Yan v. Memrad Medical Group10/30/2003
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
Two doctors, both women, went to work for a medical corporation and later became shareholders. When a second corporation was thereafter formed, shares were allocated among about three dozen employee-shareholders in proportion to their shares in the original corporation. The women claim that, as a result of gender discrimination by the original corporation, they received too few shares in the second corporation. The trial court granted summary judgment in favor of the original corporation. We affirm.
FACTS
A.
In 1993, Nancy Bucciarelli, M.D., and Kay Yan, M.D., both radiologists, began working for Memrad Medical Group, Inc., and both became shareholders, Bucciarelli in September 1995, Yan in December 1996. At the time they became shareholders, Bucciarelli and Yan entered identical agreements with Memrad for the purchase of 700 Memrad shares in three annual installments. Bucciarelli received 200 shares in September 1995, 200 in September 1996, and 300 in September 1997; Yan received 200 in December 1996, 200 in December 1997, and 300 in December 1998.
B.
In February 1997 -- at which time Bucciarelli owned 400 Memrad shares and Yan owned 200 -- a second corporation, Radiology Practice Management, Inc. (RPM), was formed to manage Memrad's business operations. Under the original plan, RPM's shares were to be issued only to the Memrad shareholder-employees whose shares were fully vested (that is, those who had acquired all of the 700 shares each was entitled to under his agreement with Memrad). Of Memrad's 39 shareholders, 33 were fully vested; the remaining 6, including Bucciarelli and Yan, were not. As of that time, the 33 vested shareholders were all men; 5 of the remaining 6 (the "partial shareholders"), including Bucciarelli and Yan, were women. The partial shareholders consulted a lawyer, held a meeting, and ultimately persuaded the others to modify the original plan.
Pursuant to a modified plan adopted in June and acted upon in July, every Memrad shareholder received 3,250 RPM shares ("contributed shares"), and the remaining RPM shares ("founders' shares") were purchased by the Memrad shareholders in direct proportion to their Memrad ownership interests as of February 7, 1997. Thus, in addition to the contributed RPM shares distributed to every Memrad shareholder, Memrad's fully vested shareholders each received 3,750 RPM founders' shares, and Memrad's partial shareholders each received a proportionately lesser number of RPM founders' shares (the balance due to the partial shareholders were deposited into an escrow account for purchase by the partial shareholders over a 10-year period reduced by previous years of employment by Memrad). Bucciarelli and Yan, both partial shareholders in Memrad in February 1997, received a proportionally reduced number of shares in RPM.
As shareholders, Yan and Bucciarelli signed at least five repurchase agreements in July 1997 (some applied to contributed shares, others to founders' shares, and two applied only to partial shareholders), and thereby agreed (as relevant to this litigation) that their RPM shares were subject to repurchase under certain circumstances.
C.
In 1998, RPM, originally a "C" corporation, changed its status to an "S" corporation. In December, the RPM repurchase agreement governing a
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