Dr. Sunil Sujan, a board-certified internist, practiced at Corona Regional Medical Center (CRMC) from 2010 to 2016. He alleged that three rival physicians on staff, competing with his growing practice, orchestrated a campaign to file dozens of false internal “MIDAS” incident reports accusing him of being unresponsive to nursing staff, with the goal of getting him censured or suspended.
After a patient under Sujan’s care died of heart failure in June 2016, CRMC’s medical executive committee (MEC), chaired by one of the rival physicians, summarily suspended his admitting privileges without, Sujan alleged, any real investigation. Facing the prospect that a suspension lasting 14 days or longer would have to be reported to the California Medical Board and the National Practitioner Data Bank, Sujan signed a lengthy settlement agreement to have his suspension lifted. The agreement did not fully exonerate him: it recited CRMC’s continuing concerns about his patient care and record-keeping and imposed a dozen onerous conditions, including mandatory training courses, a monitored backup-physician arrangement, and a mentor who would report on him to the MEC every 90 days.
Sujan later left CRMC voluntarily; when a prospective employer, Good Samaritan Hospital, sought to verify his employment history in 2017, CRMC allegedly conditioned its cooperation on Sujan releasing it from liability, jeopardizing the job offer. Sujan sued CRMC and the three physicians for conversion, interference with economic relations and contract, conspiracy, defamation, and intentional infliction of emotional distress; his wife, Nina Patel, brought a derivative loss-of-consortium claim.
The Riverside County Superior Court granted summary judgment for the defendants on the interference claims, finding Sujan had failed to exhaust the administrative remedies available to him under CRMC’s medical staff bylaws before suing for damages, as required by Westlake Community Hospital v. Superior Court (1976) 17 Cal.3d 465. The court rejected Sujan’s argument that pursuing an administrative hearing would have been futile, distinguishing Joel v. Valley Surgical Center (1998) 68 Cal.App.4th 360, because — unlike the physician in Joel, who received full, unconditional reinstatement in exchange for withdrawing his hearing request — Sujan’s settlement was heavily conditioned and did not represent the maximum relief he could have obtained administratively. The court entered judgment for the defendants and later ruled, based on a fee provision in CRMC’s bylaws making a physician who sues without exhausting his remedies liable for the hospital’s “full costs, including legal fees,” that defendants could recover attorney fees from Sujan, though not from Patel, who never signed the bylaws. The court also found defendants’ evidence insufficient to support fees for five prior law firms that had represented them, and it reduced the hourly rates claimed by two of their current partners to align with Riverside County market rates, ultimately awarding $313,830 of the $892,417 defendants had requested. Both sides appealed the fee ruling; Sujan also appealed the underlying summary judgment.
In the published case of Sujan et al. v. UHS Corona, Inc. et al., No. E084185 (Cal. Ct. App., 4th Dist., Div. 2, Sept. 2026). The Court of Appeal affirmed the judgment and the postjudgment attorney fees order in full, rejecting both Sujan’s appeal and the defendants’ cross-appeal.
On exhaustion, the court held Sujan bore the burden of proving the narrow futility exception and failed to meet it. His settlement, unlike the one in Joel, restated CRMC’s ongoing concerns about his competence and imposed a dozen substantive conditions rather than restoring him unconditionally; it therefore did not give him “the maximum relief” an administrative hearing could have provided. The court also found Sujan offered no evidence — only his own declaration — to support his claim that a report to the Medical Board would have been professionally “ruinous,” distinguishing the Supreme Court’s decision in Mileikowsky v. West Hills Hospital & Medical Center (2009) 45 Cal.4th 1259, and finding persuasive an unpublished federal decision, Ennix v. Stanten (N.D. Cal. 2007), which similarly held that a settlement short of full reinstatement does not excuse exhaustion.
On fees, the court held Business and Professions Code section 809.9, which allows fee awards only when a lawsuit challenging a reportable peer-review action was frivolous or in bad faith, did not apply, because Sujan’s suspension lasted less than 14 days and was therefore never required to be reported under section 805. That left CRMC’s one-sided contractual fee provision to govern. The court found the provision procedurally unconscionable, as a non-negotiable term of staff bylaws, but not substantively unconscionable, reasoning under Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, that the policies behind the exhaustion doctrine — preserving hospital expertise, mitigating damages, and promoting judicial economy — reasonably justified charging fees only against physicians who bypass peer review and then lose.
On the cross-appeal, the court agreed CRMC could not recover fees from Patel, since her loss-of-consortium claim was not based on the bylaws and, under the reciprocity principles of Civil Code section 1717 (which only applies to contract claims), CRMC would not itself have owed her fees had she won. The court also held defendants forfeited any challenge to the exclusion of their prior attorneys’ billing records by failing to request oral argument or seek reconsideration after the court’s tentative ruling flagged the issue, and, independently, agreed the supporting declaration was inadmissible hearsay as to work it did not personally witness. Finally, the court found no abuse of discretion in capping the hourly rates of defendants’ Los Angeles-based partners at Riverside County market rates, noting defendants offered no evidence that competent local counsel was unavailable.