Akkerman v. Santa Barbara Cottage Hosp.

Filed 10/19/06 Akkerman v. Santa Barbara Cottage Hosp. CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

Defendant Santa Barbara Cottage Hospital (SBCH) appeals a judgment in favor of plaintiffs Atze Akkerman and Elizabeth Akkerman on their cause of action for an unfair business practice injunction. (Bus. & Prof. Code, §§ 17200, 17500.) The trial court enjoined SBCH from performing electro-convulsive therapy (ECT) treatments because it used inadequate patient consent forms and had an unauthorized ECT review process.

Proposition 64 amends the Unfair Competition Law (UCL) (Bus. & Prof. Code, §§ 17200, 17500) by requiring new standing requirements. We conclude Proposition 64 is applicable here. We reverse and remand with instructions that the trial court: 1) determine whether the Akkermans should be allowed to amend their complaint and 2) decide SBCH's claim that there is no current need for an injunction.

FACTS

Atze suffered from severe depression.[1] Dr. Joseph Johnson, a psychiatrist at SBCH, performed ECT to treat his disorder.

The Akkermans sued SBCH and Dr. Johnson alleging tort causes of action for fraud, medical malpractice and loss of consortium. They alleged SBCH gave Atze and his wife "out-dated and incomplete" patient consent forms which did not adequately advise them that ECT treatments may cause "irreversible, permanent memory loss." They also alleged that Atze suffered impaired "cognitive" functioning because of the treatments. They also sought a UCL injunction on behalf of the public (Bus. & Prof. Code, §§ 17200, 17500) to prevent SBCH from using misleading consent forms for patients seeking ECT.

At trial Dr. Johnson testified that at SBCH he used a patient consent form for ECT treatment which SBCH provided to him. The form was not the one required by the state Department of Mental Health and he used this unauthorized form for many years.

Dr. Carlos Sluzki testified state law requires hospitals which use ECT to conduct "informed consent reviews." This ensures that patients understand the nature of the treatment before they consent to it. At SBCH he performed "over one hundred" of these reviews over a nine-year period. A doctor performing them must be able to certify, "I am a board-certified or eligible psychiatrist . . . ." Dr. Sluzki admitted he repeatedly signed these certifications even though he was not board certified and not an eligible psychiatrist. He said SBCH knew he lacked these qualifications.

The jury found: 1) Dr. Johnson was "negligent in obtaining the informed consent of Atze Akkerman " 2) SBCH "was negligent in performing the informed consent review," but 3) SBCH and Dr. Johnson did not cause injury to the Akkermans. The court entered judgment in favor of SBCH and Dr. Johnson on the Akkermans' tort causes of action.

The court, sitting without a jury, later held a trial on the Akkermans' two remaining causes of action for a UCL injunction against SBCH. It received additional evidence and took the matter under submission.

On November 3, 2004, before the court ruled, Proposition 64 was passed by the electorate. It imposed a new "injury in fact" standing requirement for private plaintiffs seeking UCL injunctions. (Bus. & Prof. Code, § 17204.) The trial court was apparently unaware of this change in the law.

On January 5, 2005, it filed a seven-page statement of decision. It ruled, "An injunction shall issue . . . prohibiting the further conduct of ECT at [SBCH] until [it] submits proof of correction in its protocol for the informed consent process . . . ." It found: 1) that SBCH's "designated doctor" for performing the ECT "informed consent review" conducted "hundreds" of reviews when he was unqualified to perform them, 2) that between 1998 and May of 2004 SBCH did not use the required ECT patient consent form, 3) that SBCH "has not cured the defects in its system" and 4) there is a "strong likelihood that the harmful practices at the heart of this suit will continue."

It ruled, "[s]hould [SBCH] wish to re-institute the practice of providing ECT, it must provide to this Court the following items: 1. A copy of the current consent form proposed for use . . . , 2. A written plan for on-going communications with the Department of Mental Health and the patients' rights advocates office in regards to on-going changes in the law [, and] 3. A written protocol on informed consent reviews for ECT to be utilized by the board certified or eligible psychiatrist or neurologist . . . ." It also said the Akkermans did not prove they "suffered any out of pocket loss as a result of [SBCH's] wrongdoing . . . ." (Italics added.)

SBCH filed an appeal from the order issuing the injunction. It later filed a "motion to dismiss plaintiffs' unfair business practice claims" in the trial court. It claimed "plaintiffs do not have standing to bring such claims in light of the passage of Proposition 64." SBCH also filed a "motion to lift the injunction" on the grounds that it "complied with the requirements set forth by the Court in the Statement of Decision . . . ." The trial court denied the motions on the ground that it "is without jurisdiction to modify or vacate [the injunction] while the appeal is pending."

DISCUSSION

I. Motion to Strike SBCH's Brief and Dismiss This Appeal

The Akkermans contend that SBCH's appeal from the order issuing the injunction should be dismissed. They note that SBCH includes evidence in its appendix about its trial court motion to dissolve the injunction which occurred after it filed this appeal. They claim the issues about that proceeding are not reviewable on this appeal and require consideration of matters outside the record.

Most of the issues SBCH raises involve the validity of the injunction. SBCH timely appealed from that order and the issues involving its validity are properly raised on this appeal. The motion to dismiss and strike SBCH's brief is denied.

II. Proposition 64

SBCH contends that Proposition 64 which amends the UCL applies to this injunction. We agree.

When the Akkermans filed this action the UCL had no standing requirements for plaintiffs seeking to enjoin unfair business practices on behalf of the public. "[A] private plaintiff who himself [had] suffered no injury" could "file a lawsuit under the UCL in order to obtain relief for others." (Rosenbluth International, Inc. v. Superior Court (2002) 101 Cal.App.4th 1073, 1077.)

But prior to the issuance of this injunction Proposition 64 became law. It changed the previous law by prohibiting private plaintiffs from enjoining UCL unfair business practices unless they had "suffered injury in fact and [had] lost money or property as a result of such unfair competition." (Bus. & Prof. Code, § 17204.)

The California Supreme Court has recently held that Proposition 64 applies to pending actions. (Californians For Disability Rights v. Mervyn's, LLC (2006) 39 cal.4th 223, 227.) Therefore proof of standing is a necessary element to sustain this judgment.

The Akkermans claim SBCH may not challenge their standing because it did not raise that issue at trial or before judgment. SBCH raised it in a post-judgment trial court motion. But, "[l]ack of standing may be raised at any time in the proceeding, including at trial or in an appeal." (Blumhorst v. Jewish Family Services of Los Angeles, supra, 126 Cal.App.4th at p. 1000.) Courts may not grant relief for parties who lack standing. (Ibid.)

The Akkermans contend that even if Proposition 64 applies they had standing. But the trial court found they did not present evidence to establish that they "suffered an out of pocket loss . . . ." That type of loss is now required for UCL relief. (Bus. & Prof. Code, § 17204; Blumhorst v. Jewish Family Services of Los Angeles, supra, 126 Cal.App.4th at p. 1000.)

III. Remand

SBCH claims there should be a reversal, but no remand to allow the plaintiffs an opportunity to amend or further litigate this case because they failed to prove an out-of-pocket loss. But our Supreme Court has recently rejected this claim. It held that Proposition 64 does not preclude plaintiffs who lacked or did not prove standing from amending their complaints and substituting new plaintiffs who have standing. (Branick v. Downey Savings & Loan Association (2006) 39 Cal.4th 235, 243.) It is premature for an appellate court to rule on the propriety of amendments until after the plaintiffs are given an opportunity to amend on remand. (Ibid.) The decision as to whether an amendment is appropriate "properly belongs to the superior court in the first instance." (Ibid.)

SBCH claims there is no need for a remand here because there was no substantial evidence on the merits to support injunctive relief. We disagree. The court found SBCH used patient consent forms and had an ECT review process which did not comply with state law. (See Welf. & Inst. Code, §§ 5326.2-5326.5.) Dr. Johnson's and Dr. Sluzki's testimony support these findings. SBCH submitted a declaration claiming it had stopped the past practices. But "[t]he mere fact that a defendant refrains from unlawful conduct during the pendency of a lawsuit does not necessarily preclude the trial court from issuing injunctive relief . . . ." (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 133.)

The court found there was a long pattern of non-compliance. It said SBCH did not "explain why, for the last six years [it] . . . has not kept abreast of critical changes in the mandates . . . governing the use of ECT." It found that its current ECT review administrator was inexperienced and admitted "he had never read the Code until called upon to participate in this case as a witness." It did not find SBCH's evidence about a commitment to reform to be substantial or credible. The credibility of witnesses is a matter for the trial court. (Biren v. Equality Emergency Medical Group, Inc. (2002) 102 Cal.App.4th 125, 139.) SBCH has not shown that the court's inferences about the need for an injunction were unreasonable.

IV. SBCH's Motion to Dissolve The Injunction

SBCH claims it presented evidence showing that it was, and is now, complying with state law. Its appendix includes its motion to dissolve the injunction which it filed in the trial court after filing this appeal. In that motion SBCH claimed it had complied with all the requirements mentioned in the court's statement of decision.

But as the Akkermans note, the trial court lacked jurisdiction to decide that motion because SBCH had already appealed the order granting the injunction. (Environmental Coalition of Orange County v. Avco Community Developers, Inc. (1974) 40 Cal.App.3d 513, 525.) That appeal stayed all post-judgment trial court proceedings on the issue of whether the injunction should be vacated. (Ibid.) SBCH suggests that we may find that it is now complying with state law. But we are not a trial court. SBCH may, however, present its claim about its compliance on remand. (Ibid.)

The dissent, nevertheless, assumes the hospital is now in compliance with state law. To reach this conclusion the dissent invades the province of the trial court and makes findings from Cottage Hospital's motion to dissolve the injunction. The trial court, however, did not rule on the merits of the motion. On remand it will have the opportunity to do so.

We have reviewed the parties' remaining contentions and conclude they are either not meritorious or will not change the result we have reached.

The judgment is reversed and the cause is remanded to the trial court. Should plaintiffs request leave to amend their complaint, the trial court shall exercise its discretion in ruling on the motion. The trial court shall also decide SBCH's claim that there is no current need for an injunction. Each party shall bear its own costs on appeal.

NOT TO BE PUBLISHED.

GILBERT, P.J.

I concur:

COFFEE, J

YEGAN, J.

I respectfully dissent.

Santa Barbara Cottage Hospital (Cottage Hospital) provided electroconvulsive therapy (ECT) to respondent Atze Akkerman in 1999, to treat Akkerman's depression. The procedures and form Cottage Hospital used to obtain and document Akkerman's informed consent to ECT did not conform to state law.[2] After a lengthy trial, a jury found that Cottage Hospital's negligence in using the noncompliant form and procedures caused Akkerman no harm or out-of-pocket loss. As a result, he now lacks standing to pursue his only remaining claim for injunctive relief pursuant to the Unfair Competition Law. (Bus. & Prof. Code, §§ 17200, 17500; Californians for Disability Rights v. Mervyn's LLC (2006) 39 Cal.4th 223, 228-229.)

In November 2003, Cottage Hospital adopted an informed consent form and other procedures that fully comply with state law. There is no substantial evidence that Cottage Hospital has regressed to using the noncompliant form and procedures with patients who are presently considering ECT. Nevertheless, the majority opinion instructs the trial court to determine 1. whether Akkerman should be permitted to amend his complaint to substitute a plaintiff with standing, and 2. whether the claim for injunctive relief is moot. I would remand with instructions to dissolve the injunction and dismiss the action as moot.

The majority opinion keeps this litigation alive by concluding that Cottage Hospital's now three-year old voluntary compliance with applicable standards for obtaining informed consent to ECT "does not necessarily preclude the trial court from issuing injunctive relief . . . ." (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 133.) Aguilar is distinguishable because in that case, there was no evidence the defendant had changed its unlawful conduct and an express finding by the trial court that the unlawful conduct would resume after trial without an injunction in place.

In Aguilar, a supervisor at a car rental company was found to have created a racially hostile work environment by using foul language toward Latino employees. In addition to awarding the employees money damages, the trial court enjoined the supervisor from using racial or ethnic epithets toward them and enjoined the employer from allowing the supervisor to engage in that conduct. There was no evidence that the employer disciplined the supervisor in any way or adopted procedures to prevent the re-creation of a hostile work environment in the future. To the contrary, the trial court found there was " 'a substantial likelihood based on [the supervisor's] actions that he will [engage in the harassing and discriminatory behavior] in the future unless restrained.' " (Aguilar v. Avis Rent a Car System, Inc., supra, 121 Cal.4th at p. 127.)

Our record contains no analogous evidence. Cottage Hospital has stopped using the noncompliant form and has hired a board certified neurologist to confirm patients' informed consent to ECT. Even under the UCL's broad remedial provisions, "Injunctive relief is appropriate only when there is a threat of continuing misconduct." (Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th 440, 463; see also Cisneros v. U.D. Registry, Inc.(1995) 39 Cal.App.4th 548, 574 [injunctions should not be issued absent evidence the unlawful " 'acts are likely to be repeated in the future.' "]; Caro v. Procter & Gamble Co. (1993) 18 Cal.App.4th 644, 660 [prayer for injunctive relief under UCL is moot when "the assertedly wrongful practice has ended long before the

action is filed . . . ."].) Because there is no substantial evidence of such a threat in this case, I would dismiss Akkerman's complaint for injunctive relief as moot.

NOT TO BE PUBLISHED.

YEGAN, J.

.

Denise De Bellefeuille, Judge

Superior Court County of Santa Barbara

______________________________

Thelen Reid & Priest, Kenneth R. Pedroza and E. Todd Chayet; Reback, McAndrews & Kjar, Thomas F. McAndrews and Bryan R. Rotella for Defendant and Appellant Santa Barbara Cottage Hospital.

Moxon & Kobrin and Kendrick Moxon for Plaintiffs and Respondents.

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[1] We refer to plaintiff Atze by his first name, not from disrespect, but to distinguish between the plaintiffs and to ease the reader's task.

[2] Welfare & Institutions Code section 5326.2 requires the inclusion of specific information in the informed consent form used prior to ECT. Welfare & Institutions Code section 5326.75, subdivision (b) requires a "board-certified or board-eligible psychiatrist or a board-certified or board-eligible neurologist other than the patient's attending or treating physician" to examine the patient and verify that "the patient has the capacity to give and has given written informed consent." The form previously used by Cottage Hospital omitted some of the required information, although that information was provided to Akkerman orally. The physician who verified Akkerman's informed consent was not board certified or eligible. That doctor is no longer employed by Cottage Hospital. The physician who replaced him is board certified.