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Fertility Clinic Is Liable for Providing Sperm of Decedent to His Mistress, C.A. Declares
Opinion Says Wife, As Sole Heir, Was the Owner of the Property, and Claim of Conversion Was Well-Founded
By a MetNews Staff Writer
The Sixth District Court of Appeal has held that a widow succeeded in establishing liability on the part of a fertility clinic on a conversion theory based on its use of the decedent’s sperm—which had been in storage at the facility, frozen—in impregnating a woman who had been engaged in a long-term extramarital affair with the man.
Kathy Pesic, the widow, claimed that the sperm was her property because her late husband, entrepreneur Ivan Pesic, made her his sole heir in a will he executed on Oct. 13, 2012. That was the day on which he died of cancer in Japan, where he was seeking treatment.
While reversing a judgment notwithstanding the verdict and an order for a new trial, the appeals court, in its unpublished opinion filed Monday, did not order reinstatement of a jury’s award of $842,530.68 in damages, instead ordering that a new determination of damages be made on remand. The bulk of the award—$774,280.68 of it—was for fees the widow purportedly paid the widow’s attorneys in fighting claims by her late husband’s mistress, Joyce Chin, for support of the twins born to her on July 8, 2013, through in vitro fertilization at the defendant Zouves Fertility Center (“ZFC”).
The jury also awarded $68,000 for emotional distress and $250 for the value of the misappropriated sperm.
Settlement Agreement
A settlement between the widow and Chin resulted in an agreement that the estate was not liable for the support of the twins. However, Kathy Pesic did consent to pay Chin $1.6 million for support of Chin’s six-year-old son, fathered by Ivan Pesic, of whose existence the widow had not known until after her husband’s death.
She had also not known of the affair between her husband and Chin that began in 2004. Chin was an employee at Silvaco, an internationally prominent Silicon Valley software company that Ivan Pesic founded and ran.
Liability, Justice Charles Edward Wilson said, was properly predicated on a breach by the clinic of a Feb. 5, 2011 agreement between it and Ivan Pesic and Chin that called for the sperm being discarded if the one-year contract for storage of it were not renewed. It was not renewed; the sperm was nonetheless not discarded; the sperm was provided to Chin in November 2012.
The damage award cannot not be upheld, Wilson explained, because Zouves was obstructed in its effort to show that some of the attorney fees being claimed did not relate to the issue of support for the twins but, rather, to support of the child born in 2006 and other matters.
Wording of Agreement
The provision that Wilson concluded gives rise to liability provides (with bold face in the original):
“At the end of the designated storage period, this Agreement with the ZFC Center for continued cryopreservation of the semen must be renewed, otherwise the failure to renew the contract will result in the semen being thawed and discarded.”
That language, Santa Clara Superior Court Judge Patricia M. Lucas found, in countermanding the jury’s decision, “is clearly intended to give Defendants the contractual right (but certainly no obligation) to discard semen if there has not been a renewal and additional payment.”
Wilson said:
“As the trial court construes the section, the failure to renew the agreement might not result in the semen being thawed and discarded—if, for example, Zouves simply elected not to discard it—which is directly contrary to the plain language of the agreement that it ‘will result in the semen being thawed and discarded.’ In short, we disagree with the trial court’s conclusion that this section does not impose an obligation on Zouves to discard the semen if the agreement is not renewed.”
While Lucas had taken heed of testimony by the owner of the clinic, co-defendant Dr. Cristo Zouves, that in 20 years, a new charge for storage after one year had never been imposed where a couple was undergoing continuing treatment, Wilson said that such extrinsic evidence may not be considered where the language of an agreement, such as that in issue, is unambiguous.
Other Language
Also of concern to Wilson was another provision, though its relevance is not apparent inasmuch as it pertains only if either Ivan Pesic or Chin were to die within the storage period.
The provision says:
“If at any time during the storage period either partner should die, the surviving partner shall provide the undersigned physician(s) and the ZFC Center with a certified copy of the death certificate.”
It continues that “[a]t that time the surviving Partner shall advise the ZFC Center” of what disposition that persons desires as to the sperm.
Wilson wrote: “We agree with Kathy and hold that the cryopreservation agreement unambiguously provided that the storage period ended after one year if the agreement was not renewed and that Zouves did not have the right to use Ivan’s frozen sperm after his death without presentation of a certified copy of the death certificate. Substantial evidence supports the jury’s verdict as to liability….”
He went on to say:
“[W]e conclude that Zouves could have committed conversion because the agreement did not authorize the use of Ivan’s semen after the storage period had expired or without the presentation of a certified death certificate.”
The opinion does not set forth how, given the expiration of the one-year storage period, use of the semen in in vitro fertilization would have been authorized had Chin presented a death certificate. Wilson’s premise that Chin’s showing of a death certificate would have validated the clinic’s actions contradicts his statement that “the relevant provision of the agreement…appears to be largely for the benefit of Ivan—it provided him the right to be assured that his frozen sperm will be discarded and not used if he elects not to renew the agreement,” a benefit that was passed on to the estate.
No Explanation
The justice declared that “the cryopreservation agreement unambiguously provided that the storage period ended after one year if it was not renewed, at which point the frozen sperm will be thawed and discarded, and that if a partner died during the storage period, the surviving partner was required to present a certified copy of the death certificate before Zouves had the right to allow use of Ivan’s frozen sperm.” He did not explain how that is pertinent where a “partner” did not die during the “storage period.”
On Aug. 28, 2019, Santa Clara Judge Theodore C. Zayner, in rejecting Zouves’ motion for summary adjudication, held that “the Cryopreservation Agreement only governed the posthumous disposition of Pesic’s sperm if Chin and/or Pesic died during the storage period,” which did not happen. The opinion does not discuss whether Lucas, as a judge of the same court, had the authority to overrule Zayner’s determination.
Wilson pointed out that conversion is a strict-liability tort and, accordingly, did not discuss whether fault can be ascribed to Zouves for not requiring presentation of a death certificate before utilizing the sperm in 2012 where it had no knowledge until the following year of Ivan Pesic’s death.
Facts laid out in the opinion show that Chin provided documents to the clinic purportedly signed by Ivan Pesic—though he had died two days earlier—authorizing continued efforts to effect her pregnancy.
Damage-Award Rejected
In finding the damage award to be infirm, Wilson noted that in responding to discovery requests, Kathy Pesic provided only redacted bills for attorney fees that did not show the nature of the services. Although she supplied more lightly redacted bills to Zouves in response to an order by Zayner, she did not furnish fully unredacted bills until the day before she revealed them in court in connection with her testimony.
“We conclude the trial court did not abuse its discretion in finding this constituted unfair surprise to Zouves,” Wilson proclaimed, saying that the surprise was “Kathy’s new and unexpected decision to use the unredacted invoices at the end of trial after previously refusing to provide them.”
The case is Pesic v. Zouves Fertility Center, H047915.
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