Broughton v. Cigna Healthplans, B093517
| Citation | 76 Cal.Rptr.2d 431,65 Cal.App.4th 314 |
| Decision Date | 30 June 1998 |
| Docket Number | No. B093517,B093517 |
| Court | California Court of Appeals |
| Parties | Previously published at 65 Cal.App.4th 314 65 Cal.App.4th 314, 98 Cal. Daily Op. Serv. 5215, 98 Daily Journal D.A.R. 7279 Adrian BROUGHTON, Jr., a Minor, etc., et al., Plaintiffs and Respondents, v. CIGNA HEALTHPLANS of California et al., Defendants and Appellants. |
Hammond, Zuetel & Cahill, Kenneth R. Zuetel, Jr. and Cynthia L.K. Steele, Pasadena, for Defendants and Appellants.
Mazursky, Schwartz & Angelo, Christopher E. Angelo, Los Angeles, Anthony Kornarens, Watkins & Stevens and Steven B. Stevens, Los Angeles, for Plaintiffs and Respondents.
In this appeal we are asked to determine whether an arbitration clause in a health insurance policy issued by Cigna Healthplans of California (Cigna) compels arbitration of a cause of action for violation of the California Consumers Legal Remedies Act (the Act), Civil Code section 1750 et. seq. We hold that the anti-waiver provision of the Act precludes mandatory arbitration. This holding is based on the basic purpose underlying the Act, which is to protect all California consumers, not just the named plaintiff, from continuing use of illegal business practices by a particular business entity. To fulfill that purpose, the Act provides for injunctive relief to prohibit a defendant from continuing to employ business practices found to violate the Act. Because arbitrators do not have the authority to issue and monitor injunctive relief, we conclude that arbitration does not provide an alternative, but equal, forum to resolve claims under the Act, where injunctive relief is sought, as it is in this case. For that reason, the anti-waiver provision of the Act is inconsistent with the arbitration provision of this contract. We conclude that the trial court properly severed the causes of action, denying arbitration with respect to the cause of action based on the Act, while compelling arbitration of the balance of the action.
Plaintiffs are a minor, Adrian Broughton, Jr., through his guardian ad litem, Keya Johnson (his mother) and Ms. Johnson on her own behalf. Adrian and his mother were covered by Medi-Cal, which had negotiated a contract with Cigna for health care coverage. The first cause of action in the complaint against Cigna seeks damages for medical malpractice, based on severe injuries claimed to have been suffered by Adrian at birth. 1 The second cause of action alleges violation of the Act, based on allegations that Cigna deceptively and misleadingly advertised the quality of medical services which would be provided to plaintiffs under its health care plan. Specifically, plaintiffs allege that Ms. Johnson received substandard prenatal medical services, and that she was denied a medically necessary Cesarean delivery.
Cigna answered the complaint, and filed a combined motion to compel arbitration and verified petition for an order requiring plaintiffs to arbitrate the controversy. Cigna relied on the mandatory arbitration provision in its Combined Evidence of Coverage and Disclosure Form. That clause provides: "Any controversy between Group, a Subscriber or Dependent Subscriber (whether a minor or an adult), or the heirs-at-law or personal representatives of a Subscriber or Dependent Subscriber and the Healthplan Plaintiffs opposed the motion. They argued that there was no evidence of an agreement to arbitrate between themselves and Cigna; the case does not come within the statutes governing arbitration of medical malpractice claims; Cigna waived the right to arbitrate by litigating motions before the trial court; and the second cause of action under the Act is not subject to arbitration. In support of the last argument, plaintiffs cited Civil Code section 1751, 2 a part of the Act: "Any waiver by a consumer of the provisions of this title is contrary to public policy and shall be unenforceable and void." In its reply, Cigna did not address the argument that a cause of action under the Act is not subject to arbitration.
(including any of their agents, employees, or providers) shall be submitted to arbitration. This applies whether involving a claim in tort, contract or otherwise." Cigna also relied on Code of Civil Procedure section 1281 which provides: "A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract."
The trial court severed the causes of action, granted the motion to compel arbitration of the medical malpractice cause of action, but denied the motion as to the cause of action under the Act. Cigna filed a timely notice of appeal from the order denying its motion to compel arbitration of the second cause of action for violation of the Act. The order granting the motion to compel arbitration of the first cause of action is not appealable and plaintiffs have not attempted to cross-appeal. The appeal before us is confined to review of the order denying arbitration of the second cause of action. (See Mid-Wilshire Associates v. O'Leary (1992) 7 Cal.App.4th 1450, 1453, 9 Cal.Rptr.2d 862; United Firefighters of Los Angeles v. City of Los Angeles (1991) 231 Cal.App.3d 1576, 1581-1582, 283 Cal.Rptr. 8.)
Following our initial decision affirming the trial court, Cigna petitioned for rehearing. We granted the petition, and invited the parties to address the issues raised in the petition. In particular, we asked counsel to brief "a plaintiff's right to have his or her cause of action under the Consumers Legal Remedies Act (Civ.Code, § 1750 et seq.) decided by a trial court, rather than an arbitrator."
Both sides filed supplemental briefs on this issue. In addition, we granted requests to file amicus curiae briefs by the Association for California Tort Reform and California Financial Services Association in support of Cigna, and by the American Association of Retired Persons and Consumers for Quality Care in support of the Broughtons.
This is the second recent case in which we have been asked to determine whether an insurer can compel arbitration of a statutory cause of action under a mandatory arbitration clause in a health insurance plan. In Wolitarsky v. Blue Cross of California (1997) 53 Cal.App.4th 338, 61 Cal.Rptr.2d 629, we held that an insurer may compel arbitration of a cause of action for violation of the Unruh Civil Rights Act (§ 51 et seq). The Wolitarskys alleged that they were the victims of gender discrimination within the meaning of the Unruh Civil Rights Act, and cited Civil Code, section 52, subdivision (e) in an attempt to avoid mandatory arbitration under the broad arbitration clause contained in their policies with Blue Cross. Section 52, subdivision (e) provides: "Actions under [the Unruh Civil Rights Act] shall be independent of any other remedies or procedures that may be available to an aggrieved party." We concluded: (53 Cal.App.4th at p. 346, 61 Cal.Rptr.2d 629.)
As we did in Wolitarsky, we apply established standards of statutory construction to the issues presented in this case. " '[O]ur first task in construing a statute is to ascertain Whether an insurer may compel arbitration of a cause of action under the Act presents a question of first impression. The Act was enacted in an attempt to alleviate social and economic problems stemming from deceptive business practices, which were identified in the 1969 Report of the National Advisory Commission on Civil Disorders (Kerner Commission.). (See Reed, Legislating For The Consumer: An Insider's Analysis Of The Consumers Legal Remedies Act (1971) 2 Pacific L.J. 1, 5-7, hereafter "Reed.") Section 1760 contains an express statement of legislative intent: "This title shall be liberally construed and applied to promote its underlying purposes, which are to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection."
the intent of the Legislature so as to effectuate the purpose of the law. In determining such intent, a court must look first to the words of the statute themselves, giving to the language its usual, ordinary import and according significance, if possible, to every word, phrase and sentence in pursuance of the legislative purpose. A construction making some words surplusage is to be avoided. The words of the statute must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent possible. [Citations.] Where uncertainty exists consideration should be given to the consequences that will flow from a particular interpretation. [Citation.] Both the legislative history of the statute and the wider historical circumstances of its enactment may be considered in ascertaining the legislative intent. [Citations.]' (Dyna-Med, Inc. v. Fair Employment and Housing Com. (1987) 43 Cal.3d 1379, 1386-1387 [241 Cal.Rptr. 67, 743 P.2d 1323].)" (Ibid.)
Remedies under the Act are cumulative: ...
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