Ophelia Y. MOORE, Individually and as Administratrix, et al., Plaintiffs and Appellants, v. Milton CONLIFFE, M.D., Defendant and Respondent.
Appellants Ophelia Y. Moore, individually and as guardian ad litem for Lavonda Atkinson, Vonnetta L. Atkinson and Christopher M. Moore, minors, and as administratrix of the estate of DeWanda Atkinson, appeal from an order sustaining a demurrer to their complaint as to respondent Milton Conliffe, M.D., without leave to amend, and the subsequent order of dismissal. The causes of action against respondent Dr. Conliffe in appellants' complaint arose from alleged wrongful conduct, negligence and misrepresentations committed by Dr. Conliffe and others in connection with the private arbitration of a dispute between appellants and Kaiser Foundation Hospitals, Inc. and related Kaiser entities and Kaiser physicians (collectively referred to as Kaiser). Appellants contend that the trial court erred in sustaining the demurrer on the ground that Dr. Conliffe's alleged wrongdoing consisted of communications privileged under Civil Code section 47. We agree with appellants that under the terms of the statute and established case law interpreting it, the privilege at issue does not shield Dr. Conliffe's allegedly wrongful communications from suit. We therefore reverse and remand.
I. FACTUAL AND PROCEDURAL BACKGROUND
The facts set forth in appellants' complaint are deemed admitted for purposes of this review of an order of dismissal sustaining a demurrer to a complaint. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713, 63 Cal.Rptr. 724, 433 P.2d 732; see also White v. Davis (1975) 13 Cal.3d 757, 765, 120 Cal.Rptr. 94, 533 P.2d 222.)
In late 1983, during a routine physical examination at Kaiser, 15–year–old DeWanda Atkinson was diagnosed as having been exposed to the tuberculin virus. To prevent the possibility of contracting tuberculosis, Kaiser prescribed the drug Isoniazid (also referred to as INH), to be taken on a daily basis. After complying with this prescription and taking the Isoniazid on a daily basis for approximately 4 to 5 months, DeWanda suddenly died from hepatitis in March 1984. Up to the point of her physical examination and the Isoniazid prescription, she had been completely normal and healthy. Appellants, DeWanda's mother and siblings, learned that Isoniazid could induce hepatitis as an adverse side effect, if its use and administration were not properly monitored. They charged that DeWanda's death was caused by Kaiser's failure to take proper precautions in the prescription and monitoring of Isoniazid in DeWanda's case, or to discontinue the use of the drug once it became clear that it was inducing hepatitis.
Under the written insurance contract between appellants and Kaiser, any claim against Kaiser was required to be arbitrated in a private proceeding. Kaiser retained respondent Dr. Conliffe as an independent medical examiner for the purpose of providing medical information regarding DeWanda, including his diagnosis of the cause of her death. Arbitration proceedings between appellants and Kaiser commenced in October 1989. In December 1989, during a break in the arbitration proceedings, appellants conducted a deposition of Dr. Conliffe. In connection with his deposition, appellants requested him to produce documents relating to his testimony. The document request included, among other things, Dr. Conliffe's entire file, together with any and all correspondence, documents, articles or writings he had reviewed, consulted, prepared, referred to or relied upon in his work on this case. However, at the deposition Dr. Conliffe produced only his personal resume.
At the deposition, respondent Dr. Conliffe stated his diagnosis of the cause of DeWanda's death to have been “non-A[,] non-B viral hepatitis,” rather than non-viral, drug-induced hepatitis brought on by the use of Isoniazid. In answer to questions asked at the deposition, Dr. Conliffe testified only that he had reviewed articles and literature submitted by appellants; denied recalling or being aware of any medical literature attributing hepatitis to the use of Isoniazid; and in reference to a question about his publications, stated only that he had contributed certain “epidemiological information” to an article on “toxicity.” In fact, Dr. Conliffe had himself contributed DeWanda's case to an article by another physician reviewing cases of Isoniazid-induceddd hepatitis deaths in California, published only 3 months earlier in September 1989.
In the ensuing arbitration, Kaiser denied that DeWanda's hepatitis had been caused or induced by the use of the drug Isoniazid, and argued that it was instead a form of “non-A[,] non-B viral hepatitis,” as Dr. Conliffe had testified in deposition. After the arbitration concluded on January 5, 1990, the arbitrators found that although Kaiser was negligent in its care and treatment of DeWanda, appellants had failed to show that the cause of her death was Isoniazid-induced hepatitis. Subsequently, appellants' attorney discovered the article to which Dr. Conliffe had contributed DeWanda's case as an example of Isoniazid-induced death.
In May 1990, appellant petitioned in superior court to vacate the arbitration award. Appellants filed the instant action in superior court in August 1990, naming as defendants Kaiser and its attorneys in the arbitration, but not Dr. Conliffe. In October 1990, appellants filed an amended complaint alleging a cause of action for fraudulent concealment against Dr. Conliffe. Respondent Dr. Conliffe demurred to the amended complaint.
In response, appellants attempted to amend the complaint to greatly expand the allegations and causes of action against Dr. Conliffe, adding causes of action for negligence, intentional and negligent misrepresentation, suppression of fact, civil conspiracy, breach of contract, and intentional infliction of emotional distress. Respondent Dr. Conliffe filed another demurrer and moved to strike portions of appellants' amended complaint, arguing that his deposition conduct and testimony were privileged under Civil Code section 47. The trial court sustained the demurrer without leave to amend and dismissed the action with prejudice as to Dr. Conliffe. This appeal followed.
Civil Code section 47 provides in relevant part as follows: “A privileged publication or broadcast is one made: [¶] (a) In the proper discharge of an official duty. [¶] (b) In any (1) legislative or (2) judicial proceeding, or (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law and reviewable pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure, except as follows: ․ [¶] (2) This subdivision does not make privileged any communication made in furtherance of an act of intentional destruction or alteration of physical evidence undertaken for the purpose of depriving a party to litigation of the use of that evidence, whether or not the content of the communication is the subject of a subsequent publication or broadcast which is privileged pursuant to this section. As used in this paragraph, ‘physical evidence’ means evidence specified in Section 250 of the Evidence Code․” 1
The issue presented in this case is whether communications made in private arbitration proceedings come within the terms of this statutory privilege. Respondent asserts that they do, contending that the subject statements are privileged and protected as having been made in the context of a “quasi-judicial” proceeding: namely, an expert witness deposition taken in connection with an arbitration proceeding pursuant to Code of Civil Procedure sections 1283.1 and 2034, subdivision (i). Appellants on the other hand argue that the subject communications are not privileged because the contractual arbitration at issue was a private one, and not the kind of official proceeding to which the statute applies.
This question appears to be one of first impression. We have been unable to find any cases considering the precise issue of whether statements made in the context of a private, contractual arbitration proceeding are privileged under Civil Code section 47. However, our reading of the applicable case law persuades us that appellant's position is closer to the current interpretation of the statute.
In Hackethal v. Weissbein (1979) 24 Cal.3d 55, 154 Cal.Rptr. 423, 592 P.2d 1175, the California Supreme Court considered the question of the kind of hearing that may constitute an “official proceeding authorized by law” within the meaning of Civil Code section 47. At issue was whether a hearing held before the judicial commission of a private medical society was such an “official proceeding.” The court held that it was not, because the term “official” was intended to limit the scope of the privilege to proceedings before government agencies.
Distinguishing or overruling prior cases implying that the privilege extended to communications made in private proceedings, the Supreme Court stated: “The mere fact that a statute requires the creating of committees or other groups does not ․ mean that each body so formed is ‘official.’ The committees of a private hospital are not government agencies. [Citation.] ․
“In the history of the [statutory] amendment that affects our analysis here we find no explanation of the amendment. What the amenders did was to revise section 47, subdivision 2 to read, ‘in any legislative or judicial proceeding, or in any other official proceeding authorized by law․’ (Italics added.) The intent of adding the word ‘official’ may well have been to deny the absolute privilege in nongovernment proceedings. We could hardly construe the words ‘official duty’ in section 47, subdivision 1, unchanged since 1872, to include nongovernment duties. The words of section 47, subdivision 2—‘in any ․ official proceeding’—similarly merit no extension.
“․ [S]ection 47, subdivision 2 applies exclusively to government agencies.” (Hackethal v. Weissbein, supra, 24 Cal.3d at pp. 59–61, 154 Cal.Rptr. 423, 592 P.2d 1175, fns. omitted.)
After the holding of Hackethal, the Legislature amended Civil Code section 47 to add to its coverage communications made “in the initiation or course of any other proceeding authorized by law and reviewable pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure,” dealing with writs of mandate. (Civ.Code, § 47, subd. (a).) In the subsequent case of Slaughter v. Friedman (1982) 32 Cal.3d 149, 185 Cal.Rptr. 244, 649 P.2d 886, the Supreme Court held that this provision was intended to apply the privilege to any quasi-judicial proceedings reviewable by writ of mandate, whether public or private; it did not, however, apply to purely private proceedings which are not so reviewable. (Slaughter v. Friedman, supra, at pp. 156–157, 185 Cal.Rptr. 244, 649 P.2d 886.)
In Cuenca v. Safeway San Francisco Employees Fed. Credit Union (1986) 180 Cal.App.3d 985, 225 Cal.Rptr. 852, Division Two of this court held that the statutory privilege did not apply to a proceeding before the supervisory committee of a federally regulated credit union, because it did not constitute an “official proceeding” for purposes of Civil Code section 47. The court reasoned that although the structure of the credit union and the duties of its supervisory committee and board of directors were “highly regulated by federal statute,” “[n]one of these statutorily created duties ․ suffices to make the investigation by the supervisory committee or its report to the board of directors an ‘official proceeding.’ The Credit Union is not a governmental agency nor are the proceedings of its supervisory committee and board of directors reviewable by writ of mandate. Nor was the supervisory committee ․ acting in the capacity of a governmental official performing an ‘official duty.’ Accordingly, we conclude that the trial court erred in finding the absolute privilege of section 47, subdivisions 1 and 2, applicable.” (Cuenca v. Safeway San Francisco Employees Fed. Credit Union, supra, at p. 995, 225 Cal.Rptr. 852.) 2
Thus, the court expressly considered and rejected the argument that because a proceeding may be established or regulated by state statute, it is necessarily “official.” In the context of this case, the fact that private arbitration is regulated under title 9 of the Code of Civil Procedure section 1280 et seq., does not make private arbitration proceedings held pursuant to contract “official” for purposes of the absolute privilege.
In support of his contention that arbitration proceedings such as the one that took place in this case constitute “quasi-judicial proceedings” subject to the privilege of Civil Code section 47, respondent relies on various cases which have applied the privilege in different contexts. Although the language in some of these cases may lend some support to this interpretation, on examination this language is either dicta, or else factually distinguishable because the arbitration at issue was judicial arbitration rather than private contractual arbitration such as took place under the Kaiser contract in this case. (See Silberg v. Anderson (1990) 50 Cal.3d 205, 211–215, 266 Cal.Rptr. 638, 786 P.2d 365; ITT Telecom Products Corp. v. Dooley (1989) 214 Cal.App.3d 307, 315–317, 262 Cal.Rptr. 773; Carden v. Getzoff (1987) 190 Cal.App.3d 907, 913–916, 235 Cal.Rptr. 698; Ribas v. Clark (1985) 38 Cal.3d 355, 364, 212 Cal.Rptr. 143, 696 P.2d 637.) The courts have recognized the fact that the private and judicial arbitration systems are entirely separate, mutually exclusive and independent of each other. (Porreco v. Red Top RV Center (1989) 216 Cal.App.3d 113, 118–119, 264 Cal.Rptr. 609.)
Moreover, in the recent case of Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 10 Cal.Rptr.2d 183, 832 P.2d 899, the California Supreme Court severely limited the scope of judicial review of private arbitration proceedings in order to ensure the finality of decisions by private arbitrators. The Supreme Court held that an award reached by a private arbitrator pursuant to a contractual agreement to arbitrate is not subject to judicial review except on the limited grounds set forth in Code of Civil Procedure sections 1286.2 and 1286.6; that an arbitrator's decision is not generally reviewable for errors of fact or law; and that, contrary to statements in several opinions of the courts of appeal, the existence of an error of fact or law apparent on the face of the award does not provide grounds for judicial review, even if it results in substantial injustice. (Moncharsh v. Heily & Blase, supra, at pp. 6, 11–13, 26–28, 33, 10 Cal.Rptr.2d 183, 832 P.2d 899.) 3 Significantly, the available means of review of private arbitration proceedings, as delineated by the Supreme Court in Moncharsh, do not include writ of mandamus pursuant to Code of Civil Procedure section 1084.
We conclude that the communications at issue, which took place in the context of a private arbitration proceeding pursuant to contractual agreement between the parties, were not protected by the absolute privilege of Civil Code section 47, because neither a private arbitration proceeding nor a deposition held in connection therewith is a judicial proceeding or an “official” proceeding, as that term has been interpreted by the case law, and neither proceeding is subject to review by writ of mandate under Code of Civil Procedure section 1084. We therefore reverse the trial court's dismissal of this action pursuant to its sustaining of the demurrer without leave to amend, and remand for further proceedings.
The judgment is reversed. Respondent to pay costs on appeal.
1. Evidence Code section 250 specifies as evidence a “Writing,” defined as “every ․ means of recording upon any tangible thing any form of communication or representation․”
2. Reviewing the state of the law, the court in Cuenca stated: “Whatever doubts there may have once been about what kinds of agencies may conduct an ‘official proceeding authorized by law,’ those questions have been resolved by two California Supreme Court decisions. In [Hackethal ] v. Weissbein [, supra, ] 24 Cal.3d 55 [154 Cal.Rptr. 423, 592 P.2d 1175] ․ the court declined to find that hearings conducted by the judicial commission of a private medical society were official proceedings authorized by law. [Citation.] The court explicitly rejected the contention that merely because state law required the creation of a review committee, every body so created was ‘official.’ [Citation.] After discussion of the statutory scheme, the court concluded that ‘section 47, subdivision 2 applies exclusively to government agencies.’ [Citation.] This rule was reiterated in Slaughter v. Friedman, supra, 32 Cal.3d 149, 156 [185 Cal.Rptr. 244, 649 P.2d 886]. Between the two decisions in 1979, the Legislature added [former] subdivision (2) to section 47, permitting extension of the absolute privilege to proceedings reviewable by mandate. (Stats.1979, ch. 184, § 1, pp. 403–404.) The rule of absolute privilege, then, is that only governmental proceedings or quasi-judicial proceedings otherwise reviewable by writ of mandate come within the scope of an ‘official proceeding authorized by law’ which is covered by the absolute privilege created by section 47, subdivision 2. [Citation.]” (Cuenca v. Safeway San Francisco Employees Fed. Credit Union, supra, 180 Cal.App.3d at pp. 993–994, 225 Cal.Rptr. 852, fn. omitted.)
3. Section 1286.2, which sets forth the grounds for vacation of an arbitration award, states in pertinent part: “[T]he court shall vacate the award if the court determines that: [¶] (a) The award was procured by corruption, fraud or other undue means; [¶] (b) There was corruption in any of the arbitrators; [¶] (c) The rights of such party were substantially prejudiced by misconduct of a neutral arbitrator; [¶] (d) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted; or [¶] (e) The rights of such party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefor or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title.”Section 1286.6 sets forth grounds for judicial correction of an arbitration award. It states in pertinent part: “[T]he court, unless it vacates the award pursuant to Section 1286.2, shall correct the award and confirm it as corrected if the court determines that: [¶] (a) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award; [¶] (b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; or [¶] (c) The award is imperfect in a matter of form, not affecting the merits of the controversy.”
WHITE, Presiding Justice.
MERRILL and WERDEGAR, JJ., concur.