Court Opinion

ID: 6336116
Source: CourtListenerOpinion
Date Created: 2022-04-28 18:02:03.31272+00
Date Added: 2024-06-11T09:24:07.160647
License: Public Domain

Filed 4/28/22 Greenberg v. Contra Costa Regional Medical Center CA1/2
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                   DIVISION TWO

 GARY L. GREENBERG,
             Plaintiff and Appellant,
                                                                       A160728
 v.
 CONTRA COSTA REGIONAL                                                 (Contra Costa County
 MEDICAL CENTER et al.,                                                Super. Ct. No. C1801367)
             Defendants and Respondents.

         Through the services of a placement agency, Dr. Gary L. Greenberg, an
anesthesiologist, was temporarily assigned to work at Contra Costa Regional
Medical Center (CCRMC). After three days on the job, his temporary
assignment at CCRMC was terminated for unsatisfactory performance.
Greenberg sued CCRMC, the chief of its anesthesiology department, and the
placement agency (Staff Care, Inc.) in connection with the termination.1 The
defendants moved for summary judgment, which the trial court granted.
Greenberg now appeals, and we affirm.

       Greenberg named CCRMC as a defendant and Contra Costa County
         1

responded as Contra Costa County (erroneously sued as Contra Costa
Regional Medical Center). Because the parties use CCRMC interchangeably
throughout their briefs, we will also do the same.

                                                               1
             FACTUAL AND PROCEDURAL BACKGROUND
A.    Background Facts
      We start by focusing on the two contracts at issue in this appeal:
Greenberg’s contract with Staff Care; and Staff Care’s contract with one of its
hospital “clients,” CCRMC. 2
      In 2011, Greenberg entered into a written Provider Service Agreement
with Staff Care to provide professional services as an anesthesiologist to Staff
Care’s unnamed “clients” on a “locum tenens” or temporary assignment basis
(the Greenberg/Staff Care Agreement). Under the agreement, Staff Care
“acts as an agent for Clients to arrange for professional services on a Locum
Tenens basis,” and Greenberg is an independent contractor and not an
employee or agent of Staff Care.
      The Greenberg/Staff Care Agreement has two specific provisions about
termination that are relevant. First, the agreement provides that “Client, at
its sole discretion, will have the right to terminate the services of [Greenberg]
for any assignment if Client does not reasonably find the services of
[Greenberg] to be appropriate . . . .” (For purposes of this appeal, the “Client”
is CCRMC.)
      Second, the agreement states that Staff Care, in its sole discretion and
without prior notice, may terminate its underlying agreement with
Greenberg if “Staff Care Clients for whom [Greenberg] provides services
request that [Greenberg] be removed for reasons alleged or actual, relating to
competence or professional conduct.”
      The other contract at issue is Staff Care’s 2017 contract with the

      We draw these facts from CCRMC and Staff Care’s separate
      2

statements of undisputed facts filed in support of their motions for summary
judgment, and Greenberg’s responses.

                                        2
County (the County/Staff Care Contract). This contract sets forth the terms
and conditions regarding Staff Care’s assignment of temporary physicians at
CCRMC. Greenberg is not a party to the contract. In fact, the contract
provides that “[n]othing in this Contract may be construed to create, and the
parties do not intend to create, any rights in third parties.” The contract
further provides that “[i]n the event of unsatisfactory performance by any of
[Staff Care’s] locum tenens physicians as judged by the sole discretion of
County’s Health Services Director, or his designee, County may request
replacement of such locum tenens physician . . . .”
      In July 2017, Staff Care placed Greenberg on what was to be a three-
month assignment at CCRMC; Greenberg began working there on September
13. On September 16, CCRMC informed Staff Care that it was terminating
Greenberg’s assignment. On this same day, Jeffrey Saadi, the chair of the
anesthesiology department at CCRMC, sent an email to Staff Care that
identified the reasons why Greenberg’s assignment was being terminated.
Among other things, Saadi wrote that Greenberg lacked “situational
awareness in a critical situation;” lacked “visual acuity;” was not comfortable
doing obstetric anesthesia; and lacked the required familiarity with the drugs
used in obstetric anesthesia. In short, he was unable to respond
appropriately to patients in critical situations.
      Staff Care notified Greenberg that it had received an email from Saadi
critical of Greenberg’s competence and that CCRMC no longer wanted his
services.3 Staff Care conveyed some of Saadi’s complaints to Greenberg

      3Greenberg was paid for the three days he worked at CCRMC.
Although Greenberg’s assignment at CCRMC was terminated, Staff Care did
not terminate its agreement with Greenberg and continued to notify
Greenberg of other potential temporary assignments.

                                        3
orally, and asked Greenberg to respond, which Greenberg did in a lengthy
email. Greenberg contends that CCRMC’s reasons for terminating his
assignment were pretextual.4
B.    Proceedings in the Trial Court
      Greenberg filed his initial complaint in this matter in July 2018 and
the operative Second Amended Complaint (SAC) on March 4, 2019. The SAC
alleged six causes of action; we address only the first and second causes of
action for breach of contract that Greenberg raises on appeal.5
      The first cause of action against CCRMC and Staff Care alleged that
they breached the County/Staff Care Contract by terminating Greenberg’s
assignment despite his satisfactory performance. Greenberg alleged that
Saadi and Staff Care “fabricated the complaints regarding [his] experience
and performance as a pretext for terminating his assignment to avoid paying
him the full value of his 14-week contract due to the scheduling error
involving the closed operating room.” Greenberg alleged that he is entitled to
seek relief as a third-party beneficiary to the County/Staff Care Contract,

      4Apparently, this was not the first time that Greenberg’s temporary
assignment had been terminated. Greenberg testified at deposition that in
2012, 2014, and 2017, he had temporary assignments at other hospitals and
not involving Staff Care that were terminated for performance reasons.
      5  The trial court granted defendants’ motions for summary judgment as
to all six causes of action alleged in the Second Amended Complaint, and as
to all defendants. On appeal, Greenberg challenges the trial court’s judgment
only as to the first and second causes of action. Therefore, our review is
limited to these two causes of action as raised and supported in Greenberg’s
opening brief. (Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6.) Dr.
Saadi, who was named as a defendant in the fourth cause of action for
intentional interference with contract and the sixth cause of action for fraud,
is not a party to this appeal, and Greenberg does not challenge the judgment
entered in Saadi’s favor. We do not discuss the causes of action against him.

                                       4
even though he is not a named party.
      The second cause of action alleged that Staff Care breached the
Greenberg/Staff Care Agreement because CCRMC did not have a reasonable
basis to find Greenberg’s services inappropriate.
      CCRMC and Staff Care filed motions for summary judgment or, in the
alternative, summary adjudication. Staff Care argued that the first cause of
action must be dismissed because Greenberg was not a third-party
beneficiary to the County/Staff Care Contract, and that the second cause of
action must be dismissed because Staff Care did not breach the
Greenberg/Staff Care Agreement. CCRMC argued that Greenberg was not a
third-party beneficiary to the County/Staff Care Contract, and that even if
Greenberg was, CCRMC did not breach this contract as alleged in the first
cause of action.
      In his opposition to Staff Care’s motion, Greenberg argued that there
were triable issues of fact as to whether CCRMC’s decision to terminate him
was reasonable, and whether Staff Care’s failure to investigate CCRMC’s
decision constituted a breach of the Greenberg/Staff Care Agreement. In his
opposition to CCRMC’s motion, Greenberg argued that he was a third-party
beneficiary to the County/Staff Care Contract and that CCRMC breached its
covenant of good faith and fair dealing when it terminated Greenberg’s
services.
      After a hearing on both motions, the trial court granted summary
judgment to CCRMC (and Saadi) and Staff Care. The trial court found that
Greenberg was not a third-party beneficiary to the County/Staff Care
Contract and thus could not sue for breach of that contract, and that Staff
Care did not breach the Greenberg/Staff Care Agreement.
      After the trial court entered judgments for defendants, Greenberg

                                       5
timely appealed.
                                  DISCUSSION
A.    Summary Judgment Standards
      Summary judgment is proper “if all the papers submitted show that
there is no triable issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).)
A defendant seeking summary judgment “bears the burden of persuasion that
there is no triable issue of material fact and that he is entitled to judgment as
a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850
(Aguilar).) A defendant meets this burden by showing that plaintiff “has not
established, and cannot reasonably expect to establish” an essential element
of his claim. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768
(Saelzler).)
      We review a grant of summary judgment de novo, which means we
“decide independently whether the facts not subject to triable dispute
warrant judgment for the moving party as a matter of law.” (Intel Corp. v.
Hamidi (2003) 30 Cal.4th 1342, 1348.) In deciding whether a material issue
of fact exists for trial, we “consider all of the evidence set forth in the papers,
except the evidence to which objections have been made and sustained by the
court, and all inferences reasonably deducible from the evidence.” (Code Civ.
Proc., § 437c, subd. (c).) We view the evidence in the light most favorable to
the plaintiff, as the nonmoving party. (Saelzler, supra, 25 Cal.4th at p. 768.)
B.    Analysis
      1.       First Cause of Action (Breach of the County/Staff Care Contract)
      Defendants moved for summary judgment on the first cause of action
on the ground that Greenberg could not sue for breach of contract because he
was not a party or a third-party beneficiary to the County/Staff Care

                                         6
Contract. CCRMC further argued that even if Greenberg was a third-party
beneficiary, this cause of action still fails because the undisputed facts
establish that CCRMC did not breach the County/Staff Care Contract.
      Greenberg cannot dispute that he is not a party to the County/Staff
Care Contract but contends on appeal that a triable issue of fact exists as to
whether he is a third-party beneficiary to the contract. Greenberg points to
two provisions in the contract that he contends “manifestly benefit” third-
party physicians. One provision gives CCRMC the right to request
replacement of a temporary physician in the event of “unsatisfactory
performance;” the other provision gives CCRMC the right to terminate the
County/Staff Care contract altogether if Staff Care “fail[s] to perform
properly any of its obligations” under the contract.6
      “A contract, made expressly for the benefit of a third person, may be
enforced by him at any time before the parties thereto rescind it.” (Civ. Code,
§ 1559.) “The test for determining whether a contract was made for the
benefit of a third person is whether an intent to benefit a third person
appears from the terms of the contract.” (Johnson v. Holmes Tuttle Lincoln-
Mercury, Inc. (1958) 160 Cal.App.2d 290, 297.) It is not enough that a third
party would incidentally benefit from performance of the contract. (Souza v.
Westlands Water Dist. (2006) 135 Cal.App.4th 879, 891.) The court “must
read the contract in light of the circumstances in which the parties entered
into it” to determine whether a benefit to a third party is contemplated.
(Ibid.)

      6 In his opening brief, Greenberg argues that this second provision
benefits third-party physicians like him. We are at a loss to see how. The
provision is specifically limited to Staff Care’s failure to properly perform its
obligations; it is unclear how this supports Greenberg’s argument.

                                        7
      If the issue of whether one is a third-party beneficiary “can be
answered by interpreting the contract as a whole and doing so in light of the
uncontradicted evidence of the circumstances and negotiations of the parties
in making the contract, the issue becomes one of law that we can resolve
independently.” (Prouty v. Gores Technology Group (2004) 121 Cal.App.4th
1225, 1233 (Prouty).)
      Greenberg relies on Prouty to argue that the County/Staff Care
Contract’s explicit disclaimer regarding third-party beneficiaries is not
dispositive where other provisions intentionally benefit physicians like
Greenberg. In Prouty, the court found that despite a provision in a company
buyout agreement that barred third-party claims, plaintiffs (former
employees) were third-party beneficiaries as a matter of law and summary
judgment was improperly granted. (Prouty, supra, 121 Cal.App.4th at p.
1236.) The buyout agreement contained a provision that guaranteed
employees of the purchased company like plaintiffs a certain amount of
severance pay upon termination. (Id. at pp. 1227-1228.) There was also
evidence of the circumstances surrounding the negotiation of the agreement,
including testimony from the former company’s representative that this
provision was expressly intended to protect and benefit employees like
plaintiffs. (Id. at p. 1234.) Under the principles of contract interpretation,
the court in Prouty concluded that where this specific provision was
inconsistent with the general provision barring third-party claims, the
specific provision was paramount. (Id. at p. 1235.)
      Here, by contrast, we do not find that there was an intent to benefit
physicians like Greenberg in the provisions of the County/Staff Care
Contract. First, as we have noted, the contract includes a provision titled “No
Third-Party Beneficiaries” that bars the creation of any rights in third

                                        8
parties. This expressly evidences that the contract was not intended to
benefit third parties.
      Second, the purpose of the County/Staff Care Contract, by its terms, is
for Staff Care to place temporary physicians at CCRMC in exchange for
payment by CCRMC. To that end, the contract provides that CCRMC will
pay the applicable billing rate to Staff Care for Staff Care’s temporary
physicians, according to a schedule, based on a physician’s specialty. In
certain circumstances, CCRMC pays Staff Care a recruitment fee. The
contract requires that all temporary physicians placed at CCRMC be
members of the County’s medical staff and appropriately credentialed.
      Greenberg argues that he is a third-party beneficiary on account of
provisions of the contract that limit when CCRMC may refuse the services of
a temporary physician. But these provisions confer a benefit or safeguard to
CCRMC to request a replacement physician or terminate the contract with
Staff Care altogether should Staff Care perform its obligations
unsatisfactorily. We do not find that these provisions, read in context, are
intended to create third-party beneficiary rights in physicians like
Greenberg, nor has Greenberg come forward with any evidence that CCRMC
or Staff Care intended otherwise when they negotiated and entered into the
County/Staff Care Contract.
      Third, we are not persuaded by Greenberg’s argument that Ochs v.
PacifiCare of California (2004) 115 Cal.App.4th 782 (Ochs) supports a finding
that Greenberg is an intended third-party beneficiary. In Ochs, the court
found that treating physicians with whom a health care services provider had
no contractual relationship were “[g]enerally speaking” not third-party
beneficiaries to a contract between a health care services provider and its
enrollees, and the allegations were insufficient to withstand a demurrer. (Id.

                                       9
at p. 795.) The court wrote that “under ordinary circumstances” the
physicians were “incidental beneficiaries of a contractual agreement to pay
for an enrollee’s medical care,” and because the complaint did not allege a
“more specific agreement” that might support a third-party beneficiary
theory, the demurrer was properly sustained without leave to amend. (Id. at
pp.795-796.)
      Greenberg argues that Ochs supports that he is a third-party
beneficiary since he points to a specific clause concerning the termination of a
doctor’s temporary assignment. But as we have said, this specific provision is
not sufficient to support that Greenberg was an intended third-party
beneficiary. Nor has Greenberg come forward with any evidence of the
circumstances and negotiations of the parties to the County/Staff Care
Contract which would suggest otherwise. (Cf. Prouty, supra, 121 Cal.App.4th
at p. 1234 [“[t]he uncontradicted facts of the amendment’s negotiations also
disclose Hewlett-Packard and GTG intended to benefit plaintiffs”].)
      Because we conclude that Greenberg was not a party to the contract
nor a third-party beneficiary, we do not reach the second issue raised by
Greenberg that a triable issue of fact exists as to whether CCRMC breached
the County/Staff Care Contract when it terminated Greenberg’s temporary
assignment based on allegedly pretextual reasons and without good faith.
      2.    Second Cause of Action (Breach of the Greenberg/Staff
            Care Agreement)
      Staff Care moved for summary judgment on the second cause of action
on the ground that it did not breach the Greenberg/Staff Care Agreement
when it terminated Greenberg’s assignment. Greenberg argues that a triable
issue of fact exists as to whether Staff Care breached the implied covenant of
good faith and fair dealing by terminating Greenberg’s assignment without

                                      10
first determining whether CCRMC had acted “reasonably” in finding
Greenberg’s professional services were not appropriate.
      It is well settled that “[e]very contract imposes upon each party a duty
of good faith and fair dealing in its performance and its enforcement.”
(Rest.2d Contracts, § 205.) However, the covenant of good faith cannot be
read to imply terms that are inconsistent with the express terms of the
contract. (Carma Developers (Cal.), Inc. v. Marathon Development California,
Inc. (1992) 2 Cal.4th 342, 374. (Carma).) In other words, the covenant cannot
be read “to prohibit a party from doing that which is expressly permitted by
the agreement.” (Ibid.)
      For example, our Supreme Court in Carma held that a landlord’s
termination of a tenant’s lease did not violate the covenant of good faith, even
though the landlord’s sole motive was to realize a higher profit. This was
because termination was expressly permitted under the lease and was a term
that was within the contracting parties’ reasonable expectations. (Carma,
supra, 2 Cal.4th at p. 376.)
      Here, the Greenberg/Staff Care Agreement provides that CCRMC, “at
its sole discretion, will have the right to terminate the services of [Greenberg]
for any assignment if [CCRMC] does not reasonably find the services of
[Greenberg] to be appropriate. . . .”7 Greenberg argues that Staff Care
breached its duty of good faith when it terminated Greenberg’s assignment
without investigating whether CCRMC exercised its discretion to terminate
Greenberg in good faith. In his opposition to Staff Care’s motion for
summary judgment, Greenberg argued that by agreeing to the language

      7The Greenberg/Staff Care Agreement further provides that either
Greenberg or Staff Care may terminate the agreement or an assignment with
or without cause by giving the other party at least 30 days written notice.

                                       11
quoted above, Staff Care “imposed an obligation on itself to review those
decisions by retaining a medical review committee comprised of physicians.”
This argument did not fare well with the trial court, who found that
Greenberg was “reading terms into the contract” not intended by the parties,
and that there was no evidence that the parties intended Staff Care to set up
a medical review committee to determine if every decision by a client to
terminate an assignment is reasonable.
      In his opening brief on appeal, however, Greenberg argues that
“contrary to the trial court’s order [granting summary judgment to Staff
Care], [he] was not demanding a forensic investigation of CCRMC’s
veracity.”8 Greenberg then backpedals that he “was entitled to expect that
Staff Care would take some step in good faith to assure that CCRMC was
exercising its discretion in good faith.” For whatever reason, he has changed
his position on appeal from setting up a “medical review committee” to taking
“some step.”
      Regardless, Greenberg’s argument that the covenant of good faith
required Staff Care to undertake an inquiry or investigation into CCRMC’s
decision is not supported by any express term in the agreement. It is
inconsistent with an express term in the agreement that gives CCRMC the
sole discretion to terminate Greenberg’s assignment. It is further
inconsistent with the parties’ reasonable expectations under the agreement.
Another provision of the agreement (§ 3.02(b)) provides Staff Care with the
right to immediately terminate the agreement with Greenberg if CCRMC

      8 This is Greenberg’s characterization of the trial court order. The
order itself did not refer to a “forensic investigation of CCRMC’s veracity;” it
recited Greenberg’s argument in his own words that he was entitled to a
medical review committee.

                                       12
requests that Greenberg “be removed for reasons alleged or actual, relating to
competence or professional conduct.” Given Staff Care’s broad authority
under section 3.02(b) to terminate Greenberg, it cannot have been within the
parties’ reasonable expectations that Staff Care would perform an
investigation or inquiry into CCRMC’s decision to terminate Greenberg’s
temporary assignment. In any event, Staff Care did undertake an inquiry
when it reached out to Greenberg to inform him of complaints made by Saadi,
and to ask for Greenberg’s response, which Greenberg provided in a lengthy
email.
      Finally, Greenberg cites to FEI Enterprises, Inc. v. Yoon (2011) 194
Cal.App.4th 790, 800. In FEI, the court discussed that where a party has the
power under a contract to make a purely subjective or discretionary decision,
the decision must be made in good faith. (Ibid.) But the provision at issue in
the Greenberg/Staff Care agreement did not grant Staff Care the power to
terminate Greenberg’s temporary assignment with CCRMC at its discretion;
it referred to CCRMC’s power to terminate the assignment if CCRMC did not
reasonably find Greenberg’s services to be appropriate. Under these
circumstances, there was no subjective or discretionary decision for Staff
Care to make once CCRMC decided to terminate Greenberg’s services.
                               DISPOSITION
      The judgment is affirmed. Respondents are awarded their costs on
appeal.

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                                         _________________________
                                         Miller, J.

WE CONCUR:

_________________________
Richman, Acting P.J.

_________________________
Mayfield, J.*

A160728, Greenberg v. Contra Costa Regional Medical Center et al.

     *Judge of the Mendocino Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.

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