Court Opinion

ID: 9750893
Source: CourtListenerOpinion
Date Created: 2023-08-28 15:45:28.834471+00
Date Added: 2024-06-11T07:26:27.738749
License: Public Domain

CROSKEY, J.
I respectfully dissent.
I would affirm the trial court’s award of attorney fees to Mir. While I agree with my colleagues’ resolution of the “retroactivity” and “substantially prevailing party” questions, I part company with them on their construction and application of the controlling statute. I believe the express statutory language used in Business and Professions Code section 809.91 (§ 809.9) justifies the award of fees to Mir.
I cannot agree with the majority’s conclusion that section 809.9 is unclear as to the circumstances under which attorney fees are recoverable by a prevailing party simply because section 809.9 does not itself define its use of the terms “unreasonable” and “without foundation.” Section 809.9 clearly sets out four alternative categories under which such fees may be awarded. At least one of them applies here and justifies, as a matter of law, an award of fees in Mir’s favor.
*1489The majority opinion does not discuss the specific facts on which the trial court’s decision was based, but simply refers, at two separate places, to the fact that there can be differences of medical opinion regarding (1) the quality of a health care provider’s services and (2) the actions taken by a health care facility vis-h-vis that provider. This limited and misleading acknowledgement of what actually happened here is followed by the majority’s refusal to recognize the established law of the case flowing from a now final decision of another division of this court. As the majority has chosen to eschew a detailed consideration of the factual record, it is necessary that I briefly summarize it (omitting only the brief procedural history already set out in the majority opinion).
The decision to restrict Mir’s staff privileges rested on the case of a 23-year-old patient who had swallowed a coin (a quarter) some years before he consulted with Mir for its removal. Charter Suburban Hospital’s (Hospital) charge against Mir was that his surgical removal of the coin was unnecessary because another procedure, endoscopy, could have been used to remove the coin. Endoscopy involves visualization and extraction of objects using an endoscope and related hardware. Mir had initially tried endoscopy prior to doing the surgery, but the procedure had not worked. He had examined the patient’s stomach first with a flexible endoscope and then a rigid endoscope, but could not locate the coin. During the flexible endoscope, an X-ray was taken which showed that the coin was near the scope, but upon Mir’s immediate reexamination with the scope, he still could not visually locate the coin to remove it. Mir’s surgical removal of the coin was successful and the patient had no complications from the surgery. When removed, the coin was tarnished and coated in black.
The statement of the charge against Mir reads: “(a) Unnecessary surgery was performed on this 23-year-old patient to remove a coin from his stomach. Dr. Mir proceeding with surgery after failing to remove the coin constituted poor medical judgment. The coin could have been removed from the stomach by endoscopy. A gastroenterologist should have been called to scope the patient, [f] (b) Dr. Mir demonstrated poor endoscopic technique when he failed to identify the coin endoscopically.” The judicial review committee sustained this charge except for the accusation that Mir demonstrated poor endoscopic technique.2
The trial court, in its written ruling granting Mir’s petition for a writ of mandate, noted that Mir was Board-certified in thoracic surgery and that *1490such certification required a demonstration of competence in endoscopy; the court further noted that the judicial review committee had failed to make a finding that Mir was not competent to perform the endoscopy. The trial court’s ruling stated in part: “. . . a determination that [Mir’s] decision to operate to remove the coin was poor medical judgment can only stand if there was no [sic] reasonable probability of removal of the coin by endoscopy. On this record there is no substantial evidence that anyone could have done any better with endoscopy than [Mir]. Dr. Degardi [an outside expert with substantial expertise in gastrointestinal endoscopy] gave some self-serving, ego-satisfying testimony that he never missed removing a coin, but on cross-examination failed to support that conclusion .... He was unable to satisfactorily explain the obvious inconsistency between his assertion of a consistently high success rate (which he declined to quantify . . .) and the 66.6% failure rate in the pervasive and valid statistic as to an object virtually identical in configuration to a quarter—the button battery. ... [‘ID [Mir’s] failure to remove the coin under the peculiar circumstances here is not probative, let alone determinative, of his competency in endoscopy. []Q There is no dispute in the evidence that if endoscopy failedf,] . . . surgery was indicated. Endoscopy did fail and absent any evidence that [Mir] was incompetent in that procedure the determination of poor medical judgment cannot stand.”
The Court of Appeal found that Hospital’s expert witness’s testimony substantially supported Hospital’s finding that flexible endoscopy is the preferred method for removing coins from the stomach. However, that court noted that Mir did pursue endoscopy, both flexible and rigid, before proceeding to surgery. The court also noted that (1) Hospital’s expert agreed that both in this case and in general, if endoscopy does not succeed, surgery should be used, and (2) such was the sequence used by Mir.
The Court of Appeal’s unpublished opinion, Mir v. Charter Suburban Hospital (Oct. 22, 1991) B049830 (nonpub. opn.), states in part: “The crux of the controversy, as the trial court perceived, therefore revolved around the findings [by the Judicial Review Committee] that [Mir] should not have proceeded with surgery before engaging ‘the skills of someone who was trained and skilled in endoscopy for a second attempt,’ which would have evoked a ‘very high’ chance of success. These findings, in turn, necessarily implied a determination that [Mir] was not so trained and skilled. But the *1491trial court discerned no substantial evidentiary support for that implied finding, . . . nor for the related finding that endoscopy additional to [Mir’s] would likely have been successful. We agree.”
In discussing why the judicial review committee’s findings lacked support, the Court of Appeal noted what it termed “unequivocal” evidence that Mir was himself trained and skilled in endoscopy, including gastroscopy, and further noted that (1) Mir “testified that flexible endoscopy had been part of his residency training in thoracic surgery, and he had performed numerous flexible endoscopies in the recent past, over 15 within the year before the hearing,” and (2) Hospital had itself granted him privileges in gastroscopy. Additionally, the court observed that (1) there “was no direct evidence that [Mir’s] failure to seize [the coin] was professionally deficient,” (2) while Hospital’s expert had testified that endoscopy would quite likely prove successful in retrieving the coin, the expert had “declined to put a percentage rating on the chances,” and (3) Mir had presented to the Judicial Review Committee “an empirical study concerning swallowed button batteries (similar in dimensions and configuration to quarters), which documented a 66 percent rate of failure to retrieve.” The court concluded: “On this record, lacking substantial proof of inadequacy of [Mir’s] own skill and performance, it was speculative to conclude that success would yet have attended someone else’s repeating the endoscopic procedures. It follows that [Mir’s] judgment in proceeding with surgery in the order he did was not properly impugned.”
The thrust of Mir’s section 809.9 motion for attorney fees was that since both the trial court and the Court of Appeal had determined there was no substantial evidence in the administrative record to support the findings and decision which the judicial review committee had made and Hospital’s board of directors had affirmed, the conclusion was inescapable that Hospital’s decision to defend against Mir’s petition for administrative mandamus relief was “unreasonable” and “without foundation,” as those terms are used in section 809.9. The trial court agreed. So do I.
On appeal, Hospital argues that such a conclusion is without support because Hospital reasonably and in good faith believed that substantial evidence supported the findings made and affirmed by the judicial review committee and the board of directors, respectively. Contrary to the majority’s analysis of section 809.9,1 attach no importance to Hospital’s subjective belief regarding the sufficiency of the evidence in the record to support its discipline of Mir. Besides, nothing in the language of section 809.9 indicates the Legislature intended a blanket “good faith” defense to a physician’s motion for attorney’s fees. Such an intention is not specifically set out in *1492section 809.9. Nor can it reasonably be inferred from the language which the Legislature used. Additionally, the majority’s willingness to permit a “good faith” defense to a motion for attorney fees in cases such as the one before us flies in the face of established case law (discussed infra) relating to use of the substantial evidence test in administrative mandamus proceedings. In my view, the conclusion is inescapable that Hospital’s defense of Mir’s Code of Civil Procedure section 1094.5 action was “unreasonable” and “without foundation” as a matter of law.
Section 809.9 addresses conduct which is “frivolous, unreasonable, without foundation, or in bad faith,” (italics added). “Such use of the word ‘or’ in a statute indicates an intention to use it disjunctively so as to designate alternative or separate categories. [Citations.]” (White v. County of Sacramento (1982) 31 Cal.3d 676, 680 [183 Cal.Rptr. 520, 646 P.2d 191]; accord, People v. Smith (1955) 44 Cal.2d 77, 78 [279 P.2d 33].) Despite the Legislature’s use of the disjunctive, the majority, in effect, holds that only conduct which is frivolous or in bad faith warrants imposition of what it terms section 809.9 “sanctions.” With this I cannot agree.
Analysis of the terms “unreasonable” and “without foundation” best begins by examining the standard of review which the trial court used to determine that Mir should be granted administrative mandamus relief. The court proceeded, as it was required to do, on a “substantial evidence” test under Code of Civil Procedure section 1094.5. Under this standard of review, a court must look at the evidence in support of the successful party (in this case, Hospital), and disregard the contrary evidence. All conflicts are resolved in favor of the successful party and all legitimate and reasonable inferences are indulged in to uphold the findings if possible. The weight of the evidence is disregarded. (Munoz v. Olin (1979) 24 Cal.3d 629, 635-636 [156 Cal.Rptr. 727, 596 P.2d 1143].)
From this description of the substantial evidence test, it is clear that when the trial court in the instant case examined the evidence in the administrative record, it was required to apply a standard of review that was very deferential to Hospital. Yet, the trial court nonetheless determined the evidence did not support Hospital’s finding that Mir had failed to use good medical judgment in caring for his patient, and the trial court’s determination was affirmed on review. This is the law of the case and should have been determinative of Mir’s fee application.
In concluding that the evidence did not support Hospital’s finding, the trial court necessarily found that Hospital’s finding was unreasonable. In *1493Northern Inyo Hosp. v. Fair Emp. Practice Com. (1974) 38 Cal.App.3d 14 [112 Cal.Rptr. 872], the court stated: “Unless the [challenged administrative] finding, viewed in the light of the entire record, is so lacking in evidentiary support as to render it unreasonable, it may not be set aside.” {Id. at p. 24, italics added.) Since the finding challenged by Mir was properly set aside by the trial court for insufficiency of evidence, it necessarily follows the finding was “so lacking in evidentiary support as to render it unreasonable.” This too is the law of the case.3 Because it was an unreasonable finding, it could not support Hospital’s decision to place Mir on probation.
The administrative record which the trial court examined in order to determine if there was sufficient evidence to support Hospital’s finding that Mir used poor medical judgment is the same record which the judicial review committee used in arriving at that finding and the same record the board of directors used in upholding that finding. Thus, prior to the time Mir brought his administrative mandamus suit, Hospital had had two opportunities to review the evidence presented to the judicial review committee. After Mir filed his suit, Hospital had to determine whether defense of that suit was warranted; as a result, Hospital had yet another opportunity to review the administrative record to determine if there was substantial evidence to support the finding Mir was challenging. Given that Hospital chose to defend a finding which was clearly indefensible (since it could not pass even a substantial evidence standard of review), I do not find it unreasonable *1494that Hospital be required to pay the attorney fees incurred by Mir in securing judicial relief.
This should be the result in those cases where a hospital facility’s findings are unreasonable as a matter of law, i.e., to those cases where the findings are “so lacking in evidentiary support as to render [them] unreasonable.” (Northern Inyo Hosp. v. Fair Emp. Practice Corn., supra, 38 Cal.App.3d at p. 24.) I do not see how there can be any doubt that when the Legislature used the term “unreasonable” in section 809.9 that it used it in the same sense and for the same purpose as did the Northern Inyo court.4
I cannot agree with the majority’s insistence that the legislative history of section 809.9 shows the Legislature only intended attorney fees to be awarded in cases where a litigant’s prosecution or defense of a case was frivolous or in bad faith, i.e., that the Legislature intended section 809.9 to act solely as a sanctions statute. In my view, the Senate’s internal documents relative to SB 121 l’s legislative history do not support the majority’s determination that a litigant must show the other party acted frivolously or in bad faith in order to prevail on an a motion for attorney fees. The portions of that history upon which the majority so heavily relies appear to be nothing more than someone’s shorthand analysis of section 809.9, not an analytical report of the entirety of the language actually used by the Legislature.
The majority’s position that the Legislature was focusing only on litigants who take bad faith or frivolous actions flies in the face of the rule of statutory construction which says that when the Legislature speaks of several categories, separates them by commas, and uses the word “or” prior to the last category, the intent of the Legislature was to use “or” as a disjunctive conjunction and to make those categories alternative or separate. (White v. county of Sacramento, supra, 31 Cal.3d at p. 680.) The majority has completely ignored that rule and has, in effect, written out of section 809.9 the “unreasonable” and “without foundation” categories.
Yet, courts are required to presume that all the words in a statute were intended by the Legislature “to have a meaning and perform a useful *1495function [citations].” (Mahdavi v. Fair Employment Practice Com. (1977) 67 Cal.App.3d 326, 334 [136 Cal.Rptr. 421].) “In the construction of a statute or instrument, the office of the Judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted; and where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all.” (Code Civ. Proc., § 1858; Summers v. City of Cathedral City (1990) 225 Cal.App.3d 1047, 1071 [275 Cal.Rptr. 594].) Additionally, courts are required to “first look to the plain dictionary meaning of the words of the statute” when seeking to carry out the Legislature’s intent in enacting the law. (Rice v. Superior Court (1982) 136 Cal.App.3d 81, 86 [185 Cal.Rptr. 853].) Thus, assuming arguendo that section 809.9 is in need of this court’s construction because it is uncertain, basic rules of statutory construction should be followed in accomplishing that construction.
I also disagree with the majority’s position that the provisions for attorney fees in section 809.9 are analogous to those in Code of Civil Procedure sections 128.5 (§ 128.5), 437c, subdivision (i) (§ 437c), and section 1038 (§ 1038), the relevant portions of which are set out in footnote 5 of the majority’s opinion.5 § 128.5 is intended to punish a litigant’s and/or an attorney’s improper behavior; it is a provision for sanctions. (West Coast Development v. Reed (1992) 2 Cal.App.4th 693, 702 [3 Cal.Rptr.2d 790].) It requires a finding of bad faith, a subjective standard. (Javor v. Dellinger (1992) 2 Cal.App.4th 1258, 1261 [3 Cal.Rptr.2d 662].) By their terms, sections 437c and 1038 also impose a subjective test for improper conduct.
Further, under sections 128.5 and 437c, any litigant may be sanctioned, whether his or her side ultimately prevails in the action or not. In contrast, under section 809.9, only a prevailing party is entitled to claim attorney fees. The difference implies an intent on the part of the Legislature to make the prevailing party whole, not to punish the party that did not substantially prevail. Section 809.9 thus resembles a “cost of suit” provision, one that does not need to rest on another party’s bad faith or frivolous conduct, *1496although such conduct can also be addressed by the court under section 809.9. Additionally, if the Legislature truly intended to limit the attorney fees awarded under section 809.9 to situations addressed in § 128.5, it could have simply made reference to section 128.5, or adopted similar language.
In reviewing a statute, the court presumes that the Legislature had in mind existing statutes when it enacted the one under review. (Anderson v. I. M. Jameson Corp., supra, 1 Cal.2d at p. 67.) Thus, presumptively the Legislature was aware of section 128.5 when it enacted section 809.9. In enacting the latter statute, the Legislature broadened the grounds for awarding attorney’s fees by including conduct that is without foundation or unreasonable. These new categories rest on objective standards as opposed to the clearly subjective requirement of section 128.5. They focus on situations such as the one before us now, where a reasoned review of the administrative record by Hospital or its legal counsel would have shown that the finding against Mir which the judicial review committee made lacked substantial evidentiary support in tiie administrative record. That fees might also be awarded when bad faith or frivolous conduct alone is present does not change that conclusion. Thus, by its very terms, section 809.9 is broader than section 128.5. It includes both objective and subjective standards as alternative justifications for fee awards.
The majority assert that affirmance of the trial court’s decision to award Mir attorney fees would have a chilling effect on medical staff review committees because it would require a respondent or defendant hospital to be prescient about the outcome of a lawsuit and would penalize the hospital for erring in its predictions. Not so. In my view, section 809.9 does require an impartial review of the administrative record in order to determine if substantial evidence is there to support the findings of the peer review committee and thus justify a defense of the health care provider’s law suit.
I support the proposition that review and disciplinary proceedings involving medical licensees “are not for the purpose of punishment but primarily to protect the public served by the licensee.” (Cipriotti v. Board of Directors (1983) 147 Cal.App.3d 144, 157 [196 Cal.Rptr. 367].) However, I disagree with the majority’s position that affirming Mir’s award of attorney fees conflicts with such purpose. Awarding fees to physicians who prevail in a mandamus proceeding under a substantial evidence test does not put the public at risk. Such a result should in no way restrict the vigorous investigation and presentation of evidence which should accompany a peer review committee hearing. Nor does it impede the subsequent review of the evidence presented at the committee hearing, review by both the judicial review committee and by a hospital’s board of directors, or similar body, if the *1497health care provider seeks the latter review. Hospitals are always free to consult with their own legal counsel when deciding whether to discipline staff members and whether to defend an administrative mandamus suit or other court action.
A hospital’s decision to pursue intense review of a licensed health care provider is, at the very least, to be commended, for such bodies are the public’s frontline defense against negligent or incompetent health care providers. However, once the review is conducted and the evidence is in, a health care facility should not pursue litigation when there is no substantial evidence to support its findings. Given that the substantial evidence test is such a minimum burden to bear and is one which invariably works in their favor, hospitals should be chilled from defending records that lack such evidence.6 Indeed, I believe that by enacting attorney fees provisions which can benefit a health care provider, the Legislature has indicated its intention to chill such behavior.
The ramifications to the health care provider of an adverse ruling by a peer review committee or a health care facility’s appeals board extend far beyond the provider’s standing and privileges at such facility. The adverse ruling may have to be reported to the state licensing agency having regulatory jurisdiction over the provider. (§ 805.) That report will then be furnished to other health care facilities at which the health care provider seeks new or renewed privileges and membership. (§ 805.5.) The health care provider’s professional liability insurance rates may be increased. His or her referrals from other health care providers may be negatively impacted. Additionally, the federal Health Care Quality Improvement Act of 1986 has a national data bank on licensed health care providers and therefore the health care provider’s reputation follows her or him to other states. (42 U.S.C. § 11131 et seq.)
Thus, when actions are taken against a health care provider based on findings which are not even supported by substantial evidence, the results can be grossly unfortunate for that provider. Requiring the health care *1498facility to pay the costs incurred by the provider in an action to set aside the wrongful discipline imposed by the health care facility does not seem unwarranted. I have no trouble concluding that such a burden was imposed by section 809.9.
A petition for a rehearing was denied September 26, 1994, and respondent’s petition for review by the Supreme Court was denied November 23, 1994.

 Unless otherwise indicated, all statutory references are to the Business and Professions Code.
Section 809.9 is part of Senate Bill No. 1211, legislation added to the Business and Professions Code in 1989. (Stats. 1989, ch. 336, §§ 1-12, p. 1444 et seq.) Senate Bill No. 1211 includes sections 809 through 809.9 of that code. The legislation was enacted pursuant to California’s right to “opt-out” of certain of the provisions of the federal Health Care Quality Improvement Act of 1986 (42 U.S.C. § 11101 et seq.). This federal act was enacted “to encourage physicians to engage in effective professional peer review.” (§ 809, subd. (a).) The provisions in section 809 et seq. relate to professional health care services provided by “healing arts practitioners,” a term which includes physicians and surgeons, podiatrists, clinical psychologists, and dentists. (§ 809, subd. (b).) This “opt-out” legislation was passed “because the laws of this state provide a more careful articulation of the protections for both those undertaking peer review activity and those subject to review, and better integrates [sz'c] public and private systems of peer review.” (§ 809, subd. (a)(9)(A).)

 The committee’s finding states: “It appears that flexible endoscopy is the method of choice for removal of coins from the stomach. The patient underwent flexible endoscopy by Dr. Mir and subsequent to that endoscopy, the patient was still considered stable enough to be electively scheduled for a rigid endoscopy followed by, if necessary, the surgical removal of the coin the following day. It therefore appears there was sufficient time available to avail *1490oneself of the skills of someone who was trained and skilled in endoscopy for a second attempt. This was not done. The Committee finds that had it been done, the chances of success would have been very high. Therefore, the Committee finds that the judgment demonstrated by Dr. Mir was inappropriate in electively, surgically excising the coin without a second attempt by a trained endoscopist.”

 I am particularly disturbed by the majority’s insistence on ignoring the law of the case in this matter. Both the trial court and the Court of Appeal determined that the record lacked even substantial evidence to support Hospital’s findings and decision. Those determinations stand. Yet, the majority has repeatedly trivialized them. The majority criticizes Mir for not presenting expert testimony at his judicial review committee hearing. The majority makes reference to “the opposing view held by numerous physicians at various levels of the Hospital proceedings” and states that “[notwithstanding [this] opposing view .... the trial court granted Mir’s petition for writ of administrative mandate and set aside the Hospital’s finding as unsupported by substantial evidence.” (Maj. opn., ante, p. 1486.) The majority makes reference to the “single differing opinion held by [Mir], as contrasted with the consensus of opinion held by the Hospital’s physicians.” (Maj. opn., ante, p. 1486.) This represents a disturbingly cavalier approach to the deference which this court should have given to the settled and binding determinations which had been made in this matter.
Additionally, the majority quotes the following language from Nicholson v. Lucas (1994) 21 Cal.App.4th 1657,1670 [26 Cal.Rptr.2d 778]: “The mere fact that medical minds may differ as to what constitutes acceptable levels of proficiency in a given situation does not render unreasonable an initial determination that performance was not acceptable.” However, Nicholson is not an administrative mandamus case. It is a malicious prosecution case and the “initial determination” to which the quoted language has reference is the very first determination by the defendant health care facility to restrict the plaintiff-health care provider’s privileges, i.e., the decision made by the health care facility prior to its judicial review committee’s hearing. (In Nicholson, the judicial review committee then determined that the hospital’s medical executive committee had not met its burden of proof in seeking to terminate all of the doctor’s surgical privileges.) Nicholson in no way supports the majority’s analysis of section 809.9.

 The majority has studiously ignored Northern Inyo, even though that case supports the trial court’s decision to award Mir attorney fees. By doing so, the majority has ignored a basic rule of statutory construction, to wit, that when the Legislature enacts a law, the Legislature is presumed to be aware of published judicial decisions relating to the subject of the statute. (Anderson v. I. M. Jameson Corp. (1936) 7 Cal.2d 60, 67 [59 P.2d 962]; People v. Koester (1975) 53 Cal.App.3d 631, 642 [126 Cal.Rptr. 73].) “[E]very statute should be construed with reference to the whole system of law of which it is a part so that all may be harmonized and have effect. [Citations.]” (Stafford v. Realty Bond Service Corp. (1952) 39 Cal.2d 797, 805 [249 P.2d 241].)

 Citing Southern Christian Leadership Conference v. Al Malaikah Auditorium Co. (1991) 230 Cal.App.3d 207, 228 [281 Cal.Rptr. 216], the majority also includes Code of Civil Procedure section 405.38 (§ 405.38) in its list of statutes which, according to the majority opinion, “are recognized to be sanctions provisions.” However, section 405.38, which is part of the provisions in the Code of Civil Procedure governing lis pendens, is not so characterized in Southern Christian Leadership Conference. Section 405.38 provides a modified objective test for awarding attorney’s fees: attorney fees are awarded to the party prevailing on a motion regarding lis pendens “unless the court finds that the other party acted with substantial justification or that other circumstances make the imposition of attorney’s fees and costs unjust.”

 The California Medical Association (CMA) has filed an amicus curiae brief in support of Mir. CMA notes that with respect to peer review committees and their functions, its members wear two hats. They serve on medical staff committees and judicial review committees which hear and recommend hospital action in medical staff matters. Additionally, some of them are doctors who are the review subjects of such committees. CMA asserts in its amicus brief that “it is rare that a court finds that a medical staff peer review decision is unsupported by substantial evidence.” That would be in keeping with the normal outcome of appeals in which a finding by an administrative review board or a trial court is challenged on a sufficiency of the evidence basis. Thus, it would seem that medical institutions, not the health care providers who staff them, are the major beneficiaries of section 809.9’s provision for attorney fees.