Hathaway v. Baldwin Park Community Hospital

• Decision Date: 06 November 1986
• Citation: 231 Cal.Rptr. 334,186 Cal.App.3d 1247
• Court: California Court of Appeals Court of Appeals
• Parties: Leila HATHAWAY et al., Plaintiffs and Appellants, v. BALDWIN PARK COMMUNITY HOSPITAL et al., Defendants and Respondents. B015313.

Page 334

231 Cal.Rptr. 334

186 Cal.App.3d 1247

Leila HATHAWAY et al., Plaintiffs and Appellants, v. BALDWIN PARK COMMUNITY HOSPITAL et al., Defendants and Respondents.

B015313.

Court of Appeal, Second District, Division 1, California.

Nov. 6, 1986.

[186 Cal.App.3d 1248] Ian Herzog, Los Angeles, for plaintiffs and appellants.

No appearance for defendants and respondents.

DEVICH, Associate Justice.

Plaintiffs, Leila and Frank Hathaway, appeal from the trial court's order denying their petition for extraordinary attorneys' fees. We affirm.

PROCEDURAL HISTORY

According to the declaration of the Hathaway's attorney, Ian Herzog, attached to the petition for extraordinary attorneys' fees, the Hathaways hired Mitch Rosen to prosecute a medical malpractice action against various defendants. Rosen hired Lawrence Chusid, who is both an attorney and a doctor, to serve as a consultant on the case. Thereafter, Herzog was retained to conduct the trial. ¹

The trial resulted in general verdicts in favor of Leila Hathaway and against all but one of the defendants in the amount of $889,500 and in favor of Frank Hathaway The remaining two defendants appealed from the judgment entered against them contending that the trial court erred when it granted the Hathaways' motion to dismiss the other two defendants. This court held that this issue had been waived since these two defendants did not object to the procedure at the trial level. (Hathaway v. Spiro (1985) 164 Cal.App.3d 359, 366-367, 210 Cal.Rptr. 421.)

and against all but two of the defendants in the amount of $50,000. In order to eliminate inconsistencies that existed between the jury's general verdicts and special findings, the Hathaways dismissed two of the defendants.

On March 28, 1985, the Hathaways petitioned the trial court to permit them to compensate their attorney at the rate of one-third of the amount they recovered in the case rather than the much lower amount prescribed by Business and Professions Code section 6146. ² Alternatively, the Hathaways sought permission to make a voluntary payment to Herzog. The trial court denied the Hathaways' petition on June 12, 1985. ³

ISSUES

On appeal, the Hathaways contend that section 6146 does not prohibit a trial court, in extraordinary cases, from awarding attorneys' fees in excess of the stated fee schedule. Alternatively, the Hathaways contend that if a trial court does not have the authority to award extraordinary attorneys' fees, section 6146 is unconstitutional as applied to them.

HISTORY OF MICRA

On May 16, 1975, Governor Edmund G. Brown, Jr., convened the Legislature in extraordinary session to consider legislation aimed at remedying a perceived crisis caused by rapid increases in medical malpractice insurance premiums.

The Governor's proclamation stated, in pertinent part: "The cost of medical malpractice insurance has risen to levels which many physicians and surgeons find intolerable. The inability of doctors to obtain such insurance at reasonable rates is endangering the health of the people of this State, and threatens the closing of many hospitals. The longer term consequences of such closings could seriously limit the health care provided to hundreds of thousands of our citizens. [p] In my judgment, no lasting solution is possible without sacrifice and fundamental reform. It is critical that the Legislature enact laws which will change the relationship between the people and the medical profession, the legal profession and the insurance industry, and thereby reduce the costs which underlie these high insurance premiums. [p] Therefore, in convening this extraordinary session, I ask the Legislature to consider: [p] ... [p] 8. Establishment of reasonable limits on the amount of contingency fees charged by attorneys. [p] 9. Elimination of double payments ('collateral sources'); institution of periodic payments and reversionary trusts; limitation of compensation for pain and suffering while insuring fully adequate compensation for all medical costs and loss of earnings; and setting a reasonable statute of limitations for the The Legislature responded by enacting MICRA, a sweeping statute that enacted, amended, or repealed several sections of the Business and Professions Code, the Civil Code, the Code of Civil Procedure, and the Insurance Code. The Governor approved the bill on September 23, 1975. The preamble to MICRA states, in part: "The Legislature finds and declares that there is a major health care crisis in the State of California attributable to skyrocketing malpractice premium costs and resulting in a potential breakdown of the health delivery system, severe hardships for the medically indigent, a denial of access for the economically marginal, and depletion of physicians such as to substantially worsen the quality of health care available to citizens of this state. The Legislature, acting within the scope of its police powers, finds the statutory remedy herein provided is intended to provide an adequate and reasonable remedy within the limits of what the foregoing public health and safety considerations permit now and into the foreseeable future." (Stats.1975, Second Ex.Sess. 1975-1976, ch. 2, § 12.5, p. 4007.)

filing of malpractice claims. [p] ... [p] Therefore, by virtue of Article IV, Section 3 of the Constitution, I hereby assemble the Legislature of the State of California in extraordinary session at Sacramento at 1:00 p.m. Monday, May 19, 1975, to consider and act on this legislation." (Governor's Proclamation to Leg. (May 16, 1975) Stats.1975 (Second Ex.Sess. 1975-1976) pp. 3947-3948.)

In the years that have followed its enactment, various provisions of MICRA have withstood constitutional challenges. In American Bank & Trust Co. v. Community Hospital (1984) 36 Cal.3d 359, 364, 204 Cal.Rptr. 671, 683 P.2d 670, the court held that MICRA's provision calling for periodic payment of "future damages" that are $50,000 or greater (Code Civ.Proc., § 667.7) did not violate either the state or federal due process or equal protection clauses since it was rationally related to a legitimate state interest (i.e., the reduction of medical malpractice insurance costs).

Similarly, in Barme v. Wood (1984) 37 Cal.3d 174, 180, 207 Cal.Rptr. 816, 689 P.2d 446, the court held that MICRA's provision which prohibits "collateral sources" from obtaining reimbursement from medical malpractice defendants or their insurers (Civ.Code, § 3333.1, subd. (b)) did not violate the due process or equal protection clauses since it was rationally related to reducing the cost of medical malpractice insurance.

In Roa v. Lodi Medical Group, Inc. (1985) 37 Cal.3d 920, 931-932, 211 Cal.Rptr. 77, 695 P.2d 164, the court held that MICRA's provision limiting the amount of fees an attorney may collect when representing a plaintiff in a medical malpractice action on a contingency basis (§ 6146) was rationally related to the legislation's legitimate objective and therefore did not run afoul of the due process or equal protection clauses.

In Fein v. Permanente Medical Group (1985) 38 Cal.3d 137, 158-159, 211 Cal.Rptr. 368, 695 P.2d 665, the court rejected due process and equal protection challenges to the sections of MICRA which limit damages for noneconomic losses to $250,000 (Civ.Code, § 3333.2, subd. (b)) and permits a defendant to introduce evidence of benefits a plaintiff has received from a collateral source. (Civ.Code, § 3333.1, subd. (a).) The court concluded that these provisions were rationally related to MICRA's legitimate objective.

DISCUSSION

A. Does section 6146 prohibit a trial court from awarding attorneys' fees in excess of the rates provided therein?

The Hathaways argue that section 6146 should not be interpreted as prohibiting a trial court from awarding extraordinary attorneys' fees in extraordinary cases. They cite to Roa v. Lodi Medical Group, Inc., supra, 37 Cal.3d at page 926, 211 Cal.Rptr. 77, 695 P.2d 164 wherein the court stated: "Statutory limits on attorney fees are not at all uncommon, either in MICRA, as initially introduced in the Assembly on May 19, 1975, provided, in pertinent part: "21210. (a) The [California Arbitration Commission on Medical Injury Compensation] and the courts of this state shall determine reasonable fees for the compensation of legal services performed by attorneys at law in connection with the representation of persons seeking compensation for personal medical injury tort claims. Except as provided in subdivision (b), no fee for such legal services shall exceed the following: [p] [Fee schedule]. [p] ... [p] (b) Where a plaintiff is awarded money damages in a personal tort action and such plaintiff's attorney provided or is providing legal services pursuant to a contingency fee agreement, the judge, in open court, or the commission shall review the provisions of such agreement with all parties, including the plaintiff individually, and all attorneys seeking benefits under the agreement; .... The amount of any attorney's fee shall be determined according to the contingency fee agreement unless the court or commission substitutes a different amount upon a specific finding that the amount agreed upon would be grossly inadequate or grossly excessive in view of the professional legal services actually rendered on behalf of the plaintiff." (Assem.Bill No. 1 (1975-1976 Second Ex.Sess.) Div. 17, ch. 6, § 21210.)

                California or throughout the country generally.  In this state, attorney fees have long been legislatively regulated both in workers' compensation proceedings (Lab.Code, § 4906) and in probate matters.  (Prob.Code, §§ 910, 901.)"   The Hathaways seem to be [186 Cal.App.3d 1252] arguing that section 6146 should have a provision for extraordinary attorneys' fees similar to the provisions found in Probate Code section 910 and Labor Code section 4903.  However, in both of these statutes, the Legislature specifically empowered the trial court with discretion to award

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