Your consult calendar has been thinner than usual for three months, and you cannot explain why. Your ad spend has not changed. Your reviews are strong. Then a longtime patient mentions, almost in passing, that she booked her revision with your partner at his new office across town. Your front desk tells you two more patients asked for him by name and were given a different phone number. You pull the call tracking report and see that leads from your own Google Ads campaign are landing somewhere other than your schedule.
If you are dealing with a plastic surgery partner diverting patients in California, you are not imagining the problem, and you are not stuck. California law gives co-owners real tools, from an accounting of what your partner earned to a court order that stops the diversion while the case is pending. This post explains what the law says, how to tell what is actually happening, and what to do before you take your next step.
Why This Matters Right Now
Patient diversion is not a slow leak. In aesthetic practice, one patient is rarely one transaction. A rhinoplasty patient may come back for injectables, skin care, a revision, and referrals to friends. When a partner steers that relationship to a separate practice, you lose the first procedure and the years of revenue that follow. The longer it continues, the harder it is to measure, and the easier it is for your partner to claim the patients simply followed their surgeon.
Two misconceptions keep owners from acting. The first is that patients belong to the surgeon who treats them, so nothing can be done. Patients can choose their own surgeon, and no California court will force a patient back to your practice. But whether your partner used practice resources, information, or marketing dollars to move patients while he was still your partner is a different question. The second misconception is that you must wait until the partnership ends to act. Many of the strongest claims come from what a partner does before he leaves.
California's non-compete law also shapes what your agreement can do. Business and Professions Code section 16600 was updated effective January 1, 2024, and now says it must be read broadly, in line with Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008). That often makes the duty of loyalty, not a restrictive covenant, the foundation of a cosmetic surgery patient poaching case.
Is It Legal for a Plastic Surgery Partner to Divert Patients in California?
It depends on three things: how your practice is organized, what your agreement says, and what your partner did before he left. Opening a second practice is not automatically a breach. But a co-owner who uses the practice's leads, lists, money, or equipment to build his own practice while he is still an owner is on weak ground. That is the heart of a plastic surgery practice partner dispute, and it is the kind of matter our partnership dispute attorneys handle for California owners.
What does the duty of loyalty require of a partner?
Under Corporations Code section 16404, partners in a California partnership owe each other and the partnership a duty of loyalty. Three parts matter here. A partner must account to the partnership, and hold as trustee for it, any property, profit, or benefit he gains from partnership business, property, or information, including taking a partnership opportunity. A partner may not deal with the partnership on behalf of someone whose interests are adverse to it. And before the partnership dissolves, a partner must refrain from competing with the partnership in its business.
The statute also says a partner does not violate these duties merely because his conduct furthers his own interest. That is where many fights are won or lost. Your partner will say he was only building a practice. Your answer is that he used the partnership's patients, marketing, or equipment to do it and kept the profit. The line between ambition and a breach of loyalty in plastic surgery is usually drawn by the evidence.
What if our practice is a professional corporation, not a partnership?
Many California plastic surgery practices operate as professional medical corporations under the Moscone-Knox Professional Corporation Act, which begins at Corporations Code section 13400. Section 16404 speaks to partnerships, so a dispute inside a corporation draws on corporate law and common law instead. In Jones v. H.F. Ahmanson & Co., 1 Cal.3d 93 (1969), the California Supreme Court held that controlling shareholders owe fiduciary duties to minority shareholders and must use their control fairly. Whether that principle fits a 50/50 relationship depends on the facts, which is one reason to have an attorney review your structure early.
Who files the lawsuit also matters. Claims about diverted corporate funds generally must be brought as a derivative action on the corporation's behalf, as in Schrage v. Schrage, 69 Cal.App.5th 126 (2021), while a shareholder harmed personally may sometimes sue directly, as in Jara v. Suprema Meats, Inc., 121 Cal.App.4th 1238 (2004).
How Can I Tell If My Partner Is Diverting Patients?
Diversion rarely announces itself. It shows up in three places that every plastic surgery owner can check: the patient lists, the marketing data, and the equipment.
Patient recall lists and consult leads
Recall lists are the quiet engine of an aesthetic practice. Reminders for filler touch-ups, laser packages, post-op follow-ups, and annual skin care all run on them. Ask who has access to your patient database, whether anyone exported it, and whether recall messages went out for a different practice. Patients are free to choose their surgeon, but how a list moves still matters.
Patient information is protected by California's Confidentiality of Medical Information Act, which generally bars a provider from disclosing medical information without authorization (Civil Code section 56.10). A patient list may also qualify as a trade secret under the California Uniform Trade Secrets Act if it has independent economic value from not being generally known and the owner takes reasonable steps to keep it secret (Civil Code section 3426.1).
Marketing spend and lead attribution
Practices spend heavily to make the phone ring: search ads, social media, review management, and call tracking numbers. If your partner controls the ad accounts, website forms, or call routing, leads your practice paid for can end up on his schedule. Compare call tracking logs, form submissions, and booked consultations by source. Calls forwarded to an unfamiliar number, or a campaign that still performs but converts fewer consults, are warning signs.
Under section 16404, taking a partnership opportunity and keeping the profit falls within the duty of loyalty. Marketing attribution records are often the cleanest proof, because they tie your spending directly to his revenue.
Aesthetic device leasing and equipment crossover
Lasers, body contouring platforms, and other aesthetic devices are expensive, and many partners finance them through separate entities. That can be legitimate. California law lets a partner lend money to, and do other business with, the partnership, generally with the same rights and obligations as an outsider (Corporations Code section 16404, subdivision (f)).
The problem starts when the partner owns the leasing company and sets the rent above market, moves devices to his own location, or uses practice-leased devices at his side practice without paying. The rule against dealing with the partnership on behalf of an adverse party in section 16404 targets arrangements like these. Check who signed the lease, whether the other owners approved it, and whether the payments match the market.
What Legal Options Do I Have Against a Partner Who Diverts Patients?
Accounting, disgorgement, and constructive trust
Under Corporations Code section 16405, a partner may sue the partnership or another partner for legal or equitable relief, with or without an accounting. An accounting forces your partner to open the books and show what he earned from the diverted patients. Disgorgement goes further. Instead of measuring only what you lost, it asks what he gained, and makes him give it up.
Section 16404 says a partner holds profits from partnership business as a trustee for the partnership, and Civil Code section 2224 lets a court treat someone who gains property through a violation of trust as an involuntary trustee of what he gained. In plain terms, money he earned by diverting your patients may be treated as belonging to the practice. Section 16403 also gives you the right to inspect and copy the partnership's books and records, often the first step in building the case.
Injunctive relief to stop the diversion
Money does not always fix this problem, because a lost patient relationship cannot be repurchased. Code of Civil Procedure section 526 allows a court to issue an injunction when continuing an act during the case would cause great or irreparable injury, or when money damages would be inadequate or extremely difficult to calculate. Where the situation is urgent, a temporary restraining order may be available under section 527.
A court will not order patients back to you. The more realistic goal is a narrow order that stops concrete conduct: using the practice's patient lists, redirecting practice leads or phone numbers, accessing practice ad accounts, or using practice equipment. An order preserving records can be just as valuable.
Damages, fees, and exit options
If the evidence supports it, your claims can include breach of fiduciary duty and damages for the profits the practice lost. If your agreement has an attorney's fees clause, Civil Code section 1717 makes it reciprocal, so the winning side may recover fees. That cuts both ways, so evaluate the case before you file.
Many owners also decide they cannot stay in business with the partner. Section 16405 recognizes rights such as a buyout on dissociation and compelling dissolution. For professional corporations, Corporations Code sections 1800 and 2000 cover involuntary dissolution and the buyout alternative. Our guide to plastic surgery practice partnership dissolution in California covers that path in more detail.
Can the Non-Solicitation Clause in Our Agreement Help?
Maybe, but usually less than owners expect. Business and Professions Code section 16600 voids contracts that restrain anyone from engaging in a lawful profession, trade, or business. In Edwards, the court applied that rule strictly and invalidated a clause that barred a departing accountant from working with his former firm's clients. A plastic surgery non-solicitation clause faces the same headwind.
Section 16600 does have built-in exceptions. One, in section 16602, lets a partner agree not to carry on a similar business in a defined area where the partnership did business, upon or in anticipation of dissolution or a partner's dissociation, as long as the other partners keep running a like business there. Whether your clause fits depends on its wording and timing, so have an attorney read it before you rely on it or threaten to enforce it.
The more important point is that a non-solicitation clause is not your only protection. While your partner is still a partner, the duty of loyalty under section 16404 applies whether or not your agreement mentions patients. Diversion that happened before he left is a claim about disloyalty, not restraint of trade. For more on how California treats these clauses in medical settings, see our post on medical practice non-compete agreements in California.
What NOT to Do
Do not lock your partner out of the EMR, email, or ad accounts on your own. He is still an owner, and cutting off access, withholding distributions, or changing the locks can violate your agreement, collide with his information rights under section 16403, and hand him a counterclaim. Talk to counsel first.
Do not copy patient charts or lists to a personal account to build your case. The Confidentiality of Medical Information Act applies to you too. Do not delete or alter anything, and do not confront your partner before you have preserved call logs, ad account data, scheduling reports, and emails.
Do not send patients messages that disparage your partner. Any notice about continuity of care should be neutral and accurate. Finally, do not wait. Filing deadlines vary by claim, and some claims, including those based on fraud, generally must be filed within three years of when you learned the facts (Code of Civil Procedure section 338, subdivision (d)).
Documents to Gather Before You Call an Attorney
You do not need a complete file to start the conversation, but these items make the first meeting far more useful:
- Your partnership, shareholder, or operating agreement and every amendment, including any non-solicitation or exit terms.
- Entity documents for the practice and for any separate company your partner owns, plus device leases and financing agreements.
- Call tracking reports, ad account records, and website form data, sorted by lead source and by month.
- Scheduling and recall reports showing consults and bookings by surgeon and by location over the past two to three years.
- Financial statements, distribution records, and tax returns for the same period.
- Emails, texts, or staff accounts that mention a second practice, a new location, or patients being redirected.
When to Bring in an Attorney
With a plastic surgery partner diverting patients, self-help ends once you have evidence that leads, lists, or money are moving to another practice. Other signals include a new entity or lease your partner never mentioned, an export of the patient database, staff leaving to join him, refusal to provide records you are entitled to see, or a sudden buyout offer on his terms. The earlier a lawyer is involved, the more options you keep, including a negotiated exit, mediation, arbitration if your agreement requires it, and a court order if the situation demands one.
The Takeaway
Patients can choose their surgeon, but a partner cannot use the practice's leads, lists, money, or equipment to build his own business while he still owes you a duty of loyalty. California law gives you the right to see the books, to demand an accounting, to seek disgorgement of his profits, and in the right case to ask a court to stop the diversion. Preserve evidence, avoid self-help, and get your structure and agreement reviewed before you act.
Talk to a California Business Attorney About Your Plastic Surgery Practice
If you are facing this situation, the sooner you get counsel involved, the more options you have. LawPLA works with California practice owners statewide to protect their business, livelihood, and legacy. Call our office at 213-293-7881 or reach us through our contact page to discuss your case. Is your schedule telling you something your partner is not?