Wheeler v. St. Joseph Hospital

• Decision Date: 04 November 1976
• Citation: 133 Cal.Rptr. 775,63 Cal.App.3d 345,84 A.L.R.3d 343
• Court: California Court of Appeals Court of Appeals
• Parties: , 84 A.L.R.3d 343 David W. WHEELER et al., Plaintiffs and Appellants, v. ST. JOSEPH HOSPITAL et al., Defendants and Respondents. Civ. 15761.

Page 775

133 Cal.Rptr. 775

63 Cal.App.3d 345, 84 A.L.R.3d 343

David W. WHEELER et al., Plaintiffs and Appellants, v. ST. JOSEPH HOSPITAL et al., Defendants and Respondents.

Civ. 15761.

Court of Appeal, Fourth District, Division 2, California.

Nov. 4, 1976.

Hearing Denied Jan. 19, 1977.

Richard M. Hawkins, Newport Beach, for plaintiffs and appellants

Moore, Graves & Madory, Richard E. Madory, Santa Ana, for defendant and respondent St. Joseph Hospital.

Ruston, Nance, McCormick & DiCaro, Donald A. Ruston, San Diego, and Steve D. Hillyard, Santa Ana, for defendant and respondent Frank R. Villalobos, M.D.

Beam & Ure, Santa Ana, for defendant and respondent Moran, Rowen and Dorsey, Inc.

Bonne, Jones & Bridges, Santa Ana, for defendant and respondent Thomas J. Dorsey.

OPINION

TAMURA, Associate Justice.

Plaintiffs (David and Margaret Wheeler, husband and wife) were compelled to submit their alleged medical malpractice claims against defendants to arbitration. The arbitration proceedings resulted in an award in favor of defendants and against plaintiffs. This appeal presents two basic issues: (1) Whether there was an enforceable agreement to arbitrate and (2) whether the award should have been vacated by reason of nondisclosure by the medical member of the arbitration panel of a business relationship with the firm of attorneys representing one of the doctor defendants.

FACTS

The pertinent facts giving rise to this appeal are as follows:

At about 7:55 p.m. on April 27, 1971, Mr. Wheeler was admitted to defendant St. Joseph Hospital (hospital) for an angiogram and catheterization studies in connection with a coronary insufficiency. On the following morning, shortly after the tests were performed, Mr. Wheeler suffered a brain stem infarction rendering him a total quadriplegic with inability to speak or otherwise communicate except with his eyes.

In March 1972, plaintiffs filed an action against the hospital and the doctors who performed the medical tests. Mr. Wheeler sought damages for the injuries sustained as a result of defendants' alleged medical malpractice and Mrs. Wheeler joined in the action seeking damages for loss of the services and consortium of her husband and damages for emotional distress from having allegedly witnessed the infliction of the injuries upon her husband.

On November 20, 1972, the hospital filed a petition (noticed for hearing on Dec. 1, 1972) for an order compelling plaintiffs to arbitrate their claims. ¹ The petition alleged that when Mr. Wheeler was admitted to the hospital on April 27, 1971, he signed a form entitled 'CONDITIONS OF ADMISSION' which included a paragraph entitled 'ARBITRATION OPTION'; ² the latter paragraph provided that if the patient does not agree to the 'ARBITRATION OPTION' he must either place his initials in the space provided on the form or, in the alternative, notify the hospital in writing within 30 days of his discharge of his election not to agree to arbitration; Mr. Wheeler failed to exercise his option not to agree to arbitration, either by placing his initialed in the space provided on the admission form or by notifying the hospital within 30 days of his discharge; the hospital served a written demand for arbitration on all parties to the action; the doctors have agreed to submit to arbitration but plaintiffs have refused although Mrs. Wheeler was not a signatory to the admission form, she should be bound by the 'ARBITRATION OPTION' because her claims are based upon and arise out of her husband's cause of action.

On November 29, 1972, the attorneys for the doctors served and filed with the trial court a document reciting that the doctors agreed to submit the controversy to arbitration and joined in the hospital's petition.

Plaintiffs interposed a number of objections to the petition to compel arbitration including the contention that there was no enforceable agreement to arbitrate. ³ Plaintiffs filed a declaration by Mrs. Wheeler in which she stated she was with her husband at all times during the period he was being processed for admission to the hospital; her husband signed the admission form without reading it; no one at the hospital called their attention to the 'ARBITRATION OPTION,' either before or after husband signed the document, and neither was aware of its existence; plaintiffs were never provided with a copy of the admission forms; she first learned of the provision when her attorney informed her that the hospital was attempting to compel arbitration.

Following a hearing on the petition, the court ordered all parties to the action to arbitrate the controversy 'in accordance with the provisions of their agreement dated April 27, 1971.' ⁴ The matter thereafter proceeded to arbitration hearings before a panel composed of one doctor, one lawyer, and one businessman. Following hearings, an award was made in favor of defendants and against plaintiffs.

Plaintiffs filed a petition to vacate the award on all of the grounds specified in Code of Civil Procedure section 1286.2 and on the further ground that the court abused its discretion in ordering arbitration. Defendants countered with a petition for confirmation of the award. The court denied the motion to vacate and ordered confirmation. Plaintiffs appeal from the judgment on the order confirming the award, the order confirming the award, and the order denying the motion to vacate the award. ⁵

Plaintiffs assail the judgment and the arbitration award on several grounds but their two main attacks are: (1) The court erred in compelling plaintiffs to submit their claims to arbitration and (2) the award should have been vacated because the medical member of the arbitration panel failed to disclose facts which created an impression of possible bais. For the reasons which follow, we have concluded that plaintiffs' contentions must be upheld and that the judgment must be reversed.

I

THE ORDER COMPELLING ARBITRATION

(a) Reviewability of the Order

Preliminarily, we dispose of defendants' contentions relating to the reviewability of the order compelling arbitration.

Defendants urge that by proceeding to arbitration, plaintiffs waived their right to attack the order. The contention is without merit. While an order denying a petition to compel arbitration is expressly made appealable (Code Civ.Proc., § 1294, subd. (a)), an order compelling arbitration is nonappealable. (Bertero v. Superior Court, 216 Cal.App.2d 213, 222, 30 Cal.Rptr. 719; Laufman v. Hall-Mack Co., 215 Cal.App.2d 87, 88, 29 Cal.Rptr. 829.) The rationale behind the rule making an order compelling arbitration nonappealable is that inasmuch as the order does not resolve all of the issues in controversy, to permit an appeal would delay and defeat the purposes of the arbitration statute. (Spence v. Omnibus Industries, 44 Cal.App.3d 970, 976, 119 Cal.Rptr. 171; 6 Witkin, Cal.Procedure, Appeal, § 56, p. 4070.) However, a party compelled to arbitrate is entitled to have the validity of the order reviewed on his appeal from a judgment confirming an award. (Stemer v. Modiano Construction Co., 44 Cal.App.3d 264, 270, 118 Cal.Rptr. 309; Lesser Towers v. Roscoe-Ajax Construction Co., 271 Cal.App.2d 675, 692, 77 Cal.Rptr. 100, Cf. Titan Enterprises, Inc. v. Armo Construction Co., Inc., 32 Cal.App.3d 828, 831, 108 Cal.Rptr. 456.) In exceptional situations, a party aggrieved by an order compelling arbitration may seek appellate review of the order by a petition for writ of mandate (Gunderson v. Superior Court, 46 Cal.App.3d 138, 140, 120 Cal.Rptr. 35; Bertero v. Superior Court, supra, 216 Cal.App.2d 213, 222, 30 Cal.Rptr. 719), but failure to pursue that remedy does not preclude review of the order on an appeal from the confirmation judgment. (Stermer v. Modiano Construction Co., supra, 44 Cal.App.3d 264, 270, 118 Cal.Rptr. 309.)

Defendant hospital makes the further contention that plaintiffs are estopped from attacking the order compelling arbitration because they requested their new trial motion to be taken off calendar and caused the order compelling arbitration 'to be entered' and notice thereof to be given to the parties. This contention is likewise without merit. In the first place, while we have no reason to doubt the accuracy of the hospital's allegations, there is nothing in the record before us substantiating them. But even assuming that plaintiffs took the procedural steps mentioned by the hospital, they are not thereby precluded from attacking the validity of the order compelling arbitration. An error of law may ordinarily be raised on appeal even though a new trial motion has not been made. (Mendoyoma, Inc. v. County of Mendocino, 8 Cal.App.3d 873, 877--878, 87 Cal.Rptr. 740; Schmidt v. Macco Construction Co., 119 Cal.App.2d 717, 721, 260 P.2d 230.) The present case does not fall within any known exception to the foregoing rule. The record discloses that plaintiffs challenged the power of the court to compel arbitration at every available opportunity; they raised that issue in their opposition to the petition to arbitrate, in their motion to vacate the award, and in their opposition to the petition for confirmation. They are thus not precluded, either by waiver or estoppel, from challenging the validity of the order compelling arbitration.

We thus turn to the merits of plaintiffs' contention that the court erred in compelling them to submit their claims to arbitration.

(b) Was there an enforceable agreement to arbitrate?

In order to focus upon the precise issue presented by this appeal, we point out at the outset what issues are not involved. This appeal does not involve the question whether a hospital may validly require a patient to agree in advance, as a condition of admission, to arbitrate any malpractice claim that might arise out of the hospitalization. There is nothing in the record to show, and plaintiffs do not contend, that defendant hospital would have denied Mr. Wheeler admission if he had declined to agree...