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District Court of Appeal, Second District, Division 2, California.

FIFIELD MANOR, a corporation, Plaintiff and Appellant, v. Sidney S. FINSTON and Joyce Finston, Defendants and Respondents.*

Civ. 23762.

Decided: February 23, 1960

Overton, Lyman & Prince, George W. Prince, Jr., Los Angeles, for appellant. Betts, Ely & Loomis, Richard F. Runkle, Los Angeles, for respondents.

Plaintiff brought this action to recover the cost of essential medical care and treatment provided by it for George A. Ross, deceased, pursuant to a ‘life care contract’ with said Ross, which treatment was necessitated by injuries inflicted on Ross by the defendants. A general demurrer to the complaint was sustained without leave to amend and judgment of dismissal was entered thereon. Plaintiff appeals.

The essential allegations of the complaint, which for purposes of this appeal must be considered as true (Terry v. Bender, 143 Cal.App.2d 198, 300 P.2d 119), are as follows: That plaintiff is a nonprofit corporation organized and existing under the laws of California; that the defendant Sidney Finston, on or about December 19, 1956, so negligently, recklessly and carelessly operated his automobile that said car struck George A. Ross, causing grievous injury; that Ross died on February 3, 1957; that ‘on or about July 1, 1952, the plaintiff corporation entered into a life-care contract with George A. Ross whereby said corporation expressly agreed to provide to George A. Ross all essential medical care’; that as a proximate result of said accident plaintiff was required to and did furnish Ross with essential medical care ‘including treatment by doctors, nursing care, medication and hospitalization, at a total cost to the plaintiff of $6,259.48’; that plaintiff was injured and damaged in said amount as a direct and proximate result of the negligence of the defendants; and, that the said contract between plaintiff and Ross expressly assigned to the plaintiff a right of subrogation for all expenses incurred by the plaintiff as the result of any injuries inflicted upon Ross by reason of the negligence of any third party.

The ‘life care contract’ between plaintiff and Ross was authorized by Division 3, Chapter 3, of the Welfare and Institutions Code. By section 2353 of that code, such ‘life care contract’ may specify ‘the services which are to be provided by the * * * organization’ which may include medical care. The services to be furnished by the organization are purchased by or for the recipient, by the transfer of property to the organization. (Welf. & Inst.Code, § 2350.)

It is the plaintiff's position that it has stated a cause of action directly and in its own right, to recover the damage it suffered in providing medical care for Ross which was necessitated by defendants' wrongful act in injuring him. We have concluded that its position is sound.

The life care contract between plaintiff and Ross created the relationship that existed between them. By that contract it was plaintiff's duty to furnish Ross essential medical treatment, nursing care and hospitalization. Ross in turn had a right to these services when necessary. It is thus apparent that certain rights and duties were created in favor of each of the parties to the contract. By their negligent act in injuring Ross and thus necessitating his medical care and hospitalization defendants have wrongfully invaded plaintiff's rights and its duties to Ross and have damaged plaintiff to the extent of the expenditures that their wrongful act made necessary. In other words, defendants' negligence in injuring Ross was the proximate cause of plaintiff's having to spend more than $6,000 in providing Ross with medical and hospital care in order to perform its duty under the life care contract. This plaintiff suffered a detriment by the wrongful act of defendants for which it should have a right of recovery (Civ.Code, §§ 3520 and 3523) by a direct action against the wrongdoers whose negligence was responsible for the damage sustained by it (see Civ.Code, § 3281). This conclusion is supported, in principle, by Follansbee v. Benzenberg, 122 Cal.App.2d 466, 473 et seq. 265 P.2d 183, 191, 42 A.L.R.2d 832. In that case the husband of plaintiff was injured in an automobile accident and died nine days later. Plaintiff, individually, incurred and paid certain reasonable medical and hospital expenses for her husband's care and treatment. The trial court held that she was not entitled to recover for money expended by her for these services. The District Court of Appeal, in a well considered opinion by Mr. Justice Valleé, reversed the trial court and held that plaintiff, ‘as an individual,’ was entitled to recover the moneys expended by her prior to the death of her husband for medical and hospital care for him. In reaching its conclusion the court considered whether plaintiff had a right of action against defendants for these expenses under section 956 of the Civil Code or section 377 of the Code of Civil Procedure. It held that ‘neither section is applicable’ (122 Cal.App.2d at page 473, 265 P.2d at page 187). In so holding the court stated: ‘Civil Code section 956, enacted in 1949, insofar as pertinent, provides that a thing in action arising out of a wrong which results in physical injury to the person shall not abate by reason of the death of the person injured, and that ‘When the person entitled to maintain such an action dies before judgment, the damages recoverable for such injury shall be limited to loss of earnings and expenses sustained or incurred as a result of the injury by the deceased prior to his death, and shall not include damages for pain, suffering or disfigurement, nor punitive or exemplary damages, nor prospective profits or earnings after the date of death. The damages recovered shall form part of the estate of the deceased.’ At the time section 956 was enacted, section 573 of the Probate Code was amended to make such actions maintainable by administrators or executors of the deceased person who would have been plaintiff had he lived. (See, also Veh.Code, § 402(g).) Thus, the right of action given by section 956 is in plaintiff as the executrix of the will of decedent, and the damages are limited to loss of earnings and expenses sustained or incurred as a result of the injury by the decedent prior to his death. Section 956 provides for the survival of a right of action that the decedent had for expenditures made by him for medical expenses. Here plaintiff is seeking to recover medical expenses which she individually incurred and paid. These medical expenses do not come within section 956.' This reasoning is directly applicable to the case at bar. As in the Follansbee case, Fifield Manor is seeking to recover for medical and hospital expenses that it incurred. So here, as there, such expenses do not come within section 956 since they were not paid by Ross.

In holding that section 377, Code of Civil Procedure, was not applicable the court pointed out that that section ‘given a right of action for wrongful death to the heirs or personal representatives of the decedent. At the time Civil Code section 956, was enacted, section 377 was amended to provide that the damages recoverable thereunder ‘shall not include damages recoverable under Section 956 of the Civil Code.’ An action for wrongful death is for damages caused to the heirs. (Citation.) The damages recoverable are the pecuniary loss sustained by the heirs by reason of the decedent's death. (Citations.) Expenditures made for an injured person because of the injury are not, in an action brought by his heirs, elements of their damage. (Citations.) The medical expenses paid by plaintiff are not recoverable in the action insofar as damages are sought for the wrongful death of the decedent.' In harmony with these principles the medical expenses incurred by Fifield Manor would not be recoverable in an action brought under section 377, Code of Civil Procedure.

Although there is no statutory authority granting a wife the right to sue a tortfeasor who injures her husband, for necessary medical expenses incurred by her in caring for him prior to his death, nevertheless, the court stated (122 Cal.App.2d at page 476, 265 P.2d at page 189): ‘There is no valid reason apparent for not allowing a wife to recover damages sustained by her for the expense of caring for her injured husband when he is unable from infirmity to pay such expenses himself.’ The court reasoned that the wife was ‘legally obligated to pay’ for the medical services received by her husband and that the negligence of the defendant was the proximate cause of her damage. Under these circumstances the court held that the wife ‘as an individual’ was entitled to recover for the expenses necessarily incurred by her in caring for her husband. In the instant case, plaintiff had a legal duty to provide essential medical and hospital services for decedent Ross. This duty closely parallels the duty owed by plaintiff in the Follansbee case, supra. As in that case, so here, it was the wrongful act of defendants that was the proximate cause of plaintiff's having to pay out a substantial sum of money in discharge of that duty. To paraphrase the observation of the court in the Follansbee case, ‘there is no valid reason apparent for not allowing’ plaintiff herein to recover the damages thus sustained.

Furthermore, defendants are not prejudiced, under the circumstances of this case, by allowing plaintiff to sue them directly. Ross is dead. No cause of action for the medical expenses incident to his injury resides in his estate, heirs or personal representative. Ross incurred no medical expenses recoverable by his estate under section 956, Civil Code, nor do such expenses constitute damages recoverable by his heirs in a wrongful death action under section 377, Code of Civil Procedure. Follansbee v. Benzenberg, supra. Defendants cannot be prejudiced by being required to pay damages caused by their wrongful act, particularly since the damages prayed for in this action are not recoverable by any other party. Any defenses which defendants might have had against Ross, such as contributory negligence, assumption of risk, or statute of limitations, are similarly available against plaintiff. Milsevich v. Pacific Electric Ry. Co., 68 Cal.App. 662, 668, 230 P. 15. See also Brooks v. Allis Chalmers Mfg. Co., 163 Cal.App.2d 410, 329 P.2d 575. Thus defendants are in no worse position in this suit than if sued for the same damages by Ross in the event he had lived, or by a representative of his estate had he personally incurred the medical expenses necessitated by his injuries.

Finally, in approaching a solution to the question herein posed we are not unmindful of the public policy considerations that are involved. The ever increasing number of senior citizens in this state present a social and economic problem of major importance. In order to provide for their welfare and security, the legislature enacted Division 3 of the Welfare and Institutions Code. The provision for ‘life care contracts' between elderly persons and organizations which will provide decent, well supervised homes for them, is a vital part of this division. The purpose of the legislature in enacting the Welfare and Institutions Code, as stated in section 19 thereof, was in part ‘* * * to provide for protection, care, and assistance to the people of the State in need thereof. * * *’ The courts should be slow to deny to an organization devoted to the furtherance of such a socially beneficial policy, the right to protect itself from damage by the tortious act of another, simply because there is no express statutory authority for the maintenance of such action. To do so would be to endanger the entire system which the legislature has provided for the care of the elderly. Such an institution should not be required to gamble that the beneficiary of a life care contract who is injured by the negligence of another, will survive to bring an action for the damages suffered by both parties to the contract. Thus there should be a right of action in the circumstances here presented, in favor of the plaintiff to recover expenses incurred by it in the performance of its legal obligation under the ‘life care contract’ with Ross. This is the only result consonant with the avowed intention of the legislature when it authorized ‘life care contracts' for the care and maintenance of our senior citizens.

Plaintiff states a cause of action directly and in its own right for the recovery of the damage it has sustained. It was therefore error to sustain the demurrer.

It is unnecessary to pass upon plaintiff's contention that it is entitled to maintain this action on the theory of subrogation.

The judgment is reversed.

FOX, Presiding Justice.

HERNDON, J., concurs. ASHBURN, J., concurs in the judgment.

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