Blanton v. Womancare, Inc.

• Decision Date: 25 March 1985
• Citation: 38 Cal.3d 396,212 Cal.Rptr. 151,696 P.2d 645
• Court: California Supreme Court
• Parties: , 696 P.2d 645, 48 A.L.R.4th 109 Harriette BLANTON, Plaintiff and Appellant, v. WOMANCARE INC., et al., Defendants and Respondents. L.A. 31823.

Page 151

212 Cal.Rptr. 151

38 Cal.3d 396, 696 P.2d 645, 48 A.L.R.4th 109

Harriette BLANTON, Plaintiff and Appellant, v. WOMANCARE INC., et al., Defendants and Respondents.

L.A. 31823.

Supreme Court of California, In Bank.

March 25, 1985.

Irwin L. Schroeder and Schroeder & McElroy, San Diego, for plaintiff and appellant.

Rhoades, Hollywood & Neil, Daniel S. Belsky, San Diego, Richard P. Booth, Jr., Moore, Graves & Madory, and Larry T. Pleiss, Tustin, for defendants and respondents.

GRODIN, Justice.

Plaintiff Harriette Blanton appeals from a judgment upon an award entered for defendants in an arbitration proceeding arising out of the alleged malpractice of a medical student during an abortion performed in the clinic of defendant Womancare, Inc. Plaintiff contends the trial court erred in refusing to nullify the agreement providing for the dispute to be resolved through binding arbitration, because the stipulation to submit her claim to this procedure was made without her consent. Plaintiff's point is well taken. Accordingly, we reverse and remand to the trial court with instructions to set aside the arbitration agreement and subsequent award, and order a trial de novo.

On February 17, 1977, plaintiff allegedly suffered a perforated uterus during an abortion performed by a fourth-year medical student at the clinic of defendant Womancare. Plaintiff brought an action for malpractice against the clinic, the student, and the supervising physician. The case was set for trial on July 29, 1980.

Wesley Harris was employed by plaintiff as her attorney in the malpractice action. He prepared the necessary complaints, then requested that the trial be continued until April 6, 1981. His request was granted. Shortly thereafter, the trial was continued until July 30, 1981, again at Harris's behest. On July 28, 1981, two days before the case was finally to be tried, Harris requested an agreement from defendants that the case be submitted to arbitration.

An examination of Harris conducted by the trial judge reveals Harris discussed the possibility of arbitration with his client at some point before he approached defendants with his offer to arbitrate. Harris conceded, however, that his client would only consent to arbitration if her right to a trial de novo were preserved. ¹ Nevertheless, when on July 28, 1981, Harris obtained a stipulation from defendants that the case be submitted to arbitration, the agreement contained the following provisions:

"1. The captioned case will be taken off the trial calendar and submitted to binding arbitration.

"2. Any award rendered to the plaintiff in arbitration shall be limited to a maximum of $15,000.

"3. Daniel S. Belsky, attorney for defendant, Womancare, shall have the right to select the arbitrator pursuant to the following conditions:

"(a) There shall be only one arbitrator.

"(b) The arbitrator shall be an individual reasonably familiar with the law pertaining to medical malpractice.

"(c) Mr. Belsky's right to choose the arbitrator shall be exclusive in the event he chooses an arbitrator whose practice consists primarily of defending medical malpractice actions.

"(d) In the event Mr. Belsky chooses an arbitrator whose practice consists primarily of prosecuting medical malpractice actions, said individual shall also be approved by Mr. Wes Harris." ² (Emphasis supplied.)

The stipulation was approved by the court, which issued an order to arbitrate "pursuant to section 1141.10 et seq. of the Code of Civil Procedure and California Rules of Court, section [sic ] 1600 et seq." The order declared, "The arbitration and award shall be binding." Harris also sought, and obtained, a dismissal with prejudice of defendant's supervising physician from the lawsuit.

Plaintiff did not learn of this stipulation, nor of the dismissal of the supervising physician, for nearly three months. When apprised that her attorney had submitted her dispute to binding arbitration, she immediately objected, and fired Harris. She then hired new counsel, and through him moved to invalidate the stipulation to binding arbitration executed by Harris, as well as the stipulation to dismiss the supervising doctor from the lawsuit, on the ground she had never given her consent to either decision.

The physician withdrew his opposition to the motion to set aside the dismissal, and was reinstated as a party defendant. The trial court, however, affirmed the validity of the agreement for binding arbitration, apparently in the belief the agreement concerned a "procedural" matter within the scope of an attorney's unilateral discretion. ³ After a continuance in the arbitration proceeding was granted to allow new counsel an opportunity to prepare for the hearing, the proceeding was held and the arbitrator ruled for the defense. Plaintiff's new attorney filed a request for trial de novo, but was notified that since the arbitration was binding the request was "not acceptable." Thereafter, the award was entered as a judgment and plaintiff appealed.

I

The Judicial Arbitration Act (Code Civ.Proc., § 1141.10 et seq.) ⁴ was enacted by the Legislature in 1978 as a means of coping with the increasing cost and complexity of litigation in civil disputes. In the preamble to the statute, the Legislature "finds and declares that arbitration has proven to be an efficient and equitable method for resolving small claims, and that courts should encourage or require the use of arbitration for such actions whenever possible." ( § 1141.10, subd. (a).) The act mandates submission to arbitration of certain classes of at-issue civil actions where the amount in controversy is determined to be not in excess of a specified amount ( § 1141.11), and permits submission to arbitration upon stipulation by the parties regardless of the amount in controversy ( § 1141.12).

The act provides, however, that "[a]ny party may elect to have a de novo trial, by court or jury, both as to law and facts," and that an arbitration award is final if a request for a de novo trial is not "filed within 30 days after the date the arbitrator files the award with the court." ( § 1141.20.) If there is no request for a de novo trial and the award is not vacated ( § 1141.22) the award is entered in the judgment book in the amount of the award ( § 1141.23).

Opportunity for de novo trial is what principally distinguishes court-annexed arbitration pursuant to the Judicial Arbitration Act from private arbitration conducted pursuant to the agreement of the parties and subject to the arbitration statute ( § 1280 et seq.). ⁵ The very essence of the term "arbitration" in the latter context connotes a binding award. (Domke on Commercial Arbitration (rev. ed.1984) p. 1.) The Legislature was well aware of the distinction between the two types of arbitration. The Judicial Arbitration Act provides: "The provisions of this chapter shall not be construed in derogation of the provisions of Title 9 (commencing with Section 1280) of Part 3, and, to that extent, the provisions of this chapter and that title are mutually exclusive and independent of each other." ( § 1141.30.)

The stipulation which the attorneys entered into in this case, since it provided that the award would be binding, was something of a hybrid. From a legal standpoint it could be viewed as an agreement for private arbitration, governed by the general arbitration statute, or as an agreement for judicial arbitration with advance waiver of the right to request a de novo trial. Most likely the attorneys contemplated the latter, since the agreement specifically refers to the Judicial Arbitration Act. In either event, however, the legal effect of the agreement, if it be given effect, was to relinquish the rights of the parties to judicial trial, whether by court or jury, and to waive any right to judicial review except upon the extremely narrow grounds accorded to arbitration awards under the arbitration statute and the Judicial Arbitration Act alike. ( § 1286.2; Cal.Rules of Court, rule 1615(d).)

Of course, such an agreement may often be in the best interests of a client. Here, however, the client did not consent to the agreement; she did nothing beyond retention of the attorney to suggest that he had authority to enter into such an agreement on her behalf; and she repudiated the agreement as soon as she learned of it. The question is whether she is nevertheless bound by her attorney's signature, purportedly on her behalf. ⁶

II

In our analysis of this question we distinguish at the outset between the rights which a client may have against his attorney for breach of a duty owed the client, and the right which an opposing party or the court may have to rely upon a stipulation or agreement which an attorney has made, purportedly on his client's behalf. The two categories are related, but not necessarily congruent, for a client may be bound by the actions of his attorney and at the same time have a legal claim against him on the ground that those actions were undertaken without or in excess of authority. Here, the question concerns the binding effect of the attorney's agreement.

As a general proposition the attorney-client relationship, insofar as it concerns the authority of the attorney to bind his client by agreement or stipulation, is governed by the principles of agency. (Fidelity & Casualty Co. of New York v. Abraham (1945) 70 Cal.App.2d 776, 783, 161 P.2d 689.) Hence, "the client as principal is bound by the acts of the attorney-agent within the scope of his actual authority (express or implied) or his apparent or ostensible authority; or by unauthorized acts ratified by the client." (1 Witkin, Cal.Procedure (2d ed. 1970) Attorneys, § 107, p. 117; Yanchor v. Kagan (1971) 22 Cal.App.3d 544, 549, 99 Cal.Rptr. 367.)

It is undisputed in this case that plaintiff's attorney, in signing the arbitration agreement, acted not only without his client's express authority but contrary to her express instructions....