WATERS v. BOURHIS (1983)

This is an action by a client against her former attorney and his law firm, based on his collection of allegedly excessive fees for representing her in an earlier action against her psychiatrist.   She appeals from the granting of defendants' motion for summary judgment.

We reverse the judgment.

STATEMENT OF FACTS

Appellant Barbara Waters had a history of mental difficulties.   As a result, she began seeing a psychiatrist, Jack Shonkwiler.

Soon after establishment of the physician-patient relationship, the psychiatrist commenced engaging in various forms of sexual conduct in which appellant was an observer or participant.   The conduct included intercourse between them in his office and also away from the office, during a camping trip to Yosemite.

There is evidence indicating that the psychiatrist induced and pressured appellant into participating in the sexual conduct at times by characterizing it as part of therapy designed to alleviate her sexual inhibitions and, at other times, by threatening to institutionalize her (72-hour hold).

In spring, 1978, she began participating in a criminal investigation of the psychiatrist.   Several months later, she consulted with attorney Ray Bourhis, who undertook to represent her in a civil action against the psychiatrist.

Bourhis, in a supporting declaration filed in the lower court, declared that he agreed to take her case against the psychiatrist under a contingent fee arrangement of 331/313 percent of gross recovery if the case settled prior to filing of suit and 40 percent if recovery was obtained afterwards.   He also declared that although he did not believe the case involved negligence, that he informed appellant of the existence of Business and Professions Code section 6146 ¹ and told her he would not represent her “under the restrictions of the statute.”

 That statute provides that for actions involving professional negligence of a health care provider, attorney's fees shall be limited to specified maximum amounts.   The contingent fees to which appellant agreed exceed those set forth in the code section.

A few days after his first meeting with appellant, Bourhis filed a complaint for damages against the psychiatrist.   It was entitled “Complaint for Damages” and “Malpractice-Medical.”   As summarized in Bourhis' brief on appeal, the complaint “encompass[ed] all possible theories of recovery:  (1) negligence;  (2) sexual coercion;  (3) breach of the duty of good faith;  (4) outrageous conduct;  (5) restraint.”   The first cause of action alleges, among other things, that “defendants were obligated to provide medical attention, therapy, and assistance and to dispense and supply certain medical, nursing, pharmaceutic, and related services, supplies and materials for the treatment, care, comfort and safety of plaintiff” and that “defendants carelessly and negligently provided the aforementioned services and supplies;  carelessly and negligently advised, counseled, and treated plaintiff;  and carelessly, negligently and inadequately informed her of intended treatment, causing her condition to deteriorate and causing her further to sustain additional injuries and damages ․”

Nothing in the record suggests that Bourhis made any effort to settle the case prior to filing suit when the fee would have been 331/313 percent.   Negotiations following filing of the complaint eventually produced a settlement offer of $200,000 ² , which appellant accepted.   Bourhis' declaration alleged as to disposition of the settlement, that he then again advised appellant of the existence of section 6146, that it did not apply to her case, and that if she had any questions to consult an attorney.

Appellant did seek other legal advice and, after consummation of the settlement, she filed suit against Bourhis.   In one cause of action, she requested a declaration by the court as to whether the contingency fee agreement was enforceable in view of section 6146.   A second cause charges him with a breach of fiduciary duty in misrepresenting to her that the contingency fee agreement was proper and reasonable and states that due to her reliance on the misrepresentation, she did not realize that section 6146 applied.   A third cause charges that Bourhis fraudulently and intentionally misrepresented to her that the contingency fee agreement was a reasonable and proper method for determining the amount of attorney's fees in representing her.   A fourth cause charges that if the representations were not intentionally made, they were negligently made, in that Bourhis should have been aware of the significance of section 6146 or should have discovered the same.   Additional causes allege that by reason of the illegal nature of the fee agreement, Bourhis has become unjustly enriched and is the involuntary constructive trustee for appellant in the amount of the excess over the fees allowable under section 6146.   A further cause charges that in forcing appellant to litigate her claim under section 6146, despite his knowledge of her delicate psychiatric condition, Bourhis has intentionally inflicted emotional distress on her.   The eighth and final cause charges that Bourhis, in acting as alleged, did so in bad faith, oppressively and maliciously, entitling appellant, therefore, to punitive damages.

We note that all seven of the later causes of action stem from the assumption that the first cause, violation of section 6146, is resolved in appellant's favor.

Discussion

On a motion for summary judgment made by a defendant, the task of the trial judge is to determine if there is any triable issue of fact.  (Code Civ.Proc., § 437c.)   The moving party must make a strong showing that there is no merit to the action, and his affidavits are to be strictly construed.   (Harding v. Purtle (1969) 275 Cal.App.2d 396, 399, 79 Cal.Rptr. 772.)   The counter-affidavits, on the other hand, are to be liberally construed.   (Eagle Oil & Ref. Co. v. Prentice (1942) 19 Cal.2d 553, 556, 122 P.2d 264.)   The purpose of the statute is to determine if issues exist, not to resolve them.  (Walsh v. Walsh (1941) 18 Cal.2d 439, 441, 116 P.2d 62.)

Application of Section 6146

All of appellant's causes of action are predicated, to one degree or another, on section 6146.   Thus, the basic issue in this appeal is whether that section applied to the contingent fee contract into which appellant entered and to the recovery which was thereafter obtained.   On appeal, that issue is one of law, requiring our examination and interpretation of the meaning of the statute.   We are aware of no published opinion resolving the issue before us.   Thereafter, the case turns essentially on the factual question of whether the psychiatrist's conduct can be characterized as professional negligence.

Scope of Section 6146

 Subdivision (a) provides, in part, that “[a]n attorney shall not contract for ․ a contingency fee” (emphasis added) under certain circumstances.   Limiting our review of the provision in this manner, it is clear that simply entering into such an agreement is prohibited, without regard to whether an eventual recovery turns out to have been based on professional negligence.   In other words, if an attorney contracts for a fee in excess of the limits set forth in the section and does so in contemplation of a recovery based on professional negligence, irrespective of whether or not he files an action based in part on such a theory, the fact that the actual recovery is based entirely on some other theory does not operate to remove the limitations of the code section.

 A converse situation would involve an attorney who contracts for a contingent fee in connection with an action which he believes will be based on theories other than professional negligence, and ultimately obtains a recovery based on professional negligence.   Whether or not the attorney has filed suit based on those other theories and whether or not the case is tried and he has amended the complaint to conform to proof of professional negligence, his actually collecting the fee for which he originally contracted would be rendered improper even though his having entered into the contract originally was proper.   We conclude that section 6146 applies both to fee contracts and to fee recoveries.

 We conclude also that if a plaintiff has a claim against a health care provider based on professional negligence and another claim based on some totally unrelated event (e.g., damage to property resulting from an automobile collision), and brings both claims against the provider in the same complaint, the limitations in section 6146 apply only to the portion of the recovery based on the professional negligence.   Indeed, such a complaint is for two separate “actions” in the sense that the word “action” is used in the statute.

The statute is less than clear as to its application when an action or recovery is based on several theories, including but not limited to professional negligence, but concerning the same events or course of conduct.   The same conduct could be characterized in different causes of action as constituting an intentional tort and also professional negligence, as in appellant's case against her psychiatrist.

One might argue that such a recovery should be apportioned among the categories by a “weighing” test or that some sort of “preponderance” test should be applied.   The possibility the trial judge adopted this approach is suggested, in part, by his comment when he granted the motion for summary judgment:  “I'm going to find that most of the damage was outside the scope of professional negligence under which the attorney's fees is limited.   So no limit on the fees in the case Mr. Bourhis handled and I'm going to grant summary judgment for the defendant.”

 A literal reading of the statute, however, supports the opposite view:  If the recovery is based in part on professional negligence, then all of the attorney fees should be limited in accord with section 6146.   Indeed, in such an action based on one transaction or course of conduct which is characterized in the alternative as an intentional tort and as professional negligence, these characterizations would constitute, not two different things, but two different facets of the same thing.

Furthermore, we are discouraged from taking a contrary view by the undesirable results which would flow therefrom.   If we were to interpret section 6146 to permit some form of apportionment or preponderance test, then application of the section would depend upon how a fee contract characterized the anticipated action or upon mere inclusion of a non-professional negligence cause of action or theory of recovery, without regard to whether such cause or theory had any real merit.   Such an interpretation would permit innovative attorneys to escape all or some of the limitation of the statute by habitually including as many non-professional negligence causes of action as possible, negotiating a settlement on the basis that the conduct was professional negligence, and then characterizing the settlement as based, in whole or in part, on the non-professional negligence theories.   Such an interpretation of section 6146 would quickly lead to its total destruction.   Rather, we conclude that section 6146 applies to all contingency fee contracts and collections arising out of any one transaction or course of conduct in which any claim is made of professional negligence against a medical provider, whether or not other claims or theories of recovery are advanced.

Existence of Triable Issues

 Turning now to the specifics of the instant case, it appears there are triable issues involved.   Appellant has alleged that Bourhis contracted for and recovered a fee in connection with a professional negligence action, thus bringing her suit against him within the scope of section 6146 as we construe it.   The watershed issue has to do with whether the psychiatrist's conduct constituted professional negligence.   Analysis of this issue is complicated by the fact that the case against him was settled without trial and there is no evidence of the specific factual basis for the settlement.   Thus, there was no adjudication of issues such that the recovery could be characterized as professional negligence or as something different.

Bourhis contends that the psychiatrist's conduct was not a manifestation of professional negligence.   He argues that sexual intercourse and related conduct fall outside the ambit of “therapy;”  that is, inasmuch as the act of sexual intercourse is not a medical procedure, how could it ever be characterized as a negligently performed medical procedure?

Consider, for example, a surgeon who finds to his delight that his worst enemy lies before him on the operating table.   Seeing his opportunity, he performs certain procedures which lead to the patient's death.   But these procedures are not negligent acts, they are intentional acts.

This example is offered as a contrast to the instant case.   In the case before us, the psychiatrist presumably did not intend the damage to occur.   He did intend either to treat his patient using a rather (one hopes) unusual procedure, or to satisfy certain personal needs of his own.³

There is evidence that the psychiatrist did view his sexual conduct with appellant as therapeutic.   In this regard, there evidently is a school of thought which holds that sexual conduct with a patient can constitute therapy.  (See, for example, 9 Cal.Western L.Rev. 269.)   Viewed in this light, if the therapy was performed negligently, appellant would have an action of the type contemplated in section 6146.

On the other hand, if the psychiatrist's intention was simply to satisfy his sexual wants, then he was not performing therapy.   This is Bourhis' contention.   To borrow from a case cited in appellant's brief, the defendant psychiatrist was engaged in “ ‘things any butcher, baker, beggar man or thief was capable of doing’.”  (Zipkin v. Freeman (Mo.1968) 436 S.W.2d 753, 761.)

But it is not inconsistent for an intentional act to constitute negligent professional conduct, particularly given the facts in this case.   For example, a psychiatrist becomes enamored with his patient, and decides for reasons which have nothing to do with therapy and everything to do with his personal satisfaction to engage in an affair with his client.   That is an intentional act.   The affair results in psychological harm to his client.   One might argue the damage has resulted from the psychiatrist's negligently failing to avoid becoming involved with his patient in such a way that he breached his duty to her.   This, in essence, is the very least of appellant's contentions.

An alternative view with the same result is cited by appellant in her brief.   In Hartogs v. Employers Mut. Ins. Co. of Wis. (1977) 89 Misc.2d 468, 391 N.Y.S.2d 962, the fact that, at the time the patient submitted to sexual conduct, she believed appropriate medical therapy was being administered was held to be an adequate basis upon which to characterize the damage she suffered as being the result of medical malpractice.

Appellant also contends that there was a triable issue as to whether the contingent fee contract was one associated with an action for professional negligence.   Without deciding that issue, which is a factual one, we note that two of the allegations in the first cause of action previously quoted, which allege that negligent conduct occurred in the context of medical treatment are incorporated in the seven other causes of action.   Additional evidence exists, including letters written by Bourhis himself, which characterizes the psychiatrist's conduct as constituting negligence.   Such evidence certainly raises a triable issue, at least insofar as the validity of the fee contract itself is concerned.

Not only are all causes of action in appellant's complaint against Bourhis predicated on her characterization of the psychiatrist's conduct as being professional negligence but, in addition, Bourhis' underlying suit against the psychiatrist was also based on allegations of the same professional negligence.

Perhaps the most telling element in the case before us is the judge's statement, infra, recognizing that some of the damage was based on professional negligence.   When coupled with other possible evidence and the fact that, as we have concluded, section 6146 applies if a recovery is at all based on a theory of professional negligence, there may well have been adequate evidence to support a judgment for appellant if it had been made after a trial on the merits.   Instead, the judge, in essence, reached a decision on questions which more properly should have been decided by the trier of fact after a full-blown trial.   In addition, it appears from his statement that he neglected to consider the existence of the triable issue related to whether the contract itself was based on representation in a professional negligence action.

Conclusion

For the reasons expressed above, we conclude that limitations in section 6146 apply to any action involving professional negligence, even if the conduct which is characterized as professional negligence may be or is characterized in other ways as well.   If a recovery of damages arising from a defendant's actions or omissions is based on professional negligence, the limitations in section 6146 apply, without regard to the fact that the actions or omissions also provide a basis for theories of relief in addition to professional negligence.   In the instant case, appellant is entitled to an opportunity to prove that the fee contract or recovery was, or both were, based, in whole or in part, on professional negligence.

 The judgment is reversed and the matter remanded for further proceedings consistent with the views herein expressed.

FOOTNOTES

1.   Business and Professions Code section 6146 provides, in relevant part:“(a) An attorney shall not contract for or collect a contingency fee for representing any person seeking damages in connection with an action for injury or damage against a health care provider based upon such person's alleged professional negligence in excess of the following limits:“(1) Forty percent of the first fifty thousand dollars ($50,000) recovered.“(2) Thirty-three and one-third percent of the next fifty thousand dollars ($50,000) recovered.“(3) Twenty-five percent of the next one hundred thousand dollars ($100,000) recovered.“(4) Ten percent of any amount on which the recovery exceeds two hundred thousand dollars ($200,000).“Such limitations shall apply regardless of whether the recovery is by settlement, arbitration, or judgment, or whether the person for whom the recovery is made is a responsible adult, an infant, or a person of unsound mind.“․“(d) ․“(3) ‘Professional negligence’ is 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.”[All references to statutes are to the same section of the Business and Professions Code unless otherwise indicated.]

2.   This sum is equal to the policy limits of the psychiatrist's insurance coverage.   Before this settlement offer, the insurance company had initiated a suit for declaratory relief against the psychiatrist, claiming that he was not covered under the policy because his conduct did not arise out of professional services and amounted to criminal acts.   The suit was subsequently dismissed at the insurer's own request and, afterwards, the company paid the claim.

3.   Contrast this with the hypothetical example of a psychiatrist who, similar to the surgeon in the text, engages in a course of conduct similar to that in the case before us, not to satisfy his own needs or provide therapy to his patient, but with the intent and the purpose of causing emotional harm.   Such conduct does not involve negligence, but constitutes an intentional act.

 HOLMDAHL, Associate Justice.

ELKINGTON, Acting P.J., concurs. NEWSOM, J., concurs in the result only.