Widdows v. Koch

• Decision Date: 18 June 1968
• Citation: 263 Cal.App.2d 228,69 Cal.Rptr. 464
• Court: California Court of Appeals Court of Appeals
• Parties: Don WIDDOWS, doing business as Desert Ambulance Service, Plaintiff and Appellant, v. Albert KOCH et al., Defendants and Respondents. Civ. 8917.

Page 464

69 Cal.Rptr. 464

263 Cal.App.2d 228

Don WIDDOWS, doing business as Desert Ambulance Service, Plaintiff and Appellant, v. Albert KOCH et al., Defendants and Respondents.

Civ. 8917.

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

June 18, 1968.

[263 Cal.App.2d 231] George Cheney, Barstow, for plaintiff and appellant.

Thompson & Colegate, Don C. Brown, and Gerald D. Shoaf, Riverside, for defendants and respondents.

OPINION

KERRIGAN, Associate Justice.

The plaintiff is engaged in the business of offering ambulances for hire to the general public in the desert community of Barstow, California. Although not pleaded, the parties concede that on March 17, 1966, the plaintiff advised the officials of the City of Barstow that his labor costs would be increased by reason of a rule of the U.S. Department of Labor involving the payment of premium wages to all ambulance employees working around-the-clock, and that because of such increase, his multiunit ambulance service would require the grant of a $25,000 annual subsidy from the City. The City refused to subsidize the plaintiff and the latter threatened to close his business as of March 31. However, instead of going out of business entirely, plaintiff reduced his service to a single unit manned by one crew. This ambulance was available for public hire 24 hours a day, 7 days a week.

In early May, the Barstow City Council moved to expand competition in the public ambulance service by offering the defendant Kenneth Crippen, an ambulance operator doing business in the community of Victorville, the privilege of stationing one of his embulance crews and units on city property. Thereafter, the city officials caused the following written directive to be posted at Barstow Community Hospital, a facility owned and operated by the City:

'Effective at 9:00 A.M., Saturday, May 21, 1966, and thereafter until further notice, the following procedures Will be followed in calling for an ambulance to transport patients from the Barstow Community Hospital:

'1. Unless a doctor or patient or person authorized to act for a patient specifically requests Desert Ambulance (plaintiff's ambulance service) for patient transportation, Barstow * * * Ambulance (defendant Crippen's firm) will be called for through the Barstow Police Department at 256-2211. If Barstow Ambulance * * * is not available, only then is Desert Ambulance to be called.

'2. No hospital employee may suggest Desert Ambulance in any manner unless absolutely certain that Barstow Ambulance is not available.

'3. No hospital employee may in any way hamper or interfere with any ambulance operator or crew in the fulfillment of his service obligation to the patient.

'4. All hospital personnel are reminded that the Barstow Community Hospital is a function of the City of Barstow and is governed by the City Council. The undersigned is the officially authorized agent of the City Council.

'5. Any hospital employee calling an ambulance is to file with the Hospital Administrator a note showing the patient's name, the name of the doctor on the case, the name of the ambulance service called and the time and date called. If Barstow Ambulance * * * is not used, the note is to state the reason for not using that service. The note is to show the signature of the person making the call requesting ambulance service.

'6. The Hospital Administrator, the Director of Nurses, and the Shift Supervisor will be held responsible for making certain that all employees concerned with calling for ambulance service is (sic) aware of the above requirements and procedures. * * *'

The foregoing directive remained in effect from May 20 to October 6, 1966, when it was rescinded.

In the interim, after the submission and rejection of a claim for damages against the city officials, plaintiff filed the instant action. The plaintiff's suit contained four causes of action and named Albert Koch, Administrator of the Barstow Community Hospital, James O. Tennant, Barstow City Manager, H. James Gilliam, Mayor of Barstow, and Crippen as defendants.

The First Cause of Action stated in substance that: During the period May 20 and October 6, 1966, the city officials agreed and conspired with Crippen to restrict competition in the private ambulance service to the public for hire; the city officials perpetrated an overt act in furthering the conspiracy by issuing the foregoing written command of May 20, directed to all hospital personnel; the conspiracy was formed and furthered for the purpose of injuring plaintiff in his business of supplying ambulance service to the Barstow public and for the purpose of restricting competition and creating a monopoly in favor of Crippen's ambulance service; the conspiracy was in violation of common law antitrust principles and the Cartwright Act; the conspiratorial acts of the city officials were accomplished within the course and scope of their employment; none of said conspiratorial acts were 'discretionary' in character; as a proximate result thereof, plaintiff was deprived of receiving numerous calls and requests for ambulance service at the Barstow Community Hospital; therefore, plaintiff was entitled to general and punitive damages from all the defendants.

The Second Cause of Action differed significantly from the First Cause of Action only in that plaintiff alleged that the defendant-officials, to wit, the hospital administrator, mayor and city manager, by engaging in such conspiracy together and with the defendant-Crippen, departed from the course and scope of their employment as civil servants and became private tort-feasors as a consequence thereof; this purported cause of action sought recovery of damages only from the individual defendants, but not from the city.

The Third Cause of Action was directed against the city only and charged that: the defendant-officials were acting within the course and scope of their employment in carrying out the conspiracy; the city was alerted to the fact that the officials were restricting competition in the private ambulance service business in the Barstow geographical area when plaintiff filed his proof of claim with the city on August 24; nevertheless, the city withheld any action tending to stop such injurious acts upon the part of its officials; in failing to take interdicting action after gaining knowledge of the conspiracy, the city ratified its officials' tortious conduct and was thereby estopped from denying liability for the wrongful acts of its officials.

The Fourth Cause of Action charged that an actual controversy had arisen between the parties inasmuch as plaintiff maintained that he was entitled to recover damages by reason of the existence of the conspiracy, and the defendant-city and its officials claimed that they were entitled to immunity under the provisions of the California Tort Claims Act. In the alternative, the plaintiff sought a declaration that said Act was unconstitutional as being violative of both the State Constitution and the U.S. Constitution.

The competing ambulance owner, Crippen, filed an answer to the plaintiff's complaint and, consequently, is not involved as a party on appeal. However, the remaining defendants, consisting of the city entity and the officials thereof, filed a general demurrer to the third amended complaint, and the same was sustained without leave to amend.

All four counts set forth in the complaint sound in conspiracy to restrain trade. Where a complaint charges a conspiracy and the commission of a wrongful act, the only significance of the conspiracy charge is that each member may be held responsible as a joint tortfeasor, regardless of whether or not he directly participated in the act. (Tietz v. Los Angeles Unified Sch. Dist., 238 Cal.App.2d 905, 913, 48 Cal.Rptr. 245, reh. den. 385 U.S. 964, 87 S.Ct. 389, 17 L.Ed.2d 309; Wise v. Southern Pacific Co., 223 Cal.App.2d 50, 64, 35 Cal.Rptr. 652.) A conspiracy, in and of itself, however atrocious, does not give rise to a cause of action unless a civil wrong has been committed resulting in damage. It requires a determination of whether the pleaded facts show something was done which, without the conspiracy, would give rise to a right of action. (Mox, Incorporated v. Woods, 202 Cal. 675, 677, 262 P. 302; Agnew v. Parks, 172 Cal.App.2d 756, 762, 343 P.2d 118; Schaefer v. Berinstein, 140 Cal.App.2d 278, 293, 295 P.2d 113.)

The California law of antitrust (Bus. & Prof.Code, §§ 16700 et seq.), commonly known as the Cartwright Act, is patterned upon the federal Sherman Act, and both have their roots in the common law. (Apex Hosiery Co. v. Leader, 310 U.S. 469, 498, 60 S.Ct. 982, 995, 84 L.Ed. 1311; Rolley, Inc. v. Merle Norman Cosmetics, 129 Cal.App.2d 844, 849, 282 P.2d 991.) Therefore, federal cases interpreting the Sherman Act are applicable to the Cartwright Act. (Milton v. Hudson Sales Corp., 152 Cal.App.2d 418, 440, 313 P.2d 936.)

The Cartwright Act provides: 'A trust is a combination of capital, skill or acts by two or more persons for any of the following purposes: (a) To create or carry out restrictions in trade or commerce * * * (c) To prevent competition in manufacturing, making, transportation, sale or purchase of merchandise, produce or any commodity. * * *' (Bus. & Prof.Code, § 16720.) 'Except as provided (herein) * * * every trust is unlawful, against public policy and void.' (Bus. & Prof.Code, § 16726.) 'Persons' are defined as '* * * corporations, firms, partnerships, and associations existing under or authorized by the laws of this State or any other State, or any foreign country.' (Bus. & Prof.Code, § 16702.)

It may be assumed for present purposes that the action of the city officials in issuing the memorandum directed to hospital personnel would be violative of the Cartwright Act if undertaken by a combination of private persons, individual or corporate. It may also be assumed, without deciding, that the Legislature could, in the exercise of its...