Phillips v. Desert Hospital Dist.

• Decision Date: 16 October 1989
• Docket Number: No. S001352,S001352
• Citation: 780 P.2d 349,49 Cal.3d 699,263 Cal.Rptr. 119
• Court: California Supreme Court
• Parties: , 780 P.2d 349 Paula E. PHILLIPS et al., Plaintiffs and Appellants, v. DESERT HOSPITAL DISTRICT, Defendant and Respondent.

Page 119

263 Cal.Rptr. 119

49 Cal.3d 699, 780 P.2d 349

Paula E. PHILLIPS et al., Plaintiffs and Appellants, v. DESERT HOSPITAL DISTRICT, Defendant and Respondent.

No. S001352.

Supreme Court of California In Bank.

Oct. 16, 1989.

Tanzer, Rosato & Samuels, Ellen Kamon, Cary S. Samuels, Ralph L. Rosato, Beverly Hills, Haines, Russ, McMurry & de Recat and Craig J. de Recat, Los Angeles, for plaintiffs and appellants.

Horvitz, Levy & Amerian, Encino, Merrill & Neiswender, Redlands, Thompson & Colegate, Riverside, David S. Ettinger Thomas M. Brown, David M. Axelrad, Grant Marylander and Michelle L. Stern, Encino, for defendant and respondent.

KAUFMAN, Justice.

We granted review in this case to determine whether a notice of intention to commence an action based upon a health care provider's alleged professional negligence (Code Civ.Proc., § 364, subd. (a)) may activate the notice and defense-waiver provisions (Gov.Code, §§ 910.8, 911, 911.3) of the Tort Claims Act (Gov.Code, § 900 et seq.) (act). ¹ As explained below, we conclude that a public entity must treat a notice, such as the notice at issue here, that alerts it to the existence of a claim for monetary damages and an impending lawsuit but fails to comply substantially with the claim presentation requirements of the act, as a defective "claim" that triggers the operation of sections 910.8, 911 and 911.3. These sections (1) require a public entity to notify a claimant of any insufficiencies of content or timeliness that prevent a claim as presented from satisfying the requirements of the act and (2) provide that failure to give such notice waives any defenses based on those insufficiencies. ²

I.

This appeal is from a judgment of dismissal entered after the trial court sustained defendant's demurrer. Therefore, under settled law, we assume the truth of all properly pleaded material allegations of the complaint (Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170, 164 Cal.Rptr. 839, 610 P.2d 1330; Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496, 86 Cal.Rptr. 88, 468 P.2d 216) and give it a reasonable interpretation by reading it as a whole and its parts in their context (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58).

On September 11, 1983, plaintiff Paula E. Phillips was admitted to Desert Hospital (hospital), a public hospital district, the defendant herein. On the advice of her doctors, she underwent a bilateral mastectomy and reconstructive surgery. Mrs. Phillips and her husband, also a plaintiff, allege that the surgery was both medically unnecessary and negligently performed and that as a result she developed complications, including gangrene. Plaintiffs further allege that, notwithstanding the unsuccessful surgery, Mrs. Phillips was released from the hospital on October 2, 1983, without being informed of the nature or extent of her condition. As a result plaintiffs allege that Mrs. Phillips has been compelled to seek extensive additional medical treatment, including surgical intervention.

On April 6, 1984 (205 days after the surgery and 185 days after Mrs. Phillips's release from the hospital), plaintiffs' counsel mailed to the hospital a notice (hereafter 364 notice) pursuant to Code of Civil Procedure section 364, subdivision (a), which requires potential medical malpractice plaintiffs to notify health care providers of their intent to sue 90 days prior to filing a complaint.

Plaintiffs' 364 notice was typed on their law firm's stationery which bore the firm's name, address and telephone number, was signed by their attorney and stated as follows:

"Desert Hospital

1150 North Indian Avenue

Palm Springs, California 92262

"Re: Intention to Commence Action

Paula E. Phillips and Richard A. Phillips

Date of Incident: September 12, 1983

"To Whom It May Concern:

"This letter will serve to advise you that this office intends to commence an action against Desert Hospital on behalf of Paula E. Phillips and her husband Richard A. Phillips. This action arises out of apparent Health Care Provider Negligence (Medical Malpractice) resulting from the diagnosis, care, treatment, operation and related services rendered to Paula E. Phillips on or about September 12, 1983 at Desert Hospital, Palm Springs, California, and the subsequent complications, treatment, damages and emotional distress resulting therefrom. Mr. Phillips will claim damages for loss of consortium and for his mental and emotional suffering resulting from the damages and disfigurement to his wife." (Original italics.)

Having received no response from the hospital, plaintiffs filed a complaint on July 27, 1984, in which they alleged causes of action for negligence, willful misconduct, fraud, conspiracy to defraud, concealment, intentional and negligent infliction of emotional distress and loss of consortium. The complaint named as defendants Mrs. Phillips's treating physicians and the hospital.

The hospital demurred to the complaint on the ground that plaintiffs had failed to state a cause of action because they did not allege compliance with the claim presentation requirements of the act.

Before the demurrer was scheduled to be heard, plaintiffs filed without leave of court a first amended complaint. (Code Civ.Proc., § 472 [prior to trial of issue of law thereon, pleading may be amended once of course after demurrer filed].) In the first amended complaint, plaintiffs attempted to remedy the asserted defect by stating, "Plaintiffs have complied with the provisions of Government Code § 900, et seq.," and by attaching and incorporating by reference applications they had recently sent to the state and county for leave to present a late claim. According to the amended complaint, the hospital's demurrer was the first indication to plaintiffs that the hospital was a public entity.

The amended complaint claimed the hospital was estopped from asserting any defenses based upon plaintiffs' failure to comply with the claim presentation requirements. The alleged ground of estoppel was that the hospital had attempted to conceal its identity as a public entity and had not complied with section 7530 (requiring public entities to identify themselves as such by so stating on their "letterhead stationery" and business cards).

The hospital demurred to the first amended complaint on the same ground relied upon in demurring to the original complaint, to wit, plaintiffs' alleged lack of compliance with the act. The demurrer stated that claims were required to be presented to the hospital's governing board.

The trial court sustained the demurrer without leave to amend and subsequently dismissed the amended complaint. Plaintiffs appealed from the order of dismissal and the Court of Appeal affirmed the judgment. Plaintiffs then petitioned for review. We granted review and transferred the case to the Court of Appeal for reconsideration in light of Foster v. McFadden (1973) 30 Cal.App.3d 943, 106 Cal.Rptr. 685 and sections 910.8, 911 and 911.3. The Court of Appeal subsequently rendered a second opinion in which it reaffirmed its initial judgment and distinguished the instant case from Foster v. McFadden, supra. We again granted review and now reverse.

II.

On appeal below, the court addressed the question whether plaintiffs' 364 notice complied substantially with the claim presentation requirements of the act. Finding the answer in the negative, the Court of Appeal upheld the dismissal of the plaintiffs' action. While we agree that the 364 notice does not comply substantially with the claim presentation requirements of the act (see post, fn. 7), that conclusion is not dispositive of the case. The dispositive issue is whether plaintiffs' 364 notice triggered the notice and defense-waiver provisions of the act (§§ 910.8, 911, 911.3). Recognizing that as the dispositive issue renders the Court of Appeal opinion largely irrelevant. Accordingly, we have no need to address directly much of the Court of Appeal's opinion, reasoning and authority.

A. Notice and Defense-waiver Provisions of the Tort Claims Act

It is well settled that the purpose of the claims statutes "is to provide the public entity sufficient information to enable it to adequately investigate claims and to settle them, if appropriate, without the expense of litigation. [Citations.]" (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 455, 115 Cal.Rptr. 797, 525 P.2d 701.) To achieve this purpose, section 911.2 requires a claimant to present a claim to the public entity within a specified time after accrual of the cause of action. ³ In medical malpractice cases, the action accrues on claimants' actual or constructive discovery of the malpractice. (Martinez v. County of Los Angeles (1978) 78 Cal.App.3d 242, 245, 144 Cal.Rptr. 123.)

If the public entity determines a "claim as presented" fails to comply substantially with sections 910 and 910.2, and is therefore defective, the public entity may either "give written notice of [the claim's] insufficiency, stating with particularity the defects or omissions therein" within 20 days (§ 910.8; see fn. 2, ante), or waive any defense "as to the sufficiency of the claim based upon a defect or omission in the claim as presented...." (§ 911; see fn. 2, ante.) If the public entity does send a notice of insufficiency, it may not take further action on the defective claim for a period of 15 days after such notice is given. (§ 910.8; see fn. 2, ante.) Whether or not it decides to provide a notice of insufficiency, the public entity must notify the claimant within 45 days after the claim is presented whether the claim, defective or otherwise, was timely filed. (§ 911.3, subd. (a); see fn. 2, ante.) Thus, if a section 910.8 notice of insufficiency is sent, the board must make a timeliness determination within 10 days after the last date the claimant could amend the claim to cure the insufficiency identified. Failure to provide such notice of timeliness...