Fifield Manor v. Finston

• Court: United States State Supreme Court (California)
• Writing for the Court: DOOLING; GIBSON
• Citation: 354 P.2d 1073,7 Cal.Rptr. 377,54 Cal.2d 632
• Parties: , 354 P.2d 1073, 78 A.L.R.2d 813 FIFIELD MANOR (a Corporation), Appellant, v. Sidney S. FINSTON et al., Respondents. L. A. 25858.
• Decision Date: 06 September 1960

Page 377

7 Cal.Rptr. 377 54 Cal.2d 632, 354 P.2d 1073, 78 A.L.R.2d 813 FIFIELD MANOR (a Corporation), Appellant,
v.
Sidney S. FINSTON et al., Respondents. L. A. 25858. Supreme Court of California, In Bank. Sept. 6, 1960.

[54 Cal.2d 633] Overton, Lyman & Prince and George W. Prince, Jr., Los Angeles, for appellant.

Page 378

[354 P.2d 1074] Betts, Ely & Loomis and Richard F. Runkle, Los Angeles, for respondent.

[54 Cal.2d 634] DOOLING, Justice.

Plaintiff brought this action to recover the cost of essential medical care rendered by it to George A. Ross, deceased, pursuant to a 'life-care contract.' Ross' injuries and death resulted from an automobile accident allegedly caused by defendants' negligence. A general demurrer to the complaint was sustained without leave to amend. From the judgment of dismissal accordingly entered, plaintiff appeals.

The essential allegations of plaintiff's complaint, accepted as true for purposes of this appeal (Terry v. Bender, 143 Cal.App.2d 198, 201, 300 P.2d 119), show the following situation: Plaintiff, a nonprofit corporation, had entered into a life-care contract with Ross whereby it had 'expressly agreed to provide to * * * Ross all essential medical care.' Welf. & Inst.Code, §§ 2350, 2353. Thereafter, Ross was struck by an automobile negligently operated by defendant Sidney Finston and died some six weeks later as the result of his injuries. Pursuant to its contract, plaintiff provided essential medical services for Ross 'including treatment by doctors, nursing care, medication and hospitalization' valued at $6,250. Plaintiff alleged its damage in that amount as a direct right of recovery from defendants; and it also alleged a right of subrogation, expressly assigned under the life-care contract, for 'all expenses (it) incurred as the result of any injuries inflicted upon * * * Ross by reason of the negligence or carelessness of a third party.'

There is no question as to the validity of the life-care contract. Welf. & Inst.Code, Div. 3, ch. 3, §§ 2350-2360. Defendants however contest their liability to plaintiff either (1) on the basis of plaintiff's direct right of recovery for the financial loss it suffered in providing medical care for Ross because of defendants' negligence or (2) on the basis of the subrogation agreement in the life-care contract.

1. Plaintiff's direct right of recovery.

The life-care contract between plaintiff and Ross made plaintiff responsible for furnishing Ross essential medical treatment, nursing care and hospitalization; and Ross had a right to these services when necessary. Therefore, plaintiff contends, when defendants' negligent act necessitated plaintiff's furnishing medical services to Ross pursuant to the life-care contract, plaintiff's primary right to recover the resulting medical expenses sustains its direct cause of action against defendants as the wrongdoers responsible for plaintiff's damage. Civ.Code, § 3281. As analogous situations, plaintiff argues that it was in no different position in its duty to Ross and its [54 Cal.2d 635] direct right to recover its damages from defendants as wrongdoers than the parents of a minor child seeking recovery of medical expenses incurred because of wrongful injuries to the child (Civ.Code, § 196; 14 Cal.Jur.2d Damages, § 53, p. 681; McManus v. Arnold Taxi Corp., 82 Cal.App. 215, 223, 255 P.2d 755); a husband seeking recovery of medical expenses similarly incurred for his wife because of wrongful injuries (Code Civ.Proc. § 427; Walling v. Kimball, 17 Cal.2d 364, 371, 110 P.2d 58); or an employer seeking the recovery of medical expenses incurred for an employee wrongfully injured in his employment (Lab.Code, § 3852).

In Follansbee v. Benzenberg, 122 Cal.App.2d 466, 265 P.2d 183, 42 A.L.R.2d 832, plaintiff's husband was fatally injured in an automobile accident caused by defendants' negligence. Plaintiff had incurred hospital and medical expenses for her husband's care and treatment. It was held that these expenses were not recoverable by decedent's estate under section 956 of the Civil Code, for such expenses were incurred by plaintiff wife pursuant to her legal obligation to care for her husband, rather than by the husband; nor were they recoverable by the husband's heirs under section 377 of the Code of Civil Procedure, the wrongful death statute, for such expenses were not sustained by reason of the death of the

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[354 P.2d 1075] husband. It was therefore concluded that plaintiff wife had sustained the expenses in her own right pursuant to her legal obligations to her husband and 'as an individual,' she was entitled to recover them from the defendants as the persons whose negligence proximately caused the injuries necessitating the medical services and expenses.

Plaintiff argues that its position is similar to the wife's in the Follansbee case: it was under a legal duty, pursuant to its life-care contract, to provide the medical care for Ross necessitated by defendants' negligent conduct; the medical expenses so incurred were neither recoverable by Ross' estate (Civ.Code, § 956) nor his heirs under the wrongful death statute (Code Civ.Proc. § 377); and therefore defendants' negligent act was a tort against plaintiff as well as against Ross, the physically injured person.

Plaintiff's alleged direct right of recovery depends upon its contractual obligation to decedent. The courts in common-law jurisdictions have long recognized that an action will lie for the intentional interference by a third person with a contractual relation either by unlawful means or by means otherwise lawful in the absence of sufficient justification. Imperial[54 Cal.2d 636] Ice Co. v. Rossier, 18 Cal.2d 33, 35, 112 P.2d 631; see Prosser on Torts, 2d Ed., pp. 722-725, where the development of this rule is traced. The most general application of this rule is to cases where one party to the contract has been induced to breach it, but it has been extended to cases where performance has been rendered more expensive or burdensome by the third party's intentional act. Prosser on Torts, 2d Ed., p. 730, and cases cited in note 92. However, with the exception of an action by the master for tortious injuries to his servant, thus depriving the master of his servant's services, which traces back to medieval English law (Prosser on Torts, 2d Ed., pp. 723, 729, 732; see Civ.Code, § 49, subd. (c), codifying this common-law rule; cf. Earley v. Pacific Electric Ry. Co., 176 Cal. 79, 82, 167 P. 513, L.R.A.1918A, 997; Darmour Productions Corp. v. H. M. Baruch Corp., 135 Cal.App. 351, 352-353, 27 P.2d 664), the courts have quite consistently refused to recognize a cause of action based on negligent, as opposed to intentiolnal, conduct which interferes with the performance of a contract between third parties or renders its performance more expensive or burdensome. Prosser on Torts, 2d Ed., pp. 732-733, collecting many of the cases; Harper and James, Vol. 1, The Law of Torts, § 6.10, pp. 501-510; note 23 Cal.L.Rev. p. 420.

In a comparatively recent opinion (1946) the Court of Appeals of Ohio in Stevenson v. East Ohio Gas Co., 73 N.E.2d 200, refused recovery to a workman who claimed to have lost eight days wages under his contract with his employer because of conditions caused by a negligent gas explosion in defendant's plant. The court, after noting that plaintiff had failed to find a single case supporting such a cause of action, and after citing and discussing many of the cases in which recovery for negligent interference with contract had been denied, concluded at page 204: 'It is our opinion that the courts generally have reached a wise result in limiting claims for damages in this class of cases to who (sic) may have sustained personal injuries or physical property damage and in refusing to open their doors in such cases to claims of loss of wages and other economic loss based on contract.' Cf....