Scott v. Yoho

248 Cal.App.4th 392

204 Cal.Rptr.3d 89

Vivian SCOTT, et al., Plaintiffs and Respondents

v.Robert A. YOHO et al., Defendants and Appellants.

B265641

Court of Appeal, Second District, Division 5, California.

Filed June 22, 2016

As Modified June 28, 2016

Carroll, Kelly, Trotter, Franzen, McKenna & Peabody, Mark V. Franzen, Long Beach, and Steven J. Wysocky, Los Angeles, for Defendants and Appellants.

Cynthia Chihak & Associates, Cynthia Chihak and Amy R. Martel, San Diego, for Plaintiffs and Respondents.

TURNER, P.J.

I. INTRODUCTION

Defendants, Robert A. Yoho, M.D. and New Body Cosmetic Surgery Center, appeal from a June 18, 2015 order denying their motions to compel arbitration. Defendants seek to enforce three arbitration agreements signed by the decedent, Kenisha Parker, against plaintiffs, who are her relatives. Plaintiffs are: Vivian Scott, individually and as guardian ad litem for a minor, D.G.; S.T., a minor; and La'Joyce King. Robert Lee Turner, Jr. is the guardian ad litem of S.T. Defendants argue the three arbitration agreements are enforceable under the Federal Arbitration Act. We conclude: the three arbitration agreements are subject to limited preemptive effect of the Federal Arbitration Act; the 30–day rescission right in Code of Civil Procedure ¹ section 1295, subdivision (c) is preempted by the Federal Arbitration Act; and thus the motions to compel arbitration should have been granted. We reverse the order denying the motions to compel arbitration.

II. BACKGROUND

A. Allegations of the First Amended Complaint and Defendants' Answer

Plaintiffs' first amended complaint alleges causes of action for wrongful death, medical malpractice and survivorship. Ms. Parker consulted with defendants for various plastic surgery procedures, and on September 3, 2014, Ms. Parker underwent lipoplasty and suction lipectomy. Following the surgery, she suffered respiratory arrest and died on September 3, 2014 as a direct and proximate result of defendants' negligence and carelessness.

Defendants filed a general denial of the first amended complaint's allegations. Among the 23 affirmative defenses asserted, defendants alleged, “That the instant dispute arises from a matter covered by a binding arbitration agreement between the parties, and that these answering defendants desire that this matter be therefore submitted to binding arbitration in accordance with the terms of the Arbitration Agreement.”

B. Defendants' Motion and Amended Motion to Compel Arbitration and Plaintiffs' Opposition

1. The parties' legal arguments

On July 9, 2015, defendants filed an amended motion to compel arbitration.

Defendants argued: plaintiffs' wrongful death claims were subject to physician-patient arbitration agreements signed by Ms. Parker on March 8, March 11 and September 4, 2013; the three arbitration agreements applied to plaintiffs as Ms. Parker's heirs and the agreements were subject to the Federal Arbitration Act; the 30–day cancellation period in section 1295, subdivision (c) is preempted by the Federal Arbitration Act; and an open book account was created as a result of Ms. Parker's first procedure which governed future transactions between the parties. In connection with the preemption argument, defendants argued that the 30–day rescission period in section 1295, subdivision (c) is not a legal provision applicable generally to this state's contracts. Rather, section 1295, subdivision (c) applies only to health care agreements to arbitrate and thus is preempted by the Federal Arbitration Act. (Doctor's Associates, Inc. v. Casarotto (1996) 517 U.S. 681, 686–687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (Doctor's Associates ); Morrison v. Colorado Permanente Medical Group (D.Colo.1997) 983 F.Supp. 937, 942–943 (Morrison ); Basura v. U.S. Home Corp. (2002) 98 Cal.App.4th 1205, 1212–1215, 120 Cal.Rptr.2d 328 (Basura ).)

In opposition, plaintiffs argued the three arbitration agreements were unenforceable because they did not comply with section 1295. Plaintiffs contended the three arbitration agreements did not contain a provision notifying Ms. Parker of her right to rescind them within 30 days of signing. In addition, plaintiffs asserted Ms. Parker was denied her statutory right to rescind the three arbitration agreements because she died within hours of signing the third agreement.

2. The evidence

In support of their motions, defendants submitted the three physician-patient arbitration agreements, each executed by Ms. Parker. All three arbitration agreements have identical language. The agreements are labeled, “PHYSICIAN–PATIENT ARBITRATION AGREEMENT .” Article 1 of all three arbitration agreements states: “Article 1: Agreement to Arbitrate: It is understood that any dispute as to medical malpractice, that is as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration as provided by law, and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.” Article 2 of the arbitration agreements provides: “Article 2: All Claims Must be Arbitrated: It is the intention of the parties that this agreement shall cover all claims or controversies whether in tort, contract or otherwise, and shall bind all parties whose claims may arise out of or in any relation to treatment or services provided or not provided by the physician including any spouse or heirs of the patient and any children, whether born or unborn, at the time of the occurrence giving rise to any claim....” Article 3 of the arbitration agreements specifies: an arbitration demand must be in writing and communicated to all parties; each party must select a party arbitrator within a reasonable time; the party arbitrators are to select a neutral arbitrator within a reasonable time thereafter; and the patient was to pursue his or her claims with reasonable diligence.

Article 4 of all three arbitration agreements states: “Article 4: Retroactive Ef fect: The patient intends this agreement to cover services rendered by the physician not only after the date it is signed (including, but not limited to emergency treatment), but also before it was signed as well.” In a similar vein, article 5 states: “Article 5: Miscellaneous Provisions: The patient intends this agreement to cover services rendered not only after the date it is signed (including, but not limited to emergency treatment), but also before it was signed as well.”

Below article 5, the following appears on all three arbitration agreements: “I understand that I have the right to receive a copy of this agreement. By my signature below, I acknowledge that I have received a copy.” Between this sentence and the signature lines, the following appears in all three arbitration agreements: “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 [.]” The arbitration agreements are signed by Dr. Yoho's authorized representative and Ms. Parker. The bottom of all three arbitration agreements states: “A signed copy of this document is to be given to the patient. The Original is to be filed in Patient's medical records.”

In addition, defendants relied on the declaration of Dr. Yoho to show the contracts evidenced a transaction involving interstate commerce. (9 U.S.C. § 2.) The issue of whether the transaction involved commerce relates to defendants' argument that the 30–day rescission right in section 1295, subdivision (c) is preempted by the Federal Arbitration Act. Dr. Yoho's May 14, 2015 declaration reveals the following. He is a physician licensed in California and doing business as New Body Cosmetic Surgery. According to Dr. Yoho, some of the medical supplies used during the liposuction procedure were shipped from out of state. Dr. Yoho stated, “Of the supplies used by my practice, roughly 20 percent were shipped from out of state. The original manufacturer of the materials is estimated to be 90 percent or more out of state, and the corporations which own the manufacturers largely have corporate headquarters out of state. I can say that definitively, some of the materials used for Ms. Parker's liposuction procedure originated from out of state.” In addition, Dr. Yoho advertises his medical practice through the internet. Dr. Yoho stated, “I advertise my practice of medicine to all fifty states via the internet, and have done so since 2000. My internet marketing budget is 100% of my current advertising budget. At least 10% or more of telephone calls, mail, and/or email to/from my office and relating to potential surgery or other medical treatments provided by myself, were from/to potential or existing patients residing out of state.”

According to Dr. Yoho, about five percent of his patients come from outside California. Dr. Yoho declared: “My practice is comprised of approximately 5% of patients from out of state (including the states of Washington, Oregon, Florida, Georgia, Tennessee, New York, New Hampshire, Arizona, Nevada, as well as the District of Columbia) and were treated by me at my office in Pasadena, California.” Dr. Yoho added, “Approximately less than 5% of my patient fees and earnings were as a result of payments made by/from patients outside of California.” In addition, the medical practice has contacts with companies outside California. “My practice contracted (via U.S. mail or the internet) with approximately 15 companies, insurance providers, entities, and/or other public or private corporations whose places of business are outside the State of California.

My practice regularly sends...