Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Smith v. Adventist Health System/West

November 16, 2010

BRENTON R. SMITH ET AL., PLAINTIFFS AND RESPONDENTS,
v.
ADVENTIST HEALTH SYSTEM/WEST ET AL., DEFENDANTS AND APPELLANTS.



APPEAL from a judgment of the Superior Court of Kings County. Thomas DeSantos, Judge. (Super. Ct. No. 08C0069).

The opinion of the court was delivered by: Dawson, J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

OPINION

INTRODUCTION

Brenton R. Smith, M.D., sued Adventist Health System/West and its affiliates for summarily suspending his privileges at Selma Community Hospital for a brief time in 2004 and for failing to process his October 2007 reapplication for privileges at the hospital. Defendants responded to the lawsuit by filing special motions to strike pursuant to California's anti-SLAPP statute.*fn2 The trial court denied the motions. Defendants appealed.

We conclude (1) Smith has a reasonable probability of succeeding on his claims concerning the 2004 summary suspension and (2) defendants failed to carry their burden of showing that Smith's claim concerning the failure to process his 2007 reapplication arose out of activity protected by the anti-SLAPP statute.

The order denying the anti-SLAPP motions will be affirmed.

FACTS AND PROCEEDINGS

Parties

Plaintiffs in this lawsuit are Smith and two corporations (jointly, Smith) through which he provides medical care to his patients: (1) Valley Family Health Center Medical Group, Inc., and (2) Central Valley Maternal & Child Care Centers, Medical Group, Inc.

Defendants include (1) Adventist Health System/West, (2) Selma Community Hospital (sometimes SCH), (3) Hanford Community Medical Center, (4) Central Valley General Hospital, and (5) Richard Rawson, chief executive officer of Hanford Community Medical Center and the former president of Selma Community Hospital. We refer to the four entities collectively as Adventist Health. The other defendants are (1) the Consolidated Medical Staff of Central Valley General Hospital, Selma Community Hospital and Hanford Community Medical Center (CMStaff) and (2) Nicolas E. Reiber, M.D., the chief of the consolidated staff. We refer to the combination of Adventist Health, Rawson, CMStaff and Reiber as defendants.

Adventist Health System/West owns, directly or through its subsidiaries, Selma Community Hospital, Hanford Community Medical Center, and Central Valley General Hospital. In the fall of 2005, Selma Community Hospital, Inc., the corporation that held the license to operate Selma Community Hospital, retired its license and leased the facilities to Hanford Community Medical Center. Since that time, Hanford Community Medical Center has operated the Selma facilities under its license.

Also in the fall of 2005, the medical staffs of the three hospitals were reorganized. Prior to the reorganization, the medical staff of Selma Community Hospital was organized as a separate entity. After the reorganization, the medical staffs of the hospitals were a single entity, CMStaff, which adopted its own bylaws (Bylaws). The proper interpretation of certain provisions of the Bylaws has been an issue between the parties to this appeal. (See Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 750-756.)

Overview of Earlier Litigation

The disputes between Smith and defendants have generated several lawsuits.*fn3 The first arose in 2002, when Adventist Health's attempt to purchase Smith's practice and clinics failed. (See Central Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501 [sale of Smith's clinics was not consummated; buyer sued for return of $250,000 deposit and Smith cross-complained for injunction to protect confidential information].) This court remanded the lawsuit for further proceedings, which resulted in a referee issuing a "Final Statement of Decision Following Appeal and Remand" dated June 24, 2010.*fn4

A second lawsuit arose out of disputes concerning Smith's hospital privileges at Hanford Community Medical Center and Central Valley General Hospital (the Hanford hospitals). The latter was the hospital that attempted to purchase Smith's practice and clinics. Smith's privileges were terminated and he filed a petition for writ of mandamus to restore those privileges. Smith's writ petition remained pending until Smith requested its dismissal in January 2008. (See Smith v. Selma Community Hospital (2008) 164 Cal.App.4th 1478, 1520 [Selma Community Hospital requested judicial notice of Smith's dismissal].) No appeals resulted from that lawsuit.

A third lawsuit was filed in April 2004 when Selma Community Hospital summarily suspended Smith's hospital privileges. The 2004 lawsuit is described in part II.A.3-5, post.

In July 2005, Smith filed a mandamus proceeding to challenge the July 7, 2005, decision of the governing board of Selma Community Hospital to terminate his hospital privileges and medical staff membership. (Smith v. Selma Community Hospital, supra, 164 Cal.App.4th at pp. 1498-1499.) In June 2006, the trial court issued a writ of mandate directing that Smith's privileges at the hospital be reinstated. This court affirmed. (Smith v. Selma Community Hospital, supra, at p. 1521.)

The issuance of the June 2006 writ of mandate directing that Smith's privileges at Selma Community Hospital be reinstated led to further disputes regarding its enforcement. Those disputes were resolved when the Fresno Superior Court filed an order dated December 5, 2006, directing that Smith "shall be permitted to practice on the Consolidated Medical Staff at ... Selma Community Hospital for a period of one (1) year following the submission of his application, and then must reapply for privileges, as would any other physician practicing there." Adventist Health complied with the December 5, 2006, order and Smith was allowed to practice at Selma Community Hospital.

After prevailing in the appeal of the mandamus proceeding, Smith filed a motion for attorney fees under Business and Professions Code section 809.9. The trial court denied the motion and this court reversed and remanded for further proceedings. (Smith v. Selma Community Hospital (2010) 188 Cal.App.4th 1.)

Smith's Reapplication and its Rejection

About two months before the year of court-ordered privileges were scheduled to end, Smith submitted a cover letter and package of documents to CMStaff. The October 12, 2007, cover letter described the enclosures as Smith's medical staff application package. The enclosures were a seven-page preprinted form titled "California Participating Physician Reapplication," supplemental answers to attestation questions asked in part XII of the form, and a family practice privilege list.

In response to Smith's reapplication package, Reiber sent Smith a letter dated December 4, 2007, the first paragraph of which stated:

"The Medical Executive Committee of the [CMStaff] considered your application for membership on the [CMStaff] at its meeting on Tuesday, December 4, 2007. Your application cannot be accepted since you have not yet satisfied the waiting period which applies in the case of an adverse appointment decision. We informed you last year that you were not eligible to apply for reinstatement because you had failed to satisfy the waiting period. Please see the letter dated February 21, 2007."

The referenced waiting period is established by section 4.5-10 of the Bylaws, which is titled "Reapplication After Adverse Appointment Decision" and provides in full:

"An applicant who has received a final adverse decision regarding appointment shall not be eligible to reapply to the medical staff for a period of 36 months. Any such reapplication shall be processed as an initial application, and the applicant shall submit such additional information as may be required to demonstrate that the basis for the earlier adverse action no longer exists."

The December 4, 2007, letter noted that (1) Smith had been denied reappointment at the Hanford hospitals in early 2004, (2) Smith had filed a writ of mandate proceeding to challenge those denials of reappointment, and (3) the writ of mandate proceeding was still pending in court. Because Smith's writ of mandate proceeding was still pending, the letter asserted, "there is no final decision in that matter. Once a final decision has been reached, if it remains adverse, you will be required to wait three years before you may apply for medical staff membership and clinical privileges."

The letter also advised Smith that his court-ordered privileges to practice at Selma Community Hospital would expire on December 19, 2007, and after that date he would no longer have privileges to practice there. The letter did not identify any internal procedure by which Smith could challenge the decision that he was not eligible to apply for hospital privileges. Instead, it advised Smith to have his attorney contact CMStaff's attorney if he had "any questions regarding why your application cannot be accepted."

On December 10, 2007, Smith's attorney sent a letter to the lawyer representing CMStaff. Her letter stated Smith's reasons for disagreeing with the decision to reject his reapplication for privileges, including the following:

"The [December 4, 2007,] letter is inherently inconsistent because it states both that the Hanford decision is not final and that it is final for purposes of applying 4.5-10 of the Bylaws. The hospital's position is absurd for not only for this reason, but for others, including the possibility that Dr. Smith may prevail on the writ. If that were to happen, even under your contorted interpretation of the provision, there would not be a 'final adverse decision' at all. 4.5-10 then would never apply."

The attorney representing CMStaff, Suzanne van Hall, responded to Smith's attorney in an e-mail letter sent the same day. The response did not address directly the argument regarding the inconsistency between asserting there was no final decision because the writ was pending and asserting a final adverse decision existed for purposes of section 4.5-10 of the Bylaws. Instead, the response asserted:

"So long as the petition for writ of mandate is not pursued, Dr. Smith is ineligible to apply. If he prevails on the writ, he will be reinstated pursuant to the court order; if he does not prevail, the decision will be final and the three year waiting period will commence."

The letter from van Hall offered no explanation for the position that Smith was ineligible before the 36-month period of ineligibility commenced.

Proceedings in the Superior Court

The exchange of letters did not convince Smith that CMStaff had acted properly when it refused to accept and process his reapplication. Consequently, on December 12, 2007, he sued defendants in Fresno Superior Court, seeking a preliminary and permanent injunction and damages.

Smith also filed an ex parte application for a temporary restraining order and an order to show cause regarding the issuance of a preliminary injunction. On December 20, 2007, the Fresno Superior Court denied the application for a temporary restraining order on three grounds, including improper venue. (Smith v. Adventist Health System/West, supra, 182 Cal.App.4th at p. 733.) Near the end of March 2008, the case was transferred to Kings Superior Court as a result of Adventist Health's successful motion for a change in venue. (Ibid.)

In June 2008, the Kings Superior Court granted Smith a preliminary injunction that restored Smith's hospital privileges during the pendency of the lawsuit. Adventist Health appealed that order. This court affirmed the preliminary injunction order in March 2010. (Smith v. Adventist Health System/West, supra, 182 Cal.App.4th at p. 757.) We concluded, among other things, that the trial court did not err when it "expressly found that Smith was likely to prevail on the merits ...." (Id. at p. 731.)

While the appeal concerning the preliminary injunction was pending, the litigation continued forward in the superior court. In October 2008, Smith filed a motion for leave to file a first amended complaint. The superior court granted the motion without prejudice to defendants reasserting arguments in a demurrer or motion to strike. Consequently, Smith's first amended complaint is the pleading relevant to this appeal.*fn5

The first amended complaint includes claims for (1) intentional interference with right to pursue a lawful occupation, (2) interference with prospective business advantage, (3) unfair competition, and (4) violations of the Cartwright Act (Bus. & Prof. Code, § 16700 et seq.). Smith alleged, among other things, that defendants' refusal to accept and consider Smith's reapplication for privileges violated California law and the Bylaws, and that the summary suspension of Smith in 2004 was illegal.*fn6

On December 4, 2008, Adventist Health filed a special motion to strike under section 425.16. The motion asserted that (1) Smith failed to allege he exhausted his administrative remedies and exhausted his judicial mandamus remedies prior to seeking damages, (2) Smith improperly resurrected allegations regarding the 2004 summary suspension, (3) the alleged wrongs were absolutely privileged, and (4) the alleged coconspirators were legally incapable of conspiring because they were pursuing a single economic interest.

The same day, Rawson filed a separate special motion to strike under section 425.16. Rawson's motion asserted that the alleged wrongful peer review actions (1) were not committed by him and (2) were privileged pursuant to Civil Code sections 43.8 and 47, subdivision (c).

On December 10, 2008, CMStaff and Reiber each filed a special motion to strike under section 425.16 and set the time of the hearing to coincide with the hearing on the motions by Adventist Health and Rawson. CMStaff asserted that Smith failed to exhaust his administrative and judicial remedies and could not establish an entitlement to reinstatement. Reiber's motion stated that he joined in the arguments of CMStaff, Adventist Health, and Rawson and also asserted that the claims against him were barred by the immunity provided by Civil Code sections 43.7, subdivision (b), and 47.

Smith filed an opposition to each of the four motions to strike. In support of his oppositions, Smith filed (1) a request for judicial notice of 11 documents, (2) declarations from himself, Linda Smith, and his attorney Barbara Hensleigh, and (3) 32 exhibits that included declarations, excerpts from discovery responses, minutes from meetings of Selma Community Hospital's medical executive committee, and other documents.

Defendants filed replies to Smith's oppositions. Adventist Health and Rawson opposed Smith's request for judicial notice and filed evidentiary objections to the declarations and exhibits submitted by Smith. CMStaff filed the declaration of Glenda Zeismer, the director for medical staff services for CMStaff, which attached excerpts from a manual of accreditation standards promulgated by an organization identified as the "Joint Commission."

Smith objected to the Zeismer declaration and attachments and filed a response to the evidentiary objections made by Adventist Health and Rawson.

On January 28, 2009, the superior court held a hearing on the motions to strike. In February 2009, the court issued a seven-page written order denying the motions. The court did not reach the objections made by defendants to Smith's evidence.*fn7

On March 3, 2009, Adventist Health and Rawson filed a notice of appeal. The appeal became case No. F057211 in this court. Also on March 3, 2009, CMStaff and Reiber filed a notice of appeal, which this court designated as case No. F057212.

In April 2009, this court denied Smith's motion to consolidate case Nos. F057211 and F057212 with the pending appeal of the preliminary injunction order. (Smith v. Adventist Health System/West, supra, 182 Cal.App.4th at p. 735, fn. 3.) We also directed the coordination of case Nos. F057211 and F057212 so they would be considered at the same time by the same panel.

DISCUSSION

I. California's Anti-SLAPP Statute

A. Background

In 1992, the California Legislature found and declared that "there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances." (§ 425.16, subd. (a).)*fn8 The Legislature also found and declared that "it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process." (§ 425.16, subd. (a).) When the abuse of the judicial process involves a meritless suit brought against someone who has exercised a specified constitutional right, the suit is referred to as a strategic lawsuit against public participation. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055.)

The Legislature addressed the SLAPP problem by enacting section 425.16, which is known as California's anti-SLAPP statute. (Rusheen v. Cohen, supra, 37 Cal.4th at pp. 1055-1056.) The statute created a procedural remedy--specifically, a special motion to strike--designed to dispose of some ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.