Court Opinion

ID: 9562111
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:21:48.856051+00
Date Added: 2024-06-11T09:17:12.847175
License: Public Domain

LUCAS, J.
I respectfully dissent. Undoubtedly, the underlying conduct allegedly committed by Kaiser Foundation Hospitals’ (hereinafter Kaiser) employee is shocking and reprehensible. The causes of action we confront here, however, do not concern the employee’s liability, or whether Kaiser is liable under principles of vicarious liability for the alleged conduct of the employee. Instead, we are concerned only with whether Kaiser is liable for its own primary affirmative negligent conduct. As to those particular allegations we must determine not if plaintiff has a right to proceed, but rather in which forum she must prosecute her claims against Kaiser.
Plaintiff’s relevant causes of action against Kaiser claim that it breached its duty to her “by failing to exercise reasonable care in the selection, *748employment, retention and supervision of [the employee] . . . [and that] Kaiser . . . knew or in the exercise of reasonable care should have known, that [the employee] . . . had a prior history of criminal conduct that made him unfit for employment in any position in which he would be in contact with patients, including the plaintiff.”
Further, she alleges that “Kaiser . . . knew that [the employee] . . . had a prior history of violent criminal conduct that rendered him unfit for employment in a position of contact with patients, and that despite this advance knowledge, selected and employed him with a conscious disregard for the rights, safety and welfare of the public, and of the plaintiff . . . .” Moreover, she asserts that Kaiser had knowledge of other sexual assaults by its employee on the premises “during the course of employment” and that it nonetheless, “failed and refused to investigate the prior complaints and continued to employ [him].” In other words, as I will explore, the sole basis of liability and the sole breach asserted lies in Kaiser’s conduct in failing to exercise care in its duties as an employer of persons rendering services to those such as plaintiff.
The arbitration clause in the agreement at issue here covers “Any claim arising from an alleged violation of a legal duty incident to his agreement ... if the claim is asserted; [f] (1) by a Member ... [1] (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 . . . .” (Italics added.) The agreement defines “Hospital Services” as, “[ejxcept as expressly limited or excluded by this Agreement, those medically necessary services for registered bed patients which are (1) generally and customarily provided by acute [care] general hospitals . . . and (2) prescribed, directed or authorized by the Attending Physician.”1
An obvious component of the provision of services is the retention, employment and supervision of persons who render such services. In fact, it is upon an asserted breach of this legal duty that plaintiff’s claim against Kaiser rests. If plaintiff were injured because an employee with a drinking problem was not at his or her station and instead had left to take a drink, the breach of duty alleged under a cause of action based on the hospital’s conduct in hiring and retaining the employee would essentially be the same. *749As Restatement Second of Agency section 213, states: “A person conducting an activity through servants ... is subject to liability for harm resulting from his conduct if he is negligent or reckless: ... [1] (b) in the employment of improper persons . . . involving the risk of harm to others . . . .” Note that liability arises in such causes of action from the employer’s actions which antedate the employee’s misconduct.
Comment (d) to the Restatement section explains that “One who employs another to act for him is not liable under the rule stated in this Section merely because the one employed is incompetent, vicious or careless. If liability results it is because, under the circumstances, the employer has not taken the care which a prudent man would take in selecting the person for the business in hand . . . . [f] Liability results . . . not because of the relation of the parties, but because the employer antecedently had reason to believe that an undue risk of harm would exist because of the employment.” (See Annot. (1973) 48 A.L.R.3d 359.) Thus the employer is not liable merely because the employee has injured the third party. Nor is the employer’s liability different whether he negligently employs a careless or a vicious employee; the relevant breach lies in the employer’s acts vis-a-vis selection of the employee.2
My colleagues rest their conclusion that the arbitration clause here was ambiguous on finding credible plaintiff’s argument that “her cause of action did not arise from the rendition of services under the Agreement, but from an intentional sexual assault committed outside the employee’s scope of employment. ” (Ante, p. 742.) In finding ambiguity, the majority ignores the elements of the cause of action actually alleged by the plaintiff herself. The underlying conduct of the employee was certainly a contributing cause. Nonetheless, assuming arguendo that she will be able to establish every element of her causes of action against the employee, plaintiff must still prove Kaiser’s primary and independent misconduct in its “selection, employment, retention and supervision of [its employee] . . . .’’By improperly focusing only on the employee’s conduct, rather than on the actual claim *750against Kaiser, the majority has strained to find ambiguity where none exists.
Even if one assumes for purposes of argument that ambiguity exists as to the application of the arbitration clause here, I see no reason to depart, in this case, from well-established principles of arbitration law. Underlying this area is the strong preference California courts have traditionally held for arbitration. (See Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 322 [197 Cal.Rptr. 581, 673 P.2d 251] [hereinafter Ericksen].) This well-established public policy favors arbitration as a speedy and inexpensive method of resolving disputes, beneficial to all parties. (Keating v. Superior Court (1982) 31 Cal.3d 584, 595 [183 Cal.Rptr. 360, 645 P.2d 1192], partially revd. on other grounds, sub nom., Southland Corp. v. Keating (1984) 465 U.S. 1 [79 L.Ed.2d 1, 103 S.Ct. 852]; Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 711-712 [131 Cal.Rptr. 882, 552 P.2d 1178].)
Rejecting the generally applicable principle that “arbitration agreements should be liberally construed” (Baker v. Sadick (1984) 162 Cal.App.3d 618, 623-624 [208 Cal.Rptr. 676]), and ignoring the basic tenet which we only recently reaffirmed that “doubts concerning the scope of arbitrable issues are to be resolved in favor of arbitration [citations]” (Ericksen, supra, 35 Cal.3d at p. 323), the majority utilizes instead a confusing and incomplete analysis to conclude that ordinary rules of contract interpretation should be applied. In view of the express legislative support for the use of arbitration mechanisms to resolve disputes involving health care providers, the majority’s failure to clearly explain upon what basis it chooses to reject usually applicable principles becomes even more troubling.
My colleagues observe, for example, that “The intentions of the parties to this arbitration clause are not clear.” (Ante, p. 744.) This declaration merely begs the question of which set of rules should apply. It is highly unlikely that the problem of how to deal with ambiguity in an arbitration clause will arise if the parties’ intentions are crystal clear. In any event, ambiguity, and questions relating to the parties’ intentions, have normally never been treated as a basis for rejecting rules applicable to arbitration agreements. It is true of course that “there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate and which no statute has made arbitrable.” (Freeman v. State Farm Mut. Ins. Co. (1975) 14 Cal.3d 473, 481 [121 Cal.Rptr. 477, 535 P.2d 341].) It is equally true, however, that “[c]ourts should indulge every intendment to give effect to such proceedings [citation] and order arbitration unless it can be said with assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” (Pacific Inv. Co. v. Town*751send (1976) 58 Cal.App.3d 1, 9 [129 Cal.Rptr. 489]; see also Van Tassel v. Superior Court (1974) 12 Cal.3d 624, 627 [116 Cal.Rptr. 505, 526 P.2d 969]; Weeks v. Crow (1980) 113 Cal.App.3d 350, 353 [169 Cal.Rptr. 830].)
Only two years ago we utilized this principle to hold that a claim that an agreement was itself fraudulently obtained was a matter within the scope of arbitration. That rule stemmed in large part from a recognition that opening the door too widely to litigation over the scope of arbitration clauses would tend to deprive the parties to the arbitration agreement of the very advantages the process is intended to produce. To that end, we concluded in Ericksen that “in the absence of indication of contrary intent, and where the arbitration clause is reasonably susceptible of such an interpretation, claims of fraud in the inducement of the contract. . . will be deemed subject to arbitration. ” (35 Cal.3d at p. 323, fn. omitted.)3 Here, the majority concedes that Kaiser’s interpretation of the agreement “has some inherent appeal” which “demonstrate^] that the scope of the arbitration clause is at best ambiguous” {ante, p. 742), but gives that grudging conclusion no effect despite explicit precedent making such a finding of major significance.
Of course, the general rule is otherwise where the arbitration clause is part of an adhesive contract. Indeed, the majority flirts with utilizing principles involving such contracts. But my colleagues concede as they must that in Madden v. Kaiser Foundation Hospitals, supra, 17 Cal.3d 699, we held that freely negotiated group contracts for hospital and medical coverage are not contracts of adhesion. The majority seeks to avoid the Madden analysis and to import contrary principles of interpretation on the basis that the contract here has certain “adhesive characteristics” and is in “standard form.” These considerations do not, in my view, justify creating an exception to the general rules of liberal construction applicable to arbitration, nor, in the end, do my colleagues expressly rely upon the factors to which they refer as a basis for finding an exception.
Perhaps then the majority’s rationale rests in the claim that “Surely it was not contemplated, let alone expected, by either party to the Agreement that this sort of attack would befall petitioner while she was hospitalized under Kaiser’s care. It is, therefore, difficult to conclude that the parties *752intended and agreed that causes of action arising from such an attack would be within the scope of the arbitration clause.” (Ante, p. 745.)4 It is immediately after this pronouncement, but without drawing any conclusions, that the majority launches into its discussion of the treatment of ambiguities under general contract rules rather than rules applied to agreements to arbitrate.
Examination of the above language demonstrates the pervasive fallacies of the majority’s opinion in this respect. First, of course, the attack giving rise to the claim may well not have been specifically contemplated at the time the contract was signed. Arbitration agreements when executed before a dispute arises are, if intended for broad coverage, of necessity unspecific in their descriptions of arbitrable claims. Moreover, even if we were to apply a “reasonable expectations” analysis, as the majority suggests, the question is not whether the patient expected to be raped, but whether she expected a dispute over the hospital’s hiring practices to go to arbitration. Herrera v. Superior Court (1984) 158 Cal.App.3d 255 [204 Cal.Rptr. 553], and Baker v. Sadick, supra, 162 Cal.App.3d 618, which the majority distinguishes by arguing they involved medical malpractice claims, are instructive.
In those cases the court addressed whether arbitration provisions governed by Code of Civil Procedure section 1295 extended to claims other than those asserting medical malpractice based on negligence. In the former case, the plaintiff objected to arbitration; in the latter, the defendant doctor did so.5 In both the court concluded that claims alleging intentional torts were covered by the arbitration agreements.6
In order to reach the conclusion that the intentional tort claims were arbitrable, the Court of Appeal construed section 1295 of the Code of Civil Procedure. Subdivision (a) of the section states: “Any contract for medical services which contains a provision for arbitration of any dispute as to professional negligence of a health care provider shall . . . [utilize the fol*753lowing language:] ‘It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration . . . ” (Italics added.) Subdivision (g) of the section, interestingly not cited by the majority along with the rest of the provision, defines “Professional negligence” as “a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the provider is licensed and which are not within any restriction imposed by the licensing agency or licensed hospital.” (Italics added.)
Rather than construing the section narrowly as applicable only to claims arising out of negligent acts by a health care provider, the Herrera court instead concluded “As we read section 1295, the language about disputes regarding professional negligence, and definition of professional negligence, are designed to set the threshold of the type of action in which the arbitration provision will be used .... [T]he language which the Legislature specified must be included in the arbitration provision shows that the Legislature intended arbitration of disputes over medical services to extend beyond negligence. ” (158 Cal.App.3d at p. 262; see Baker v. Sadick, supra, 162 Cal.App.3d at p. 626.) The Court of Appeal looked to the statutory intent to encourage generally arbitration of claims relating to provision of health care as well as the general public policy favoring arbitration. While Kaiser is not subject to all the terms of section 1295 (see subd. (f)) it and similar health care providers are still required to set forth arbitration clauses in agreements with subscribers.7 There is no indication that the Legislature intended that such agreements be more narrowly construed than those governed in their entirety by section 1295’s terms.8
*754The definition of “professional negligence” remains applicable to Kaiser under the terms of the section. Kaiser is charged here with breaching its duty to employ proper personnel to render care to patients, conduct which falls within the definition of “a negligent act or omission to act . . . in the rendering of professional services.” The issue is not, as the majority has it, the employee’s conduct per se, but rather it is Kaiser’s asserted role as an employer which hired and retained a person without proper inquiry or attention to his background and performance.
The bottom line is that the agreement here was indisputably susceptible to the interpretation urged by Kaiser and relied upon by the trial court. In fact, given the nature of the actual claim against Kaiser, I believe it is the only plausible interpretation. But even assuming that the plaintiff’s version reaches the level of creating ambiguity, I have searched in vain for an explanation in the majority opinion of why it is appropriate here to discard and disregard express legislative preference and abundant precedent relating to resolution of such disputes.
I would affirm the trial court judgment granting Kaiser’s motion to submit the matter to arbitration.
Grodin, J., concurred.
The petition of real parties in interest for a rehearing was denied March 18, 1986. Grodin, J., Lucas, J., and Panelli, J., were of the opinion that the petition should be granted.

In addition, the agreement states that “When prescribed, the following Hospital Services are provided without charge: room and board; general nursing care; services and supplies; . . . .” The services performed by an orderly obviously are included. No physician writes specific prescriptions for the number of sheets to which a patient is normally entitled, or the number of times the bed is to be changed, yet such “services and supplies” are provided without charge as part of the general “prescription” for hospital care.

This principle was demonstrated in a different context in Underwriters Ins. Co. v. Purdie (1983) 145 Cal.App.3d 57 [193 Cal.Rptr. 248], where a liquor store was sued for negligent employment when its employee shot a deliveryman during an argument. The insurance policy covering the incident contained a firearms exclusion clause. The court reviewed California law, observing that in this state “an employer may be liable to a third person for the employer’s negligence in hiring or retaining an employee who is incompetent or unfit. (Rahmel v. Lehndorff(1904) 142 Cal. 681 [76 P. 659]; Monty v. Orlandi (1959) 169 Cal.App.2d 620, 624-625 [337 P.2d 861] . . . .)” (145 Cal.App.3d at p. 69.) Responding to the insurer’s claim that the exclusion clause governed, the court concluded that “the use of the firearm in the instant case . . . was a mere contributing cause.” (Id. at p. 70.) The key negligent act involved was the “hiring of an employee with a propensity for violence” (id. at p. 69) and coverage therefore extended to the employer’s acts in that regard despite the employee’s use of a firearm to inflict injury.

Ericksen of course looked to both state and federal authority in determining which principles to apply. The United States Supreme Court recently reiterated the concept that “The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” (Moses H. Cone Hospital v. Mercury Constr. Corp. (1983) 460 U.S. 1, 24-25 [74 L.Ed.2d 765, 785, 103 S.Ct. 927].) The majority’s opinion here thus bucks not only state but also federal trends.

One wonders, if this conduct was so completely unthinkable and not subject to anticipation, how the hospital can be found liable for negligent employment. The majority may have won the battle for plaintiff, but essentially lost for her her war.

Interestingly, in Baker the arbitration clause was construed against the doctor so as to require arbitration of punitive damages claims. Here, of course, the majority construes the clause against the health provider so as to require court adjudication. This further demonstrates the problems of using a “reasonable expectations” rule. It would be extremely difficult to apply, leading to different results under the same contract language depending upon who wished to go to arbitration.

For example, in Herrera, the plaintiff amended her complaint to include causes of action alleging torts such as assault and battery, fraud and deceit, and unjust enrichment. (158 Cal.App.3d at pp. 257-259.) All such claims were found arbitrable.

An additional consideration weighing against utilization of the “reasonable expectations” rule adopted by the majority is that it would require case-by-case litigation, defeating the general policy favoring arbitration reflected in the Legislature’s enactment of section 1295.

The decision of the United States Supreme Court in Steelworkers v. Warrior & Gulf Co. (1960) 363 U.S. 574 [4 L.Ed.2d 1409, 80 S.Ct. 1347], is illuminating. The court considered there the role of courts in overseeing promises to arbitrate made in the labor context. Acknowledging that “arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit” (p. 582 [4 L.Ed.2d at p. 1417]), the court emphasized that in view of the strong congressional policy favoring settlement through arbitration, “the judicial inquiry under § 301 must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award he made .... Doubts should be resolved in favor of coverage.” (363 U.S. at pp. 582-583, fn. omitted [4 L.Ed.2d at pp. 1417-1418].) The Legislature similarly has expressed a strong preference for use of arbitration to resolve disputes arising in regard to provision of health care and services. As did the United States Supreme Court, we should therefore give great weight to such explicit indications of legislative intent. This the majority has entirely failed to do.