Axline v. Saint John's Hosp. & Health Center

• Decision Date: 06 May 1998
• Docket Number: No. B105689,B105689
• Citation: 63 Cal.App.4th 907,74 Cal.Rptr.2d 385
• Court: California Court of Appeals Court of Appeals
• Parties: , 98 Cal. Daily Op. Serv. 3466, 98 Daily Journal D.A.R. 4723 Stanton G. AXLINE, M.D., Plaintiff and Appellant, v. SAINT JOHN'S HOSPITAL AND HEALTH CENTER, Defendant and Respondent.

Page 385

74 Cal.Rptr.2d 385

63 Cal.App.4th 907, 98 Cal. Daily Op. Serv. 3466,

98 Daily Journal D.A.R. 4723

Stanton G. AXLINE, M.D., Plaintiff and Appellant, v. SAINT JOHN'S HOSPITAL AND HEALTH CENTER, Defendant and Respondent.

No. B105689.

Court of Appeal, Second District, Division 4, California.

May 6, 1998.

Curtis & Connolly, Tom Curtis, Freeburg, Judy & Nettels and Steven J. Freeburg, Pasadena, for Plaintiff and Appellant.

McDermott, Will & Emery, Lee L. Blackman, Los Angeles, and Thomas A. Ryan, Anaheim, for Defendant and Respondent.

EPSTEIN, Acting Presiding Justice.

Appellant, Dr. Stanton G. Axline, sued Saint John's Hospital (the Hospital) when it denied his application to become a member of the medical staff. The Hospital's demurrer was sustained without leave to amend upon the trial court's conclusion that Dr. Axline had signed a release that effectively shielded the Hospital from liability. The trial court also concluded that Dr. Axline had failed to plead the elements of the malicious prosecution tort. We conclude the release does not apply to this case. We also conclude that Dr. Axline properly pled a claim for malicious

prosecution. We therefore reverse the judgment of dismissal.

FACTUAL AND PROCEDURAL SUMMARY

On appeal from the sustaining of a demurrer without leave to amend, we assume the truth of all properly pleaded allegations in the complaint. (Silberg v. Anderson (1990) 50 Cal.3d 205, 210, 266 Cal.Rptr. 638, 786 P.2d 365.) The following summary is taken from the second amended complaint, which is the charging pleading.

Dr. Axline applied to join the Hospital's medical staff. He was required to sign, and did sign, a release which provides in part: "In filing this application for membership on Saint John's Medical Staff, I agree to be bound by the Bylaws of the Hospital and the Bylaws, Rules, and Regulations of the Medical Staff, the Ethical and Religious Directives for Catholic Health Facilities, and the applicable state and federal laws, in connection with all matters relating to the processing of the application and as a member if I am appointed to the Medical Staff. [p] By applying for appointment to the Medical Staff I hereby signify my willingness to appear for interviews and before committees in regard to my application, and I hereby release from liability, to the fullest extent permitted by law, all representatives of the Hospital and its Medical Staff for their acts performed in connection with evaluating my application and my credentials and qualifications. [p] I hereby further authorize and consent to the communication of information and documents between this Hospital, or its Medical Staff, and other medical staffs, medical societies, medical schools or training programs, professional associations, professional liability insurance companies, and licensing authorities in jurisdictions in which I have trained, resided, or practiced, for the evaluation of my professional training, experience, character, conduct, judgment, and ethical qualifications and I hereby release from liability, to the fullest extent permitted by law, this Hospital and its Medical Staff and other individuals and organizations for so doing. [p].... [p] Evaluation and inquiries into my professional competence and qualifications shall be accomplished in a professional manner. I shall be afforded a fair procedure in the event that action on this application, or with respect to my privileges, is adverse. Such procedure shall include reasonable notice of the reasons for such action, and opportunity for rebuttal and impartial determination, as is more specifically set forth in the bylaws of the medical staff." (Emphasis added.)

Dr. Axline alleges several improprieties in the procedures followed by the Hospital in processing his application. He asserts the Hospital violated its bylaws on multiple occasions and failed to provide him an opportunity to address allegations brought against him. He does not allege improper communication between the Hospital and any other party. Based on the alleged violations, Dr. Axline sued for intentional interference with practice of profession, intentional interference with prospective economic advantage, breach of fiduciary duty, breach of contract, and malicious prosecution.

In its demurrer, the Hospital argued that by signing the release Dr. Axline gave up all rights against the Hospital in connection with his application to join the medical staff. The court sustained the demurrer without leave to amend. The court found: "There are insufficient allegations to overcome the bar by virtue of plaintiff's release of moving party from liability for Peer Review Activities in [plaintiff's] application to Medical Staff of moving party/Hospital. There are insufficient allegations of malice to avoid the bar. As to the 5th cause of action [malicious prosecution]: the elements of this cause are not set forth."

DISCUSSION

A

"When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. The burden of proving such reasonable According to the Hospital, Dr. Axline released all claims against it so that the Hospital could be liable only if malice were alleged. The Hospital appears to argue both that the release is valid because it is coextensive with the statutory immunities provided in Civil Code sections 43.7, 43.8, and 47, and that the release provides protections greater than those provided in the statutory immunities. We first consider whether the statutory immunities shield the Hospital from liability. We next discuss whether the release provides greater protection.

possibility is squarely on the plaintiff." (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58, internal citations omitted.)

Civil Code section 43.7, subdivision (b), provides: "There shall be no monetary liability on the part of, and no cause of action for damages shall arise against, any ... committee of a professional staff of a licensed hospital (provided the professional staff operates pursuant to written bylaws that have been approved by the governing board of the hospital), for any act or proceeding undertaken or performed within the scope of the functions of the committee which is formed to maintain the professional standards of the society established by its bylaws, or any member of any peer review committee whose purpose is to review the quality of medical ... services rendered by physicians ... for any act or proceeding undertaken or performed in reviewing the quality of the medical ... services rendered by physicians ... if the professional society, committee, or board member acts without malice, has made a reasonable effort to obtain the facts of the matter as to which he, she, or it acts, and acts in reasonable belief that the action taken by him, her, or it is warranted by the facts known to him, her, or it after the reasonable effort to obtain facts."

Subdivision (e) of the same statute provides: "This section shall not be construed to confer immunity from liability on any ... hospital. In any case in which, but for the enactment of the preceding provisions of this section, a cause of action would arise against a ... hospital, the cause of action shall exist as if the preceding provisions of this section had not been enacted." (Emphasis added.)

Under the plain terms of the statute, section 43.7 provides conditional immunity for individuals, not hospitals. Therefore, Hospital cannot invoke this section as a shield to liability. (See Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465, 481, 131 Cal.Rptr. 90, 551 P.2d 410 ["[D]efendants recognize that section 43.7 of the Civil Code ... provides no privilege at all for the hospital itself, ... "].)

Civil Code section 43.8 provides absolute immunity to persons who "communicate certain information to medical staff committees." (Alexander v. Superior Court (1993) 5 Cal.4th 1218, 1225, fn. 6, 23 Cal.Rptr.2d 397, 859 P.2d 96.) It states in part: "[T]here shall be no monetary liability on the part of, and no cause of action for damages shall arise against, any person on account of the communication of information in the possession of such person to any hospital ... [or] peer review committee, ... " (Emphasis added.)

The Legislature did not specifically exclude hospitals from the scope of Civil Code section 43.8, as it did in section 43.7. Given the express language, the Hospital does not explain how it can fall within the definition of "any person." But even if somehow it could, the alleged misconduct does not relate to the communication of information to a hospital or to a peer review committee. Thus, the immunity provided in section 43.8 for "the communication of information" is not triggered.

The Hospital also directs our attention to Civil Code section 47, subdivisions (b) and (c), the so-called "litigation privilege." (Edwards v. Centex Real Estate Corp. (1997) 53 Cal.App.4th 15, 28, 61 Cal.Rptr.2d 518.) The "litigation privilege is intended to encourage parties to feel free to exercise their fundamental right of resort to the courts for assistance in the resolution of their disputes, without being chilled from exercising this right by the fear that they may subsequently be sued in a derivative tort action arising out of something said or done in the context of the litigation." (Id. at p. 29, 61 Cal.Rptr.2d 518.) Section 47, subdivision (b) protects publications or broadcasts that occur in (1) a The privilege in Civil Code section 47, subdivision (c) applies to "a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who...