Dignity Health v. Mounts ( 2024 )

Filed 9/17/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
DIGNITY HEALTH, 2d Civ. No. B325563
(Consl. w/B330787)
Plaintiff, Cross-defendant and (Super. Ct. No. 17CV-0592)
Respondent, (San Luis Obispo County)
v.
TROY I. MOUNTS et al.,
Defendants, Cross-
complainants and Appellants.
Respondent Dignity Health dba French Hospital
Medical Center (“Dignity”) filed its complaint against Troy I.
Mounts, M.D. and Troy I. Mounts, M.D., Inc., (collectively
“appellant”) an orthopedic surgeon, to recover an advance paid to
appellant under their Physician Recruitment Agreement.
Appellant filed a cross-complaint alleging Dignity retaliated
against him for complaining about the quality of patient care,
interfered with his prospective economic opportunities and
engaged in unlawful business practices. Dignity filed an anti-
SLAPP motion to strike the cross-complaint. (Code Civ. Proc.,
§ 425.16.) The trial court denied that motion. In an unpublished
opinion, we reversed the trial court’s order. We remanded the
matter for the trial court to determine whether appellant had
demonstrated a probability of prevailing on the merits of his
claim. (Id., subd. (b)(1); Dignity Health v. Appellant (Feb. 23,
2022, B289209).)
The trial court concluded appellant had not
demonstrated a probability of prevailing because Dignity’s
actions were subject to the litigation privilege (Civ. Code, § 47,
subdivision (b)),1 the common interest privilege (id., subd. (c)),
and barred by the statute of limitations. It therefore granted the
motion to strike appellant’s cross-complaint and ordered him to
pay Dignity’s attorney fees and costs. Appellant contends the
trial court erred. We affirm.
Facts
Dignity hired appellant, an orthopedic surgeon, to
work in a spine surgery practice at the San Luis Obispo French
Hospital Center. Dignity contends that concerns regarding
appellant’s clinical competence arose almost immediately. At the
same time, appellant complained that he was not getting staff
support or adequate time in the operating room to perform
complex surgeries. Dignity put appellant’s complex surgeries “on
hold” and required him to complete a previously scheduled
surgery with a second surgeon he had not worked with before.
Disputes regarding appellant’s practice continued. In
December 2015, Dignity’s Chief of the Medical Staff, Chief of
All statutory references are to the Civil Code unless
1
otherwise stated.
2
Anesthesiology, Vice President of Medical Affairs and the Chair
of the Surgery Department requested that appellant refrain from
operating until they completed a Focused Professional
Practitioner Evaluation (FPPE) review. Appellant agreed to this
restriction. Two days later, Dignity’s Medical Executive
Committee (“MEC”) sent appellant a letter notifying him that
Dignity would be required to submit a report to the Medical
Board of California under Business & Professions Code section
805 (“805 Report”) if the voluntary restriction of privileges lasted
longer than 30 days. When appellant attempted to rescind his
voluntary restriction of privileges, the Chief of Staff responded
that he could do so, but Dignity could respond by summarily
suspending his privileges. A suspension that lasted longer than
14 days would also require an 805 Report.
By the time appellant’s attorney notified Dignity that
he wanted to lift his voluntary restriction, it had already lasted
30 days. Dignity filed an 805 Report with the Medical Board and
a report with the National Practitioner Data Bank (NPDB). The
NPDB report stated that the “basis for action” was “IMMEDIATE
THREAT TO THE HEALTH OR SAFETY.”2 (Capitalization
added.)
About two weeks later, Dignity’s MEC sent appellant
a memorandum regarding the ongoing peer review investigation.
Appellant submitted a rebuttal statement. At the FPPE meeting,
2Appellant requested that the Department of Health &
Human Services review the NPDB report. Without reviewing the
merits of Dignity’s actions, the Department concluded that
Dignity’s actions were “reportable under applicable law and
regulations” and that the report “accurately describe[ed]
[Dignity’s] action and reasons for action . . . .”
3
no one acknowledged appellant’s rebuttal statement. He
characterizes the meeting as focusing on issues not previously
raised with him.
After the meeting, the hospital chief of staff called
appellant to advise him that, although nothing was final yet, the
committee’s decision was probably not going to be favorable to
appellant. He encouraged appellant to resign his position.
Appellant resigned on February 10, 2016.
Appellant subsequently lost privileges at two
hospitals in California. He was considered for employment at a
hospital in Montana and another in Tennessee. Dignity declined
to provide records relating to the FPPE to either entity.
Appellant contends he lost both employment opportunities
because of Dignity’s refusal and the NPDB report.3
Procedural History
Dignity sued appellant to recover a recruiting bonus
it had paid to him. Appellant filed a cross-complaint alleging
retaliation in violation of Health & Safety Code section 1278.5,
intentional interference with prospective economic advantage
and unfair competition in violation of Business & Professions
Code, section 17200.
Dignity filed an anti-SLAPP motion to strike the
cross-complaint. The trial court denied the motion because it
concluded appellant’s retaliation claim arose out of Dignity’s
“retaliatory purpose” rather than its protected peer review
activity. In an unpublished opinion, we reversed the trial court’s
3In 2022, the Medical Board of California brought an
accusation against appellant relating to his treatment of three
patients in 2018 and 2019, after he resigned from Dignity. The
Medical Board withdrew the accusation in 2023.
4
order. We remanded the matter to permit the trial court to
determine whether appellant had demonstrated a probability of
prevailing on the merits of his claim.
On remand, the trial court granted the motion to
strike, concluding that all of appellant’s claims were based on
conduct protected by the litigation privilege (§ 47, subd. (b)), the
common interest privilege (id., subd. (c)), reporting for which
Dignity is immune under federal law (42 U.S.C. § 11137), or acts
that are outside the one-year statute of limitations. (Code Civ.
Proc., § 340.) Appellant contends the trial court erred because it
viewed the evidence in the light most favorable to Dignity, failed
to consider each individual basis for the retaliation claim, failed
to consider the continuing violation doctrine as an exception to
the statute of limitations defense, and misunderstood the basis
for his intentional interference with prospective economic
advantage claim. We affirm.
Standard of Review
The anti-SLAPP statute authorizes a special motion
to strike a claim “arising from any act of that person in
furtherance of the person’s right of petition or free speech under
the United States Constitution or the California Constitution in
connection with a public issue . . . .” (Code Civ. Proc., § 425.16,
subd. (b)(1).) Deciding whether to grant an anti-SLAPP motion
to strike requires the court to conduct a two-step inquiry. At the
first step, the moving defendant has the burden to establish that
the claims alleged against it “arise from” one or more of the
statutorily defined categories of protected activity. (Bonni v. St.
Joseph Health System (2021) 11 Cal.5th 995, 1009 (Bonni I), Code
Civ. Proc., § 425.16, subd. (e)(1)-(4).)
5
At the second step, the burden shifts to the plaintiff
to demonstrate “a probability that [he or] she would prevail on
the particular claim. . . . ‘Put another way, the plaintiff “must
demonstrate that the complaint is both legally sufficient and
supported by a sufficient prima facie showing of facts to sustain a
favorable judgment if the evidence submitted by the plaintiff is
credited.”’” (Taus v. Loftus (2007) 40 Cal.4th 683, 713-714.) This
burden includes defeating any legal defense raised by the
defendant. (Curtin Maritime Corp. v. Pacific Dredge &
Construction, LLC (2022) 76 Cal.App.5th 651, 668; RGC
Gaslamp, LLC v. Ehmcke Sheet Metal Co., Inc. (2020) 56
Cal.App.5th 413, 434.)
In conducting this inquiry, the court does not weigh
evidence or resolve conflicting factual claims. (Baral v. Schnitt
(2016) 1 Cal.5th 376, 384.) The court “accepts the plaintiff’s
evidence as true, and evaluates the defendant’s showing only to
determine if it defeats the plaintiff’s claim as a matter of law.”
(Id. at p. 385.) Claims that have “minimal merit may proceed.”
(Navellier v. Sletten (2002) 29 Cal.4th 82, 94.) We review de novo
the trial court’s decision to grant an anti-SLAPP motion.
(Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 788.)
Discussion
Retaliation. Appellant’s cross-complaint alleges that
he complained to Dignity about his access to operating rooms,
lack of competent operating room staff and lack of qualified
assistant surgeons. He alleges that Dignity then retaliated
against him for raising these concerns.
Health & Safety Code section 1278.5 provides, “A
health facility shall not discriminate or retaliate, in any manner,
6
against a patient, employee, member of the medical staff, or other
health care worker of the health facility because that person
has . . . (A) Presented a grievance, complaint, or report to the
facility, to an entity or agency responsible for accrediting or
evaluating the facility, or the medical staff of the facility, or to
any other governmental entity.” (Id., subd. (b)(1)(A).) A prima
facie case under this statute requires the plaintiff to show that he
or she “(1) presented a grievance, complaint, or report to the
hospital or medical staff (2) regarding the quality of patient care
and (3) the hospital retaliated against him or her for doing so.”
(Alborzi v. University of Southern California (2020) 55
Cal.App.5th 155, 178-179.) There is a rebuttable presumption
that a heath care facility retaliated against an employee who
presented a complaint or grievance if the facility was aware of
the grievance and took adverse action against the employee
within 120 days of the filing of the grievance or complaint.
(Health & Saf. Code, § 1278.5, subd. (d)(1), (2).)
Appellant identifies nine specific categories of
retaliatory action taken against him by Dignity: (1) reducing
appellant’s scheduled operating room time, providing less
operating room support and requiring him to perform surgeries
with an unqualified and unfamiliar second surgeon; (2) informing
another local hospital that one or more of appellant’s cases had
“significant adverse outcomes” before meeting with appellant
about those cases; (3) obstructing his ability to perform surgeries
by rescheduling them for non-medical reasons and referring his
patients to other hospitals; (4) depriving appellant of due process
by not following the hospital’s own bylaws; (5) not explaining to
appellant the impacts his agreement to voluntarily restrict his
staff privileges; (6) rejecting his rescission of the voluntary
7
restriction of privileges; (7) filing a false 805 report and report to
the NPDB; (8) forcing appellant to resign; and (9) interfering with
his right to practice his occupation elsewhere by refusing to
provide prospective employers with records from the FPPE.
Appellant contends these acts were presumptively retaliatory
because they occurred within 120 days of his last grievance. He
argues the trial court erred in granting the anti-SLAPP motion
because Dignity did not present evidence rebutting this
presumption.
Dignity counters, and the trial court found, that
appellant failed to show a probability of prevailing because the
conduct on which he relies was privileged. We agree.
Two privileges are at issue here: the litigation
privilege in section 47, subdivision (b), and the common interest
privilege in section 47, subdivision (c). The litigation privilege
confers an absolute privilege on communications made as part of
a judicial or other “truth-seeking” official proceeding. This
includes communications made in connection with a medical peer
review proceeding. (Kibler v. Northern Inyo County Local
Hospital Dist. (2006) 39 Cal.4th 192, 202-203; Ramalingam v.
Thompson (2007) 151 Cal.App.4th 491, 499-500.) As applied to a
peer review proceeding, the privilege is intended to afford
participants unfettered access to the proceeding without fear of
subsequent derivative tort actions. (Bonni v. St. Joseph Health
System (2022) 83 Cal.App.5th 288 (Bonni II); Optional Capital,
Inc. v. Akin Gump Strauss, Hauer & Feld LLP (2017) 18
Cal.App.5th 95, 115.) To accomplish that purpose, the privilege
extends to steps taken before and after the peer review itself.
(Klem v. Access Ins. Co. (2017) 17 Cal.App.5th 595, 613.) We
8
broadly apply the privilege and resolve doubts in favor of its
application. (Ibid.)
The common interest privilege is more qualified. It
extends to “a communication, without malice, to a person
interested therein, (1) by one who is also interested, or (2) by one
who stands in such a relation to the person interested as to afford
a reasonable ground for supposing the motive for the
communication is innocent, or (3) who is requested by the person
interested to give the information.” (§ 47, subd. (c).) The party
asserting this privilege bears the burden to show that the
statement was made on an occasion that falls within the statute.
At that point, the opposing party has the burden to prove that the
statement was made with malice. (Lundquist v. Reusser (1994) 7
Cal.4th 1193, 1202 (Lundquist).) Malice, for purposes of section
47, subdivision (c), is “‘“a state of mind arising from hatred or ill
will, evidencing a willingness to vex, annoy or injure another
person.”’” (Lundquist, at p. 1204, quoting Brown v. Kelly
Broadcasting Co. (1989) 48 Cal.3d 711, 723.)
Here, each category of retaliatory conduct alleged by
appellant involves communications that are privileged under
either subdivision (b) or subdivision (c) of section 47. First,
appellant contends Dignity retaliated against him by reducing
his operating room time, providing less staff support and
requiring him to work with a second surgeon. Dignity, its
medical staff and appellant shared a common interest in
appellant’s surgical practice. Communications regarding the
conditions under which he performed surgery fall within the
scope of the section 47 subdivision (c) privilege. (Cuenca v.
Safeway San Francisco Employees Federal Credit Union (1986)
180 Cal.App.3d 985, 995 [common interest privilege applies to
9
“Communications made in a commercial setting relating to the
conduct of an employee”].)
Appellant did not present evidence that Dignity acted
with malice when it engaged in these communications. Unless
they were malicious, Dignity’s communications in this category
were privileged. Privileged communications cannot form the
basis of a claim for retaliation. (Lundquist, supra, 7 Cal.4th at p.
1204.)
Appellant’s second category of retaliatory conduct is
that Dignity informed other hospitals of adverse outcomes from
his surgeries. His third category is that Dignity obstructed his
ability to perform surgeries by rescheduling them and by
referring his patients to other hospitals. Categories 4, 5 and 6
involve Dignity failing to follow the procedures in its bylaws,
failing to explain to him the effect of his voluntary restriction of
privileges, and its refusal to accept his rescission of the voluntary
restriction. In category 8, appellant contends Dignity retaliated
against him by forcing him to resign his position. Each of these
categories involves privileged conduct and communications. Civil
Code section 47, subdivision (b) privileges communications that
are related to a medical peer review, including communications
made in the course of appellant’s FPPE, communications among
Dignity staff members with or about appellant, and
communications with others regarding the peer review. (Bonni
II, supra, 83 Cal.App.5th at pp. 302-304.) The communications
are also privileged under section 47, subdivision (c) because all of
the hospitals and patients involved shared a common interest in
appellant’s performance as a surgeon.
Appellant’s seventh category of retaliatory conduct is
Dignity’s filing of an 805 Report and a NPDB report. These
10
reports are absolutely privileged under subdivision (b) of section
47. (Bonni, I, supra, 11 Cal.5th at pp. 1017-1018; Joel v. Valley
Surgical Center (1998) 68 Cal.App.4th 360, 372.)
The last category is Dignity’s failure to communicate
with prospective employers by providing those entities with
records from the FPPE. This is also privileged because the
section 47, subdivision (b) privilege extends to silence that
communicates information related to the FPPE or its conclusion.
(Crossroads Investors, L.P. v. Federal National Mortgage Assn.
(2017) 13 Cal.App.5th 757, 787; Kachlon v. Markowitz (2008) 168
Cal.App.4th 316, 343 (Kachlon) [recording a notice of default is a
privileged communication and failing to record a rescission of the
notice is “no less privileged”].)
“A plaintiff cannot establish a prima facie case if the
litigation privilege precludes a defendant’s liability on the claim.”
(Timothy W. v. Julie W. (2022) 85 Cal.App.5th 648, 661-662.)
Because all of the retaliatory conduct alleged by appellant is
covered by the litigation or common interest privileges, any cause
of action based on that conduct is barred by the anti-SLAPP
statute. (Bonni II, supra, 83 Cal.App.5th at pp. 306-307; Seltzer
v. Barnes (2010) 182 Cal.App.4th 953, 972 (Seltzer).)
Intentional Interference with Prospective Economic
Advantage. The trial court correctly concluded that appellant
failed to show a probability of prevailing on the merits of his
claim for interference with prospective economic advantage. This
claim is based on Dignity’s failure to share records relating to the
FPPE with two hospitals that appellant alleged had expressed an
interest in hiring him. As we have noted, Dignity’s silence on
questions about the FPPE is subject to the litigation privilege in
section 47, subdivision (b). (Kachlon, supra, 168 Cal.App.4th at
11
p. 343.) The trial court properly granted the motion to strike this
claim. (Seltzer, supra, 182 Cal.App.4th at p. 972.)
Unlawful Business Practices. Appellant alleges that
Dignity violated Business & Professions Code, section 17200, by
retaliating against him and interfering with his prospective
economic advantage. (Cel-Tech Communications, Inc. v. Los
Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)
Because he has not shown a probability of prevailing on the
merits of those claims, this claim also fails.
Attorney Fees. “[A] prevailing defendant on a special
motion to strike shall be entitled to recover that defendant’s
attorney’s fees and costs.” (Code Civ. Proc., § 425.16, subd. (c).)
For the reasons we have explained, the trial court correctly
awarded Dignity its attorney’s fees and costs because it prevailed
on the anti-SLAPP motion.
Conclusion
The trial court’s orders granting the motion to strike
and the motion for attorney’s fees are affirmed. Dignity shall
recover its costs on appeal.
CERTIFIED FOR PUBLICATION.
YEGAN, J.
We concur:
GILBERT, P. J.
BALTODANO, J.
12
Rita Federman, Judge
Superior Court County of San Luis Obispo
______________________________
Novian & Novian and Farhad Novian, Andrew B.
Goodman; Steptoe & Johnson and Ashwin J. Ram, Alexander W.
Avery, for Defendants, Cross-Complainants and Appellants.
Manatt, Phelps & Phillips and Barry S. Landsberg,
Doreen Wener Shenfeld, Joanna S. McCallum; De Castro Law
Group and José-Manuel A. de Castro, Lori V. Minassian, for
Plaintiff, Cross-Defendant and Respondent.