RUSSELL v. STANFORD UNIVERSITY HOSPITAL (1996)

Code of Civil Procedure section 340.5, as amended by the 1975 Medical Injury Compensation Reform Act (MICRA), requires than an action for injury or death based upon a health care provider's alleged professional negligence be commenced within three years after the date of injury, or one year after the plaintiff discovers or with reasonable diligence should have discovered the injury, whichever period expires first.

Code of Civil Procedure section 364, enacted by MICRA, provides that no such action may be commenced unless the defendant has been given at least 90 days' prior notice of intention to commence the action.   Subdivision (d) of section 364 provides that “[i]f the notice is served within 90 days of the expiration of the applicable statute of limitations, the time for the commencement of the action shall be extended 90 days from the service of the notice.”

In Woods v. Young (1991) 53 Cal.3d 315, 279 Cal.Rptr. 613, 807 P.2d 455 the Supreme Court held that when section 364's 90–day notice of intent was served within the last 90 days of section 340.5's one-year discovery period, the one-year period would be tolled for 90 days and not merely extended by 90 days from the date of notice, with the result that in such a case a plaintiff would have a period of one year and 90 days from actual or constructive discovery in which to commence the lawsuit.  (53 Cal.3d at p. 325, 279 Cal.Rptr. 613, 807 P.2d 455.)   The Supreme Court explicitly noted that section 340.5's three-year outside limitation period was not in issue in that case.

In the medical malpractice action before us the plaintiff discovered her injury, in the requisite sense, less than a year before the end of the three-year period, gave her section 364 notice 51 days before the end of the three-year period, and commenced her action 90 days after her section 364 notice and 39 days more than three years after the date of injury.   Had the three-year period been tolled for 90 days, as the one-year period was held to be tolled in Woods, the plaintiff's complaint would have been timely.

But section 340.5 also provides that “[i]n no event shall the time for commencement of legal action exceed three years unless tolled for any of” three specific circumstances which do not include giving of a section 364 notice within the last 90 days of the three-year period.   Read literally, section 340.5's in-no-event provision directly conflicts with section 364's extension provision with respect to the three-year period.   Taking the position that the in-no-event provision precluded extension of the three-year period, the defendants moved for summary judgment on the ground that the plaintiff's action was time-barred.   The superior court granted the motion.

 The plaintiff appeals.   To reconcile the apparently conflicting provisions of sections 340.5 and 364 we have applied settled principles of statutory construction.   Under these principles we hold that a section 364 notice given 90 days or less before the end of section 340.5's three year period operates, notwithstanding section 340.5's in-no-event provision, to toll the three-year period in the manner described by the Supreme Court, with respect to the one-year discovery period, in Woods.

Our conclusion differs from that reached in Rewald v. San Pedro Peninsula Hospital (1994) 27 Cal.App.4th 480, 483, 487, 32 Cal.Rptr.2d 411, decided after the plaintiff commenced this action but before the defendants moved for summary judgment.   In Rewald the Court of Appeal concluded that a section 364 notice given less than 90 days before section 340.5's three-year period expired could not operate to toll (or, implicitly, to extend) the three-year period.   The superior court, as required by Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937, accepted and applied the Rewald holding.   Unlike the superior court, we are not bound by Rewald.  (9 Witkin, Cal. Procedure (3d ed.   1985) Appeal, § 772, pp. 740–742.)   We respectfully disagree with Rewald, and shall reverse the summary judgment.

The circumstances in Rewald were analogous to those in this case.   Rewald gave his section 364 notice nine days before the end of the three-year period, and filed his action 94 days after he gave his section 364 notice and 85 days after the end of the three-year period.   Had the Woods construction applied, Rewald's complaint would have been timely.

But in Rewald the Court of Appeal concluded that the Woods construction does not apply to section 340.5's three-year period.   Citing Fogarty v. Superior Court (1981) 117 Cal.App.3d 316, 172 Cal.Rptr. 594 (which addressed whether a general tolling provision, not part of MICRA, could be applied to toll section 340.5's three-year period), the Court of Appeal found that “the Legislature intended the three-year limitations period to be tolled and extended by only [the] three circumstances” enumerated in section 340.5 itself.  (27 Cal.App.4th at p. 486, 32 Cal.Rptr.2d 411.)   The Court of Appeal agreed with Fogarty that “ ‘[t]here is no evidence of a legislative intent in the instant situation to allow exceptions [to the three-year period] other than those listed in section 340.5.   All indications of intent are to the contrary.’ ”  (Ibid.)

The Court of Appeal perceived that the legislative intent underlying section 340.5, as enacted in 1970 and substantially amended by MICRA in 1975, was to set firm time limits on claims for medical malpractice.

Before 1970, such claims had been subject to a one-year statute of limitations (Code Civ. Proc., § 340), but the one-year statute was subject in turn to the common-law “delayed discovery rule” under which “a cause of action does not accrue, nor the statute of limitations start to run, until plaintiff discovers or in the exercise of reasonable diligence should discover the negligent cause of his or her injury.”  (Young v. Haines (1986) 41 Cal.3d 883, 890, 226 Cal.Rptr. 547, 718 P.2d 909;  cf.  Sanchez v. South Hoover Hospital (1976) 18 Cal.3d 93, 96–97, 132 Cal.Rptr. 657, 553 P.2d 1129.)

As enacted in 1970, section 340.5 explicitly provided for a one-year statute to run from discovery (cf.  Sanchez v. South Hoover Hospital, supra, 18 Cal.3d at p. 99, 132 Cal.Rptr. 657, 553 P.2d 1129), but set a four-year outside limitation on medical malpractice claims, subject to tolling while the defendant had failed to disclose any relevant act, error or omission of which he or she should have been aware.   The Supreme Court has noted that “[i]n many cases, this statutory tolling provision would yield the same result as the common law discovery rule.   Generally, a patient was deemed entitled to rely on the representations of the negligent physician, and was under no duty to discover a cause of action while under the physician's care.”  (Young v. Haines, supra, 41 Cal.3d at p. 893, fn. 8, 226 Cal.Rptr. 547, 718 P.2d 909.) Nor did section 340.5, in its original form, specify that this was the only circumstance in which the limitation period could be tolled.

As amended by MICRA in 1975, section 340.5 shortened the outside limitation period from four years to three and added the “[i]n no event” provision.   In Rewald the Court of Appeal endorsed the Supreme Court's statement that essentially open-ended tolling of the statute of limitations on medical malpractice claims “ ‘had been a contributing cause of the perceived malpractice insurance crisis which precipitated MICRA.  [Citations.]  The clear legislative purpose [under MICRA] was to make available to malpractice plaintiffs only those tolling provisions set forth in the statute.’ ”  (Id. at p. 487, 32 Cal.Rptr.2d 411, quoting from Young v. Haines, supra, 41 Cal.3d 883, 896–897, 226 Cal.Rptr. 547, 718 P.2d 909;  cf.  Sanchez v. South Hoover Hospital, supra, 18 Cal.3d at p. 98, 132 Cal.Rptr. 657, 553 P.2d 1129.)   Thus, the Rewald court concluded, “both the limiting language used in the three-year outside limitation portion of section 340.5 and the history of MICRA compel the conclusion that the ninety-day judicially construed tolling provision in section 364 is not applicable to the three-year period.”   (27 Cal.App.4th at p. 487, 32 Cal.Rptr.2d 411.)

We agree with Rewald 's evaluation of the legislative purpose of section 340.5 as amended by MICRA.   Our concern is that Rewald 's analysis appears neither to take account of the legislative purpose of section 364 nor to seek to reconcile the two MICRA provisions.

In neither Fogarty v. Superior Court, supra, 117 Cal.App.3d 316, 172 Cal.Rptr. 594, nor Young v. Haines, supra, 41 Cal.3d 883, 226 Cal.Rptr. 547, 718 P.2d 909, on which Rewald primarily relies and which the defendants cite, was the reviewing court required to reconcile apparently conflicting provisions of MICRA itself:  In each case the strict tolling limitations of section 340.5, as amended by MICRA, were properly found to prevail over the tolling provisions of independent statutes of more general application (Code Civ. Proc., § 352 in Fogarty;  former Civ.Code, § 29 in Young ) which had been in the codes since 1872.   In Laird v. Blacker (1992) 2 Cal.4th 606, 7 Cal.Rptr.2d 550, 828 P.2d 691, an attorney malpractice case also cited by the defendants, the Supreme Court addressed the significance of the in-no-event provision (broadly similar to section 340.5's) of Code of Civil Procedure section 340.6 but was not called upon to reconcile apparently conflicting statutory provisions.

 In this case we deal with separate provisions of a single statutory enactment.   We must be mindful of the rule that a statute “should be construed as a whole and inconsistent parts of the statute should be harmonized if possible” (People v. McCaskey (1985) 170 Cal.App.3d 411, 415, 216 Cal.Rptr. 54), “in order to carry out the overriding legislative purpose as gleaned from a reading of the entire act” (Wells v. Marina City Properties, Inc. (1981) 29 Cal.3d 781, 788, 176 Cal.Rptr. 104, 632 P.2d 217;  Herbert Hawkins Realtors, Inc. v. Milheiser (1983) 140 Cal.App.3d 334, 338, 189 Cal.Rptr. 450;  cf. generally 7 Witkin, Summary of Cal. Law (9th ed.   1988) Constitutional Law, § 94, pp. 146–147).   If conflicting provisions of a statute cannot be semantically or logically harmonized, special rules are invoked to serve the precept that “[a] construction which makes sense of an apparent inconsistency is to be preferred to one which renders statutory language useless or meaningless.”  (Ibid.) Thus, for example, “[i]f conflicting provisions of a statute cannot be harmonized, then, the provision that is positioned later in the statute normally controls the earlier provision.”  (People v. McCaskey, supra, 170 Cal.App.3d at p. 415, 216 Cal.Rptr. 54;  cf.  Hartford Acc. etc. Co. v. City of Tulare (1947) 30 Cal.2d 832, 835, 186 P.2d 121.)

The defendants argue that there is no conflict between section 340.5 and section 364.   We disagree:  This case itself provides a vivid example of the conflict between the provisions.   The defendants' argument may be understood to be that their position—that the provisions of section 364 must necessarily give way to the provisions of section 340.5—is so strong as to leave no room for rational disagreement.   But the problem does not admit of so facile a solution.   Both section 340.5 and section 364 implement rational legislative judgments as to how MICRA's ultimate goal of reducing the cost of medical malpractice insurance could legitimately be served.   Not only the texts but also the purposes of both sections must be weighed.

 The purpose of section 364 was to put the defendant or defendants on notice of the intended claim and, simultaneously, to start a 90–day waiting period, in order “to decrease the number of medical malpractice actions filed by establishing a procedure that encourages the parties to negotiate ‘outside the structure and atmosphere of the formal litigation process.’ ”  (Woods v. Young, supra, 53 Cal.3d at p. 320, 279 Cal.Rptr. 613, 807 P.2d 455, quoting from Note, California's Medical Injury Compensation Reform Act:  An Equal Protection Challenge (1979) 52 So.Cal.L.Rev. 829, 963;  id. at p. 325, 279 Cal.Rptr. 613, 807 P.2d 455.)

If (as the Legislature implicitly assumed) a period of 90 days, after notice of the intended claim was given and before the action was commenced, was essential to good-faith efforts to negotiate a settlement, then the Legislature needed to find a way to assure that a plaintiff would not be compelled by the statute of limitations to commence his or her action less than 90 days after giving notice.

The Legislature might have elected to provide that the plaintiff's notice could be given no later than 90 days before the end of the applicable limitation period.   That the Legislature did not do so may reflect the insight that such a provision would in practical effect have shortened each of the limitation periods by 90 days (cf.  Woods v. Young, supra, 53 Cal.3d at pp. 320–321, 279 Cal.Rptr. 613, 807 P.2d 455):  For example, a plaintiff who did not discover his or her injury until less than 90 days before the end of the three-year outside limitation period could not have given the required notice and thus, under the literal terms of section 364, could not have commenced the action.   Manifestly the Legislature concluded that a plaintiff should be empowered to give the notice at any time within the applicable limitation period.

The other apparent solution was to extend or toll the limitation periods if necessary to allow the plaintiff to with hold his or her action for a full 90 days after notice.   The broad outlines of this solution had been foreseen by a California Assembly Select Committee on Medical Malpractice nearly a year before the bill which became MICRA was introduced:  “Written notice of intent to file a malpractice suit should be provided potential defendants within a specific time period before the running of the statute of limitations.   Upon the filing of such notice, the statute of limitations would be automatically extended for a specified period, to enable the parties to negotiate an amicable settlement in good faith.”  (Assem.  Select Com. on Medical Malpractice, Preliminary Rep. (June 1974) p. 65.)

Extension or tolling of the applicable limitation period would also have resolved a potential problem raised by another MICRA provision, Code of Civil Procedure section 365.  Section 365 provides in essence that although failure to comply with section 364 would not invalidate proceedings or affect the jurisdiction of courts, such a failure by an attorney “shall be grounds for professional discipline․”  As the Supreme Court later perceived in Woods (addressing only the one-year period), unless a section 364 notice would toll or extend the statute of limitations the statutory scheme would pose “a dilemma for the plaintiff's attorney who serves the notice within the last 90 days of the 1–year limitation period.   In that situation, the attorney must either comply with section 364(a)'s proscription against commencing the action during that statute's 90–day waiting period, thereby forfeiting the client's cause of action, or the attorney must file the lawsuit during the statutory 90–day waiting period [and thus violate section 364], thereby ‘triggering’ section 365's provision of possible disciplinary action․”  (53 Cal.3d at p. 320, 279 Cal.Rptr. 613, 807 P.2d 455.)

Against this background the Legislature, by subdivision (d) of section 364, chose the solution of extending “the applicable statute of limitations” (emphasis added), a reference which suggests the Legislature had in mind both the one-year and the three-year periods.   In Woods the Supreme Court, in the context of the one-year period, construed subdivision (d) as a tolling provision and thus implemented the legislative solution while resolving technical anomalies in a sensible way.

Rewald rejected the legislative solution so far as it might apply to the three-year period.   While thus maintaining the literal integrity of section 340.5, Rewald 's holding frustrated the purpose of section 364 and left plaintiff's counsel with the professional dilemma Woods recognized.

Our conclusion—that subdivision (d) of section 364, as construed in Woods, should apply not only to the one-year period but also to the three-year period—will serve the purpose of section 364, and resolve counsel's dilemma, without significant impact upon the concept of a strict outside limitation on professional negligence actions against health care providers.   Under Woods 's construction, a section 364 notice given less than 90 days before the end of the three-year period will operate to extend the period exactly 90 days, and any conceivable prejudicial effect of so relatively short an extension will be substantially if not wholly offset by the fact that as a practical matter the section 364 notice itself will make the defendant or defendants aware of the intended claim within the three-year period.   Our conclusion takes technical support from the rule that a provision positioned later in a statute normally controls an earlier provision:  Section 364 was positioned later both in the MICRA bill and in the Code of Civil Procedure.   On balance we are persuaded that our conclusion affords a better reconciliation of the conflicting provisions of sections 340.5 and 364 in light of the ultimate legislative purpose to be served.

Under our holding, as applied to the undisputed facts before us, the plaintiff's section 364 notice operated to extend the three-year limitation period to a date more than seven weeks after the plaintiff filed her medical malpractice action.

The judgment entered February 23, 1995, is reversed and the cause is remanded to the superior court with directions to vacate its order granting the defendants' motion for summary judgment and to enter a new order denying the motion.   The plaintiff shall recover her costs on appeal.

BAMATTRE–MANOUKIAN, Associate Justice.

COTTLE, P.J., and WUNDERLICH, J., concur.