph 59 of the Complaint, the allegations are conclusions for which no 2 response is required. To the extent a response is required, Defendant lacks sufficient information 3 and belief upon which to admit or deny the allegations of paragraph 59 of the Complaint and, on 4 that basis, denies the same. 5 Defendant admits the allegations of paragraph 60 of the Complaint. 6 Answering paragraph 61 of the Complaint, Defendant admits that Exhibit 4 includes a true 7 and correct copy of Defendant's letter of resignation. As to the remaining allegations of paragraph 8 61, Defendant lacks sufficient information and belief upon which to admit or deny said allegations 9 and, on that basis, denies them. IO 11 12 13 14 15 16 17 18 19 Defendant lacks sufficient information and belief upon which to admit or deny the allegations of paragraph 62 of the Complaint and, on that basis, denies the same. Defendant lacks sufficient information and belief upon which to admit or deny the allegations of paragraph 63 of the Complaint and, on that basis, denies the same. Defendant lacks sufficient information and belief upon which to admit or deny the allegations of paragraph 64 of the Complaint and, on that basis, denies the same. Defendant lacks sufficient information and belief upon which to admit or deny the allegations of paragraph 65 of the Complaint and, on that basis, denies the same. Defendant lacks sufficient information and belief upon which to admit or deny the allegations of paragraph 66 of the Complaint and, on that basis, denies the same. 20 Answering paragraph 67 of the Complaint, Defendant has no recollection of ever advising 21 Greene of a delay or postponement of her resignation and, on that basis, is informed and believes 22 and thereon alleges that she never advised Greene to that effect. Defendant does recall that during 23 a telephone conversation on August 23, 2017, Greene told Defendant that he had begun 24 preparation of paperwork while she was a member of the board of directors, that he needed to 25 complete the paperwork while she was a member of the board of directors and that he asked 26 Defendant to delay her resignation from the board of directors. Defendant further recalls that 27 Greene asked her to send him a note delaying her resignation for one day. Defendant further 28 alleges, as follows: Defendant knows of the allegation by Greene to that effect and the purported 2432951 v2 / 21905.000 1 9 VERIFIED ANSWER BY LINDA WILBOURN TO PLAINTIFF'S COMPLAINT IN RE SEARCH WARRANT 013487 VSW 013487 February 05, 2019 · ·1· · · IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA ·2· · · · · · · ·IN AND FOR THE COUNTY OF TULARE ·3· DEPARTMENT 13· · · · · ·HONORABLE JOHN P. BIANCO, JUDGE ·5· · · · · · · · · · · · · · -o0o- EXHIBIT 24 ·6 exhibitsticker.com ·4 ·7 ·8· · · ·9· · · 10· · · 11 IN THE MATTER OF· · · · · ) · · · · · · · · · · · · · ) In Re: SEARCH WARRANT· · ·)· NO. VSW 013487 NO. 013487 EXECUTED ON· · ) AUGUST 22, 2018.· · · · · ) __________________________) 12 13· ·Visalia, California· · · · · · · · · February 5, 2019 14 15 16· · · · · · · · REPORTER'S PARTIAL TRANSCRIPT 17· · · · · · · · · · · Pages (1 - 60) 18 CERTIFIECi TRANSCRJF T 1 19 20 21 22 23 24 25 26· ·Reported by:· KIMBERLEY A. WERTH, CSR #11513, RPR Superior Court of the State of California County of Tulare 03-27-2019 10:03AM IN RE SEARCH WARRANT 013487 VSW 013487 February 05, 2019 Page 2 ·1· · · · · · · · · · · · APPEARANCES: ·2 · · · For the District Attorney's Office: ·3 ·4· · · ·5· · · ·6· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · TIM WARD, DISTRICT ATTORNEY BY: TREVOR HOLLY, DEPUTY BY: NADYA HANNAH, DEPUTY County Civic Center, Room 224 Visalia, California· 93291 ·7 ·8· ·For Yorai Benzeevi: ·9 · · 10· · · 11· · · 12· · · 13 · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · KEKER, VAN NEST & PETERS, LLP Attorneys at Law BY: ELLIOT R. PETERS BY: ELIZABETH K. MCCLOSKEY BY: AJAY KRISHNAN 633 Battery Street San Francisco, California· 94111-1809 14 15 16 17 18 19 20 21 22 23 24 25 26 Superior Court of the State of California County of Tulare 03-27-2019 10:03AM IN RE SEARCH WARRANT 013487 VSW 013487 February 05, 2019 Page 28 ·1· ·to call a special meeting to ratify the election, if ·2· ·she has a reason. ·3· · · · · ·THE WITNESS:· I didn't call a special meeting, ·4· ·and as chair, I called the meetings.· The notice to me ·5· ·said "the next regularly scheduled meeting," that ·6· ·would have been August. ·7· ·BY MR. HOLLY: ·8· · · · · ·Q.· ·So did you have any reason for not -·9· ·strike that. 10· · · · · ·So on the August meeting -- did you make a 11· ·decision regarding your serving on the board in August 12· ·prior to the regularly scheduled board meeting? 13· · · · · ·A.· ·Are you asking me if I resigned? 14· · · · · ·Q.· ·Yeah, I have to lay the foundation for 15· ·this. 16· · · · · ·A.· ·I'm sorry.· Ask me again. 17· · · · · ·Q.· ·Did you make a decision to resign in 18· ·August? 19· · · · · ·A.· ·I did. 20· · · · · ·Q.· ·When did you make that decision or when 21· ·did you communicate that decision to somebody 22· ·representing the board?· I have emails that might 23· ·refresh your memory. 24· · · · · ·A.· ·The Monday before the election -- the 25· ·Monday before the regularly scheduled board meeting. 26· · · · · ·Q.· ·So I'll show you People's Exhibit 60.· Do Superior Court of the State of California County of Tulare 03-27-2019 10:03AM YVer1f IN RE SEARCH WARRANT 013487 VSW 013487 February 05, 2019 Page 29 ·1· ·you recognize what that is? ·2· · · · · ·A.· ·I don't recognize it.· It appears to be a ·3· ·communication from Bruce Greene to Northcraft, ·4· ·Jamaica, Torrez, Dr. Benzeevi about my resignation ·5· ·letter. ·6· · · · · ·Q.· ·On the second page -·7· · · · · ·A.· ·Yes, this is a copy of my resignation ·8· ·letter. ·9· · · · · ·Q.· ·Now, your resignation letter states that 10· ·you intended to resign on noon prior to the meeting. 11· ·Was that your intention? 12· · · · · ·A.· ·Noon prior to the meeting, yes, the day 13· ·of the meeting. 14· · · · · ·Q.· ·So was it your intention to not be a 15· ·board member by the time the meeting was called? 16· · · · · ·MS. MCCLOSKEY:· Objection, vague as to time. 17· · · · · ·THE COURT:· Overruled. 18· · · · · ·THE WITNESS:· Yes, it was my intention to 19· ·resign before the meeting. 20· ·BY MR. HOLLY: 21· · · · · ·Q.· ·Now, did you change your mind about 22· ·resigning from the board prior to the board meeting at 23· ·some point during that day? 24· · · · · ·A.· ·No. 25· · · · · ·Q.· ·So as far as you're concerned, when that 26· ·board meeting was held, were you a member of the Superior Court of the State of California County of Tulare 03-27-2019 10:03AM YVer1f IN RE SEARCH WARRANT 013487 VSW 013487 February 05, 2019 Page 30 ·1· ·board? ·2· · · · · ·A.· ·No. ·3· · · · · ·Q.· ·Now, did you send a text to Mr. Greene ·4· ·stating that you had changed your mind and you wanted ·5· ·to resign the following day? ·6· · · · · ·A.· ·I did not. ·7· · · · · ·Q.· ·Did you find a text like that on your ·8· ·phone? ·9· · · · · ·A.· ·I did. 10· · · · · ·Q.· ·When you found that text, did you bring 11· ·it to the District Attorney's Office? 12· · · · · ·A.· ·I did. 13· · · · · ·Q.· ·Had you initially forgotten about -14· ·actually, strike that. 15· · · · · ·To your memory, did you send this text? 16· · · · · ·MS. MCCLOSKEY:· Objection, asked and answered. 17· · · · · ·THE COURT:· Overruled. 18· · · · · ·THE WITNESS:· I do not remember sending a text 19· ·that ended up in your office.· I don't remember 20· ·sending that text. 21· ·BY MR. HOLLY: 22· · · · · ·Q.· ·Did you authorize Mr. Greene to cancel 23· ·the board meeting on August 23rd? 24· · · · · ·A.· ·No. 25· · · · · ·Q.· ·Did he ask you for authority to do that? 26· · · · · ·A.· ·No. Superior Court of the State of California County of Tulare 03-27-2019 10:03AM YVer1f < EXHIBIT Linda Wilbourr1 My resignation will be effective ,Q0,,8JJ,Q.u.s,t, 2~. at 8,:QQam. Linda J;•:;r,'?'!.:C••-.!·~}•~"""""0-,.1;~""!';;:~';-'!'1·-.-;.--:--:-:,..""S'"=':7.-''''",,''" ;;~:-:•"!\ "l';;,':!' "<'' ·:, " Wil1bourn I wi'II not be able to attend tonight's meeting DEFENSE EXHIBIT 553 3 25 exhibitsticker.com 4:00 PM ( ) PLFT(s) )ADEFT(s) ( ) ID ( ) EVID .(..,1"1D....k'fEVID OTHER _ _ _ _ _ ( ) ID ( ) EVID Date: Z ---'?---'~ CLERK OF THE SUPERIOR COURT By ---1lJlCE.lA HERNANDEZ Deputy Subject: Attachments: Greene, Bruce R. [/O=BH/OU=DENVER/CN=RECIPIENTS/CN=BGREENE] 8/23/2017 3:16:07 PM Linda Wilbourn (linda.wilbourn@comcast.net) [linda.wilbourn@comcast.net] TRMC/ Celtic Leasing Opinion Certificate.DOC; Opinion Letter (Celtic Leasing Corp.).doc; DocPkg3826A01.pdf Importance: High From: Sent: To: EXHIBIT 26 Linda - I am attaching a draft of an Opinion Certificate which I need to render my opinion for this new equipment lease/finance transaction. This Opinion Certificate is almost identical to the Opinion Certificate which you had signed in connection with the Leasing Innovations lease/financing transaction last month. I am also attaching a copy of the lease and a draft of my opinion letter, since those are referenced in the Opinion Certificate. Would you kindly sign and email the Opinion Certificate back to me as soon as possible. If you have any questions about this, please call me. Thank you. Bruce Greene Partner BakerHostetler 11601 Wilshire Boulevard I Suite 1400 Los Angeles, CA 90025-0509 T +1.310.442.8834 M +1.310.308.1003 bgreene@bakerlaw.com bakerlaw.com es Exhibit 23 001 exhibitsticker.com Message OPINION CERTIFICATE Reference is made to that certain proposed Master Lease No 3826A and Lease Schedule No. 38236A01 (together, the "Lease") between Tulare Local Health Care District ("Lessee") and Celtic Leasing Corp. ("Lessor"). Terms used but not defined herein shall have the meanings given to such terms in the Lease. In connection with the opinion letter (the "Opinion Letter") of Baker & Hostetler LLP to be issued to Lessor pursuant to the Lease, the undersigned, on behalf of Lessee, and not in her individual capacity, hereby certifies, as follows: 1. The undersigned is a duly elected and qualified Chair of the Board of Directors of Lessee. As such, the undersigned is familiar with the matters set forth herein and is authorized on behalf of Lessee to execute this Certificate. 2. All representations and covenants of Lessee set forth in the Lease and all documents being executed in connection with the Lease, are true, correct and complete, and you are hereby expressly authorized to rely thereon. 3. The execution and delivery of the Lease was authorized by the vote of the Board of Directors of Lessee at a meeting held on June 20, 2017 at which time a quorum was present, and is evidenced by Resolution No. 852, a full, true and correct copy of which is attached hereto. Resolution 852 is in full force and effect as of this date and has not been amended or repealed by the Board of Directors of Lessee .. 4. None of the transactions evidenced by the Lease is being entered into for any personal, family or household purposes. 5. All applicable public bidding procedures and other applicable laws have been followed regarding the award of the Lease to Lessor. 6. The undersigned has reviewed a draft of the Opinion Letter, confirmed the truth, accuracy and completeness of all statements of fact made therein and is unaware of any facts or information that would cast doubt on the validity of any matters stated within the Opinion Letter or the correctness thereof. 7. Opinion Letter. The undersigned authorizes Baker & Hostetler LLP to render the 1 093734.000003 611036753.1 Exhibit 23 002 IN WITNESS WHEREOF, the undersigned has executed this Opinion Certificate as of August 23, 2017. Linda Wilbourn Chair of the Board of Directors 2 093734.000003 611036753.1 Exhibit 23 003 Baker&Hostetler LLP I l601 Wilshire Boulevard Suite 1400 Los Anpeles, CA 00025~0509 T 310.820.8800 F 310.820.8859 www.bakerla.w.com August_, 2017 Celtic Leasing Corp. 4 Park Plaza, Suite 300 Irvine, CA 92614 Re: Lease Schedule No. 382q,"Q7i(the 2'2.!1'!2!;!JJ1!1.U1Atn Master Lease No. 3826A (the "Lease'') il)}>and between Leasing Corp. ("Lessor'') and Tulare Loc~f "!:jf?althcarepistrict Ladies and Gentlemen: We have acted as special i 9IifOtrn!!\'! ypunsel to µ§§See in connection with the above-referenced Lease between Lessee and Wessor. In renderiiig}pur opinigq, we havi$;}$lso examined such certificates of public officials, organizati0n$! gocurmi$:t1J§pf Lessei$;;J9 nd other certificates and instruments as we hay@ 9§@Ql!!39 nece$$$(Y fgf tmi$; pµepose§ pf the opinions herein expressed. As to cert§!!@ questiOW$I9f facfr¥)$fi$;rial to Out ¢P!Qi0rj} we have relied upon the certificate of aq gffieer of the U@§§!3e (tm@ ''.Opinion ®eiltificate") and the representations of the LeS§§§ contained into§ ~ease.Jr\§ to certain matters involving California election law, we havi$; [€!lied upon the gpJnion dfifM!jyhael L Allan, Esq, Allan Law Office. We §~Press no opirjJgp with respect to the effect of any law other than the laws of the State G$Ufprnia (the}'.ltate"), including, without limitation, the California Uniform Commercial Cdd~ (toe "UC:C:j!), and the federal law of the United States (together with the laws of the Stat~jWApplieable Law"). Whenever our Opinion herein is qualified by the phrase "to the best of our knowledge" (or similar phrase), it is intended to indicate that the current, actual knowledge of the attorneys within the Los Angeles office of this firm engaged in the representation of Lessee in connection with the Lease transaction is not inconsistent A-Ua.nta c;tiic:ago Houston Los Angeles 093734.000003 611224192.1 Clncinnatl New York ()IGvofanc.i Orlando (~o/cnnbtls PhilarJe!phia c.::oste-1. bAf:Jse. l.Jenver Seattle Washington, DC Exhibit 23 004 Celtic Leasing Corp. August_, 2017 Page 2 with that portion of the opinion which such phrase qualifies. Except as expressed herein, we have made no independent investigation of any such matters and we have not made any other examination of Lessee. Based on the foregoing, and subject to the qualifications and exceptions herein contained, we are of the opinion that: 1. Lessee is a political subdivision of the State, to wit, a local healthcare district, duly organized and existing under the laws of the State, and specifically Section 32000 et seq of the California Health & Safety Code. 2. The UCC and no other statute of &m@IIState, governs the creation, perfection, priority and enforcement of any security !@J@f@$t9reated by the Lease. ucc; 3. Within the meaning of the g§SSee is ari O!Jr@gistered organization, having its sole place of business or its chi§f@?S§Cutive office in ft!)i $tate. Lessee's true and correct legal name is stated above. 4. Lessee is authorized and hij§ power Qnder State lease the property described in the Lea$i @Qgto carry Ou\ i!$ibbligations thereunder and the transactions contemplated thereQY; i!Jq!µging, withbQtI!irnitation, payment of all rental payments set forth in the Lease. 5. Benny ~@@g§evi, M.D:J!$ qualifi§g ~!Jg c:1uthdfi~@P to execute, on behalf of Lessee, any apg @!I dbcQi§nts relaf@Q\tO tbi l;iasi@bgLease Schedule. 6. Bas@g>µpon R@$¢!Iution Nd)J§p2 of the Lessee, which was adopted by the Board of Directdf$Jpf th§}g@§§ee on JQijj§ 20, 2017 (a copy of which is attached hereto)1tl1!s! h;@c:1se, iridlqgj!Jg}Jhe !@~§§ of th@Jproperty subject thereto and Lessee's oblig~t!qMS thef@O!l)ger, ha$ Q@en duly ~OtbgrizegI approved, executed and delivered by aqg}gjlfbehalf ofth§ µ§ssee ~!Jg is a valid\~pg binding contract of Lessee, enforceable agai@§tLessee in accqtgc:1nce vyj\jj)ts terms . 7. To the besf}qf our kriqvyledge, the authorization, approval and execution of the Lea$@+ and all otjj$!f proceedings of Lessee relating to the transactions contemplatedtb@reby have p§en performed in accordance with all open meeting, public bidding and othe¢ ijpplicaq!i !ijws, rules and regulations of the State. 8. The ex;q;qjibn of the Lease and the appropriation of moneys to pay the payments coming due> under the Lease do not result in the violation of any constitutional, statutory or other governmental limitation relating to the manner, form or amount of indebtedness which may be incurred by Lessee. 9. The accrual and payment by Lessee, and collection from Lessee, of the charges provided for in the Lease, including rental, interest, late fees, attorney's fees and other charges, do not and will not violate the constitution or any law of the State. 093734.000003 611224192.1 Exhibit 23 005 Celtic Leasing Corp. August_, 2017 Page 3 We express no opinion with respect to any documents other than the Lease and the Lease Schedule. The foregoing opinions are subject to the following qualifications, limitations and exceptions: (a) The effect of bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights, powers, privileges, remedies and interests of creditors, obligees or sureties including, without limitation, the effect of Sections 54:t'>.and 548 of the Federal Bankruptcy Code and comparable provisions of the lavy~i{Jne State; (b) The effect of the limitations impg§,~~ QY !';\pplicable Law or rules or principles (of equity, public policy or otherwise) afl9ffng tnl~/lforcement of obligations generally, whether considered at law, in ~q~ity or othe!ilj§e, including (without limitation) those pertaining to specific perj'qt;ance, injunctive ti!!~f, materiality, good faith, fair dealing, diligence, reasona)'p!~ness, unconscionabil!I;. impossibility of performance, redemption or other cure, sur~\yship rights or defens~itvyaiver, laches, estoppel, or judicial deference or other equita~!lremeqj~~; (c) The enforceabililqJ~/lY term or ptqyJ§jOn of the Lease thafpurportedly grants to a party or authorizes ~[ p~ffl']Jts a party ~L other person to exercise or otherwise enforce or pursue specif'!irignt~j~gvyers, priv'!!~ges, remedies or interests in a manner impermissible under or otm~rwiseiij,~~n?istenfvvif!i)Applicable Law or public policy of the State fr~IJ!l!?.to time in~ffect; (d) T!i)IJ.menforc~~tpility und~~j;;~lain circtin;r§tances of provisions in the Lease to the effect\~~t rights ~~remedies;~~ not exclusive, that every right or remedy is cumulative and mayQs! ex€!tlP!$€!c!in addifi~ijJo or with any other right or remedy, that electiQ!l~f;~~rticularrtl~c!yOrr~;~qjes dqt§not preclude recourse to one or more oth€!r tlledies; al'l"ic! thaflif!~.( right dr The uneijf~rceabilil>under certain circumstances of any term or provision j~Jhe Lease irryq~r,nifying party against liability for its own wrongful or negligent a~§gr where suq!')jndemnification is contrary to public policy or prohibited by Applicable La~; a (f) The!~!:1fR(9~~bility of any term or provision in the Lease purporting to assign contractual rigij!i)fto the extent such provisions are limited by requirements of notice to and consent df any third parties to such contracts or other interested parties, or any other restrictions as to the assignability of such contractual rights; (g) The effect of the provisions of the UCC which require a secured party, in any disposition of personal property collateral, to act in good faith or in a commercially reasonable manner; 093734.000003 611224192.1 Exhibit 23 006 Celtic Leasing Corp. August_, 2017 Page 4 (h) Any rights under the Lease which are governed by the UCC are subject to the limitations and restrictions of the UCC which such statute provides cannot be waived; (i) We express no opinion as to the existence, validity, binding effect, enforceability, attachment, perfection or priority of any security interest or lien created or purported to be created under the Lease; U) There may be limitations on the exercise of the Lessor's remedies arising out of any failure by the Lessor to comply with stqJ!YJpry requirements or judicial decisions thereunder in the actual exercise of its ~jglflts in connection with the foreclosure, sale or other enforcement of its securityj!;!f~r,sts in any of the Equipment; (k) We express no opinion as to whE:!th~ror ndttmE:!.Lease transaction will be treated for federal and state income tax PYFJPP§E:!S as a trU~!~ 9se, or as a financing transaction . (I) Our opinions in Par 6 above are based solely lqfP~fl the Opinion Certificate and the Allan Law Office opinion. In our opinion, the for~gpj~g>qualification~(m-nltations and excepfibns do not render the Lease invalid as a lmpl~; §Qd there et§\t in the Lease or pursuant to Applicable Law, legally adequate[~p,ea!i~fpr a realiiiJipn of the principal benefits and/or security intended to be provid~~ by the~~§,§e. We advi§~!+~~sortnl~ircumsf~!"!~esg~!"'!occqt~{tE:!r the perfection of a security interest in per~p!"!~I propertM 'yVhich c0lq!~ puse the(§ecurity interest to become unperfected, inc1Ug!!"'!9t withoLit!!@litation, flfl~Jact that a financing statement lapses after five years; the UCGQf~etes.Q~~in limitatip~~. on the rights to proceeds; a change in the narn!?Pr\lflE:!tjebtOrprtlfl~!PCa(jp~pf the g~ptor will result in the security interest in cert;~!m pfopert~f~ pecdrq~ µnperfect,gyple§~f appropriate steps are taken; and a s~~µ[ed party's riglfl(§\§re sUpj,~t to the l'igf)(§ of certain purchasers of the collateral to acqµjt~the collateralf[~~.of the§~furity interest. Tp tbe extent that tbe oblf!lJitions of Lessee may be dependent upon such matters, we~§§ume that: !§~§sor is duly formed, validly existing and in good standing under the law§ pf its juri§g!otion of formation; Lessor has the requisite power and authority to exeoµtE:! and~~!!ver the Lease and to perform its obligations under the Lease; the Lease lil~P!?~!Jduly executed and delivered by Lessor, and constitutes the legally valid and bindir,gpbligation of Lessor, enforceable against Lessor in accordance with its terms; there are no other documents, understandings, or agreements (whether written or oral) between or among the parties which would expand, modify or otherwise affect the obligations of the parties under the Lease, the documents submitted to us contain therein all the terms intended by the parties. We have also assumed that: (1) The Lease transaction is not being entered into for any personal, family or household purposes. 093734.000003 611224192.1 Exhibit 23 007 Celtic Leasing Corp. August_, 2017 Page 5 (2) Lessee has "rights" (within the meaning of Section 9203 of the UCC) in the Equipment, and value has been given by the Lessor to Lessee in connection with the transactions contemplated by the Lease. This opinion is intended solely for the benefit of the Lessor and its successors and assigns in connection with the Lease transaction . No part of this opinion may be relied upon by any other person or for any other purpose, be incorporated, quoted or otherwise referred to in any other document or communication or be filed with or otherwise furnished to any governmental authority or other person without our prior written consent, except that our prior written consent is not needed to furnish a copy of this opinion: (a) in connection with any proceedings relating to the Lease or the enforcement thereof; and (b) to accountants and legal counsel for the Lessor (each of whom may rely upon this opinion as though it had been addressed and delivered to them as of the date of this opinion). In all cases, reliance upon this opinion is conditioned upon acceptance of all of the qualifications, exceptions, assumptions, definitions, exclusions and other limitations set forth herein. This opinion speaks only as of the date hereof, and to its addressees and their successors and assigns, and we have no responsibility or obligation to update this opinion, to consider its applicability or correctness to anyone other than its addressees, and their successors and assigns, or to take into account changes in law, facts or any other developments of which we may later become aware. Very truly yours, BAKER & HOSTETLER LLP 093734.000003 611224192.1 Exhibit 23 008 27 1 2 3 4 5 6 Attorney for Plaintiffs TULARE COUNTY SUPERIOR COURTS STATE OF CALIFORNIA, VISALIA DIVISION 8 10 THE PEOPLE OF THE ST ATE OF CALIFORNIA, vs. 13 RICHARD TORREZ, Individually and in his capacity as a member of the Board of Directors, Tulare County Local Health Care District; and DOES 1 -- 10 16 17 18 19 20 21 _2_7_1_0_8_6_ __ PETITION FOR ALTERNATIVE WRIT OF MANDATE 12 15 CASE NO: Petitioner, 11 14 Si:P 11 2017 TIM WARD TULARE COUNTY DISTRICT ATTORNEY TREVOR J. HOLLY, SBN# 226564 DEPUTY DISTRICT ATTORNEY 221 S. MOONEY BLVD., ROOM 224 VISALIA, CA 93291 TELEPHONE: (559) 636-5494 FAX: (559) 730~2658 Email: tholly@co.tulare.ca.us 7 9 exhibitsticker.com EXHIBIT Respondents, (CCP §1085, et. seq.) Date: September 15, 2017 Time: 8:30 am Department: One (1) SENOVIA GUTIERREZ, lawfully elected Director of the Board of Directors, Tulare County Local Health Care District, BRUCE GREEN, fonner general counsel for TRMC Board, I3AKER & HOSTETLER, former general counsel for TRMC Board, Real Party in Interest. 22 23 24 I. INTRODUCTION Plaintiffs, THE PEOPLE OF THE STATE OF CALIFORNIA, by and through their 25 attorneys, TIM WARD, District Attorney, and TREVOR HOLLY, Deputy District Attorney, 26 submit this Petition for Alternative Writ of Mandate to order RICHARD TORREZ, 27 individually and in his capacity as the Director of the Fourth District of the Tulare Local 28 PETITION FOR ALTERNATIVE WRIT OF MANDATE -l- 1 2 Health Care District, Board of Directors; and DOES ONE through 10 (hereinafter collectively 3 the RESPONDENTS) to recognize the office and authority of the lawfully elected 4 representative for the Director of the 3rd District of the Tulare Local Health Care District, 5 SENOVIA GUTIERREZ, real pai1y jn interest. Plaintiffs bring this request pursuant to California Code of Civil Procedure 6 7 8 § 1085(a), which provides that the Court may issue a Writ of Mandate to compel « •.•. the admission of a pa1ty to the use and enjoyment of a right or office to which the 9 party is entitled." Pursuant to California Code of Civil Procedure § 1087 the People 10 request an Alternative Writ of Mandate, ordering RESPONDENTS to recognize 11 SENOVIA GUTIERREZ as a Board Member of the Tulare Local Heath Care District, 12 with all the privileges and powers thereof, to obey the lawful orders of the Board of 13 Directors of the Tulare Local Health Care District, and to Order the RESPONDENTS 14 to Show Cause as to why they have not yet done so. 15 The Tulare Local Health Care District is a Hospital District organized pursuant to 16 Division 23 of the California Health & Safety Code. lt is governed by a five member Board, 17 who are elected for four year terms by the citizens of the District. Elections are done by 18 district, each director being elected by one geographically defined district. On July 11, 2017, 19 the Board Member for the 3rd District, Dr. Pannod Kumar, was voted out of office in a recall 20 election, and Senovia Gutienez was elected to his seat. 21 Board Chair Linda Wilbourn and Board Director RICHARD TORREZ, as well as ex- 22 legal counsel Bruce Greene and his firm, Baker & Hostetler LLP, have refused to recognize 23 Ms. Gutierrez as a Board Member by facetiously claiming that Cal. Elections Code §15400 24 delegates to the Board the authority to decide if and when an elected Board Member can 25 claim their seat on the Board. This is a purposefully obtuse reading of the statute. Elections 26 Code § 15400 states that the governing body "shall" declare as elected the person having the 27 highest number of votes. This is a ministerial announcement of a fact that has already 28 occuned, not an invitation for the Board to decide who may serve on the Board or when a PETITION FOR ALTERNATIVE WRIT OF MANDATE -2- I 2 3 4 5 publically elected Board Member may assume their lawful duties. In denying and delaying Ms. Gutierrez her seat, the RESPONDENTS have unlawfully denied SENOVIA GUTIERREZ the right to her elected office, as well as subve1ted the democratic decision of the Citizens of Tulare County. II. PARTIES 6 7 8 1. Petitioner, District Attorney of Tulare County. 2. Respondent, Richard Tonez, Director for the 1st District of the Tulare Local Health Care District. 9 10 3. Respondent, The Board of Directors of the Tulare Local Health Care District, dba Tulare Regional Medical District. 11 12 4. party in interest. 13 14 Bruce Greene, attorney at law, and the law firm of Baker & Hostetler, LLP, a real 5. Senovia Gutierrez, real paity in interest. 15 III. J1JRISDICTION 16 17 18 19 20 Jurisdiction is proper as the superior comt has original jurisdiction to issue writs on mandate. [Cal. Const. art. VI, § 1O; see Code Civ. Proc. § l 085 (writ may be issued by any court, except municipal orjustice coutt.]. Venue is proper in this Comt because Districfs Board of Directors is situated in this district. [Code Civ. Proc. § 394.] 21 IV. ARGUMENT 22 23 24 25 26 27 28 SUMMARY OF FACTS A. Background The Tulare Local Heath Care District was organized on November 27, 1945 under the provisions of Division 23 of the California Health and Safety Code, and as such is a public agency. The District provides health care services for the City of Tulare, as well as the southwestern areas of Tulare County. It maintains and operates a hospital, the Tulare PETITION FOR ALTERNATIVE WRJT OF MANDATE 2 Regional Medical Center, as well as other medical facilities. The District does business under 3 the name of Tulare Regional Medical Center, (TRMC herein). 4 TRMC is governed by five Board Members, who arc each elected by district. Each 5 Board Member serves a four year te1m, and regular elections are staggered, with a pmtion of 6 the Board up for election every two years. There has been controversy in the community over 7 the governance of TRMC. This resulted in two new Board Members, Kevin Northcraft and 8 Mike Jamaica, being elected dming regular elections held on November 8, 2016. The 9 10 incumbent Board Members held a majority of seats after this election, maintaining a 3-2 majority. 11 This situation changed when a recall election was called for the incumbent Board 12 Member for the 3rd District, Dr. Pannod Kumar. The recall election was held on July 11, 13 2017, which resulted in Dr. Kumar being recalled. During thal same election, SENVOVIA 14 GUTIERREZ was elected as the representative for the 3rd District. The election was ce1tificd 15 on July 21, 2017 by the Tulare County Registrar of Voters and widely repol1ed in the local 16 media. An election packet was shipped via Fed-Ex to TRMC by the Registrar and received at 17 10:00 a.m. on July 26, 2017. Senovia Guticnez took her Oath of Office on July 25, 2017, 18 19 20 administered by the Honorable Judge Gorelick. B. The Refusal to Announce Mrs. Gutierrez's Victory At the regularly scheduled Board Meeting on July 26, 2017, the first since the 21 election, the Board refused to announce Ms. Gutierrez's election, as required by Election 22 Code § 15400. Board Chair Wilbourn, relying on the advice of then Board counsel Bruce 23 Greene, claimed that the announcement of Ms. Guticn-cz's election was in the Chair 24 Announcements, rather than in body of the Agenda. She further stated that because of this 25 there was a possible Brown Act violation, and the matter would not be heard. 26 The TRMC Bylaws allow for any three Board Members to call a special meeting. On 27 July 27, 2017 Board Members Mike Jamaica, Kevin N01thcraft, and Senovia Gutein-ez called 28 a special meeting to carry on the business of TRMC. Board Members Linda Wilbourn and PETITION FOR ALTERNATIVE WRIT OF MANDATE ~4~ l 2 RICHARD TORREZ, by and tlu·ough their legal counsel Bruce Greene, refused to 3 aclmowledge the authority of the newly constituted Board. Mr. Greene stated in an email sent 4 to Board Members on July 27, 2017) that; 5 "Until EC Sect 15400 is complied with, the person having the highest number of votes 6 after a recall election is NOT a member of the Board. As you are well aware, the 7 Board has not declared Ms. GutieITez elected to the Board, and therefore she is not a 8 member of the Board at this time. Accordingly, her signature on the purpmted agenda 9 is of no legal significance, and to the extent that the purpo1ted agenda was intended to 10 call for a special meeting, it is likewise of no legal significance. 11 Any actions which you, Mr. Jamaica and Ms. Gutie1Tez may take, should you elect to 12 proceed with your meeting tomorrow will be if no legal force or effect. The District 13 has no intention of providing you with any assistance in holding this unauthorized 14 meeting." (see Northcraft Dec., Exhibit #5) 15 Undete1Ted, Board Members Kevin No1thcraft, Mike Jamaica, and Scnovia Gutienez 16 held the special meeting on July 27, 2017. At this meeting several Board actions were taken, 17 including terminating Bruce Greene and Baker & Hostetler LLP, as legal counsel. I3oard 18 Members Linda Wilbourn, RICHARD TORREZ, and former counsel Bruce Green have 19 refused to acknowledge or obey any of the Board's directives pursuant to this July 27, 2017 20 21 meeting. The nexl regularly scheduled Board Meeting occurred on August 23, 2017. The day 22 of the meeting Linda Wilbourn, RICHARD TORREZ, by and through their agent Bruce 23 Greene, sought to orchestrate a cancelation of the meeting in order to obstruct Ms. Gutieffez 24 from exercising her power as the lawfully elected Board Member for the 3rd District. On 25 August 23, 2017, at 3:09 p.m. RESPONDENT Greene sent an email stating that Board Chair 26 Linda Wilbourn was resigning effective as of noon that day. He fmther stated that Board 27 Member RESPONDENT RICHARD TORREZ would not be attending the meeting, for 28 unspecified reasons, and therefore the meeting would be canceled for a lack of quorum. A PETITION FOR ALTERNATIVE WRIT or MANDATE -5- I 2 letter from Mrs. Wilbourn was provided in the email, stating that she bad resigned at noon, 3 and the cancelation notice posted on the meeting room door stated the same. 4 5 6 7 8 9 TRMC Bylaws require a majority of Board Members to be present to provide a Quorum. lf one buys into the fiction that Ms. GutieITez is somehow not a Board Member at this time, Mrs. Wilbomn's resignation would leave the Board with three active members. As both Board Member Kevin Northcraft and Mike Jamaica were present, they would have constituted a majority of the Board. Realizing his e1rnr, Mr. Greene sent out a new email at 4:00 pm stating that Mrs. Wilbourn had made a mistake and had intended to resign the IO following day, and therefore he was canceling the meeting due to a lack of quorum. This ll constituted a blatantly transparent attempt to once again deny Ms. Gutierrez's Board seat, 12 13 14 using the fiction that the Board must somehow approve her election in order for it to be valid. The majority of the Board Members, consisting of Ms. Gutienez, Mr. Jamaica, and Mr. N01thcraft, showed up to the August 23,2017 Board Meeting to find the meeting room 15 locked and a notification that the meeting had been canceled affixed to the meeting room 16 door. They proceeded to the lobby of the building where they conducted the meeting. Board 17 Member RlCHARD TORREZ and purported legal counsel Bruce Greene have refused to 18 acknowledge the validity of this August 23, 2017 meeting, claiming that Senovia Gutie1Tez is 19 not a Board Member. One of the many Board actions at that meeting was the removal of 20 21 22 23 24 Bruce Greene and Baker & Hostetler, LLP, as legal counsel. Both the remnants of the old TRMC Board and Bruce Greene have continually defied this removal action. The voters of the 3i·d District have been denied their democratic choice for an elective representative in their hospital district. RESPONDENTS first created a fiction that Ms. Guticnez's election was not effective until they approved of it. Then they manufactured a 25 delay claiming it was not a valid agenda item, and then orchestrated a cancelation of the 26 August 23, 2017 regularly scheduled meeting in an ongoing eff01t to deny her the duties and 27 responsibilities of her elected position. 28 PETITION FOR ALTERNATIVE WRJT OF MANDATE -6~ l 2 C. Bruce Greene's and Baker & Hostetler LLP's Refusal to Follow the Lawful Orders 3 of the Board 4 Bruce Green and Baker & Hostetler LLP have continuously refused to acknowledge 5 the lawful orders of the Board since the meeting on July 27, 2017, claiming that Senovia 6 Gutienez is not a Board Member. In doing so, Baker & Hostetler LLP has refused to 7 acknowledge the Board's action to terminate Baker & Hostetler, LLP as general counsel for 8 the District, and has refused to provide the District with its legal files. On August 28th, 2017 9 Attorney Peter W. James, of Baker & Hostetler LLP drafted and emailed a letter to the 10 Board's current legal counsel, Nikole Cunningham of McCormick & Barstow. James 11 specifically stated that RESPONDENTS do not recognize Ms. Gutierrez as a Board Member 12 and therefore refuse to recognize their tennination as counselor or to turn over any legal files 13 14 to newly appointed counsel, McCormick & Barstow. The District has numerous, urgent legal issues, including a trial in case #VCU266902, 15 Martin-Soares, Deanne v. Tulare Local Health Care District, that was set for trial on 16 September I I, 2017. Both firms, Baker & Hostetler and McCormick and Barstow, have 17 appeared on this case claiming to be general counsel, making either settlement or trial 18 impossible. On September 6, 201 7, this Cou1t vacated the September 11, 2017 trial. A jury 19 trial setting hearing is scheduled for October 4,2017. The obstreperous actions of 20 RESPONDENTS serve only to delay the progress of this trial, resulting in a needless waste of 21 judicial time and resources, as well as fmiher burdening Tulare Local Health Care District. 22 V. LEGAL ANALYSIS 23 24 25 26 A. Authority of Comt to Issue An Ex Parte Writ of Mandate The People bring this suit pursuant to California Code of Civil Procedure sect. 1085(a) which states: 27 "A writ of mandate may be issued by any comi to any inferior tribunal, corporation, 28 board, or person, to compel the performance of an act which the law specially enjoins, PETITION FOR ALTERNATIVE WRIT OF MANDA TE ~7~ I 2 as a duty resulting from an office, trust, or station, or to compel the admission of a 3 party to the use and enioyment of a right or office to which the party is entitled. and 4 from which the party is unlawfully precluded by that inferior tribunal. corporation. 5 board, or person." (CCP § 1085). 6 The statute itself confers upon the Court the power to decide this issue. In order to 7 8 9 10 ll 12 13 14 successfully bring a Writ of Mandate, the People must be able to show that they have a beneficial interest in the issue, that there is no other adequate remedy at law, and that the defendant failed to pe1form a non-discretionary duty imposed upon them by law. As set forth below, RESPONDENTS use of Cal. Elections Code§ 15400 to deny the authority of the lawfully elected representative of the 3rd District is a maHer of public importance impacting the citizens of this County. The defendants have a non-discretionary obligation to recognize the authority ofSenovia Gutie1Tez as a Board Member. A Writ is the only relief that will provide an adequate and immediate remedy at law. 15 16 17 18 B. The People of Tulare County. as Represented by the District Attorney. Have a Beneficial Interest In the Issues Presented The District Attorney's Office has a beneficial interest in this case because the duties 19 of the District Attorney encompass the preservation of the democratic process and the 20 protection of the constitutional rights of the Citizens of Tulare County, including those who 21 22 23 24 25 26 27 28 elected Ms. Gutienez to be their representative. A governmental entity may bring a writ of mandate, so long as it has a beneficial interest (Contra Costa v. Social Welfare Bd (1962) 199 Cal. App. 2d 468, Los Angeles Count v. Tax Appeals Bd No. 2 267 Cal. App. 3d 830). These issues presented by this case are of public importance, and fall within the District Attorney's responsibilities. "The public interest" exception satisfies the beneficial interest element where the question is one of an important public right and the object of the action is to enforce a public duty". (Friends of Oceana Dunes, Inc. v. San Luis Obispo Cty. Air Pollution Control Dist. (2015) 235 Cal. App. 4th 957, 962). The unlawful denial of an PETITION FOR ALTERNATIVE WRJT OF MANDATE ~8- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 elected official's authority, particularly when it involves a community hospital, is of great public interest. However, a broader and more significant interest lies in the legal inte1pretation of Election Code section 15400, which applies to all local governing bodies in the State of California, which is a matter of tremendous public impo1iance. The Com1s have found that the standard of care for indigents is a matter of public importance (Madera Community Hosp. v Madera (1984) 155 Cal. App. 3d 136, 143), as well as the calculation of AFDC benefits is a matter of public importance (Green v. Obledo (1981) 29 Cal. 3d 126, 144 ), and the interpretation of laws regulating the issuance of pe1mits by Air Quality Boards (H&S 42300) (Friends of Oceana Dunes, Inc. v. San Luis Obispo Cty. Air Pollution Control Dist. (2015) 235 Cal. App. 4th 957,962). Whether a governing body may use Cal. Elections Code §15400 to deny an elected Board Member's legal authority is clearly a matter of equal or greater impo1i, and therefore must qualify as a matter of public importance. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. A Writ of Mandate is The Only Sufficient Remedy It could be argued that the primary issue in this case is the title to office, and therefore the matter should proceed via a quo warranto proceeding. Petitioner intends to file a quo warranto application with the Attorney General, arguing that the Board as a legal entity usmped the Ms. Gutienez's office by failing to recognize her as a Board Member, reducing a five member Board to a four member Board, with each Board Member subsuming a portion of the power of Ms. Gutienez's vote on the Board. However, a writ of mandate is the more appropriate remedy, as the issues presented here go beyond the issue of title to office. It is often stated that a remedy for a claim of title will not lie in mandamus. (People v. Olds (1853) 3 Cal. 167). This is clearly the case when a party seeks to lie superior legal title to an office over another party. (Morton v. Broderick (1897) 118 Cal. 474,481). However, in this case there is no dispute over who is the lawful representative for the 3rd District. The previous representation, Dr. Kumar, was subject to a recall election which he lost on July 11, PETITION FOR ALTERNATIVE WRIT Of MANDATE -9- 1 2 2017. Pursuant to Cal. Elections Code section I I 384, Dr. Kumar was removed from office 3 following his successor's qualification, which occurred when Ms. Gutierrez took the Oath of 4 Office on July 25th, 2017. He has never asserted that he maintains the office, and has not 5 attempted to exercise the authority of that office. 6 7 8 9 10 11 12 The issues of title to office here are incidental to the primary issue of whether the "shall declare" po11ion of Elections Code section 15400 can be used to deny the authority of a lawfully elected Director. It is well settled law that mandamus may be brought when the issues of title are incidental (Morton v. Broderick (1897) 118 Cal. 474, Stout et al v. Democratic County Central Committee of City and County ofSan Francisco et al. (1952) 40 Cal.2d. 91, 94, lvlcKannay v. Horton (1907) 151 Cal. 711,714). Here, the issue of title is incidental to 1) The Boards failure to declare Ms. Gutierrez a Board Member as required by 13 Elections Code section 15400; and 2) The failure Director TotTez, general counsel Bruce 14 Greene, and Baker & Hostetler to follow the lawful directives of the Board, claiming that 15 16 17 18 19 20 21 22 23 Senovia Gutie1Tez has no lawful authority due to the Board's initial failure to "declare" the fact of her election. Time is of the essence in this matter. Currently, TR.MC, including their general counsel, is operating without the consent of the majority of the Board, and has been doing so since July 26th, due to a faulty interpretation of Elections Code section 15400. Every action taken without the consent of the elected board does i1Teparable damage to the District, the constitutional rights of the Citizens of Tulare County, and the democratic process in our County. A writ is the swiftest, surest remedy to cure a situation of public importance where ineparable damage is done as each day passes. 24 25 26 27 28 PETITION FOR ALTERNATIVE WRJT OF MANDATE - 10- 1 2 D. The Failure to Declare Ms. Gutieuez a Board Member Pursuant to E.C. § 15400. ,., Cal. Elections Code section 15400 states: .) "The governing body shall declare elected or nominated to each office voted on at 4 each election under its jurisdiction the person having the highest number of votes for 5 the office, ... " 6 The use of "shall" in the language makes it clear that this is not a discretionary act, it 7 8 9 10 11 12 is a duty compelled by law. The Board may not decline to accept a duly elected Board Member, it may not declare someone a Board Member who has not been duly elected 1• Elections Code section 15400 appears in Elections Code Division 15, Chapter 5, which is entitled "Announcement of Results", fm1her indicating that governing bodies were never intended to have any discretion as to whether to accept lawfully elected candidates. In a recall election, it is the intent of the law that a candidate takes office immediately. 13 14 15 16 17 18 Cal. Elections Code section 11384 states that once an officer has been recalled, he must be removed from office upon the qualification of his successor. Elections Code section 11386 states that the winning candidate in a recall election must qualify in l O days after their election. These statutes clearly illustrate the common sense public policy that recall candidates are to immediately take office upon election. The Board clearly had a duty to declare Ms. Gutie1Tez a Director on the first regularly 19 20 21 22 23 24 25 scheduled Board Meeting on July 26th, 2017. The concerns expressed by Linda Wilbourn and Bruce Greene were specious, at best. The announcement of Ms. Gutierrez's election was not a matter for a vote, or even a discussion, it is merely an acknowledgement of an existing fact. It does not even fall within the purview of Government Code section 54954.2. Even if the Brown Act somehow did apply, it could not trump the right of an elected representative to ascend to their rightful position. 26 27 28 1 Exceptions exist for elections that allow for a plurality of votes or other methods of election. (Ele.C. 15452) PETITION FOR ALTERNATlVF: WRIT OF MANDATE - 11- 1 2 3 T01i-ez and former Board Chair Wilbourn could have easily cured their enor by agreeing to a special meeting to make the announcement. They both not only failed to do so, 4 but also refused to atlend special meetings called by the other Board Members. This clearly 5 indicates that the motive behind failing to declare Ms. Gutierrez as a Board Member was not 6 concern about the Brown act, but rather a conce11ed attempt to deny her the rightful authority 7 of her elected office. 8 Board Members Linda Wilbourn and Richard Tonez, and their legal counsel, Bruce 9 Greene, further exacerbated the situation by attempting to orchestrate the cancelation of the 10 meeting on August 23, 201 7. Mrs. Wilbourn, per her letter, resigned at noon on that day, and 11 the reduction of Board Members would have allowed Mike Jamaica and Kevin No1thcraft to 12 13 14 15 16 constitute a quorum for a meeting. Therefore, at 4:00 p.m., Mr. Greene retroactively claimed that Mrs. Wilbourn really intended to resign the next day, which would leave the meeting without a quorum, if one did not count Ms. Gutierrez as a Board Member. This was yet another blatant attempt to deny Ms. Gutierrez her rightful position based on the fiction that the Board must somehow approve her election. 17 18 19 20 E. Ms. GutieITez Status as the Director for the Third District is Unaffected By The Failure of the Board to "Declare" Her A Board Member Under E.C. § 15400. Bruce Greene and Baker & Hostetler have put forth the theory that because Cal. 21 Elections Code section 15400 requires that Board to declare a winning candidate a Board 22 Member, no one can be a Board Member without the Board declaring them one. In doing so, 23 they have done an admirable job of standing the statute on end and twisting it to mean the 24 exact opposite of what the legislative intent is. The clear intent of the statute is to require 25 Boards to accept the oulcomes of elections, not to provide them the means of preventing 26 opponents from serving on the Board. 27 28 Elections Code section 15400 use of "shall" makes it clear that the Board is to accept a newly elected Board Member, period. It limits the power of the Board, rather than giving PETITION FOR ALTERNATIVE WRIT OF MANDA TE -12- 1 2 them the power to ove1turn or obstruct the democratic process. Elections Code section 11386 3 makes it clear that the new Board Member is a Board Member at the time of their 4 qualification, as at that time the incumbent Board Member is removed from office. Therefore, 5 Ms. Gutienez cun-ently is a fully empowered Board Member, and she has been since the day 6 she took her Oath of Office on July 25th, 2017. 7 8 F. The Failure of Richard Tonez. Bruce Greene. and Baker & Hostetler to Obey 9 The Lawful Directives of The Board. 10 Ms. Gutienez has been subject to an orchestrated plan to intrude upon and usmp her 11 elected office. The first pa11 of the plan was enacted when Board Chair Wilburn and legal 12 counsel Bruce Greene advanced the erroneous theory that an elected candidate is not a Board 13 14 15 Member unless the Board declares them to be one. Once the specious legal the01y that Ms. GutieITez cannot be a Board Member was advanced, the second pm1 of the plan was enacted, which was to make sure that she was never actually declared a Board Member. First, the 16 Board claimed concern about a Brown Act error, and removed the item from consideration at ]7 the July 26th, 2017 meeting. Then, they refused to hold or recognize and special meeting to 18 c01Tect the error. Finally, they manipulated the timing of Mrs. Wilboum's resignation in an 19 e:ffo1t to deny a quorum for the August 23rd, 2017 meeting. 20 During the special meeting on July 27, 2017, and the regular scheduled meeting held 21 on August 23rd, 2017, Board Members Mike Jamaica, Pe1ter Northcraft, and Senovia 22 GutieITez voted to remove Bruce Greene and Baker & Hostetler, LLP, as legal counsel for 23 TRMC. Baker & Hostetler and Bruce Greene have continually refused to acknowledge this 24 termination, continuing to act in the Boards name and refusing to turn over files to the 25 Board's new counsel, McCormic & Barstow, LLP. 26 This has created a biza!l"e situation where an Bruce Greene and Baker & Hostetler 27 insist that they are representing the Board, but they are doing so against the express wishes of 28 the Board. They claim the power to do this because there has been no «declaration" under PETITION FOR ALTERNATIVE WRJT OF MANDA TE - 13 - 1 2 3 4 5 Elections Code section 15400, however they orchestrated events to prevent said declaration. This is an untenable situation which has caused the District to be rudderless for over a month and a half and thrown the management of the District into disa1rny. Therefore, the People ask for the following relief. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PETITION FOR ALTERNATIVE WRIT OF MANDA TE ~14~ .. PRAYER 2 3 4 WHEREFORE, Petitioners pray for the following relief: 1. For this Court to issue U1e Alternative Writ and Mandate directing that SENOVIA GUTIERREZ was the lawful Iloard Member for the 3rd District of the Tulare Local 5 Health Care District nunc pro tune as of July 25th, 2017, with the full powers and 6 privileges thereof from that date forward; 7 8 9 10 I1 12 13 2. To Mandate that all Board Members of the Tulare Local Health Care District, including RICHARD TORREZ, recognize SENOVIA GUTIERREZ as the lawfully elected and seated Board Member for the 3rd District of the Tulare Local Health Care District as of July 25th, 2017. 3. To award any further relief as the Court may deem just and proper. Respectfully submitted this 11 th day of September, 2017. 14 15 16 TIM WARD DISTRICT ATTORNEY 17 18 TREVOR J. HOLLY DEPUTY DISTRICT ATTO 19 20 21 22 23 24 25 26 27 28 PETITION FOR ALTERNATIVE WRIT OF MANDATE ~ 15 ~ BakerHostetler 09/21/17 Invoice Date: 50422868 Invoice Number: B&H File Number: 07110/093734/000021 34-0082025 Taxpayer ID Number: Page 1 Tulare Local Healthcare District 869 North Cherry St Tulare, CA 93274-3462 Regarding: 28 exhibitsticker.com EXHIBIT District Attorney Lawsuit For professional services rendered through September 20, 2017 BALANCE FOR THIS INVOICE DUE BY 10/21/17 $ 24,815.10 it Please include this page with payment Invoice No: 50422868 Firm Contact Information Bernadette O'Neill (310) 979-84 70 Boneill@bakerlaw.com Please Remit To: Baker & Hostetler LLP P.O. Box 70189 Cleveland, OH 44190-0189 FOR WIRE REMITTANCES: Baker & Hostetler LLP KeyBank, N.A., Cleveland, OH Account No: 1001516552 / ABA 041001039 SWIFT Code: KEYBUS33 Reference Invoice No: 50422868 Email the "Remittance Copy" to bakerlockboxl@bakerlaw.com BAKER 0001305 Bake r Host etler 09/21/17 Invoice Date: 50422868 Invoice Number: B&H File Number: 07110/093734/000021 34-0082025 Taxpayer ID Number: Page 2 Tulare Local Healthcare District 869 North Cherry St Tulare, CA 9327 4-3462 District Attorney Lawsuit Regarding: For professional services rendered through September 20, 2017 $ Fees $ Expenses 23,195.00 1,620.10 $ BALANCE FOR THIS INVOICE DUE BY 10/21/17 24,815.10 Baker & Hostetler LLP Atlanta Houston Chicago Los Angeles Cincinnati New York Cleveland Orlando Columbus Philadelphia Denver Costa Mesa Washington, DC Seattle BAKER 0001306 09/21/17 50422868 093734.000021 Page 3 Invoice Date: Invoice Number: Matter Number: Tulare Local Healthcare District Regarding: District Attorney Lawsuit Matter Number: 093734.000021 Amount Hours Rate Welsh Robert C 25.00 $ 685.00 Greene Bruce R 7.00 745.00 5,215.00 MacDonald, Hugh A. 3.80 225.00 855.00 Name $ 35.80 Total $ 17,125.00 23,195.00 Hours Amount Attend to District Attorney ex parte motion; joinder motions (review documents; draft responsive declarations; telephone conferences with B Benzeevi; telephone conferences with R Torrez); coordinate with Orrick 5.00 3,725.00 MacDonald, Hugh A. Review file and prepare indexed binders regarding Writ of Mandate, Temporary Restraining Order, Application to Sue in quo warranto, and Gutierrez Joinder materials for September 15, 2017 hearing; transmit to Mr. Welsh. 3.50 787.50 09/14/17 Welsh Robert C Communicatio ns with client regarding ex parte hearing; Review ex parte motions filed by District Attorney and McCormick Barstow firm; communicatio ns regarding response; review and revise Mr. Greene's declaration; communicatio ns with attorneys at Orrick law firm regarding opposition to be filed by HCCA. 2.50 1,712.50 09/15/17 Greene Bruce R Attend to hearing matters; telephone conferences with B Benzeevi, M Grossman, R Welsh 2.00 1,490.00 09/15/17 MacDonald, Hugh A. Update scanned Writ of Mandate, Temporary Restraining Order, Application to Sue in quo warranto, and Gutierrez 0.30 67.50 Date Name Description 09/14/17 Greene Bruce R 09/14/17 Baker&Hostetler LLP Atlanta Houston Chicago Los Angeles Cincinnati New York Cleveland Orlando Columbus Philadelphia Denver Costa Mesa Washington, DC Seattle BAKER 0001307 Descrietio n Name Date 09/21/17 50422868 093734. 000021 Page4 Invoice Date: Invoice Number: Matter Number: Tulare Local Healthcare District Hours Amount Joinder materials to file and server archive. 09/15/17 Welsh Robert C Prepare for and attend ex parte hearing in Tulare Superior Court; travel to Visalia for hearing; travel back to Los Angeles. 9.90 6,781.50 09/17/17 Welsh Robert C Review reply memorandum submitted by Barstow McCormick firm; conduct legal research regarding cases cited in reply; review our expert report; review case law regarding mandatory injunctions; attend conference call with client and Mr. Grossman. 2.60 1,781.00 09/18/17 Welsh Robert C Prepare for and travel to Visalia for ex parte hearing; attend hearing; conference with client and Mr. Grossman following hearing; travel back to Los Angeles. 10.00 6,850.00 35.80 23,195.00 Total Expenses and Other Charges 09/20/17 09/20/17 845.00 Ground Transportation Local (E 109) Agnes K Lindsay dba All Unique Limousine LLC Return Travel from Tulare County Municipal Court 221 S Mooney Blvd Visalia, CA 93291 9/18/2017; Inv. 1356 Ground Transportation Local (E 109) Agnes K Lindsay dba All Unique Limousine LLC Travel to Tulare County Municipal Court 221 S Mooney Blvd Visalia, CA 93291 9/15/2017; Inv. 1356 773.00 Subtotal - Ground Transporta tion Local (E109) _ _ _1..,_,6_1_8_.0_0_ 09/14/17 2.10 Copier/ Duplication (E101) 21 Copies Subtotal -Copier/ Duplicatio n (E101) _ _ _ _2_.1_0_ Total $ 1,620.10 Baker&Hostetler LLP Atlanta Houston Chicago Los Angeles Cincinnati New York Cleveland Orlando Columbus Philadelphia Denver Costa Mesa Washington, DC Seattle BAKER 0001308 Case 17-01095 Doc 4 EXHIBIT 29 1 2 3 4 5 6 7 8 9 10 11 MARSHALL B. GROSSMAN (STATE BARNO. 35958) ra@Jorrick.com K, IIBRRINOTON & SUTCLIFFE LLP 777 South Figueroa Street. Suite 3200 Los Angeles, CA 90017-5855 Telephone: +1213 629 2020 Facsunile: + 1 213 612 2499 CYNTHIA J. LARSEN (STATE BAR NO. 123994) clarsen@Jonick.com MICHAEL C. WEED (STATE BARNO. 199675) m com 0 RRINOTON & SUTCLIFFE LLP 400 Capitol Mall, Suite 3000 Sacramento, CA 95814 Telephone: +1 213 629 2020 Facsimile: +1 213 612 2499 Attorneys for Plaintiff Healthcare Conglomerate Associates, LLC 12 13 SUPERIOR COURT OF THE STATE OF CALIFORNIA 14 COUNTY OF LOS ANGELES 15 16 HEALTHCARE CONGLOMERATE ASSOCIATES. LLC, 17 18 19 20 21 Plaintiff, Case No. BC61 6133 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF v. TULARE LOCAL HEAL1H CARE DISTRICT DBA TULARE REGIONAL MEDICAL CENTER; DOES 1 through 20, Defendants. 22 23 24 25 26 27 28 COMPLAINT FOR BREACH OF CONTRACT AND DECLAM.TORY RELIEF exhibitsticker.com Filed 12/28/17 Filed 12/28/17 Case 17-01095 1 Plaintiff HealthCare Conglomerate Associates, LLC brings this complaint for breach of 2 contract and declaratory relief against Defendant Tulare Local Health Care District dba Tulare 3 Regional Medical Center and DOES 1 through 20 (oollectively 4'Defendants") and alleges as 4 follows: 5 First Cause of Action - Breach of Contract 6 (HCCA vs all Defendants) 7 PARTIES 8 9 10 11 1. Plaintiff HealthCare Conglomerate Associates, LLC ("HCCA") was and now is a California Limited Liability Company with its principle place of business in Los Angeles, California, 2. Defendant Tulare Local Health Care District dba Tulare Regional Medical Center 12 (the "District,,) was and now is a local healthcare district in Tulare, California and organized 13 under sections 32000 et seq. of the California Health and Safety Code. The District's Bylaws 14 provide that the Board of Directors of the District (the "Board") is to be comprised of :five elected 15 directors. 16 3. 17 18 On May 29, 2014, HCCA and the District entered in.to a written Management Services Agre.ement C'MSAn) regarding services to be rendered to the District by HCCA. 4. HCCA does not know the true names or capacities of DOES 1 through 20. 19 inclusive, and therefore sues these defendants under fictitious names. HCCA is infor.med and 20 believes and thereon alleges that at all times herein mentioned each of the Defendants sued herein 21 as DOES l Q20, inclusive, acted in concert as agent, employee, firumcier or otherwise of each of 22 the remaining Defendants and was at all times acting as such including their efforts to in.duce the 23 District to breach the MSA as hereafter alleged, 24 25 JURISDICTION. VENUE, AND ARBITRATION 5. Section 11 (d) of the MSA provides that "the exclusive jurisdiction and venue of all 26 actions claims, or other legal proceedings arising in my manner pursuan~ to this Agreement, shall 27 be vested in the [Los Angeles Superior Court] and in no other." 28 6. All or part of this dispute is subject to arbitration under California Code of Civil COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF Doc 4 Filed 12/28/17 Case 17-01095 1 2 3 4 5 6 Doc 4 Procedure section 1281.2 and section lO(e)(tl) of the MSA which reads as follows: If the claim of default is disputed by the party :receiving such notice [ of default], within ten (10) business days thereafter the party receiving the notice shall give notice t(? the charging party that the party receiving such notice disputes that the factual matters alleged constitute a default under this Agreement. If the parties cannot resolv e such dispute .•. the parties shall submits such matter to binding arbitration in Los Angeles County, California, in acoordance with the American Health Lawyers Associates Alternative Dispute Resolution Services Rules and Procedure for Arbitration, and applying the Law of the State. 7 8 HCCA specifically asserts the applicability of. and does not waive, the 9 arbitration. HCCA has served upon the District a formal letter notice of material parties' agreement to breaches of the 10 MSA and defaults pursuant to sections lO(a)(i) and l O(e)(i) of the MSA. 11 defaults of the M?A by the Defendants which were curable have not been 12 of the breaches and defaults are not capable of being cured. Plainti ff has complied with all 13 applicable claims procedures pertaining to presentation of claims agains t the The breaches and · cured and the balance 15 District, as set forih in the MSA. The parties have yet to meet and.confer to determine if they will jointly waive their right to arbitration and proceed with this civil action. 16 FACTUAL ALLEGATIONS 14 17 18 19 20 21 22 23 24 25 26 7. Pursuant to the terms of the MSA, HCCA was engaged to manage and operate the District's acute care hospital located in Tularet California (the "Hosp ital") together with related clinics and other facilities as defined in the MSA. Previously, on Januar y 10, 2014, HCCA and the District entered into a written short term management agreement as an interim placeholder agreement (the "Interim MSA") pending the completion of their negoti ations and execution of the MSA. This action seeks relief under the express terms of the MSA. 8. In the years leading up to the engagement ofHCCA as the Manager of the District, the management of the District and the Hospital under District stewar dship was in shambles. For example, over a period of seven years the District employed six differe nt Chief Executive Officers and at least a half dozen Chief Financial Officers. Prior to the signin g of the Interim 27 MSA, the District suffered severe and progressively worsening financial 28 million in the immediately preceding six months; over $8 million il_1 the losses, namely, over $4 immediately preceding -2COMPLAINT FOR. BREACH OF CONTRACT AND DECLARATORY RELIEF Filed 12/28/17 Case 17-01095 1 fiscal year; over $16 million in the prior three fiscal years; and a combined loss ofjust under $5 2 million in the preceding ten year period. The Hospital's operating margin over the preceding ten 3 years averaged a negative 0.72. 4 9. In 1994, following the ''North.ridge Earthquake" which badly damaged hospital 5 facilities in Southern California; Senate Bill 1953 mandated California hospitals be rebuilt to 6 meet more stringent seismic guidelines. The District sought voter approval in 2005 for an $85 7 million General Obligation bond offering to construct a new hospital tower which would bring 8 the existing Hospital into compliance. The funds raised by the District from the sale of those 9 bonds were exhausted in 2014 even though the new tower was unoccupied and only two thirds 10 11 complete. Today the Hospital remains out of compliance with Senate Bill 1953. 10. In addition, prior to the Interim MSA, the construction project for the new tower 12 was mired in multiple lawsuits and unpaid claims with no prospects for its completion. At that 13 time the District was in critical financial condition with the proposed new tower incomplete and 14 some three years overdu~ and the District lacked the funds necessary to complete the new tower. 15 11. The financial condition of the District was so bad for the fiscal years ending 2012 16 and 2013. that its outside independent auditors :refused to issue a "clean opinion'' and instead 17 imposed a "going concern" condition to its audit report opin,ion. Such an opinion meant that the 18 auditors had grave concern about their client's ability to avoid liquidation over the next 12 19 months. Under the management of HCCA, the fmancial conditions improved greatly and this 20 condition was removed, which earned the District a clean or unqualified opinion from its auditors. 21 12. HCCA is informed and believes and thereon alleges that in the years leading lip to 22 2014, and thereafter, the volume of inpatients at the Hospital was materially :reduced by nearly 23 40% of the prior volume and deliveries volume reduced by some two thirds. HCCA is informed 24 and believes and thereon alleges that patient volume was also reduced because doctors in the 25 geographical area of the Hospital, specifically including some actiD;g as or related to the then 26 Board and those serving in -leadership roles on the Hospital's Medical Executive Co:mmittee, were 27 referring patients to other facilities. 28 13. HCCA is informed and believes and thereon alleges that before the Interim MSA COMPLAINT FOR BREACH OF CONTRACT AND DECLAllATORY R.a.lEP Doc 4 Filed 12/28/17 Case 17-01095 1 was signed, the fimmcial deterioration of the District left it with less than a month's worth of cash 2 for its operations. In addition, the District was operating under and subject to a five-year 3 Corporate Integrity Agreement it was required to enter with the Federal Office of Inspector 4 General to redress a history of its physician contracting practices. s 6 7 14. In December 2012, the Board of the District was reconstituted and began efforts to address and correct the financial and administrative conditions it faced. 15. · In 2013, the District solicited and received bids from diverse parties, including 8 HCCA, to take over the management of all of the District's operations, including those of the 9 Hospital. In December 2013, the Board unanimously selected HCCA to do so from among the 10 bidders. The selection of HCCA was followed by the execution of the Interim MSA in January 11 2014. The Board's unanimous selection ofHCCA for the long term was in May 2014, and led to 12 the execution of the long term and now extant MSA. 13 16. In or about January 2016, the federal Center for Medicare and Medicaid Services 14 (CMS) performed a survey of the Hospital's performance in past years and found ·a history of 1S gross negligence by .the physician leadership at the Hospital and threatened to exclude the 16 Hospital from federal funding. The Hospital receives approximately 80% of its funding from. I7 governmental sources, so such a step by CMS would have caused the immediate closure of the 18 Hospital. HCCA, as the manager, responded with prompt action to help secure finimcial stability 19 . for the Hospital and improved patient care for its patients. 20 17. In addition, because of the non-compliance of the previous physician leadership 21 and the imminent threat to the Hospital• s ability to qualify for federal funding after the CMS 22 survey, the Board disaffiliated itself from its then existing medical staff and instead associated . 23 itself and the District with a new medical staff organization. After this restructuring and under 24 the new leadership of the medical staff, all doctors who previously worked at the Hospital 25 retained all of their clinical privileges. Inmid~2016, ~MS found the prior deficiencies were 26 properly addressed and corrected - corrections which. included the affiliation with a new medical 27 staff organization. 28 18. ' Under HCCA management, virtually all Hospital employees desiring employment -4COMPLAIN'!' FOR BREACH OF CONTRACT AND DECLARATORY RELJEF Doc 4 Filed 12/28/17 Case 17-01095 1 were hired by HCCA. In addition. to date HCCA has given two across-the-board pay raises as 2 well as dozens of additional individual pay increases. Pay had been frozen for years at the 3 District prior to the MSA. HCCA employs for the Hospital nearly 500 trained medical 4 professionals and support staff. s 19; In the three-plus years under HCCA management, the Hospital has had several 6 dozen months of positive net margins as confirmed by lmllWU audits. In the first six months 7 HCCA was on board. the Hospital had a $1.3 million net margin, and in the first full fiscal year 8 under HCCA. the Hospital recognized a net margm exceeding $7 million. Similady, that first full 9 fiscal year under HCCA saw a 10% operating margin. 20. Fitch Ratings, a leading national credit rating firm, rates the firum.cial stability of 11 United States hospitals. Such ratings are relied upon by financial institutions and bond investors. 12 Under HCCA, Fitch has upgraded the District's revenue bond ratings, and updated its outlook for 13 the District :from "negative" to "positive." 14 15 16 17 18 19 21. Just eight months after HCCA took over the management of the District's operations, Fitch Ratings stated in its August 28, 2014 ratings :report: SIONS OF TURNAROUND: The Stable Outlook reflects the dramatic turnaround in operating and :financial performance since Fitch's last review in February 2014 ..•.Fitch believes the positive trend over the last few months indicates performance improvement plans taking hold and signal recovery. 22. In its report dated August 27, 2015, Fitch's positive outlook continued. Fitch 20 reported that the District's financial condition "reflects sustained evidence of operational and 21 financial turnaround and stabilization." It also stated that "[u]nder HCCA's leadership. operating 22 and financial performance improved drmuatically over the last 18 months." 23 23. On August 23, 2016, Fitch again reported positive results for the District and 24 stated clearly its view of the reason for the success: "[The District] has sustained the trend of 25 strong operating performance since Fitch•s last rating review in August 2015. Ongoing work by 26 the management team in place since January 2014 has brought a financial turnaround, and double 27 digit operating EBITDA margins are expected to continue." 28 24. Similarly. on October 25, 2016, the national bond rating fum Moody's Investors -5COMPLAINT FOR: BREACH OF CONTRACT AND DECLARATORY RELIEF Doc 4 Filed 12/28/17 Case 17-01095 1 Service revised the District's outlook rating from negative to stable. Moodyt s emphasized the 2 "improved operating performance beginning in fiscal 2014, driven by a new management team" - 3 namely, HCCA. Moody's explained in more detail, stating: 4 5 6 7 8 9 10 11 12 13 14 15 Beginning in fiscal 2014, a new management team a:ffiliated with Healthcare Conglomerate Associates (HCCA) has generated significantly improved financial performance, growing revenues and reducing unnecessary costs. Operating revenues in fisc~ 2015, for example, increased by close to 16.8%, resulting in a good 10.5% operating margin and marking the district's first positive operating margin since fiscal 2011. Previously, due largely to significant declines in patient volume and capital project costs, the district had three consecutive years of negative operating margins from :fiscal 2012 through fiscal 2014. 25. Moody's also opined that the positive outlook for the District would continue, due to HCCA's management: The district's new :financial management team [HCCA] bas succeeded in reversing the district's past trend of weak operating performance, with the district's liquidity and operating margins demonstrating notable improvement. We believe that the current management terun will remain in place over the intermediate term. maintaining a trend of stable financial operations. 26. Under HCCA 's management. the Hospital has shown a profit and the District bas 16 eajoyed a far better than average net margin and :financial stability it bas not experienced in over a 17 decade. In 2015 alone, the Hospital's ·financial returns were three times the national average for 18 hospitals and were greater than it had at any time in the prior 12 years. The market value of the 19 Hospital had increased by $28 million since HCCA became its manager. 20 27. Since in or about 2013, a group of individuals, including former Board members 21 and medical providers who were in positions of management/responsibility before HCCA ·was 22 selected as manager, and some aligned with those medical providers, as well as candidates who 23 recently sought and won election to the District's Board, have publicly called for the District to 24 unilaterally terminate the MSA simply because they do not like its terms. They characterize their 25 objections to the MSA and intent to terminate the MSA in these words: they want to ''throw out 26 the current HCCA contract based on [undefined] illegal overreach." For example, on July 30, 27 2016, they said their intention, if elected to the Board, is to "renegotiate or .throw out the current 28 HCCA contract,, and to "do it 'the Tulare way'-not the Southern California divisive, secretive, -6COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF Doc 4 Filed 12/28/17 Case 17-01095 Doc 4 l and machine politics way." Simply stated, these individuals have sought to gain and now claim 2 control of the Board with the intent to shred the MSA with no legal cause to 3 do so. 28. 4 On November 8, 2016, the two candidates for Board seats, Kevin Northc raft and Michael Jamaica, were elected to the Board. Following a, recall electio n, Senovia Gutierrez was 5 also recently elected to the Board. 6 7 8 9 29. Threats by these newlyGelected members of the Board to dishonor the MSA, and their continued disparagement of the Hospital and HCCA, have undem iined the ability ofHCCA to perform its management function under the terms of the MSA and poisons the environment within which the Hospital must function to the detriment of the community. 10 caused irreparable harm to the Hospital, the District's residents who 11 Hospital employees and families, and HCCA. 12 They have also utilize the Hospital, the 30. 13 Kevin Northcraft has reposted and published on social media a Citizen s for Hospital Acco1J!1tability ("CHA") post alleging that the MSA "broug ht our hospital to its current 14 _financial ruin, and thus, explains clearly how HCCA and Dr. Kumar are solely responsible for the 15 · substandard care offered at our hospital today, •.. •• He has made clear his desire to "amend or 16 canc~l." or in other words~ "renegotiate or throw out the curren t HCCA oontm.ct" during his 17 election campaign. 18 19 20 21 22 23 31. Michael Jamaica has also stated his intent to have the MSA "amend[ ed] or canool[ed].t' Inexplicably, on August 8, 2017, Michael Jamaica person ally served a lawsuit filed against the District while purporting to act as a Board :member of the District. 32. Senovia Gutierrez has stated through social media that the District needs to "get rid ofHCCA." 33. 24 Because of the negative and destructive actions on the part of these individ uals and certajn other members of the community, the history of favorable Fitch ratings for the District has 25 come up negative. On August 9, 2017, Fitch downgraded its rating on revenue bonds and 26 District's Issuer Default Rating from BB- to B. The Fitch report noted the downgrade was due 27 largely to a decline in liquidity, though it "assumes improvement in TRMC 's cash position associated with liquidity support in the near term." The report states Fitch expec_ts "near term 28 COMPLAINT FOR BREA.CH OP CONTRACT AND DECLARATORY RELIEF the Filed 12/28/17 Case 17-01095 1 improvement in TRMC's cash position from a $22 million working capital loan which is 2 expected to close the week of August 14, 2017." 3 34. The District, purporting to act through Kevin Northcraft, Michael Jamaica, and 4 Ms. Senovia Gutierrez, has breached the terms of the MSA including section 3(d)(iii) of the S MSA. Such actions have caused damage, including economic loss to HCCA. 6 35. 7 14 The District shall timeJy_ furnish Manager with sufficient funds to timely pay the expenses relating to the Operations, including funding of both operating expenses and non-operating expenses. Subject to the more expedient funding requirement.,; set forth in Section 4(b)(viii), if funds in the Master Account are insufficient. Manager shall notify the District of the need for funds by submitting Manager's fund request to the District and the District shall supply the requested funds within three (3) days of Manager's notice to the District of the need for same, provided that for '1.Wmticipated Emergent Expense. Manager shall have the right to provide a shorter notice period. Manager shall not be obliged to fund the District expense hereunder or provide funds to accommodate shortfalls in revenue, however, Manager may, in its sole and absolute discretion, advance funds as provided in Section 4(i)(i)(l). Manager shall not be in default hereunder if Manager's failure to comply with the terms of this Agreement is due to the lack of adequate funds provide by the District. 15 36. 8 9 10 1l 12 13 Section 3(b)(iii) of the MSA reads as follows: In the recent past, the District has repeatedly breached an.d violated the provisions 16 of section 3(b)(ill) by failing to furnish sufficient funds to timely pay to HCCA the expenses 17 relating to the Hospital, clinics and other facilities as required under the MSA. As a direct result 18 of these breaches, HCCA has now advanced over $7,000,000 in funds for the District's aooount, 19 as loans to the District. To evidence these advances, HCCA has received promissory notes for 20 the amounts of these advances as provided for in section 4(j)(i)(l) of the MSA. As provided for 21 in these notes, HCCA has made demand for payment of the principal of the loans, which is 22 approximately $7,000,000 and interest due at the contract rate set forth in section 6(e) of the 23 MSA. The District has failed to make payment of these notes in whole or in pm. 24 37. 2S The Leased Employees shall be employees of Manager for purposes of Manager's benefit programs or plans now existing or hereafter created, including compensation and payment and withholding of federal, state and local income, social security, unemployment, Medicare, other payroll and employment mx.es, Section 125 plans, Section 403(b) annuities, workers' compensation and health insurance.... All expenses and charges incurred in connection with the Leased Employees shall be reimbursed to manager by the 26 27 28 Section 4(b)(iii) of the MSA reads as follows: COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF Doc 4 Filed 12/28/17 Case 17-01095 1 District. 2 The District has recently breached and violated this provision of the MSA by failing to reimburse 3 HCCA for expenses and charges incurred in connection with employees HCCA leases to the 4 District. The current amount owed and unpaid for such leased employees is approximately S $5,000,000 with interest due thereon at the contractual rate set forth in section 6(e) of the MSA. 6 HCCA has made timely demand upon the District for ~uch payment but the District bas failed imd 7 refused to pay the amount due or any portion thereof. 8 38. 9 (a) Management Fee. As Manager,s fee for the performance of the management services under this Agreement, Manager shall receive monthly (in advance on the first day cif each month) a fee (the ''Muagement Feest) in the amount of Two Hundred Twenty Five Thousand Dollars ($225,000). Effective as of each January 18', commencing January 1, 2015, the Management Fee shall be increased as provided in Section 6(b}. 10 11 12 13 14 15 Sections 6(a) and 6(e) of the MSA reads as follows: (e) Late Payments. If payment of amounts due hereunder, including Management Fees, Employee Lease Payments and reimbursement of other amounts, are not made on the due date, then interest shall accrue on any unpaid amounts for each day beyond the due date at a. rate equal to the lessor of: (a.) one percent (1.0%) per month or (b) the m.wdmum nonusurious interest rate allowable by Law. 16 17 The District has :recently breached and violated this section of the MSA by failing to pay HCCA 18 the management fee and expense reimbursement required to be paid the amount due or any 19 portion thereof. The current amount owed an~ unpaid for such Management Fee is approximately 20 $500,000 and additional sums for such expense reimbursement with interest due on both sums at 21 the contractual rate set forth in section 6(e). 22 39. At all times herein mentioned, HCCA has performed all conditions required of it 23 under the texms of the MSA, except for any which may have been waived or excused by the 24 conduct of the District 25 40. 26 If Manager, at any time and in good faith, shall deem itself insecure and for the purposes of this Agreement, Manager shall be entitled to deem itself insecure when some event occurs, fails to occur or is threatened or some objective condition exists or is threatened which significantly impairs the prospects that any of the obligations of the District hereunder will be paid when due, or which significantly affects the financial or business 27 28 Section lO(a)(iii) of the MSA reads as follows: -9COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF Doc 4 Filed 12/28/17 Case 17-01095 1 5 condition of the District. If Manager deems itself insecure, it shall have no obligation to continue performing hereunder more than thirty (30) days from and after it notifies the District that it has deemed itself insecure, unless the District provides Manager with an unconditional, irrevocable letter of credit (the "Letter of Credit'') from a U.S. banking institution acceptable to Manager, insured by a federal insurance agency ("Issue:r'').... If the Letter of Credit is not timely provided, then Manager shall have the right to immediately ruminate this Agreement (with no righ~ on the part of the District to cure same) and receive the Termination Fee. 6 41. 2 3 4 7 deems itself insecure given the conduct of the recently elected Board members including that 8 alleged above and the significant amounts now owed and past due to HCCA. HCCA is informed and believes the District has no intention to respond to HCCA's notice by posting a Letter of 9 10 Credit or paying the Termination Fee as provided under the terms of the MSA. 11 42. 12 The Termination Fee shall be an amount equal to Seventy Thousand Dollars ($70,000) per month first increased by CPI ... and then multiplied by the remaining number of months in the Term (not to exceed 120 months) at the time of the te~atio n, discounted to its present value using the discount rate of the Federal Reserve Bank of San Francisco at the time of termimm.on plus one percent (1 %). 13 14 15 16 17 . On September 1s. 2017, HCCA provided written notice to the District that it 43. Section lO(b)(ii) of the MSA reads as follows: HCCA has been required to retain legal counsel to represent it in these proceedings. 44. The Di~trict's actloffl!, as set forth above, constitute anticipatory and actual 18 breaches of the MSA, including a breach of the implied covenant of good faith and fair dealing, 19 entitling HCCA to all lawful damages flowing therefrom. 20 Second Cause of Action - Declant oey Judgme nt 21 (HCCA vs all Defeodants) 22 45. HCCA alleges and incorporates by reference the preceding paragraphs. 23 46. An actual controversy has a.risen and now exists between HCCA and the District 24 25 now purportedly acting through those recently elected to the Board. 47. HCCA contends and seeks a declaratory judgment that it has lawfully invoked the 26 "deemed insecure" provision of the MSA and that there is no legal cause for the District to 27 terminate the MSA and is informed and believes and thereon alleges that the District contends to 28 the contrary. COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF Doc 4 Filed 12/28/17 Case 17-01095 1 48. A judicial determination of the parties• rights and obligations as alleged herein is 2 necessary to remove potential uncertainty with respect to HCCA's invocation ofthe "deemed 3 insecure" provision of the MSA, and the District's oorresponding obligations under the MSA. 4 49. HCCA has no plain, speedy and adequate remedy available in the ordinary course 5 of the law for relief from the matters set forth in this complaint, and HCCA therefore seeks relief 6 on the grounds set forth herein. 7 8 9 PRAYER FOR RELIEF , 'WHEREFORE, Plaintiff HCCA prays for judgment as follo~s: 10 1. For a judgment for breach of contract and dam.ages, according to proof; 11 2. For a Declaratory Judgment that HCCA has lawfully invoked the "deemed 12 insecure" provision of the MSA and that the MSA cannot lawfully be terminated by the District 13 and, in any event, not without the prior provision of a. letter of credit or payment of the 14 Termination Fee as provided in the MSA; 15 3. For reasonable attorney's fees; and 16 4. For general relief. 17 18 19 20 MARSHALL B. GROSSMAN CYNTHIA J. LARSEN MICHAEL C. WEED Orrick, Herrington & Sutcliffe LLP 21 22 23 By: _M~lt:..:.:t".::..lillft...-h.Vt_...;;l..:;:.(13=--~---~.,...·-~-~-..,...,.-:._µMARSHALL B. GROSSMAN Attorneys for Plaintiff 24 25 26 27 28 COMPLAINT FOR BREACH OF CONTRACT AND DECLARATORY RELIEF Doc 4 ttD ,., ::-l·. Q\ ORIGINAL 1 2 3 4 Robert C. Welsh (SBN 130782) BAKER & HOSTETLER LLP 11601 Wilshire Boulevard Suite 1400 Los Angeles, CA 90025-0509 Telephone: 310.820.8800 Facsimile: 310.820.8859 Email: rwelsh@bakerlaw.com EXHIBIT 30 exhibitsticker.com \ Fi 1.ED TULARE CIJUNTY ,::,I. Ir ERIOR COURT Vl~/-\UA DI IISivN SEP 15 2017 5 S E HAr'!E C!'MEFOtJ, CL· K 6 7 Attorneys for Respondent RICHARD TORREZ and Real Party in Interest BAKER & HOSTETLER and BRUCE GREENE BY: -------- 8 TULARE COUNTY SUPERIOR COURTS 9 STATE OF CALIFORNIA, VISALIA DIVISION 10 11 THE PEOPLE OF THE STATE OF CALIFORNIA, Case No.: 271086 0.. ..J ..J ~ ""< 12 ~~:5 13 Petitioner, ~i-J 0 ,_ ,_ z 0 >- ...., ::r:...., z....,> ,kl"" ..J OU "'""f-,_ 14 ~ <( '° 15 16 V. RICHARD TORREZ, Individually and in his capacity as a member of the Board of Directors, Tulare County Local Health Care District; and DOES 1-10, 19 20 21 22 Date: Time: Dept: September 15, 2017 8 :30 a.m. One (1) Respondents, 17 18 Declaration of Bruce R. Greene in Opposition to Ex Parte Application to Petition for Alternate Writ of Mandate SENOVIA GUTIERREZ, lawfully elected Director of the Board of Directors, Tulare County Local Health Care District, BRUCE GREENE, former general counsel for TRMCBoard, BAKER & HOSTETLER, former general counsel for TRMC Board, Real Part in Interest. 23 24 25 I, Bruce R. Greene, declare as follows: 26 1. 27 I am an attorney at law, duly admitted to practice law in the State of California. I ani. a partner in the law firm of Baker Hostetler LLP (the "Baker Firm"). I make this declaration in opposition to Petitioner's Ex Parte Application to Petition for Alternative 28 DECLARATION OF BRUCE R. GREENE IN OPPOSITION TO EX PARTE APPLICATION 611316705.1 1 Writ of Mandate. I know all of the following facts of my own personal knowledge and, if 2 call and sworn as a witness, could and would testify competently thereto. 3 2. 4 Local Healthcare District (the "District") and its Board of Directors (the "Board"). 5 3. 6 "ex parte alternate writ of mandate" and the supporting declarations of Kevin Northcraft 7 8 9 10 Since 2014, the Baker Firm has been engaged to render legal services to the Tulare I have read the pleadings filed by the Tulare County District Attorney seeking an ("Northcraft") and Michael Jamaica ("Jamaica"). 4. The facts as alleged in the District Attorney' s pleadings, and in the declarations of Mr. Northcraft and Mr. Jamaica are inaccurate and misleading. Moreover, I believe that the analysis of the law (specifically Elections Code§ 15400) in the District Attorney's pleadings is likewise erroneous. 11 5. 0.. ..J ..J ;;: 12 "'<( ,..~,_J,.. 0z .., <( <( t;; 0 l/) ...l >- .., :r:"';,. z"' .\i"' ..J OU "',.. .., ,.. 13 The District Attorney appears to have done little or no investigation before filing this action. No one from the District Attorney's office contacted the Baker Firm, HCCA or Mr. Torrez to discuss the matter. Instead, the District Attorney apparently relied solely 14 on the declarations of Mr. Northcraft and Mr. Jamaica, and possibly the attorneys who 15 they purportedly engaged to represent the District (the McCormick, BafstoW·firm) the 16 legitimacy of whose engagement is in dispute. Even the tone of the pleadings suggests ~< "' 17 18 19 unprofessionalism and bias (referring to myself and the Baker Firm as "former general counsel" for the Board. 6. Dr. P::irmod Kum::ir w::is recalled ::is a director of the District after a special election that was held on July 11 , 2017. 20 21 7. The confirmation of the results of the election by the Tulare County Registrar of Voters was not certified to the Board until July 25, 2017 (which the Board received on 22 23 24 25 July 26, 2017). A copy of the transmittal letter from the Tulare County Registrar of Voters (including the FedEx delivery slip) is attached as Exhibit "A". 8. The Tulare County Registrar of Voters stated in her letter as follows: "Per Elections Code 15400, the governing body shall declare elected or nominated to each 26 office voted on at each election under its jurisdiction the person bearing the highest 27 number of votes for that office. Therefore, please place the Certified Statement of Vote 28 on the agenda for your next regularly scheduled meeting of the Tulare Local Healthcare -2DECLARATION OF BRUCE R. GREENE IN OPPOSITION TO EX PARTE APPLICATION 611316705 .1 1 District". 2 9. 3 District) requesting that the declaration of the election results be placed on the agenda for 4 the next regular meeting of the Board, which was scheduled for July 26, 2017. At that 5 time, the Board had not received the certification of the election results and as a result, the 6 On or about July 21, 2017, Mr. Northcraft contacted HCCA (the Manager of the declaration of the election results was not placed on the agenda, although the agenda did include an announcement by the Chair of the Board that Senovia Gutierrez had received 7 the highest number of votes in the election. The agenda had to be posted seventy-two (72) 8 hours before the meeting, which was 4:00 p.m. on Sunday, July 23, 2017, and, in fact, the 9 agenda was posted at that time. 10 10. 11 Chair of the Board, announced publicly that there was a question as to whether the agenda 12 as posted would permit a vote of the Board declaring Ms. Gutierrez to be a Board 13 member. She stated that she would hear the position of attorneys for both sides in the Prior to the commencement of the meeting on July 26, 2017, Linda Wilbourn, 0. ..J ..J :;: "'< '.j,-l 0 ........ z ~ :r:0 !>- :5"' Ul Z > Ul ol!l "' ..J OU "' ........ "' 14 "" 15 matter and then a decision would be made. However, before the meeting commenced, it became apparent that neither Northcraft or Mr. Jamaica were present. Therefore, there ~..; 16 17 - was no quorum and the meeting was cancelled. I was on the telephone with the Board when all these events occurs. 11 . Later that same day, Mr. Northcraft, Mr. Jamaica and Ms. Gutierrez purported to 18 call a "special meeting" of the Board, to be held on July 27, 2017, and Mr. Northcraft 19 submitted a proposed agenda, a copy of which is attached hereto as Exhibit "B". Notably, 20 the agenda did not include an item declaring Ms. Gutierrez as a Board member under 21 Elections Code§ 15400. I emailed Mr. Northcraft advising him that under the District's 22 Bylaws a special meeting could only be called by at least three (3) directors, and that since Ms. Gutierrez had not yet been declared as a director under Elections Code § 15400, she 23 could not be one of the three. 24 12. 25 Nevertheless, Mr. Northcraft, Mr. Jamaica and Ms. Gutierrez apparently held their "special meeting" on July 27, 2017, and purported to take certain actions at that meeting, 26 including termination of the Baker Firm as counsel for the District, and the engagement of 27 the McCormick, Barstow firm as general counsel for the District. A copy of Mr. 28 Northcraft's email dated July 28, 2017, which indicates the action taken at that meeting, is -3DECLARATION OF BRUCE R. GREENE IN OPPOSITION TO EX PARTE APPLICATION 611316705 .1 1 attached hereto as Exhibit "C". Notably, there was no mention of any action taken at that 2 meeting to declare Ms. Gutierrez as a Board member under Elections Code§ 15400. 3 13. 4 called special meeting held the prior day was not authorized and that any action taken at 5 that meeting was of no force or effect. 6 14. 7 8 On July 28, 2017, I sent Mr. Northcraft an email restating my position that the so- Mr. Northcraft, Mr. Jamaica and Ms. Gutierrez called for another purported "special meeting" of the Board on August 9, 2017. A copy of the agenda for that meeting is attached hereto as Exhibit "D". I sent Mr. Northcraft an email restating my position about that meeting. 9 10 15. Nevertheless, Mr. Northcraft, Mr. Jamaica and Ms. Gutierrez apparently held their "special meeting" on August 9, 2017. A copy of Mr. Northcraft's email dated August 10, 11 C. ..J ..J;:: 2017, which indicates the action taken at that meeting, is attached hereto as Exhibit "E". 12 Notably, no action was taken at that meeting to declare Ms. Gutierrez a Board member 13 under Elections Code§ 15400. After that meeting, I sent Mr. Northcraft another' email "'.., .... 14 reaffirming my prior position about the validity of that meeting. "' 15 16. 16 agenda was prepared by HCCA (as it always does) and was posted in the ordinary course. "'< ~ i--l 0 ........ z ~~j 0 >- "' ::r:"' ;,z"' -lj"' ..J OU ~< 17 18 The next regular meeting of the Board was scheduletl fo'!"Jftrgust 23, 2017. An One of the items on the agenda was the declaration that Ms. Gutierrez was a Board member under Elections Code§ 15400. A copy of that agenda is attached hereto as Exhibit "F". 19 17. Mr. Northcraft submitted his own agenda for the August 23, 2017 meeting, which 20 also contained the declaration of Ms. Gutierrez as a Board member. A copy of that 21 22 23 24 25 agenda is attached hereto as Exhibit "G". 18. On the morning of August 23, 2017, Ms. Wilbourn sent me a letter stating that she was resigning from the Board. I forwarded that letter to all concerned parties. 19. I was not present at the Board meeting that was held on August 23, 2017. However, I have viewed that meeting online (a video was posted by the local media). Mr. 26 Torrez did not attend the meeting. I understand that there was some initial confusion 27 about whether there was a quorum. However, as Mr. Northcraft states in his declaration, 28 that meeting did take place. No action whatsoever was taken at that meeting in open -4DECLARATION OF BRUCE R. GREENE IN OPPOSITION TO EX PARTE APPLICATION 611316705.1 1 session, as Mr. Northcraft, Mr. Jamaica and Ms. Gutierrez immediately went into closed 2 session (and subsequently announced that no reportable actions were taken in closed 3 session). Attached hereto as Exhibit "H" is an email dated August 24, 2017 from Mr. 4 Northcraft which confirms the foregoing. Notably, no action was taken at that meeting to declare Ms . Gutierrez a Board member under Elections Code § 15400. 5 6 20. I have never contested the validity of the meeting held on August 23, 2017 (even though Ms. Gutierrez was improperly purporting to act as a Board member) because the 7 8 9 meeting was duly noticed and a quorum was present (2 out of 3 members) after Ms. Wilbourn resigned. 21. I have received several communications from the McCormick, Barstow firm 10 requesting that we tum over all District files to them. In each case, we have responded 11 that we do not recognize their firm as counsel to the District and that we consider Baker 12 Firm to be legal counsel until we are duly discharged at a legitimated Board meeting. "'< t; V) < ..,J 13 22. "'°' ...... ~< OU 14 Given that Mr. Northcraft and Mr. Jamaica represent a quorum, regardless of what else '° 15 happens, if they both attend the mee_ting proceeds, the Board can declare Ms. Gutierrez a ..,.., ;:: °'~,-..l< 0.. 0 .... .... z "' ::r:0 >-"'> ,:; °'z"'. ., 16 The next regularly scheduled Board meeting is to be held on September 27, 2017. Board member under Elections Code § 15400, and can take any further actions that it may lawfully take (including discharging the Baker Firm, if that is their desire). I am advised 17 18 19 by HCCA that the agenda for that meeting will contain an item declaring Ms. Gutierrez as a Board member under Elections Code § 15400. 23 . Despite the District Attorney's pleadings, neither the Baker Firm not Mr. Torrez 20 have taken any actions to usurp the power of the Board, or to interfere with the legal 21 process by prohibiting or delaying Ms. Gutierrez from becoming a lawful member of the 22 Board. Mr. Torrez is not compelled to attend Board meetings, and his absence from the 23 August 23, 2017 meeting was of no consequence, since there was a quorum. 24 24. 25 26 Moreover, the positions taken by the Baker Firm with respect to Elections Code§ 15400 are supported by two independent attorneys who specialize in elections law, Michael L. Allan, Esq., and Cary Davidson, Esq. of the firm of Reed & Davidson. In both instances, the Baker Firm was advised that the requirements of Elections Code § 15400 27 28 could not be ignored and had to be complied with. In addition, Mr. Allan has prepared a written opinion setting forth his views on the matter. Attached as Exhibit "I" is a true and -5DECLARATION OF BRUCE R. GREENE IN OPPOSITION TO EX PARTE APPLICATION 611316705. 1 1 correct copy of Mr. Allan' s eight page written opinion. I believe Mr. Allan's reasoning 2 and ultimate conclusions to be both sound and persuasive. 3 25. 4 Code sets forth the procedures for a new Board member to be elected and qualify after a 5 recall election. Those statutes call for the Registrar of Voters to certify the election results 6 As far as the Baker Firm is concerned, we were following the law. The Elections to the Board, for the person who is certified as receiving the highest number of votes to qualify and take the oath of office, and the last step is for the Board to declare that person 7 8 9 ..J ;: j ....J 26. It is disingenuous for the District Attorney to accuse Mr. Torrez or the Baker Firm of interfering with the elections process. Indeed, Mr. Northcraft and Mr. Jamaica had 11 several opportunities to comply with Elections Code § 15400. The July 26, 2017 regular 12 meeting could well have resulted in that declaration, but the voluntary decision of Mr. 13 Northcraft and Mr. Jamaica not to attend the meeting (thereby resulting in a lack of a 0 ....... z ~ ~j 0 >- "' :i: UI > Z w ~ " ..J 14 co 15 ...O U ... ~< " "' occurred. 10 0.. ..J " < a member of the Board (Elections Code § 15372 - 15400). Clearly, the last step never quorum) made that impossible. At the regular meeting held on August 23, 2017, since the declaration of Ms. Gutierrez as a Board member was on the agenda, they could have voted to declare her a Board member under Elections Code§ 15400. They did not do so. And 16 notably, at the two purported "special meetings" held by Mr. Northcraft, Mr. Jamaica and 17 . Ms. Gutierrez, the three of them never voted to declare Ms. Gutierrez a Board member 18 under Elections Code § 15400. 19 27. 20 the Court does not grant the requested ex parte relief, there is simply no evidence to 21 support that. The only mention of harm is in the Northcraft and Jamaica declarations, 22 Finally, despite the allegations that there will be irreparable harm to the District if whereupon they refer to a pending case against the District involving a public records act claim, which had been scheduled for September 11 , 2017. However, Judge Reed 23 24 subsequently vacated the trial date in that case until after the September 27, 2017 Board meeting, recognizing that the issues will be moot by then. To our knowledge, the 25 hospital's operations have continued as usual and there is absolutely no urgency in this 26 matter, and certainly nothing that cannot wait until after the September 27, 2017 meeting. 27 All of the concerns raised in the District Attorney' s pleadings will likewise be moot after 28 that meeting. -6DECLARATION OF BRUCE R. GREENE IN OPPOSITION TO EX PARTE APPLICATION 611316705 .1 1 2 3 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed at Los Angeles, California, this 14th day of September 4 5 6 7 8 9 10 11 I>. ..J ..J:;:: "~...J < 12 0 ........ z ~~:5 0 >- "' 13 :i::"' z"'> ~ " ..J OU ""' ........ ~< "' 14 16 17 18 19 20 21 22 23 24 25 26 27 28 -7DECLARATION OF BRUCE R. GREENE IN OPPOSITION TO EX PARTE APPLICATION 611316705 .1 Tulare Local Health vs. Greene Deposition of Cary Davidson SUPERIOR COURT OF THE STATE OF CALIFORNIA TULARE LOCAL HEALTHCARE DISTRICT dba Tulare Regional Medical Center, a Public Agency EXHIBIT exhibitsticker.com IN AND FOR THE COUNTY OF KERN ) ) 31 ) ) Plaintiff, ) ) versus ) No. BCV-19-103514 ) BRUCE R. GREENE; BAKER & HOSTETLER) LLP, a limited liability ) partnership; et al., ) ) Defendants. ) __________________________________) DEPOSITION OF CARY DAVIDSON 515 SOUTH FIGUEROA STREET, SUITE 1110 LOS ANGELES, CALIFORNIA 90071 THURSDAY, FEBRUARY 13, 2020 LESLI KELIGIAN, CERTIFIED SHORTHAND REPORTER NO. 6006, RPR H I N E S R E P O R T E R S 1 Tulare Local Health vs. Greene Deposition of Cary Davidson 1 relating to the seating of Senovia Gutierrez. 2 Greene and Baker and Hostetler are both named as real 3 parties in interest. 4 Q Bruce In September of 2017, did -- were you aware 5 that this proceeding was pending in the Tulare County 6 Superior Court? 7 A No. 8 Q I'd like to you look at Page 5, Paragraph 24. 9 10 We've highlighted this. Mr. Greene says under penalty of perjury here, 11 "Moreover, the positions taken by the 12 Baker firm with respect to Elections 13 Code 15400 are supported by two 14 independent attorneys who specialize in 15 elections law, Michael L. Allan, 16 Esquire, and Cary Davidson, Esquire, of 17 the firm of Reed and Davidson." 18 Did you have any communications with 19 Mr. Greene, whether orally or in writing, about the fact 20 that he was going to include you as one of two 21 independent attorneys who specialize in election law 22 that support the positions that were taken by the Baker 23 firm with respect to Elections Code 15400? 24 A No. 25 Q Did you ever tell Mr. Greene that you supported H I N E S R E P O R T E R S 47 Tulare Local Health vs. Greene 1 deposition. 2 BY MR. MURPHY: 3 Q Deposition of Cary Davidson As of the July 2017 time frame when you were 4 providing these professional courtesies to Mr. Greene, 5 were you of the mindset that the requirements of 6 Elections Code Section 15400 could not be ignored and 7 had to be complied with? 8 A My recollection is otherwise. 9 Q That it could be ignored and not complied with? 10 A That's my recollection. 11 Q And did you express that recollection -- did 12 you ever express that to Mr. Greene? 13 A That's my recollection. 14 Q What do you recall expressing to Mr. Greene 15 specifically? 16 A I don't recall. 17 Q And in connection with your recollection, was 18 that expressed in writing or telephonically or via 19 voicemail? 20 A 21 22 23 24 25 I don't recall. MR. MURPHY: I have. Okay. Those are all the questions Thank you. MR. LAMPE: Anybody on the phone have questions? MR. O'ROURKE: H I N E S No questions. R E P O R T E R S 60 MICHAEL L. ALLAN, ESQ. 2181 EAST FOOTHILL BOULEVARD, SUITE 102 PASADENA, CAUFOR lA 91107 INVOICE TO: August 31, 2017 INVOICE#: Bruce R. Greene, Esq. Baker & Host etl er LLP 11601 Wilshire Blvd, Ste 1400 Los Angeles, CA 90025-0509 !ITEM 08 - 31 - 17- 006 EXHIBIT 32 HOURS RATE TOTAL Legal Servic ;:s re: Failure to Seat Tulare Local Health Care District Special Election Candidate S. Gutierrez, an d related matters 19.7 $ 450/Hr $ 8,865.00 Incurred Cos s: Ill/ Ill! $NIC Total Attorneys Fees & Costs: Ill! Ill/ $ 8,865.00 Less Disbursement from Client Trust Account: !Ill Ill/ $ Not Appl Outstanding Attorneys Fees & Costs: !Ill !Ill $ 8,865.00 Sheets detailing billable hours are attached hereto. Ill/ /Ill Ill/ exhibitsticker.com DATE: ----- hoTAL AMOUNT CURRENTLY DUE: .............................................................. $ s,&65.oo I MICHAEL L. ALLAN BILLABLE HOURS lcLIENT Bruce Greene Baker & Hostetler TOTAL HOURS ITOTAL :BILLED: IDATE IWORK DONE IHRS I 08/22/17 Email from B. Greene re: elections law analysis request 0.1 N/C 08/2 3/17 Phone call with B. Greene opinion re: failure to seat Senovia Gutierrez following special election for TLHD; Research, Review & Analysis re: Elections Code Section 15400 1.6 08/24/17 Research, Review & Analysis re: Elections Code Section 15400, Legislative History re: Election Code Section 15400, Related Case Law, Distinction between Election and qualification for seating, Various Election Code Provisions, Government Code Provisions, Health & Safety Code Provisions Facts pertaining to post election activity pertaining to TLHD recall and special elections of July 2017; Review Client document re: Draft Opinion to Celtic Financial; Review Email from B. Greene; Draft analysis of the same re: failure to seat elected candidate S. Gutierrez 13.6 08/25/17 Review Emails from B. Green, Draft Email Responses to B. Greene re: Certification, Qualification of Candidate for Office, Bond Issue, local government compliance with Sec. 15400 examples, Registrar of Voters letter to TLHD, Bylaws of TLHD, Dissenting TLHD members putative meetings, disclosure of efforts by dissenting TLHD members to rescind prior resolution and action; Revise opinion to include additional issues, facts, legal reference re: the foregoing matters per request of client. 4.3 08/27/17 Email to B. Greene re: hand executed copy of Opinion 0.1 N/C 08/29/17 Review Email from Paula Nguyen of Celtic Financial; Response to Email from P. Nguyen; Text to B. Greene; Review Email Response of B. Greene to Nguyen re: quorum at June 20, 20 I 7 meeting of TLHD 0.3 N/C 08/30/17 Phone Call with Tim Ong of Celtic Financial at request of B. Greene; Phone Call with B. Greene re: quorum at June 20, 2017 meeting of TLHD 0.2 20.2 08/22 08/30/17 I08/22 _ : 08/30/17 I 119.7 I EXHIBIT 33 09/05/17 Invoice Date: 50416056 Invoice Number: B&H File Number: 07110/093734/000003 34-0082025 Taxpayer ID Number: Page 1 Tulare Local Healthcare District 869 North Cherry St Tulare, CA 93274-3462 Regarding: exhibitsticker.com BakerHostetler General (2015-2017) For professional services rendered through August 31, 2017 BALANCE FOR THIS INVOICE DUE BY 10/05/17 $ 16,268.18 Rem ittan ce Copy Please include this page with payment Invoice No: 50416056 Firm Contact Information Bernadette O'Neill (310) 979-8470 Boneill@bakerlaw.com Please Remit To: Baker & Hostetler LLP P .0. Box 70189 Cleveland, OH 44190-0189 FOR WIRE REMITTANCES: Baker & Hostetler LLP KeyBank, N.A., Cleveland, OH Account No: 1001516552 / ABA 041001039 SWIFT Code: KEYBUS33 Reference Invoice No: 50416056 Email the "Remittance Copy" to bakerlockbox(@bakerlaw.com BAKER 0000230 BakerHostetler 09/05/17 Invoice Date: 50416056 Invoice Number: B&H File Number: 07110/093734/000003 34-0082025 Taxpayer ID Number: Page 2 Tulare Local Healthcare District 869 North Cherry St Tulare, CA 93274-3462 General (2015-2017) Regarding: For professional services rendered through August 31, 2017 7,225.50 $ Fees 9,042.68 $ Expenses $ BALANCE FOR THIS INVOICE DUE BY 10/05/17 PREVIOUS BALANCE 561,520.96 TOTAL BALANCE DUE 577 1 Z89.1~ 16,268.18 Baker &Hostetler LLP Atlanta Houston Chicago Los Angeles Cincinnati New York Cleveland Orlando Columbus Philadelphia Denver Costa Mesa Washington, DC Seattle BAKER 0000231 09/05/17 50416056 093734.00000 3 Page 3 Invoice Date: Invoice Number: Matter Number: Tulare Local Healthcare District Regarding: General (2015-2017) Matter Number: 093734.00000 3 Amount Hours Rate Paule, Francisco 1.40 $ 325.00 Brust Barry A. 1.70 465.00 790.50 Berg Jeffrey P 4.00 750.00 3,000.00 Greene Bruce R 4.00 745.00 2,980.00 Name 7,225.50 $ 11.10 Total 455.00 $ Hours Amount Work on opinion issues. 0.30 225.00 Paule, Francisco Continue researching loan issues. 1.40 455.00 08/22/17 Berg Jeffrey P Consult regarding Form of opinion and various requirements. Review various drafts of opinions. Staff review of same. 0.90 675.00 08/22/17 Brust Barry A. Review proposed opinion regarding board election and authorization of lease; conferences regarding same. 1.00 465.00 08/23/17 Berg Jeffrey P Review revised opinion form and review various scenarios for use of opinion; staff review of same. 0.70 525.00 08/23/17 Brust Barry A. Continue discussions regarding opinion; review revised opinion. 0.70 325.50 08/24/17 Berg Jeffrey P Work on opinion and related arguments. 1.00 750.00 08/25/17 Berg Jeffrey P Review draft opinions and staff review of issues raised by opinions. 1.10 825.00 08/28/17 Greene Bruce R Attend to loan/lease matters with Celtic, leasing innovations, Medequities; attend to Graham Prewett matter; e-mail communication from Salinas firm re 4.00 2,980.00 Date Name Description 08/21/17 Berg Jeffrey P 08/21/17 Baker &Hostetler LLP Atlanta Houston Chicago Los Angeles Cincinnati New York Cleveland Orlando Columbus Philadelphia Denver Costa Mesa Washington, DC Seattle BAKER 0000232 Date Description Name 09/05/17 50416056 093734.000003 Page4 Invoice Date: Invoice Number: Matter Number: Tulare Local Healthcare District Hours Amount 11.10 7,225.50 Griesbach and Ibarra matters Total Expenses and Other Charges 08/31/17 8,865.00 Other Professional Services (E123) Michael L Allan Professional Services; Inv. 08_31_17_006 Subtotal - Other Professional Services (E123) ___8..,_,8_6_5_.0_0_ 08/18/17 177.68 Westlaw Research - 08/18/17 by PAULE FRANCISCO Subtotal - Automated Research (E106) Total 177.68 ----- $ 9,042.68 Baker&Hostetler LLP Atlanta Houston Chicago Los Angeles Cincinnati New York Cleveland Orlando Columbus Philadelphia Denver Costa Mesa Washington, DC Seattle BAKER 0000233 09/05/17 50416056 093734.000003 Page 5 Invoice Date: Invoice Number: Matter Number: Tulare Local Healthcare District ACCOUNT SUMMARY Invoice Date 04/28/16 10/21 /16 Invoice Number 50227549 $ 50299352 11/28/16 50314450 12/14/16 50325561 01/18/17 50336079 02/10/17 50346037 03/13/17 50356460 04/11/17 50366083 05/16/17 50379199 Total Last Total Last Payments Adjustmen t Adjustmen t Original Payment Applied Date Applied Date Amount $ 82,795.23 04/05/17 $ 35,361.34 0.00 57,659.24 $ 47,433.89 57,659.24 91,269.53 0.00 91,269.53 39,252.85 21,302.59 0.00 0.00 0.00 39,252.85 21,302.59 33,997.72 33,997.72 41,529.82 41,529.82 87,571.76 48,106.85 0.00 0.00 06/12/17 50387630 07/14/17 50398777 29,659.15 27,207.54 0.00 0.00 08/09/17 50408475 08/10/17 50408941 29,232.02 0.00 5,968.00 0.00 08/23/17 50413671 1,330.00 0.00 $ 596,882.30 $ 35,361.34 Total A/R Balance 87,571.76 48,106.85 0.00 29,659.15 27,207.54 29,232.02 5,968.00 1,330.00 Account Receivable Balance This Invoice Total Due including current invoice $ $ 561,520.96 $ $ $ 561,520.96 161268.18 §Z7_789.14 Baker &Hostetler LLP Atlanta Houston Chicago Los Angeles Cincinnati New York Cleveland Orlando Columbus Philadelphia Denver Costa Mesa Washington, DC Seattle BAKER 0000234 EXHIBIT 34 exhibitstickerLom Exhibit 14 Senovia Gutierrez 01?22?20 Dawn Thompson, 7517 To: From: Sent: Subject: Paule, F.Lucas[fpaule@bakerlaw.com] Greene, Bruce R.[/O=BH/OU=DENVER/CN=RECIPIENTS/CN=BGREENE] Fri 7/21/2017 6:03:18 PM (UTC-07:00) Re: new board member This was part ofrecall. Just have the chair announce that as a result of the recent election dr Kumar is no longer a board member and he has been replaced by Senovia Gutierrez. I don't see any reason for any board action to be taken. It can be fit in right after the call to order. Call it something like Chair announcement. Sent from my Bakerlaw mobile device . ·- On Jul 21, 2017, at 5:59 PM, Paule, F. Lucas wrote: · Bruce, would this be added to the open session? I'm not aware of the details of this special election, do you have any more information I can add to the description? From: Yorai Benzeevi [mailto:benny@healthcca.com] Sent: Friday, July 21, 2017 5:52 PM To: Greene, Bruce R.; Paule, F. Lucas Subject: Fwd: new board member Please see below for additional agenda item. Benny Benzeevi, MD, FACEP Chairman Healthcare Conglomerate Associates Cell (559) 303 - 7144 Sent from a mobile device Please excuse brevity/typos Begin forwarded message: Date: July 21, 2017 at 5:27:05 PM PDT To: benny@healthcca.com, linda.wilbourn@comcast.net Subject: new board member Based on the certification today of the July 11 election, Senovia Gutierrez will be sworn in prior to the July 26 regular meeting and be in office. If the meeting is held, please provide her the packet for 7/26 meeting. She can be reached at 559-553-5199, email senovia@live.com. The July 26 agenda also should include an item to declare the results of the special election of July 11, 2017. Thank you. kevin northcraft