Westlake Community Hosp. v. Superior Court

• Decision Date: 06 July 1976
• Citation: 131 Cal.Rptr. 90,17 Cal.3d 465,551 P.2d 410
• Court: California Supreme Court
• Parties: , 551 P.2d 410 WESTLAKE COMMUNITY HOSPITAL et al., Petitioners, v. The SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent; Sarah KAIMAN, Real Party in Interest. L.A. 30504.

Page 90

131 Cal.Rptr. 90

17 Cal.3d 465, 551 P.2d 410

WESTLAKE COMMUNITY HOSPITAL et al., Petitioners, v. The SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent;

Sarah KAIMAN, Real Party in Interest.

L.A. 30504.

Supreme Court of California,

In Bank.

July 6, 1976.

Rehearing Denied Sept. 3, 1976.

Musick, Peeler & Garrett, Joseph A. Saunders and Karns & Karabian, Los Angeles, for petitioners.

No appearance for respondent.

Paul Caruso, Beverly Hills, for real party in interest.

TOBRINER, Justice.

Recent California decisions establish that before a public or private hospital may deny a doctor the right to practice his profession at that hospital, either by the termination of existing staff privileges or by the denial of an initial application for such privileges, the hospital must provide a fair procedure which affords the doctor an opportunity to answer the 'charges' upon which his exclusion rests. (See, e.g., Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541, 116 Cal.Rptr. 245, 526 P.2d 253; Ascherman v. San Francisco Medical Society (1974) 39 Cal.App.3d 623, 114 Cal.Rptr. 681.) In the instant case we must decide, in the light of these recent decisions, what procedural requisites, if any, a doctor who has been deprived of such hospital privileges must fulfill before he may institute a tort action for damages.

For the reasons discussed below, we conclude initially that before a doctor may initiate litigation challenging the propriety of a hospital's denial or withdrawal of privileges, he must exhaust the available internal remedies afforded by the hospital. As we explain, this exhaustion of remedies principle has long been applied in suits attacking the actions of comparable 'private associations' and we conclude that the doctrine applies when a doctor sues in tort for monetary damages as well as when he seeks a judicial order compelling reinstatement or admission.

We further conclude that whenever a hospital, pursuant to a quasi-judicial proceeding, reaches a decision to deny staff privileges, an aggrieved doctor must first succeed in setting aside the quasi-judicial decision in a mandamus action before he may institute a tort action for damages. As we point out, mandate has been the traditional means for reviewing analogous quasi-judicial determinations, and we believe that before hospital board or committee members are subjected to potential personal liability for actions taken in a quasi-judicial setting, an aggrieved doctor should be required to overturn the challenged quasi-judicial decision directly in a mandamus action. At the same time, however, we reject defendants' broad contention that a hospital and its board or committee members enjoy an absolute immunity from tort liability whenever by a quasi-judicial proceeding they deny hospital privileges; once the hospital's quasi-judicial decision has been found improper in a mandate action, an excluded doctor may proceed in tort against the hospital, its board or committee members or any others legally responsible for the denial of staff privileges.

1. The facts of the instant case.

In September 1974, plaintiff, Dr. Sarah Kaiman, instituted the underlying action against two private hospitals, Westlake Community Hospital (Westlake) and Los Robles Hospital (Los Robles), as well as numerous individual members of the hospitals' boards and committees. Dr. Kaiman's complaint alleged that she is a qualified doctor 'whose professional ethics and qualifications are of the highest calibre,' that she has been engaged in the private practice of medicine for 25 1/2 years, that she is licensed to practice medicine in four states and has been licensed to practice medicine in California since March 1971. The complaint further alleged that Dr. Kaiman had been accorded staff privileges at Westlake in December 1972 but that on November 28, 1973, the hospital revoked all of her staff privileges.

According to the complaint, Dr. Kaiman's revocation from Westlake was the result of a malicious conspiracy, engineered by all of the named defendants in order to destroy Dr. Kaiman's medical practice and to restrain competition in order to benefit each member of the conspiracy; the complaint alleged that in furtherance of the conspiracy defendants deliberately concealed the truth as to her qualifications to practice her profession. The complaint additionally alleged that the revocation of her privileges at Westlake 'was pursued and perfected in a manner contrary to established principles of fairness and justice,' and contrary to Westlake's own bylaws and constitution. Finally, the complaint alleged that Westlake and its board and committee members had maliciously conspired with Los Robles and certain of its board and committee members, and that, pursuant to such conspiracy, Los Robles had improperly denied Dr. Kaiman's application for staff membership.

On the basis of the foregoing allegations, the complaint asserted that plaintiff was entitled to substantial general and exemplary damages on a number of distinct theories: (1) intentional and unlawful interference with the right to pursue and practice a lawful calling and trade; (2) conspiracy to restrain competition; (3) intentional infliction of emotional distress; and (4) fraud and deceit. ¹ The complaint did not seek either reinstatement to staff privileges at Westlake or the admission to staff privileges at Los Robles.

Several months thereafter, Westlake and the individual defendants associated with Westlake filed the motion for summary judgment which is at issue in the instant proceeding. ² In support of the motion, defendants submitted numerous affidavits, some pertaining to the revocation of plaintiff's staff privileges at Westlake ('Westlake affidavits') and others relating to the denial of plaintiff's application for membership at Los Robles ('Los Robles affidavits').

In brief, the Westlake affidavits declared that between October 31, 1973, and November 20, 1973, an ad hoc committee composed of the chief of staff and two other doctors reviewed the hospital medical records and treatments of Dr. Kaiman and prepared a report for the hospital's credentials committee recommending the revocation of all of Dr. Kaiman's medical staff privileges; on November 20, the credentials committee considered the report, approved the recommendation and forwarded it to Westlake's board of directors, which subsequently approved the recommendation of revocation on November 28, 1973. The following day, the hospital notified Dr. Kaiman of its decision to revoke her privileges, informed her of her right under the hospital bylaws to request a quasi-judicial hearing before a judicial review committee, and advised her that she could continue to treat patients currently hospitalized until their discharge but that written consultation by another member of the hospital staff would be required as to treatment of new partients admitted to the hospital pending her hearing.

The Westlake affidavits further stated that a week later, Dr. Kaiman requested a hearing pursuant to the hospital's bylaws and that on January 31, 1974, a hearing took place before the hospital's judicial review committee. At the hearing, counsel appeared and represented both the executive committee of the hospital and Dr. Kaiman, both parties called witnesses and introduced documentary evidence, and the entire proceedings were transcribed by certified reporters; the hearing lasted approximately five hours. On March 20, 1974, the hospital informed Dr. Kaiman that the judicial review committee had determined that her staff privileges should be revoked, advising her of her right to appeal the decision to the hospital's board of directors at a meeting scheduled for that purpose on March 27, 1974. Dr. Kaiman appeared before the board of directors on March 27 and presented her objections to the decision of the judicial review committee; the board of directors affirmed the decision of the judicial review committee and so notified Dr. Kaiman.

In addition to setting forth the foregoing chronology of events, the Westlake affidavits quoted a provision of the Westlake bylaws which reads in relevant part: 'Each member of, or applicant to the Medical and Dental Staff, waives any right of personal redress against the Medical and Dental Staff, the Judicial Review Committee, the Governing Board, or any member thereof, for disciplinary action taken under this article.'

The Los Robles affidavits related an emtirely distinct chronology of events. According to these affidavits, Dr. Kaiman had been admitted to membership on the 'courtesy staff' of Los Robles in December 1972, but had resigned from such membership in June 1973. On March 1, 1974, Dr. Kaiman filed a new application for admission to the Los Robles staff. From March 13, 1974, to May 10, 1974, the Los Robles staff contacted the references included in Dr. Kaiman's application and discovered information which contradicted some of the statements which Dr. Kaiman had made in her application concerning positions which she had previously held at other hospitals. The affidavits also disclosed that the hospital received additional information from a local physician with whom Dr. Kaiman had previously practiced which raised doubts as to Dr. Kaiman's professional competency.

On May 10, 1974, the Los Robles medical committee formally considered Dr. Kaiman's application and, according to the affidavits, determined that regardless of the outcome of Dr. Kaiman's dispute with Westlake, her application for membership at Los Robles should be denied because of the information disclosed by Los Robles' own investigation of her qualifications. Subsequently both the medical executive committee and the Los Robles board of trustees concurred in this decision, and on June 24, 1974, the hospital informed Dr. Kaiman that her application for membership had been denied.

Although the Los Robles affidavits do not indicate that the...