Lead Opinion
Opinion
Code of Civil Procedure section 364, subdivision (a),
Facts
This appeal is from a judgment of dismissal entered after the trial court sustained a demurrеr without leave to amend. Under well-settled law, therefore, we assume the truth of all properly pleaded material allegations. (Phillips v. Desert Hospital Dist. (1989)
On April 4, 1993, Rebekka Pratte (Pratte) was injured when her hand was slammed in the door of a van owned by the First Church of God— Santa Maria, Inc. (the Church). She was treated by defendant doctors Reo Reiswig, Karen S. Kolba, and C. Baring Farmer (the doctors). After treatment she developed a serious condition known as complex regional pain syndrome.
Pratte sued the Church, which was insured by plaintiff Preferred Risk Mutual Insurance Company (Preferred Risk). On January 24,1996, Preferred Risk paid the $1 million policy limit to Pratte in exchange for a release of all claims against the Church. On July 2,1996, Pratte sued Doctors Reiswig and Farmer for malpractice. Because the action was “based upon” her physicians’ alleged negligence, it was governed by MICRA’s statutory provisions, including section 364, which governs the notice of intention and commencement of professional negligence actions. (§ 364, subds. (a), (d).) Pratte followed those statutes in pursuing her claim.
On January 16, 1997, Preferred Risk served Doctors Reiswig and Kolba with section 364, subdivision (a), notices of intent to sue them for malpractice. On February 19, 1997, it served a similar notice on Dr. Farmer. On April 10, 1997, Preferred Risk filed a complaint in subrogation to the Church’s right of equitable indemnity against all three doctоrs, essentially claiming that they should indemnify it for the amount it spent to settle Pratte’s action against the Church because their malpractice caused Pratte’s injuries.
The doctors demurred to the complaint on the grounds that it did not state a subrogation cause of action and was barred by the general one-year personal injury statute of limitations in section 340, subdivision (3). They asserted that, because section 340, subdivision (3), applies to general tort actions and is not part of the MICRA statutory scheme, Preferred Risk could not seek protection under the MICRA 90-day tolling provision for actions “based upon” professional negligence. (§ 364, subd. (d).) The trial court sustained the demurrer on statute of limitations grounds, entering judgment of dismissal for defendants. The Court of Appeal affirmed the judgment. We granted review to decide whether section 364, subdivision (d), applies to Preferred Risk’s equitable indemnity action.
A person whose negligence causes injury that a physician’s malpractice aggravates may seek equitable indemnity from the physician. (Smith v. Parks Manor (1987)
Preferred Risk paid Pratte on January 24, 1996. Its indemnity cause of action accrued on that date for purposes of commencing the statute of limitations, because one is injured by another’s wrongful act when one pays more than one’s proper share of a settlement to a plaintiff. The parties agree that section 340, subdivision (3), which governs all general tort actions, governs the equitable indemnity action. That section imposes a one-year limitations period for “[a]n action ... for injury to . . . one caused by the wrongful act or neglect of another . . . Thus, Preferred Risk was required to file its complаint by January 24, 1997, unless its action was tolled or extended by law.
Section 364, subdivision (a), provides that “[n]o action based upon the health care provider’s professional negligence may be commenced unless the defendant has been given at least 90 days’ prior notice of the intention to commence the action.” Failure to comply with the 90-day notice provision does not invalidate court proceedings and is not jurisdictional, although it may subject a plaintiff’s attorney to State Bar disciplinary proceedings. (§ 365.) Section 364, subdivision (d), states: “If the notice is served within 90 days of the expiration of the applicable statute of limitations, the time for the commencement of the action shall be extended 90 days from the service of the notice.” (§ 364, subd. (d).) Preferred Risk filed its complaint on April 10, 1997, more than one year after the indemnity cause of action accrued on January 24, 1996. The action is time-barred unless tolled under section 364, subdivision (d), for 90 days after January 16, 1997, when Preferred Risk served notice of intent to sue on Doctors Reiswig and Kolba.
The Court of Appeal concluded that the 90-day tolling provision of section 364, subdivision (d), does not apply to equitable indemnity claims. The court did acknowledge that, because section 364, subdivision (d), tolls “the applicable statute of limitations” and is not limited to MICRA statute of limitations provisions, it arguably could apply even to non-MICRA limitations periods, as it has in other cases. (See, e.g., Anson v. County of Merced (1988)
Discussion
As we have observed, the Legislature enacted MICRA in 1975 in response to rapidly increasing premiums for medical malpractice insurance. (Delaney v. Baker (1999)
Notwithstanding the clear policy behind section 364, to encourage settlements and lower insurance premiums, the doctors assert that the tolling provision of section 364, subdivision (d), doеs not apply to equitable indemnity actions because they are not governed by MICRA statute of limitations provisions. Instead, equitable indemnity, actions are simple common law tort actions filed to regain money lost by another’s negligence, with the general tort statute of limitations under section 340, subdivision (3), alone applying to the claims. The doctors reason that, because the actions seek to recover economic loss, and because section 340, subdivision (3), a non-MICRA provision, governs them, the tolling provision of section 364, subdivision (d), cannot protect them.
Our cases implicitly reject the doctors’ contention. We have held that the MICRA рrovisions may apply to equitable indemnity actions. (Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital (1994)
Western Steamship involved the doctrine of equitable indemnity in the MICRA context and Civil Code section 3333.2. Subdivision (a) of that section provides: “In any action for injury against a health care provider based on professional negligence, the injured plaintiff shall be entitled to recover noneconomic losses . . . .” Subdivision
The doctors attempt to distinguish Western Steamship on the ground that we specifically differentiated between substantive questions involving MICRA and simple procedural ones invoking statutes of limitations and other limitations on liability available to defendants in indemnity actions. (Western Steamship, supra, 8 Cal.4th at pp. 114-115.) Like the Court of Appeal, the doctors rely on our statement in Western Steamship separating MICRA’s substantive and procedural provisions: “[F]or certain procedural purposes, such as statutes of limitations, an indemnity claim is an independent action. [Citation.] As to matters of substantive law, however, it is wholly derivative and subject to whatever immunities or other limitations on liability would otherwise be available.” (Ibid., fn. omitted.)
Although Western Steamship distinguished betweеn substantive and procedural statutes to facilitate its analysis, the comparison has little force in this case. The doctors fail to acknowledge that Western Steamship relied on an out-of-state case that construed a medical malpractice statute of limitations to apply to contribution actions against health care providers. (Western Steamship, supra,
The doctors also assert that, even if we assume Western Steamship does not preclude
The doctors’ contention does not withstand scrutiny. Western Steamship recognized that, although equitable indemnity is based upon restitution, its restitutionary nature does not preclude the courts from apportioning liability among multiple tortfeasors on a comparative negligence basis. (Western Steamship, supra, 8 Cal.4th at pp. 108-109.) Indeed, Western Steamship assumed that an action for partial equitable indemnity may be based upon professional negligence and may indeed be subject to MICRA’s limit on noneconomic damages. (Id. at p. 111.) Moreover, although we have never attempted to define for all purposes the phrase “based upon” professional negligence, we have recognized that, in deciding whether an action is “based upon” professional negligence, the test is whether it flows or originates from a healthcare provider’s negligent act or omission. (See Central Pathology Service Medical Clinic, Inc. v. Superior Court (1992)
The courts have also rejected a similar contention in another nonMICRA statute of limitations context. (Anson, supra, 202 Cal.App.3d at pp. 1204-1205.) Anson held that the section 364, subdivision (d), tolling provision extended the six-month statute of limitations period of Government Code section 945.6, which governs actions against public entities. Citing section 364, subdivision (d), Anson observed the statute specifically states that, if a notice of intention is “ ‘served within 90 days of the expiration of the applicable statute of limitations,’ ” the limitations period is extended 90 days from service of notice. (Anson, supra,
The doctors attempt to distinguish Anson on the ground that it involved a negligence action against the governmental entity that employed the negligent physicians and was therefore “based upon” the health care provider’s negligence; it was not an equitable indemnity action like Preferred Risk’s, which is “based upon” settling the underlying negligence action. The doctors rely on a case holding that section 364, subdivision (d), does not apply to battery actions because those actions are not
Conclusion
We conclude that section 364, subdivision (d), which tolls for 90 days the limitations period for an action based upon a health care provider’s professional negligence, applies to equitable indemnity actions based upon professional negligence and governed by separate statutes of limitatiоn, including section 340, subdivision (3). Had the Legislature intended the tolling provision of section 364, subdivision (d), to apply only to section 340.5, rather than the more general “applicable statute of limitations,” it could easily have so stated. By applying section 364, subdivision (d), to cases based upon a health care provider’s professional negligence, including derivative claims for equitable indemnity that follow settlement of the original action, we further the legislative purpose of the 90-day tolling period, and MICRA in general, to give doctors and their insurers an opportunity to negotiate with prospective plaintiffs and settle derivative claims without unnecessary litigation. (See Woods, supra,
George, C. J., Baxter, J., Werdegar, J., and Brown, J., concurred.
Notes
All statutory references are to the Code of Civil Procedure unless otherwise noted.
Because its notice of intent to sue Dr. Farmer was served after the one-year limitations period of section 340, subdivision (3), expired, Preferred Risk is not appealing the sustaining of the demurrer as it applies to its action against Dr. Farmer.
In the Court of Appeal, Preferred Risk asserted as an alternative argument that the one-year MICRA statute of limitations in section 340.5 applied to its action, which automatically fell under the protection of section 364, subdivision (d), as a derivative MICRA lawsuit. The Court of Appeal concluded that section 340.5 does not govern indemnity actions, and in its petition for review and opening brief, Preferred Risk conceded the point. Prior to oral argument in this court, we asked the parties for supplemental briefing on the question whether section 340.5 had any application to this case. In light of the supplemental briefing and our own review of the question, we conclude the statute has no application to Preferred Risk’s indemnity action.
Concurrence Opinion
At issue here is the applicability of Code of Civil Procedure section 364,
I disagree with the majority, however, that the applicable statute of limitations here is section 340, subdivision (3), which imposes a one-year limitations period for “[a]n action ... for injury to . . . one caused by the wrongful act or neglect of another . . . .” (See maj. opn., ante, at pp. 212-213 & fn. 2.) In my view, the correct statute of limitations is section 340.5, which provides for, as applicable, either a three-year or a one-year period of limitations in actions “for injury or death against a health care provider based upon such person’s alleged professional negligence.”
I
In 1993, Rebekka Pratte’s hand was slammed in the door of a van owned by the First Church of God—Santа Maria, Inc. (the Church). After Doctors Reo Reiswig and Karen S. Kolba treated the injury, Pratte developed a serious condition known as “complex regional pain syndrome.” She sued the Church, which was insured by plaintiff Preferred Risk Mutual Insurance Company. On January 24, 1996, plaintiff insurer paid Pratte the policy limit of $1 million in exchange for a
Defendants demurred, claiming, as relevant here, that the complaint was barred by the one-year statute of limitations of section 340, subdivision (3). The trial court sustained the demurrer without leave to amend, and the Court of Appeal affirmed the judgment.
n
Section 340.5 provides: “In an action for injury or death against a health care provider based upon such person’s alleged professional negligence, the time for the commencement of action shall be three years after the date of injury or one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first.” (Italics added.) Thus, section 340.5 applies to any complaint that satisfies these three requirements: (1) the action must be “against a health care provider,” for (2) “injury or death,” based on (3) the health care provider’s “alleged professional negligence.” Here, plaintiff insurer’s action against defendant physicians for equitable indemnity meets each of these criteria.
First, plaintiff insurer’s action against defendant physicians is “against a health care provider.” (§ 340.5.) Subdivision (1) of section 340.5 provides an explicit definition of the term “[hjealth care provider.” Thе majority and defendant physicians do not dispute that defendants fall within this definition.
Second, plaintiff insurer’s action is for “injury.” (§ 340.5.) More specifically, it is for the financial injury that the Church suffered when plaintiff paid, on the Church’s behalf, $1 million to accident victim Pratte to compensate her. Implicit in the majority’s determination that the applicable statute of limitations is section 340, subdivision (3), which imposes a one-year limitations period on actions for “injury . . . caused by the wrongful act or neglect of another” (italics added), is a finding that the action here is for “injury.”
Third, the action is “based upon” the health care provider’s “alleged professional negligence.” (§ 340.5.) Plaintiff аlleged that accident victim Pratte was injured in an accident involving the Church, which was insured by plaintiff; and that as Pratte’s health care providers, both defendant physicians committed acts of professional negligence that aggravated Pratte’s injury, as a result of which plaintiff insurer paid Pratte more in damages than it would have been obligated to pay if the physicians’ negligent acts had not occurred. Thus, the action squarely falls within section 340.5’s requirement that it be “based upon” defendant health care providers’ professional negligence. The majority concedes as much by concluding that plaintiff’s action falls within the notice requirement and the extension provision of section 364, which (like the third requirement of section 340.5) apply only to actions “based upon the health care provider’s professional negligence.”
Instructive here is our decision in Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital (1994)
Although the majority and I differ on the applicable statute of limitations here—whether it is section 340, subdivision (3), as the majority concludes, or section 340.5, as I conclude—the result is the same. Plaintiff’s indemnity claim accrued when plaintiff “suffered actual loss through payment.” (People ex rel. Dept. of Transportation v. Superior Court (1980)
In other cases, however, the majority’s conclusion that section 340.5 has no bearing on actions for equitable indemnity may have more serious consequences, especially in the application of tolling provisions.
The one-year statute of limitations in subdivision (3) of section 340 is subject to many tolling provisions. For example, the statute is tolled when the defendant is absent from the state (§351); when the plaintiff is a minor (§ 352); when the plaintiff is insane (ibid.); when the plaintiff is imprisoned on a criminal charge for a term less than life (§ 352.1); when the plaintiff is represented “by an attorney over whose practice a court of this state has assumed jurisdiction pursuant to Section 6180 or Section 6190 of the Business and Professions Code” (§ 353.1); when the plaintiff is under a disability caused by a state of war (§ 354); when a timely action is filed, but a judgment fоr the plaintiff is reversed on grounds other than the merits (§ 355); when a person entitled to bring an action dies (§ 366.1); or in any case in which the doctrine of equitable tolling applies (see generally, Addison v. State of California (1978)
None of these tolling provisions can extend the maximum three-year limitations period of section 340.5, enacted as part of MICRA in 1975. (Belton v. Bowers Ambulance Service (1999)
Unless otherwise stated, all further statutory references are to the Code of Civil Procedure.
Dissenting Opinion
I dissent.
I agree with the majority that the time for bringing this action is governed by Code of Civil Procedure section 340, subdivision (3), the one-year limitations period for most torts, and not by the time for bringing actions under the Medical Injury Compensation Reform Act (MICRA).
I disagree, however, that we may import the notice provision under MICRA (§ 364) to toll the limitations period. As a majority determined in Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital (1994)
Like the Court of Appeal, I conclude that section 364 does not apply to a case which does not involve a claim for medical malpractice by an injured individual. I would adopt its analysis, in part, as set forth below.
“Section 364 applies to an ‘action based upon the health care provider’s professional negligence.’ (§ 364, subd. (a).) ‘Professional negligence’ is defined as a ‘negligent act or omission to act by a health care provider in the rendering of professional services, which ... is the proximate cause of a personal injury or wrongful death ....’(§ 364, subd. (f)(2).) In other words, section 364 applies to claims by a patient who has been injured by a practitioner’s medical malpractice, or that patient’s heirs in a wrongful death case.
“Preferred Risk argues that such an interpretation defeats the purpose of section 364, which is to ‘decrease the number of medical malpractice actions filed by establishing a procedure that encourages parties to negotiate “outside the structure and atmosphere of the formal litigation process.” ’ (Woods v. Young (1991)
“These goals will not be met by extending the tolling provisions of section 364 to joint tortfeasors who file a claim for equitable indemnity against an allegedly negligent physician. Medical malpractice
“Moreover, it will be a rare situation in which the party injured by medical malpractice will not file a direct claim against a negligent physician. In this case, for example, [the insured] filed a lawsuit against two of the respondent doctors on July 2, 1996 [more than six months before Preferred Risk settled the case]. [Fn. omitted.] Notices under section 364 are filed-by the injured party in such cases, making further notice by joint tortfeasors both unnecessary and ineffective in promoting early settlement.”
“[The majority opinion in] Western Steamship was careful to distinguish between the substantive and procedural aspects of MICRA. ‘[F]or certain procedural purposes, such as statutes of limitations, an indemnity claim is an independent action. ... As to matters of substantive law, however, it is wholly derivative and subject to whatever immunities or other limitations on liability would otherwise be available.’ (8 Cal.4th at pp. 114-115.)
“Section 364, unlike Civil Code section 3333.2, is a procedural statute. It does not thwart the stated goals of MICRA to limit its tolling provision to direct claims of medical malpractice by an injured patient or that patient’s heir. The Legislature specifically reduced the limitations period for medical malpractice actions when it enacted MICRA. To extend the applicable limitations period in an action for equitable indemnity which seeks apportionment based on a party’s alleged medical malpractice ‘is inconsistent with the spirit’ of that statutory scheme. (Noble v. Superior Court (1987)
Ironically, although the majority assert that the application of MICRA procedural requirements to this equitable indemnity action will further the policies underlying MICRA, respondent doctors strongly urge a contrary result. They observe that in a case like this, when a patient has already sued, section 364 notice by the insurer in an equitable indemnity action is not only duplicative, it is meaningless; under no likely circumstances will it advance any relevant policy behind MICRA.
For these reasons, I would affirm the judgment of the Court of Appeal.
Unless otherwise indicated, statutory references are to the Code of Civil Procedure.