County of Contra Costa v. Kaiser Foundation Health Plan, Inc.

• Decision Date: 03 July 1996
• Docket Number: No. A070798,A070798
• Citation: 47 Cal.App.4th 237,54 Cal.Rptr.2d 628
• Court: California Court of Appeals Court of Appeals
• Parties: , 97 Cal. Daily Op. Serv. 5116, 96 Daily Journal D.A.R. 8216 COUNTY OF CONTRA COSTA et al., Cross-Complainants and Respondents, v. KAISER FOUNDATION HEALTH PLAN INC., et al., Cross-Defendants and Appellants.

Page 628

54 Cal.Rptr.2d 628

47 Cal.App.4th 237, 97 Cal. Daily Op. Serv. 5116,

96 Daily Journal D.A.R. 8216

COUNTY OF CONTRA COSTA et al., Cross-Complainants and Respondents, v. KAISER FOUNDATION HEALTH PLAN INC., et al., Cross-Defendants and Appellants.

No. A070798.

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

July 3, 1996.

As Modified Aug. 1, 1996.

Kennedy P. Richardson, Yvonne M. Pierrou, Marion's Inn, Oakland, Richard E. Dodge, Denise Billups-Slone, McNamara, Houston, Dodge, McClure & Ney, Walnut Creek, for appellants.

David B. Lynch, Dale L. Allen, Jr., Christopher E. Arras, Low, Ball & Lynch, San Francisco, Thomas A. Watrous, Gordon, DeFraga, Watrous & Pezzaglia, Martinez, Gregory Michael Doyle, Rebecca F. Weisman, McLemore, Collins & Toschi, Oakland, for respondents.

REARDON, Associate Justice.

In this case, we hold that an agreement to arbitrate between a plaintiff-patient and a defendant-health care provider does not bind a cross-complainant who was not a party to the agreement and who now seeks equitable indemnity from the health care provider.

I. FACTS

The facts on appeal are undisputed. On November 16, 1993, pedestrian Darlene Bonanno crossed the Contra Costa County intersection of Pacheco Boulevardand De Normandie Way in order to reach a bus stop maintained by Central Contra Costa County Transit Authority. Bonanno--who was mentally retarded--was injured when struck by a motor vehicle that had been, in turn, struck by Jeremy Joseph McLain's vehicle. She was later treated at Kaiser hospital in Martinez.

In February 1994, Bonanno filed a complaint by and through her guardian ad litem, Robert Bonanno. She sued, inter alia, respondents Contra Costa County, the transit authority and McLain, and appellants Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals and the Permanente Medical Group, Inc. ¹ She alleged causes of action for negligence against McLain, maintaining a dangerous condition of public property against the county and its transit authority, negligent provision of public services against the transit authority, and medical malpractice against Kaiser.

Kaiser moved to compel arbitration of Bonanno's claims alleged against it and to stay the trial court proceedings. (See Code Civ. Proc., § 1281.2.) ² Bonanno's Kaiser health plan required that all medical malpractice claims be submitted to binding arbitration. In May 1994, the trial court granted this motion to compel arbitration. In July 1994, Bonanno filed an amended complaint, alleging the same essential causes of action.

The county, its transit authority and McLain each filed cross-complaints for equitable indemnity against Kaiser. Kaiser answered the cross-complaints of the county and McLain, alleging that they were subject to the mandatory arbitration provisions of Bonanno's health plan. Kaiser moved to compel arbitration of the cross-complaints filed by the county and McLain and to stay the action pending the outcome of arbitration. (See § 1281.2.) In the event that the motions to compel and stay were not granted, Kaiser sought to sever these two cross-complaints against it from Bonanno's complaint and from the cross-complaints against any other cross-defendants. (See § 1281.4.) The county, the transit authority and McLain opposed the motion to compel arbitration, contending that they were not signatories to the arbitration agreement and thus, could not lawfully be bound by it.

The trial court denied the motion to compel arbitration of the cross-complaints and granted the motion to sever the cross-complaints from the complaint. The order applies to the cross-complaints filed by the county, the transit authority and McLain. Kaiser appeals the order, contending that all cross-claims must be arbitrated and the trial court's contrary ruling defeats both the agreement and the Medical Injury Compensation Reform Act's (MICRA) public policy. (See §§ 1294, subd. (a), 1295.) We affirm the order.

II. STANDARD OF REVIEW

The issues presented on appeal turn on the interpretation of the arbitration agreement and statutes. As they are all questions of law, we are not bound by the trial court's interpretation, but must construe the instrument anew on appeal. (Stratton v. First Nat. Life Ins. Co. (1989) 210 Cal.App.3d 1071, 1083, 258 Cal.Rptr. 721; Poag v. Winston (1987) 195 Cal.App.3d 1161, 1173, 241 Cal.Rptr. 330 [written instrument]; see McCorkle v. State Farm Ins. Co. (1990) 221 Cal.App.3d 610, 614, 270 Cal.Rptr. 492 [insurance policy].)

III. ARBITRATION OF INDEMNITY CLAIMS

A. Introduction

First, Kaiser contends that the indemnity claims raised by the county, the transit authority and McLain are within the express scope of the arbitration provision and resemble other types of parasitic claims by nonsignatories that must be arbitrated. It argues that appellate precedents and equitable considerations require such derivative claimants to submit to arbitration despite their lack of prior consent.

On the petition of a party to an arbitration agreement alleging a written agreement to arbitrate a controversy that another party refuses to submit to arbitration, the court must order the parties to arbitrate their dispute. (§ 1281.2.) Bonanno's agreement with Kaiser provided that: "Any claim ... shall be submitted to binding arbitration if: [p] (1) The claim is asserted by ... [p] ... [p] (c) Any person claiming that a duty to him or her arises from a Member's relationship to one or more Respondents. [p] (2) The claim is asserted against ... the following [Respondents]: [p] (a) Kaiser Foundation Health Plan, Inc., [p] (b) Kaiser Foundation Hospitals ... [or][p] (c) The Permanente Medical Group, Inc. [p] ... [p] (3) The claim arises from alleged violation of any duty incident to or arising out of this Agreement, including any claim for medical or hospital negligence or for premises liability, irrespective of the legal theories upon which the claim is asserted." Each of the equitable indemnity cross-claims against Kaiser is based on the theory that Kaiser breached its duty to provide health care to Bonanno and is thus more at fault than the cross-complainants themselves.

B. Cross-complainants as Nonsignatories

Assuming arguendo that the language of this agreement covers cross-claims for equitable indemnity (see, e.g., Mormile v. Sinclair (1994) 21 Cal.App.4th 1508, 1515, 26 Cal.Rptr.2d 725 [wife's arbitration agreement with physician was intended to include nonsignatory spouse's loss of consortium claim within its ambit] ), the fact remains that none of the cross-complainants were signatories to the agreement. They never agreed to submit their claims to arbitration. On this ground, they persuaded the trial court that they were not required to submit their cross-claims to arbitration. On appeal, Kaiser contends that the cross-claims must nevertheless be arbitrated because they are derivative or parasitic claims that depend on Bonanno's rights against Kaiser. If the cross-complainants' claims turn on its duty to Bonanno and the breach of its duty to her, Kaiser reasons that the cross-complainants must be bound to arbitrate their cross-claims as she is so bound.

The California cases binding nonsignatories to arbitrate their claims fall into two categories. In some cases, a nonsignatory was required to arbitrate a claim because a benefit was conferred on the nonsignatory as a result of the contract, making the nonsignatory a third party beneficiary of the arbitration agreement. In other cases, the nonsignatory was bound to arbitrate the dispute because a preexisting relationship existed between the nonsignatory and one of the parties to the arbitration agreement, making it equitable to compel the nonsignatory to also be bound to arbitrate his or her claim. Kaiser argues that the cross-complainants fall in the second category because, in its view, their claims are derivative of Bonanno's causes of action.

Appellate courts have stated that arbitration agreements are enforced with regularity against nonsignatories. (See, e.g., Mormile v. Sinclair, supra, 21 Cal.App.4th at p. 1511, 26 Cal.Rptr.2d 725.) However, a preexisting relationship between the nonsignatory and one of the parties to the arbitration agreement is a common factor in these cases. For example, when a patient who agreed to arbitration brings a medical malpractice action against a physician, some courts hold that the patient's spouse must arbitrate a loss of consortium cause of action even though the spouse did not sign the arbitration agreement. (Id. at pp. 1511-1516, 26 Cal.Rptr.2d 725; Gross v. Recabaren (1988) 206 Cal.App.3d 771, 781, 253 Cal.Rptr. 820.) Minors are bound by a parent's agreement to arbitrate medical malpractice claims filed against a health care provider. (§ 1295, subd. (d); Doyle v. Giuliucci (1965) 62 Cal.2d 606, 609-610, 43 Cal.Rptr. 697, 401 P.2d 1; see Pietrelli v. Peacock (1993) 13 Cal.App.4th 943, 947, 16 Cal.Rptr.2d 688 [preconception contract binds child]; Bolanos v. Khalatian (1991) 231 Cal.App.3d 1586, 1591, 283 Cal.Rptr. 209 [infant claiming in utero injuries]; Wilson v. Kaiser Foundation Hospitals (1983) 141 Cal.App.3d 891, 896-900, 190 Cal.Rptr. 649.) A spouse must arbitrate a wrongful death claim when his or her decedent spouse applied for health insurance for both of them and the application contained an arbitration clause. (Hawkins v. Superior Court (1979) 89 Cal.App.3d 413, 416-419, 152 Cal.Rptr. 491.) The wrongful death claims of nonsignatory adult heirs of a group health plan member must be arbitrated if the member agreed to arbitrate his or her heirs' claims. (Herbert v. Superior Court (1985) 169 Cal.App.3d 718, 722-727, 215 Cal.Rptr. 477.) When an unmarried pregnant woman signs an arbitration agreement with her physician, the child's father must also arbitrate a medical malpractice cause of action related to the child's birth. (Michaelis v. Schori (1993) 20 Cal.App.4th 133, 139, 24 Cal.Rptr.2d 380 [stillbirth]; Bol...