Opinion
B328300
06-18-2024
SOHAIL NASIM et al., Plaintiffs and Respondents, v. HCA HEALTHCARE, INC. et al., Defendants and Appellants.
Barnes &Thornburg, Kevin D. Rising and Serj J. Daniel for Defendant and Appellant Team Health Holdings, Inc. Theodora Oringher, Todd C. Theodora, Anthony F. Witteman and Adam G. Wentland for Defendants and Appellants HCA Healthcare, Inc., HCA Health Services of California, Inc.; West Hills Hospital and Mark Miller. The Law Offices of J. Grant Kennedy and J. Grant Kennedy for Plaintiffs and Respondents.
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County, No. 22VECV01444 Virgina Keeney, Judge. Affirmed.
Barnes &Thornburg, Kevin D. Rising and Serj J. Daniel for Defendant and Appellant Team Health Holdings, Inc.
Theodora Oringher, Todd C. Theodora, Anthony F. Witteman and Adam G. Wentland for Defendants and Appellants HCA Healthcare, Inc., HCA Health Services of California, Inc.; West Hills Hospital and Mark Miller.
The Law Offices of J. Grant Kennedy and J. Grant Kennedy for Plaintiffs and Respondents.
FEUER, J.
HCA Healthcare, Inc., HCA Health Services of California, Inc., West Hills Hospital (Hospital), and Mark Miller (collectively, HCA defendants) and Team Health Holdings, Inc. (Team Health) appeal from the order denying their motion to compel arbitration of claims brought by Sohail Nasim, M.D., Snasim, Inc., a medical corporation, Caleb Hirsh, M.D., Samir Parmekar, M.D., Paul Diehl, M.D., Dr. Paul E. Diehl, a medical corporation, H. Norman Xu, M.D., and Norman Xu M.D., Inc. (collectively, Doctors) arising from the Hospital's removal of the Doctors from an emergency room (ER) on-call panel. Defendants contend the trial court erred in finding the Doctors' causes of action did not fall within the scope of the arbitration agreement. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Professional Services Agreements
In 2019 or 2020 each of the Doctors signed a professional services agreement (Agreement) with the Hospital. The Agreement stated at the top of page 1 as the subject: "Regarding Emergent Coverage for the care of Indigent patients (the 'Services')." The Agreement stated, "Facility desires to retain Contractor to provide the Services, and Contractor desires to provide the Services all upon the terms and conditions stated below. This Agreement is entered into for the purpose of defining the parties' respective rights and responsibilities." The Agreement provided that it would expire on November 30, 2021, unless it was "sooner terminated." Further, either party could terminate the Agreement "without cause" by providing 60 days' prior written notice. Each Agreement was signed by the respective Doctor and the Hospital.
Drs. Parmekar and Diehl signed their Agreements in November 2019; Drs. Nasim and Hirsh signed their Agreements in December 2019; and Dr. Xu signed his Agreement in April 2020. Each Agreement stated it was "governed by the laws of the state in which Facility is located." The Agreement defined "Facility" as West Hills Hospital doing business as West Hills Hospital and Medical Center located in California.
For ease of reference, we consider the language in the Hospital's Agreement and addenda with Dr. Nasim, as do the parties and the trial court. The Hospital's individual Agreements with the other doctors are substantially the same.
"Contractor" is defined in the Agreement as either the doctor or his medical corporation.
Under the Agreement, the Hospital agreed to compensate the Doctor for covered services rendered to indigent patients. Two addenda were executed simultaneously with the Agreement and were attached to and incorporated into the Agreement. The first addendum, titled "Professional Services Agreement Addendum, [¶] Staff Provider" (first addendum), defined the "'covered services'" under the Agreement as "professional medical services rendered to indigent patients." Section 3 described the Doctor's duties, including call coverage for the emergency department and a non-discrimination provision that applied to the Doctor's conduct in responding to a call.
Selected capitalization and boldface are omitted for portions of the Agreement and addenda.
The second addendum, titled "Professional Services Agreement [¶] Separate Billing and Compensation for Covered Services to Indigent Patients" (second addendum), specified the compensation for the Doctor under the Agreement. Section 2 provided that the "Facility and Contractor shall make their own independent charges for services to patients, and each shall independently bill for and collect the charges due to them." However, section 4 ("Compensation for Covered Services to Indigent Patients") specified, "For Covered Services to an Indigent Patient, Facility will pay Contractor a flat fee based on the top three (3) CPT codes, not to exceed an annual maximum of $300,000, using the correct modifier indicating professional services were rendered by the Facility."
The Agreement included an arbitration provision that "expressly extend[ed] beyond the termination" of the Agreement. The arbitration provision in section 5.P of the Agreement's "Miscellaneous Provisions" stated in part: "Alternative Dispute Resolution. In the event of any controversy or dispute related to or arising out of this Agreement, the parties agree to meet and confer in good faith to attempt to resolve the controversy or dispute without an adversary proceeding. If the controversy or dispute is not resolved to the mutual satisfaction of the parties within five (5) business days of notice of the controversy or dispute, either party shall have the option of submitting the controversy or dispute to arbitration, which shall be conducted in the county and the state in which Facility is located.... To the extent permitted by law, the parties hereby jointly and severally waive any and all right to trial by jury in any action or proceeding arising out of or relating to this Agreement, or the obligations hereunder. The parties each represent to the other that this waiver is knowingly, willingly and voluntarily given."
B. The Doctors' First Amended Complaint
On September 29, 2022 the Doctors filed a complaint against the HCA defendants and Team Health (collectively, defendants), and on February 16, 2023 a first amended complaint. The Doctors alleged HCA Healthcare, Inc. and its subsidiary, HCA Health Services of California, Inc., owned and operated the Hospital. Miller was the Hospital's former chief executive officer and an alleged agent for Team Health. According to the Doctors, the medical executive committee governed the medical staff and was independent from the Board of Trustees, which controlled the hospital business administration.
HCA Health Services of California, Inc. was erroneously sued as HCA Health Care Services of Southern California, Inc.
The Doctors alleged they had admitting privileges at the Hospital for over 15 years: Drs. Diehl and Hirsch since 1988; Dr. Nasim since 2000; Dr. Xu since 2001; and Dr. Parmekar since 2009. The Doctors were members of an on-call panel that attended to unassigned patients in the emergency room (ER). The Doctors billed the patients' respective insurance companies, determining their own billing rates and collection practices.
On March 23, 2021 the Hospital sent requests for proposal (RFP) to replace the Doctors on the ER on-call panel. The Doctors alleged the RFP process was a sham because the HCA defendants already were in negotiations with Team Health to replace the Doctors with Team Health's physicians. The Hospital removed the Doctors from the on-call panel in October 2021. The Hospital allegedly benefitted from granting the ER and hospitalist service contracts to Team Health because Team Health allowed the Hospital to receive fees for patient billing and collection for care provided by Team Health doctors. The Doctors alleged, "This arrangement constituted a kickback of fees charged for a percentage of amounts billed and collected in exchange for granting of the ER and panel hospitalist service contracts to [Team Health]. [¶] . . . Defendants' scheme was to replace independent medical doctors with corporate controlled doctors in an elaborate endeavor to maximize the profits in the illegal corporate practice of medicine." Further, the HCA defendants allegedly targeted the Doctors because they were whistleblowers who stood up for patient rights. In addition, the HCA defendants' replacement of the Doctors on the on-call panel without any input from the Hospital's medical executive committee was improper and amounted to the corporate practice of medicine.
The Doctors alleged defendants engaged in unfair business practices, including depriving the Doctors of their vested property rights in their hospital privileges and engaging in illegal kickbacks and the corporate practice of medicine in violation of Business and Professions Code section 17200et seq. (first cause of action); the Hospital retaliated against the Doctors as whistleblowers in violation of Health and Safety Code section 1278.5 and Government Code section 12653 (second and third causes of action); defendants restrained competition and trade in violation of the Cartwright Act and Business and Professions Code section 16720 et seq. (fourth cause of action); defendants intentionally interfered with the Doctors' prospective economic advantage (fifth cause of action); defendants conspired "to control [the Hospital's] costs and improve its profits by exerting unlawful control over" Team Health's physicians (sixth cause of action); and the Doctors were entitled to declaratory relief (seventh cause of action). The Doctors sought, among other relief, compensatory damages, statutory penalties, punitive damages, and declaratory and injunctive relief, including restoration of their ER on-call panel "vested property rights."
C. The Defendants' Motion To Compel Arbitration
On March 7, 2023 defendants moved to compel arbitration of the claims in the first amended complaint and to stay the action. They argued each of the Doctors signed a substantially similar Agreement for the Hospital's ER on-call panel. Each Agreement contained a broad arbitration clause providing that "[i]n the event of any controversy or dispute related to or arising out of this Agreement," the parties would meet and confer in good faith, and if the dispute was not resolved within five days, "either party shall have the option of submitting the controversy or dispute to arbitration." Defendants asserted the gravamen of the first amended complaint was the Hospital's termination of the ER on-call panel and non-renewal of the Agreements; thus, the Doctors' claims were subject to arbitration under the "broad" arbitration clause. Defendants argued the Hospital was entitled to compel arbitration as a signatory to the Agreements with the Doctors. They acknowledged only the Hospital signed the Agreements but maintained the nonsignatory defendants could compel arbitration as the owners, agents, and employees of the Hospital based on the allegations in the first amended complaint, as well as equitable estoppel.
D. The Doctors' Opposition to the Motion To Compel Arbitration
In their opposition, the Doctors argued each Agreement was only between a Doctor (or medical corporation) and the Hospital. The other defendants were not parties to the Agreement. Further, each Agreement stated it was "regarding" only "'Emergent Coverage for the care of Indigent patients,'" which was less than 5 percent of the on-call services provided by the Doctors, and the first amended complaint did not allege any dispute "regarding payment, treatment, responsibilities, or duties" under the Agreements.
The Doctors further argued, "The subject matter of the . . . complaint arises from the loss of 'vested property rights' regarding [the Doctors] serving on the emergency room on-call panel because of a contract that was entered into with [Team Health] that precludes [the Doctors'] ability to exercise their vested property rights. Those rights have been in existence for many years prior to the" Agreements. The Doctors maintained the Agreements "could not control or terminate [their] vested property rights, as those rights were not created[,] controlled or terminable by the [Agreements]. Only the [medical executive committee] has control over vested property rights and due process is required to take them as a matter of both case law and statute."
Dr. Hirsch, who was chief of staff at the Hospital, stated in his declaration in opposition to the motion to compel that he performed ER on-call panel work at the Hospital from 1989 to 1993, many years before he entered into the Agreement with the Hospital. The purpose of the Agreement was to allow Dr. Hirsch to "get paid for providing care to indigent patients." He never intended that the Agreement would modify or control his vested rights. Further, indigent patient care was only approximately 5 percent "of the work doctors did on the on-call panel[,] and regardless of the [Agreement], doctors serving the on-call panel were still obligated to treat the indigent in exactly the same way as any other patient." Dr. Nasim averred in his declaration that he had performed ER panel work for the Hospital since 2000, which was prior to his Agreement with the Hospital. He confirmed Dr. Hirsch's understanding that the Agreement did not modify his vested rights, but rather, were intended solely to provide compensation for indigent patient services, which work previously was required but not compensated.
E. The Trial Court's Ruling
On March 30, 2023, after a hearing held the prior day, the trial court denied the defendants' motion to compel arbitration. The court explained, "[T]he [Agreement] was only intended to set forth the agreement between the doctors and West Hills Hospital relating to the care of indigent patients. Because this case involves many claims that do not relate to or arise out of the treatment of indigent patients, the court agrees that the arbitration agreement should not be interpreted to include any other relationship or vested rights, if any, between the plaintiffs and the hospital." The court rejected the defendants' argument that the first addendum expanded the scope of the Agreement "to cover all work the doctors did for the hospital (including service on the on-call panel) and to extinguish any vested property rights or due process rights they may have developed by virtue of other work with or on behalf of the hospital."
The trial court continued, "The court finds that there is no ambiguity created by the addendum and that the clear import of the language was that it relate[d] only to 'covered services,' as defined in [s]ection 3(B) of the addendum. When read together with the opening paragraph of the [Agreement] itself, which clearly indicated that it was the hospital's desire that the contract would only cover services to indigent patients (and a means to recover for services for those patients), the other language merely describes how the doctor was to provide services to those indigent patients. There was no clear intent expressed that the contract would govern all relations between the parties, or all on[-]call services."
The trial court concluded, "Because that small subset of patients is the only group covered by the [Agreement], the court finds no intent by the parties to subject their entire working relationship-including hospital privileges, presence on the on-call panel in the emergency room and service on the hospital committees, and the like-to the [Agreement's] arbitration agreement." Because the court found the arbitration agreement did not apply to the Doctors' claims, the court did not address whether the non-Hospital defendants were third party beneficiaries of the Agreements.
The HCA defendants and Team Health timely appealed.
DISCUSSION
A. Principles of Arbitration and Standard of Review
Section 1281.2 requires the trial court to order arbitration of a controversy "[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy . . . if it determines that an agreement to arbitrate the controversy exists." In any motion to compel arbitration, the threshold questions "are whether an agreement to arbitrate exists [citations] and, if so, whether the parties' dispute falls within the scope of that agreement." (Ahern v. Asset Management Consultants, Inc. (2022) 74 Cal.App.5th 675, 687 (Ahern); accord, Pinnacle Museum Tower Assn. v. Pinnacle Market Development (U.S.), LLC (2012) 55 Cal.4th 223, 236 ["'"A party cannot be required to submit to arbitration any dispute which he has not agreed so to submit."'"]; Duran v. EmployBridge Holding Co. (2023) 92 Cal.App.5th 59, 65 (Duran) ["Whether the parties agreed to arbitrate all or a portion of 'the present controversy turns on the language of the arbitration clause.''']; Performance Team Freight Systems, Inc. v. Aleman (2015) 241 Cal.App.4th 1233, 1244 ["Only disputes that fall within the scope of an arbitration provision are arbitrable."].)
"The scope of arbitration is, of course, a matter of agreement between the parties," although "doubts concerning the scope of arbitrable issues are to be resolved in favor of arbitration." (Ericksen, Arbuthnot, McCarthy, Kearney &Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323; accord, Duran, supra, 92 Cal.App.5th at pp. 65-66 ["California has a strong public policy favoring arbitration and, as a result, ambiguities or doubts about the scope of the arbitration provision should be resolved in favor of arbitration."].) "The policy favoring arbitration, however, does not apply when unambiguous language shows the parties did not agree to arbitrate all or a part of the dispute." (Duran, at p. 66; accord, Eminence Healthcare, Inc. v. Centuri Health Ventures, LLC (2022) 74 Cal.App.5th 869, 876.)
"'The ordinary rules of contract interpretation apply to arbitration agreements.'" (Gregg v. Uber Technologies, Inc. (2023) 89 Cal.App.5th 786, 800; accord, Western Bagel Co., Inc. v. Superior Court (2021) 66 Cal.App.5th 649, 662.) "In determining the scope of an arbitration clause, '[t]he court should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made.'" (Victoria v. Superior Court (1985) 40 Cal.3d 734, 744; accord, Ahern, supra, 74 Cal.App.5th at p. 687; see Civ. Code, § 1648 ["However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract."].) "'"A court must view the language in light of the instrument as a whole and not use a 'disjointed, singleparagraph, strict construction approach' [citation]."'" (Rice v. Downs (2016) 248 Cal.App.4th 175, 186 (Rice).)
"We review the trial court's interpretation of an arbitration agreement de novo when, as here, that interpretation does not depend on conflicting extrinsic evidence." (Ahern, supra, 74 Cal.App.5th at p. 687; accord, Duran, supra, 92 Cal.App.5th at p. 65.) "'"Whether an arbitration agreement applies to a controversy is a question of law to which the appellate court applies its independent judgment where no conflicting extrinsic evidence in aid of interpretation was introduced in the trial court."'" (Ahern, at p. 687; accord, Rice, supra, 248 Cal.App.4th at p. 185 [appellate court is "'not bound by the trial court's construction or interpretation'"].)
B. The Doctors' Causes of Action Do Not Fall Within the Scope of the Arbitration Agreement
Defendants contend the arbitration clause is broad because it requires arbitration of "any controversy or dispute related to or arising out of this Agreement." "A broad clause includes language that requires arbitration of '"'any claim arising from or related to'" the agreement." (Ahern, supra, 74 Cal.App.5th at p. 689; accord, Vaughn v. Tesla, Inc. (2023) 87 Cal.App.5th 208, 220 (Vaughn) ["use of the phrase 'arising from or relating to' signifies the Arbitration Provision is a 'broad provision'"].) "A narrow clause, on the other hand, typically includes language that requires arbitration of' 'a claim, dispute, or controversy "arising from" or "arising out of" an agreement, i.e., excluding language such as "relating to this agreement" or "in connection with this agreement."'" (Ahern, at p. 689; Ramos v. Superior Court (2018) 28 Cal.App.5th 1042, 1052 (Ramos) ["Clauses providing for arbitration of disputes '"arising from"' or '"arising out of"' an agreement have generally been interpreted to apply only to disputes regarding the interpretation and performance of the agreement."].)
We agree the arbitration provision is broad because it includes language that requires arbitration of any controversy or dispute related to or arising out of the Agreement. (See Ramos, supra, 28 Cal.App.5th at pp. 1051-1052 [former law partner's "discrimination, retaliation, anti-fair-pay, and related claims" were covered by broad arbitration clause requiring arbitration of any dispute or controversy "'arising under or related to'" partnership agreement or partnership]; cf. Ahern, supra, 74 Cal.App.5th at pp. 681, 689 ["'any dispute arising in connection with the interpretation or enforcement of the provisions of this Agreement, or the application or validity thereof, shall be submitted to arbitration'" was a "particularly narrow" arbitration provision].) "[C]ourts have interpreted agreements with broad arbitration clauses . . . to encompass tort, statutory, and contractual disputes that '"'have their roots in the relationship between the parties which was created by the contract.'"'" (Ramos, at p. 1052; accord, Vaughn, supra, 87 Cal.App.5th at p. 221 ["Consistent with the proposition that 'relating to' acquires meaning from the subjects being related, the phrase normally encompasses extracontractual claims only 'so long as they have their roots in the relationship between the parties which was created by the contract.'"].)
Although the phrase "arising from or relating to" is broad, the duty to arbitrate under the Agreement is necessarily limited to "any controversy or dispute" relating to or arising out of "this Agreement." (See Vaughn, supra, 87 Cal.App.5th at p. 220 ["the phrase ['arising from or relating to'] only acquires meaning by considering what two things are being related to each other-in this instance [p]laintiffs' claims and their direct employment with" the employer]; Ramos, supra, 28 Cal.App.5th at p. 1051 ["While the phrase 'arising under or related to' is very broad, it is necessarily qualified by what follows: 'this Agreement . . . or the Partnership.'"]; Rice, supra, 248 Cal.App.4th at p. 187 ["The parties did not simply agree to arbitrate 'any controversy,' effectively meaning every controversy between them. 'Any controversy' is necessarily modified by 'arising out of this Agreement.'"].)
Defendants contend the Doctors' causes of action are related to the Agreements and fall within the scope of the arbitration provision because the Agreements cover all of the Doctors' on-call services, not just those for indigent patients. In support of this argument, they point to multiple provisions in section 3 of the first addendum outlining the Doctors' duties. Section 3.A of the first addendum required each Doctor to, "[w]hen available, . . . respond to all calls requested by the Emergency Department and acknowledge that determination of the need for call is at the discretion of the requesting Emergency Department physician." Section 3.C provided, "Contractor will provide Emergency Department call coverage in accordance with the Facility's Bylaws, Rules and Regulations and Policies and Procedures and in accordance with the call schedule maintained by the Facility." Likewise, section 3.E mandated that each Doctor "shall respond to all calls requested by the Emergency Department and acknowledge that determination of the need for call is at the discretion of the requesting Department physician." And section 3.F barred Doctors from being on call at another hospital while on call at the Hospital. Defendants highlight that these provisions do not specify that the required call coverage is limited to indigent patients.
As defendants acknowledge, the Agreements for Drs. Diehl and Hirsch do not include this provision.
Section 3.F of the first addendum provided, "Panel Participation. When taking call from for Facility's call panel, Facility will be the only hospital and the designated specialty will be the only specialty for which Contractor should be on call, unless suitable back-up is arranged for instances when Contractor is engaged in activities at another hospital and is unavailable to respond in a timely fashion to Facility consults."
Defendants also argue that section 3.D, which expressly barred discrimination based on economic or insurance status, was inconsistent with the trial court's narrow interpretation of the Agreements because it would not have been necessary to bar discrimination based on economic or insurance status if the agreement was limited to patients with this status. But the nondiscrimination clause contained boilerplate language preventing discrimination on the basis of numerous protected classes, and it is not reasonable to believe the parties intended, by failing to excise the references to financial and insurance status, to broaden the scope of the Agreements beyond services for indigent patients. Section 3.D of the first addendum stated, "Nondiscrimination. Neither Contractor nor any Contractor's Representative may refuse to respond to a call based upon arbitrary, capricious or unreasonable discrimination involving an individual's race, religion, national origin, age, gender, physical condition, economic status, ethnicity, citizenship, disability, medical condition, marital status, sexual orientation, insurance status, ability to pay, or perception that the individual has any of these characteristics or is associated with anyone who has or is perceived to have these characteristics."
Defendants' construction of section 3 of the first addendum-to expand the scope of the Agreements-is not a reasonable interpretation of the Agreements because it is contrary to the language at the top of the Agreements stating the Agreements were "[r]egarding Emergent Coverage for the care of indigent patients (the 'Services')." Each Agreement required the Doctor to provide coverage for indigent patients in exchange for compensation by the Hospital. As the Agreement stated in the first paragraph titled "Background": "Facility desires to retain Contractor to provide the Services, and Contractor desires to provide the Services all upon the terms and conditions stated below. This Agreement is entered into for the purpose of defining the parties' respective rights and responsibilities." Because the term "Services" was defined at the top of the first page of the Agreement as "emergent coverage for the care of indigent patients," the scope of each Agreement was necessarily limited to compensation for the Doctors' services to indigent patients.
Defendants urge us to ignore the definition of "Services" in the Agreement because section 5.U of the Agreement provides that "headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction of interpretation of this Agreement." But the definition of "Services" at the top of the Agreement is not contained in a heading; rather, it is a description of the subject of the Agreement.
Our interpretation of the scope of the Agreements, as limited to services for indigent patients, is supported by other language of the Agreement and addenda. As discussed, "Covered Services" in section 3.B of the first addendum encompassed only services rendered to indigent patients. And Section 1.E of the Agreement provided that for purposes of compensation, "Contractor shall maintain . . . such documentation required by Facility, verifying the Services provided pursuant to this Agreement, and shall submit said documentation as a condition precedent to Facility's payment obligation hereunder." (Italics added.)
Further, the second addendum acknowledged in section 2 that the Hospital and Doctor generally "shall make their own independent charges for services to patients, and each shall independently bill for and collect the charges due to them." But section 4 provided that "for Covered Services to an Indigent Patient," the Hospital would pay the Doctor "a flat fee based on the top three (3) CPT codes, not to exceed an annual maximum of $300,000.00 using the correct modifier indicating professional services were rendered at the Facility." Section 5 of the second addendum added that "[t]he compensation paid to Contractor by Facility pursuant to this Agreement shall constitute Contractor's sole compensation for Covered Services provided hereunder. In no event shall Contractor bill Indigent Patients or any third party for such Covered Services."
If the parties had intended the Agreements to cover the Doctors' services for all patients, as argued by defendants, there would be no need to define "Services" as "Emergent Coverage for the care of Indigent patients," and "Covered Services" as "Professional Medical Services rendered to Indigent Patients." Defendants' interpretation of the Agreements to include the Doctors' services for all on-call patients renders the terms "Services" in the Agreements and "Covered Services" in the addenda surplusage. (See Gregg v. Uber Technologies, Inc., supra, 89 Cal.App.5th at p. 800 ["'An interpretation that leaves part of a contract as surplusage is to be avoided.'"]; Coral Farms, L.P. v. Mahony (2021) 63 Cal.App.5th 719, 727 ["A contract is read as a whole, 'so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.' (Civ. Code, § 1641.) Contracts 'are construed to avoid rendering terms surplusage.'"].) The Agreements therefore govern the parties' rights and obligations only with respect to compensation for professional medical services rendered to indigent patients.
Moreover, contrary to defendants' contention, the Doctors' causes of action do not relate to or arise from the Agreements. In the first amended complaint, the Doctors alleged they had vested property rights as members of the ER on-call panel, and the Hospital improperly divested the Doctors of their rights by removing them from the on-call panel and replacing them with Team Health's doctors. (See Anton v. San Antonio Community Hospital (1977) 19 Cal.3d 802, 824-825 ["[T]he admission of a physician medical staff membership establishes a relationship between physician and hospital which, although formally limited in duration by force of law, gives rise to rights and obligations .... "[T]he full rights of staff membership vest upon appointment, subject to divestment upon periodic review only after a showing of adequate cause for such divestment in a proceeding consistent with minimal due process requirements."], superseded by statute on another ground as noted in Fahlen v. Sutter Central Valley Hospitals (2014) 58 Cal.4th 655, 678, fn. 11; Nasim v. Los Robles Regional Medical Center (2008) 165 Cal.App.4th 1538, 1542 ["A doctor who has been granted hospital privileges has a vested '"property interest which directly relates to the pursuit of his [or her] livelihood."'"].)
The Doctors' hospital privileges and on-call panel membership rights existed prior to their 2019 and 2020 Agreements. The Doctors alleged they had admitting privileges at the Hospital for over 15 years, and as Dr. Hirsch declared (and Dr. Nasim declared for a different period), he "personally did ER panel work at West Hills Hospital from 1989 to 1993, many years before there was a professional services agreement." The Agreements allowed the Hospital to receive payments, and in turn pay the Doctors for services rendered to indigent patients, which constituted "approximately five percent of the work doctors did on the on-call panel." Nowhere in the first amended complaint did the Doctors allege that the Hospital breached its obligations under the Agreements. While the Agreements had various expiration dates ranging from October 31, 2021 to March 31, 2023, each Agreement could be terminated "without cause" upon 60 days' prior written notice by either party. The fact the Agreements terminated in October 2021 when the Hospital removed the Doctors from the on-call panel does not mean the dispute over the Doctors' vested rights related to or arose out of the Agreements, which specified the Doctors' duties and the Hospital's obligation to pay the Doctors for services rendered to indigent patients.
Defendants highlight isolated paragraphs of the first amended complaint to tie the Doctors' allegations to the Agreements. These arguments do not fare any better. In paragraph 72, the Doctors allege that they were taken off the on-call panel because of their history as whistleblowers. Paragraph 75 then provides as an example that in 2018 some of the Doctors criticized the hospital for errors that resulted from having overworked ER nurses address medication issues instead of having pharmacy technicians perform the work. Thus, defendants argue, paragraph 75 is "related to" section 2.B. of the first addendum, which states the Hospital "shall employ sufficient non-physician personnel as it deems necessary for the proper operation of the Program." This single reference to staffing in paragraph 75 in the historical background section of the first amended complaint (containing facts that predate the Agreements) is not sufficient to show the Doctors' causes of action arising from their removal from the on-call panel are related to the requirement in the Agreements that the Hospital provide sufficient non-physician staffing. Defendants' other examples of the issues previously raised by some of the Doctors in criticizing the Hospital likewise do not transform the Doctors' causes of action to disputes that relate to or arise from the Agreements.
Because the Doctors' causes of action do not arise from or relate to the subject of the Agreements, they do not fall within the scope of the arbitration agreement.
Defendants contend the nonsignatory defendants can enforce the arbitration clause because the first amended complaint alleged that defendants were the "agents" or "alter egos" of each other. However, the Agreements made clear that the nonsignatory defendants had no right to enforce the Agreements, providing in section 5.Q: "Third Party Beneficiaries. This Agreement is entered into for the sole benefit of Facility and Contractor. Nothing contained herein or in the parties' course of dealings shall be construed as conferring any third party beneficiary status on any person or entity not a party to this Agreement, including, without limitation, any Contractor's Representative." In any event, because we conclude the Doctors' causes of action do not fall within the scope of the arbitration agreement, we need not decide whether the nonsignatory defendants have any right to enforce the Agreements or whether equitable estoppel applies.
DISPOSITION
The order denying the motion to compel arbitration is affirmed. The Doctors are to recover their costs on appeal from the HCA defendants and Team Health.
WE CONCUR: MARTINEZ, P. J., RAPHAEL, J. [*]
[*] Judge of the San Bernardino Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.