Wilson v. Kaiser Foundation Hospitals

• Decision Date: 14 April 1983
• Citation: 190 Cal.Rptr. 649,141 Cal.App.3d 891
• Court: California Court of Appeals Court of Appeals
• Parties: Brett WILSON, By and Through his Guardian ad litem, Ruth WILSON, et al., Plaintiffs and Respondents, v. KAISER FOUNDATION HOSPITALS and Permanente Medical Group, Defendants and Appellants. Civ. 21977.

Page 649

190 Cal.Rptr. 649

141 Cal.App.3d 891

Brett WILSON, By and Through his Guardian ad litem, Ruth WILSON, et al., Plaintiffs and Respondents, v. KAISER FOUNDATION HOSPITALS and Permanente Medical Group, Defendants and Appellants.

Civ. 21977.

Court of Appeal, Third District, California.

April 14, 1983.

Rehearing Denied May 11, 1983.

Hearing Denied June 13, 1983.

Klein & deVries, Douglas K. deVries, Sacramento, for plaintiffs and respondents.

Thelen, Marrin, Johnson & Bridges, T. Emmet Thornton, Arthur P. Morello, Jr. and Curtis A. Cole, Los Angeles, Craddick, Candland & Conti, Richard Conti, Alamo, for defendants and appellants.

SPARKS, Associate Justice.

The question to be decided is whether a binding arbitration clause in a group medical and hospital agreement governs a claim for prenatal injuries by a child who, while not a member of the group at the time of medical malpractice, becomes one at the moment of his birth.

Defendants Kaiser Foundation Hospitals (Hospitals) and Permanente Medical Group (Permanente) appeal from an order denying enforcement of an arbitration provision in a medical services contract to plaintiff's cause of action for prenatal injuries. ¹ We hold that the arbitration clause is binding upon plaintiff and shall reverse.

Plaintiff Brett Wilson, son of Ruth and Michael Wilson, was born at a Kaiser Hospital on February 26, 1981. His mother, Ruth, was employed by Permanente as a clinical assistant. By virtue of her employment Ruth became eligible for health care benefits under the Kaiser Foundation Ruth enrolled herself and her family under this agreement on June 1, 1979, and thus became a subscriber and member of the Health Plan. Since Ruth had previously selected the Health Plan's prepaid medical coverage for herself and her family, she sought defendants' services for the delivery of plaintiff. Four months later, in June 1981, after returning to work following her maternity leave-of-absence, Ruth formally enrolled plaintiff as a family dependent member of the group plan. ³

                Health Plan (Health Plan).  The Health Plan is a nonprofit California corporation in the business of operating a prepaid service plan for the rendition of medical and hospital services to its subscribers and members.  It contracts with defendant Permanente for medical services and with defendant Hospitals for hospital services to its [141 Cal.App.3d 894] members. 2  Effective January 1, 1979, Permanente entered into a separate contract with Health Plan entitled, "Group Medical and Hospital Service Agreement."   Under the terms of that agreement Health Plan agrees to arrange for specified hospital and medical services for eligible individuals enrolled in a Permanente group.  The agreement contains a provision requiring arbitration of all medical malpractice disputes.  The arbitration clause provides:  "Any claim arising from alleged violation of a legal duty incident to this Agreement shall be submitted to binding arbitration if the claim is asserted:  [p] (1) By a Member, or by a Member's heir or personal representative ('Claimant');  [p] (2) On account of death, mental disturbance or bodily injury arising from rendition or failure to render services under this Agreement, irrespective of the legal theory upon which the claim is asserted;  ..."
                

In September 1981 plaintiff, through Ruth as his guardian ad litem, and his parents jointly filed a complaint for personal injuries. The complaint alleged plaintiff sustained perinatal injuries (i.e., injuries sustained shortly before and after birth) through the negligence of defendants. Plaintiff sought compensation for epilepsy, brain damage and other undefined injuries. Plaintiff's parents sought damages for his future care and for their own emotional distress.

In turn, defendants filed a petition to compel arbitration and a motion to stay the action. (Code Civ.Proc., §§ 1281.2; 1281.4.) Plaintiff opposed the petition, asserting he was not a "member" under the terms of the agreement either at the time of his injuries or at the time of his birth. Plaintiff also asserted that since the agreement does not expressly and unambiguously provide for arbitration of perinatal injuries, the action was properly filed in superior court.

Following hearing and argument, the trial court entered its order granting the petition as it applied to plaintiff's claim of postnatal negligence and also ruled plaintiff's parents' claims must be arbitrated. The court, however, denied the petition as to plaintiff's claim of prenatal negligence.

A reading of the court's findings of fact and conclusions of law indicates the basis for the court's reasoning. The court determined plaintiff was not automatically a member of the Health Plan at the time of birth and that subsequent enrollment was necessary to make plaintiff a member. The court impliedly found, however, that Ruth's enrollment of plaintiff in June 1981 had the effect of retroactively making plaintiff a member as of the time of birth under the

provisions of the agreement. Therefore, the court concluded all claims arising at or after plaintiff's birth were required to be arbitrated. The court also ruled, however, the agreement does not expressly provide for arbitration of claims relating to prenatal negligence and that any such claim was not subject to arbitration. Thus, while the complaint alleges negligence commencing when Ruth experienced difficulty during labor and continuing through the delivery of plaintiff, the effect of the trial court's order is that plaintiff may now litigate in superior court his claim of prenatal (i.e., pre-birth) negligence.

DISCUSSION

The focal point of our analysis must be on the relevant provisions of the agreement. In this regard we note that as the underlying facts are not in dispute, " 'it is the duty of the appellate court ... to make its own independent determination of the meaning of the language used in the instrument[s] under consideration.' [Citations.]" (Bareno v. Employers Life Ins. Co. (1972) 7 Cal.3d 875, 881, 103 Cal.Rptr. 865, 500 P.2d 889.)

It is uncontroverted that the agreement provides for arbitration of all claims arising out of or incident to the rendition or failure to render services under it, and that the agreement was in effect throughout the period alleged in the complaint. Our review of the agreement persuades us that plaintiff was automatically enrolled as a member at the time of his birth in accordance with the provisions of Health and Safety Code section 1373, subdivision (c). The agreement provides that the Health Plan "is subject to the requirements of Chapter 2.2 of Division 2 of the California Health and Safety Code and of Subchapter 5.5 of Chapter 3 of Title 10 of the California Administrative Code, and any provision required to be in this Service Agreement by either of the above shall bind Health Plan whether or not set forth herein." Health and Safety Code section 1373, subdivision (c), a part of that chapter, provides in relevant part: "Every plan contract which provides coverage to family members or dependents of the subscriber or enrollee shall grant immediate accident and sickness coverage, from and after the moment of birth, to each newborn infant, ... No such plan may be entered into or amended if it contains any disclaimer, waiver, or other limitation of coverage relative to the coverage or insurability of newborn infants of a subscriber or enrollee covered from and after the moment of birth ...." This construction of the agreement comports with the implementing procedure inaugurated by the Health Plan. In May 1980 the Health Plan announced that "[b]eginning July 1, 1980 Kaiser Foundation Health Plan will implement a new procedure to automatically enroll newborn children delivered in Kaiser Foundation Hospitals.... If the employee does not want to enroll an eligible newborn, he or she will be required to go to a Health Plan office to complete a form to stop the enrollment process."

Although the trial court determined plaintiff was not automatically enrolled upon birth, its error was harmless in light of its finding that Ruth's subsequent enrollment of plaintiff in June 1981 was retroactive to the time of birth. ⁴ Therefore, under either our interpretation of the agreement or the interpretation of the trial court, the conclusion is the same: that plaintiff was a member of the Health Plan as of the time of birth, and all claims asserted by plaintiff regarding birth and postbirth services rendered by defendants were properly ordered into arbitration.

We turn to the crucial issue presented in this appeal: whether plaintiff is also required to arbitrate his claim of prenatal negligence.

Plaintiff contends that even if he were a member upon birth, he was not "alive" and thus not a member when injuries were suffered while a fetus. Moreover, plaintiff notes the agreement provides for coverage "from birth," and does not specifically provide for the arbitration of "prebirth" or "prenatal" injuries. Plaintiff argues that the injuries suffered prior to his birth, and thus prior to his membership in the Health Plan, need not be submitted to arbitration. We disagree.

At the time of the negligent infliction of the prenatal injuries plaintiff, as a fetus, accrued no right of action against the wrongdoer. "At common law," the court recounted in Scott v. McPheeters (1939) 33 Cal.App.2d 629, 632, 92 P.2d 678, 93 P.2d 562, "the weight of authority holds that an unborn child, in contemplation of law, has no existence as a human being separate from its mother, and that it therefore has no right of action for personal injuries inflicted upon it prior to its birth, by the wrongful conduct of another." (See generally, Annot., Liability for Prenatal Injuries (1971) 40 A.L.R.3d 1222.) By the enactment of Civil Code section 29, ⁵ California rejected the common law rule and created a new cause of action for prenatal injuries by a child who survives those injuries and...