Opinion
G054231
09-04-2018
STEPHEN VALBUENA, Plaintiff and Appellant, v. MICHAEL WALKER et al., Defendants and Respondents.
Neufeld Marks, Paul S. Marks and Erin E. Brady for Plaintiff and Appellant. Schmid & Voiles, Denise H. Greer, Kathleen D. McColgan, and Lawrence D. Wong for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2012-00607144) OPINION Appeal from a judgment of the Superior Court of Orange County, Franz E. Miller and Ronald L. Bauer, Judges. Affirmed. Neufeld Marks, Paul S. Marks and Erin E. Brady for Plaintiff and Appellant. Schmid & Voiles, Denise H. Greer, Kathleen D. McColgan, and Lawrence D. Wong for Defendants and Respondents.
Stephen Valbuena's medical malpractice lawsuit was ordered to arbitration. The arbitrator entered a summary judgment arbitration award in favor of orthopedic surgeon Stephen A. Mikulak, physician assistant Michael Walker, and Mikulak's partnership, California Orthopedic Specialists Medical Group (hereafter collectively referred to in the singular as Mikulak). The trial court denied Valbuena's motion to vacate the award, and entered a judgment confirming the arbitration award. On appeal, Valbuena challenges the ruling sending his case to arbitration. We conclude his contentions lack merit and affirm the judgment.
BACKGROUND FACTS
In July 2007, Valbuena signed a standard medical services arbitration agreement for knee surgery performed by Mikulak. Satisfied with the successful outcome of his knee surgery, Valbuena returned four years later seeking hip replacement surgery. Mikulak did not ask Valbuena to sign a new arbitration agreement for the hip replacement surgery.
All did not proceed as planned. During the surgery Valbuena suffered damage to his sciatic nerve resulting in a condition known as "foot drop," which is an inability to control the muscles that permit toe, foot, and ankle flexion. This injury means Valbuena must currently use a brace to help him walk, he moves with a pronounced limp, and he is prone to falling down.
After Valbuena filed a medical malpractice action, Mikulak moved to compel arbitration. The motion was based on the theory the 2007 arbitration agreement Valbuena signed before his knee surgery covered any disputes arising from the 2011 hip replacement surgery.
The arbitration agreement stated, in pertinent part, the following provisions:
"Article 1: Agreement to Arbitrate: It is understood that any dispute as to medical malpractice . . . will be determined by submission to arbitration."
"Article 2: All Claims Must be Arbitrated: It is the intention of the parties that this agreement bind all parties whose claims may arise out of or relate to treatment or service provided by the physician . . . . [¶] All claims for monetary damages exceeding the jurisdictional limit of the small claims court . . . must be arbitrated including, without limitation, claims for loss of consortium, wrongful death, emotional distress or punitive damages . . . ."
"Article 5: Revocation: This agreement may be revoked by written notice delivered to the physician within 30 days of signature. It is the intent of this agreement to apply to all medical services rendered any time for any condition."
Judge Franz E. Miller granted the motion. He rejected Mikulak's argument the 2011 hip replacement surgery was part of an "open book account" with the same medical provider as described in Code of Civil Procedure section 1295, subdivision (c). He determined the open book account initiated by the knee surgery in 2007 was closed when Valbuena's surgery was completed and he paid the bill. However, Judge Miller, citing Reigelsperger v. Siller (2007) 40 Cal.4th 574 (Reigelsperger), concluded this ruling was just a starting point in his analysis because parties may agree to arbitrate future events. Focusing on Article 5 of the 2007 arbitration agreement, Judge Miller determined the clause covered disputes not only related to the knee surgery but also any future treatment unrelated to the same condition.
All further statutory references are to the Code of Civil Procedure.
Three years later, after completion of the arbitration, Valbuena filed a motion to vacate the arbitration award entered after the arbitrator granted Mikulak's summary judgment motion. The motion was based on the argument the arbitrator exceeded his powers by failing to recognize there were triable issues of facts related to Valbuena's medical malpractice claim. Valbuena also asserted the award must be vacated because his rights were substantially prejudiced by the arbitrator's refusal to permit further briefing. After considering Mikulak's opposition to the motion, Judge Ronald L. Bauer denied the motion to vacate. He confirmed the arbitration award and entered judgment in Mikulak's favor.
DISCUSSION
Valbuena's only issue on appeal is the trial court erroneously granted Mikulak's motion to compel arbitration. An order compelling arbitration is not subject to immediate, direct appeal, but is reviewable on appeal from the final judgment on the award. (Fagelbaum & Heller LLP v. Smylie (2009) 174 Cal.App.4th 1351, 1359 (Fagelbaum).) "The standard of review of an order compelling arbitration is substantial evidence, where the trial court's decision was based upon the resolution of disputed facts, or de novo where the facts are not in conflict." (Id. at p. 1360.)
Valbuena maintains the trial court erroneously relied on the Reigelsperger case, which is factually distinguishable. In Reigelsperger, the court considered whether an arbitration agreement, signed when a chiropractor first treated a patient, applied to a medical malpractice claim by that patient arising from treatment for a different condition two years later. (Reigelsperger, supra, 40 Cal.4th at p. 576.) Based on language in the arbitration agreement stating that it intended to bind the patient and health care provider "'who now or in the future treat[s] the patient [,]'" our Supreme Court held the arbitration agreement was enforceable and required arbitration of the malpractice claim arising from the later treatment. (Ibid.)
We conclude Reigelsperger is applicable to the instant appeal. The arbitration agreement Valbuena signed in 2007 continued to apply to medical services and treatment provided by Mikulak when Valbuena returned to his care in 2011. The arbitration agreement stated in Article 1, "It is understood that any dispute as to medical malpractice" must be arbitrated. (Italics added.) Article 2 was titled "All Claims Must be Arbitrated" and specified the agreement bound "all parties whose claims may arise out of or relate to treatment or service provided" by Mikulak. Article 5, contained on the same page as Articles 1 and 2, stated the agreement could be revoked in writing within 30 days, otherwise "[i]t is the intent of this agreement to apply to all medical services rendered any time for any condition." (Italics added.)
This last statement in Article 5, that the arbitration agreement apply "to all medical services rendered any time for any condition" is an enforceable provision. It reflects the parties contemplated the possibility of future transactions to which the arbitration agreement would apply. Although this agreement did not use the word "future" like the Reigelsperger agreement, the parties' agreement to arbitrate disputes arising from services "rendered any time for any condition" was a promise to arbitrate malpractice claims arising from later treatment of conditions unrelated to the knee surgery. This language does not evidence an intent to limit arbitration to medical services provided in 2007.
Valbuena raises several arguments challenging the enforceability of the "future disputes" clause in Article 5. He asserts the clause is unenforceable for the following reasons: (1) It is not part of Article 1 or 2, or presented in a "conspicuous fashion"; (2) due to its location in Article 5, the clause must be read narrowly to have limited application to contract revocation issues; and (3) it is unconscionable. We will address each argument separately below.
I. Location of the Clause
Valbuena argues it is significant the bold, red type warning in the contract above the signature line referred to Article 1, but not Article 5's "future disputes" clause. He asserts one would expect an agreement to arbitrate disputes arising 40 to 50 years in the future would be included in Article 1 or 2. He notes Article 1 and 2 describe the scope of claims subject to arbitration but contain no temporal elements. He argues that if the category of claims included those arising from future medical services "logic dictates" it should have been part of the provision defining the types of claims (Articles 1 and 2). Valbuena concludes, "The placement of the 'rendered any time' clause in Article 5 ('Revocation'), instead of Article 1 or Article 2, renders ineffective the legal requirement that the patient be warned in conspicuous language about his or her (purported) 'forever-into-the-future' loss of jury trial rights." He is wrong.
Section 1295 provides all medical malpractice arbitration agreements must include specifically worded provisions. Section 1295, subdivision (b), requires all medical arbitration agreements to include the following warning: "Immediately before the signature line provided for the individual contracting for the medical services must appear the following in at least 10-point bold red type: [¶] 'NOTICE: BY SIGNING THIS CONTRACT YOU ARE AGREEING TO HAVE ANY ISSUE OF MEDICAL MALPRACTICE DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A JURY OR COURT TRIAL. SEE ARTICLE 1 OF THIS CONTRACT." In addition, section 1295, subdivision (a), specifies the language that must be included in Article 1. "[T]he failure to use the language specified by the statute could render the arbitration provision unenforceable. [Citation.]" (Titolo v. Cano (2007) 157 Cal.App.4th 310, 318.)
However, nothing in section 1295 states medical malpractice agreements may not include additional provisions. (Coon v. Nicola (1993) 17 Cal.App.4th 1225, 1232.) "In fact the wording of subdivision (a) is indicative of this when it requires mandatory language to be set forth in the 'first article of the contract.' The implication here is that other articles may be added depending upon the needs of the parties." (Ibid.) There is no specification in section 1295 as to where a clause agreeing to arbitrate future disputes must be located in the agreement. If not specified, we see no reason why the parties could not include the "future disputes" provision in Article 5, which was devoted to describing the duration of the agreement. Our Supreme Court in Reigelsperger determined that as long as the arbitration agreement includes the language required by section 1295, as it did here, the parties may broaden their agreement with additional language. (Reigelsperger, supra, 40 Cal.4th at p. 579.) For all the above reasons, we reject Valbuena's argument the clause should be stricken due to its "incongruous, inconspicuous placement within the document."
Article 5 essentially states that if the agreement is not revoked in 30 days, the parties intended for it to apply to all present and future disputes arising from Mikulak's medical services.
II. Scope of the Clause
Valbuena's alternative argument is as follows: If this court refuses to disregard the "future disputes" provision, we should follow "a more conventional method of contract interpretation" and "harmonize" what is an ambiguous clause with the terms of revocation also outlined in Article 5. He concludes the "future disputes" provision should apply only to the disputes regarding revocations of the arbitration agreement. This contention lacks merit because the "future disputes" provision is not ambiguous and basic contract law requires the clause be interpreted in the context of the entire agreement (not just Article 5).
Article 5, titled "Revocation," contains two sentences regarding the duration of the agreement, as follows: (1) "This agreement may be revoked by written notice delivered to the physician within 30 days of signature," and (2) "It is the intent of this agreement to apply to all medical services rendered any time for any condition." These same two concepts are discussed together in subdivision (c) of section 1295, which provides, "Once signed, [a medical services arbitration agreement] governs all subsequent open-book account transactions for medical services for which the contract was signed until or unless rescinded by written notice within 30 days of signature." "The plain meaning of this provision is that a medical services agreement is effective upon execution by the parties and remains in effect until or unless a party rescinds within the 30-day period." (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1164.)
The only difference between the statute and Article 5 is the latter provides the agreement shall remain in effect for a potentially longer period of time, broadly covering all future disputes (for "medical services rendered any time for any condition") unless it is timely revoked. Although the provision is broadly worded, the language is clear and explicit. We conclude none of the terms are ambiguous, uncertain, or reasonably susceptible to more than one interpretation.
We are not persuaded by Valbuena's argument ambiguity was created by "the unusual placement of such an important clause." In light of the statutory provision discussing duration and revocation in the same sentence, we do not find the placement particularly odd or extraordinary. It is reasonable to discuss the duration of the agreement in the same provision as how a party may shorten that time through revocation. We also reject Valbuena's argument the provision is ambiguous because the language used in the Reigelsperger agreement was clearer. This is not the test used to determine ambiguity. A provision is considered ambiguous when it is "'capable of two or more constructions, both of which are reasonable.' [Citation.]" (Foster-Gardner, Inc. v. National Union Fire Ins. Co. (1998) 18 Cal.4th 857, 868 (Foster-Gardner).) The fact clear and explicit language could have been further clarified does not make it ambiguous.
Valbuena's final ambiguity argument also lacks merit. He asserts verb tense is an important consideration in contract interpretation. He suggests the use of past tense ("'rendered'") in the "future disputes" provision made it ambiguous. He cites several cases holding the use of past tense can refer to services provided in the past. Two of the cases refer to statutory construction. (State of California ex rel. Bowen v. Bank of America Corp. (2005) 126 Cal.App.4th 225, 240 ("deliberate use of the certain, indicative, past tense suggests that Congress intended the reverse false claims provision to apply only to existing legal duties to pay or deliver property[]"]; Mathis v. Brown & Brown of S.C., Inc. (2010) 389 S.C. 299, 318 [698 S.E.2d 773, 783] [court misread Payment of Wages Act in awarding prospective wages because Act's use of past tense of word 'rendered' suggests services provided in the past].) The other two cases concern waiver provisions. (Turner v. Redwood Mutual Life Assn. of Fresno (1936) 13 Cal.App.2d 573, 577 [life insurance policy medical information privilege waiver used present and past tense held not to apply to future communications]; Sturgis Savings & Loan Assn. v. Italian Village, Inc. (1978) 81 Mich. Ct. App. 577, 580 [265 N.W.2d 755, 757] ["It should be noted that 'labor rendered, material supplied' was written in the past tense" making the lien waiver as to future work ambiguous].) None of the cited cases concerned interpretation of a medical malpractice arbitration agreement.
We find the use of past tense does not make the provision unclear or suggest the arbitration agreement applied only to past medical services. "'"[L]anguage in a contract must be construed in the context of that instrument as a whole, and in the circumstances of that case, and cannot be found to be ambiguous in the abstract."' [Citation.]" (Foster-Gardner, supra, 18 Cal.4th at p. 868.) Article 2 stated the parties agreed to arbitrate claims that "may arise out of or relate to treatment or services provided by the physician." (Italics added.) The added provision in question, found in Article 5, was the parties intention that the agreement apply "to all medical services rendered any time for any condition." (Italics added.) The use of past tense in Articles 2 and 5 simply acknowledged the factual reality that any medical malpractice claim will not arise until after a physician provides negligent medical services. Obviously, a medical malpractice claim cannot relate to treatment not yet provided.
III. Doctrine of Unconscionability
"'"To briefly recapitulate the principles of unconscionability, the doctrine has '"both a 'procedural' and a 'substantive' element," the former focusing on "'oppression'" or "'surprise'" due to unequal bargaining power, the latter on "'overly harsh'" or "'one-sided'" results.' [Citation.] The procedural element of an unconscionable contract generally takes the form of a contract of adhesion, '"which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it."' . . . [¶] Substantively unconscionable terms may take various forms, but may generally be described as unfairly one-sided." [Citations.]' [Citation.]" (Walnut Producers of California v. Diamond Foods, Inc. (2010) 187 Cal.App.4th 634, 645 (Walnut Producers).)
"'Under this approach, both the procedural and substantive elements must be met before a contract or term will be deemed unconscionable. Both, however, need not be present to the same degree. A sliding scale is applied so that "the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa." [Citation.]' [Citation.]" (Walnut Producers, supra, 187 Cal.App.4th at p. 645.)
With respect to procedural unconscionably, Valbuena argues the "future disputes" clause was put in an inconspicuous place, "offend[ing] procedural norms." He maintains the agreement was substantively unconscionable because it "force[s] arbitration on patients forever into the future, with a vague clause, located in a section of the agreement where it should not be located." Valbuena claims he, like any person agreeing to arbitration before undergoing a contemplated medical procedure, "would understandably skip the part about revocation of the agreement, and would not expect a legal landmine to be buried there." He adds, "This was especially so since the agreement has the patient explicitly sign the document a second time, in order to have prior medical services arbitrated (at Article 6), but does not ask for a signature for future services." In other words, Valbuena contends a patient signing his or her name next to Article 6, explaining the retroactive effect of the agreement, should be excused from reading the sentence directly above regarding the agreed upon duration of the agreement and means of revocation. We conclude these contentions lack merit.
As stated earlier, the placement of the clause in Article 5 was not procedurally incorrect. We find nothing to support Valbuena's contention the location of the provision offended procedural norms. Article 5 was not hidden in a footnote or written in smaller font than the rest of the provisions clearly set forth in a one-page document. The clause was not made inconspicuous by its placement towards the end of the agreement as opposed to being inserted within the already quite lengthy beginning paragraphs. To the contrary, the clause was made less inconspicuous by its short length and its location immediately above Article 6, which required the patient's additional acknowledgment with a second signature.
Valbuena offers no legal authority to support his theory a patient would "understandably skip" the short section about revocation. "When a person with the capacity of reading and understanding an instrument signs it, he may not, in the absence of fraud, coercion or excusable neglect, avoid its terms on the ground he failed to read it before signing it. [Citation.]" (Bolanos v. Khalatian (1991) 231 Cal.App.3d 1586, 1590.)
Valbuena's substantive unconsionability argument was addressed and rejected by our Supreme Court. (Reigelsperger, supra, 40 Cal.4th at p. 580.) Valbuena was not forced to sign an agreement binding "'the parties in perpetuity . . . .'" (Ibid.) "The answer to this objection is that, like other contracts, arbitration agreements that do not specify a term of duration are terminable at will after a reasonable time has elapsed. [Citations.] [The patient] did not try to terminate the arbitration agreement." (Ibid.) Based on all of the above, we conclude the clause was not procedurally or substantively unconscionable. We must affirm the trial court's decision to compel arbitration and will not disturb the judgment.
DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on appeal.
O'LEARY, P. J. WE CONCUR: MOORE, J. IKOLA, J.