Ascherman v. San Francisco Medical Society

Decision Date31 May 1974
CourtCalifornia Court of Appeals Court of Appeals
PartiesStanford W. ASCHERMAN, M.D., Plaintiff and Appellant, v. SAN FRANCISCO MEDICAL SOCIETY, a nonprofit corporation, et al., Defendants and Respondents. Civ. 30453.

Slaff, Mosk & Rudman, by Edward Mosk, Los Angeles, for appellant.

Lamb & Glynn, Robert L. Lamb, San Francisco, for respondent American Mut. Liab. Ins. Co.

Hassard, Bonnington, Rogers & Huber, Alan L. Bonnington, San Francisco, for respondents S. F. Medical Soc., American Society of Internal Medicine, Eugene M. Webb, M.D., Malcolm S. Watts, M.D., Albert L. Whitehall, Direct Wire Telephone Service Co., Margaret Novitsky; Richard G. Logan, Oakland, of counsel.

Crosby, Heafey, Roach & May, Chris Gasparich, Oakland, for respondents, Franklin Hospital, French Hospital, Hahnemann Hospital, St. Joseph's Hospital, Edmund Butler, M.D., Morris Groper, M.D., Frederick Howard, M.D., O. W. Jones, M.D., Harold Lindner, M.D., George Monardo.

SIMS, Acting Presiding Justice.

Plaintiff, a licensed and practicing physician has appealed from four separate judgments entered in favor of three groups of defendants 1 in an action in which he sought (1) to enjoin all of the defendants from conspiring together so as to prevent or interfere with the plaintiff in the practice of his profession in the manner in which the plaintiff alleged the defendants had conspired so to do, (2) to enjoin certain defendant hospitals and their operators from excluding the plaintiff from their respective staffs or from the use of their respective facilities, (3) compensatory damages for alleged interference with plaintiff's practice in the sum of $1,000,000 and (4) exemplary damages of $5,000,000.

The judgments were entered by the court pursuant to the provisions of section 630 of the Code of Civil Procedure 2 after the jury was discharged because it could not arrive at a verdict. Plaintiff's basic contention is that the court erred in granting the defendants' motions for judgment, because the evidence was sufficient to sustain a judgment in his favor on the theory that the defendants, and each of them, joined together at various times to tortiously interfere with and to deprive him of his right to follow his profession. Inherent in the foregoing contention is the proper delineation of the rights of the plaintiff with respect to practice in the hospitals. As indicated below the plaintiff claimed that each of the hospitals, in either dismissing him from its staff, or refusing him admission to its staff, or in refusing him the use of its facilities, denied him due process of law and acted improperly in failing to take appropriate proceedings under its bylaws. The plaintiff contends that the court erred not only in withdrawing these claims from consideration by the jury, but also in improperly instructing the jury that they were not to consider such matters. Plaintiff alleges that further error was committed in charging the jury that compliance with the provisions of section 43.7 of the Civil Code 3 would exonerate the physician defendants because that section is unconstitutional, and that the court improperly admitted prejudicial testimony regarding alleged mismanagement of surgical cases by the plaintiff.

It is concluded that the power of a nonprofit hospital, whether public or private, to pass on an application for appointment to or renewal of staff membership is a fiduciary power to be exercised reasonably and for the public good; that the applying physician is entitled to minimal due process of law protection; that the trial court erred in instructing the jury that it should not concern itself with whether or not the hospitals in failing to reappoint or to appoint the plaintiff had violated certain principles of law, and that the hospitals were not required to give him a hearing or give him any reason for their action. Furthermore, the court erred in instructing the jury that there was no issue concerning the question of whether any of the hospitals failed to comply with its bylaws, and that there was no necessity for a hearing if the bylaws did not so provide. The errors in instructing were prejudicial with respect to plaintiff's case against the hospital defendants. Although the court properly ordered judgment with respect to defendants American Society of Internal Medicine, Watts, Whitehall, Direct Wire Telephone Service Co., Novitsky, Webb, and American Mutual Liability Insurance Company, it erred in ordering judgment for the hospital defendants, and the local medical society. The provisions of section 43.7 of the Civil Code are constitutional, but their application to this case depends on the resolution of factual issues, and they do not absolve the doctor participating in the hospital's decisions as a matter of law. The court properly admitted expert hindsight of certain cases, but failed to limit its consideration to the question of his right to recover damages. The judgments must be reversed as to the local medical society and the hospital defendants, and affirmed as to the remaining defendants.

The first cause of action in plaintiff's second amended complaint for injunction and damages alleges that a conspiracy was entered into and joined by all of the named defendants for the purpose of injuring the plaintiff in his professional reputation and in his profession of physician and surgeon; that the conspirators caused plaintiff to be dropped from the medical staffs and to be denied access to the facilities of certain named hospital defendants, to be denied liability insurance from the defendant insurer, to be denied the referrals which would otherwise have been made by the medical society's telephone referral service, all to his damage as prayed for in the complaint.

The second cause of action alleged that defendants Franklin Hospital, Monardo, Butler, Jones, and Howard had maliciously and oppressively deprived plaintiff of staff membership without due process of law; the third alleged that defendants at Franklin Hospital had failed to follow their bylaws in dismissing plaintiff from the hospital; and the fourth alleged that Dr. Butler, as Chief of the Department of Surgery at Franklin Hospital had arbitrarily, capriciously and maliciously injured plaintiff in his profession by making false charges in securing the dismissal of plaintiff from the hospital.

The fifth cause of action alleged that defendants St. Joseph's Hospital and Dr. Lindner, its chief of surgery, and various agents maliciously and oppressively dismissed plaintiff from the staff of St. Joseph's without due process of law; and the sixth alleges that the foregoing defendants failed to follow the bylaws of St. Joseph's in dismissing plaintiff from the staff.

The seventh cause of action alleges that the Homeopathic Foundation, doing business as Hahnemann Hospital, at the insistence of Dr. Groper, the chief of surgery at Hahnemann Hospital, failed to accord plaintiff due process of law in dismissing him from the staff, and the eighth claims that the Hahnemann Hospital and its agents failed to follow its bylaws in dismissing plaintiff from the staff.

The ninth cause of action claims that French Hospital failed to accord plaintiff due process of law in considering his application for staff privileges, and in the tenth cause, it is claimed that French Hospital did not follow its own bylaws in rejecting his application for privileges.

Answer were filed on April 9, 1965, by defendants Hahnemann Hospital, and Monardo, Jones, Groper, Butler, Lindner, and Howard denying the material allegations of the complaint, contending that the bylaws had not been violated, nor were they required to give plaintiff any rights other than those contained in the bylaws, and raising various defenses. In 1965 the five physician hospital-defendants subsequently amended their answers, pursuant to a court order, to raise the additional defense of the provisions of Civil Code section 43.7. (See fn. 3 above.)

Other defendants then demurred to the conspiracy count. The demurrers were sustained without leave to amend and plaintiff appealed. On July 3, 1968, in an unpublished opinion of this court (1 Civ. 23673, Div. Four) held that wrongful or malicious interference with the pursuit of a lawful business or occupation constitutes a tort, and rejected the claim that 'in order to maintain professional standards and medical care of high quality, private hospitals and their staffs must have absolute discretion to exclude doctors from membership, without possibility of suit for damages resulting from the exclusion. . . .' The court reversed the judgments of dismissal and ordered the lower court to rule on the special demurrers.

In May 1969, the medical society defendants filed an answer to the second amended complaint and the amendment to the second amended complaint. The insurer filed an answer in the same month and the hospital defendants filed a further answer in July.

Trial by jury began on November 2, 1970, and motions for a nonsuit and for a directed verdict on behalf of all defendants were denied. Jury deliberations began December 3. On December 4 the jurors advised the court they were divided six and six and could not reach a verdict, and they were discharged. On December 30 defendants' motions for judgments under Code of Civil Procedure section 630 were granted. Thereafter the judgments appealed from were entered (see fn. 1 above) and this appeal ensued.

The general evidence of plaintiff applicable to all issues is as follows: Plaintiff was born in Chicago, where his father was a physician for 50 years. He graduated from Stanford in 1946 with a Bachelor of Arts Degree, received a Bachelor of Science Degree at the University of Illinois in 1948, and graduated from the University of Illinois College of Medicine in 1950 at the age of 23. He then served his internship and residence at Cook County Hospital from 195...

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