Second District, Division 8 Reverses $45,728.75 Fee Award Against Los Angeles Metropolitan Medical Center, But Remands For Bad Faith Determination.
Business and Professions Code section 809.9, a specialized fee shifting provision, provides that in any suit brought to challenge an action taken or a restriction imposed which must be reported to the California Medical Board, the trial court must, at the conclusion of the action, award to a substantially prevailing party the costs of suit, including reasonable attorney’s fees, if the other party’s conduct in bringing, defending, or litigating the suit was frivolous, unreasonable, without foundation, or in bad faith. Section 809.9 is a sanctions statute similar to former Code of Civil Procedure section 128.5. (Mir v. Charter Suburban Hospital, 27 Cal.App.4th 1471, 1483-1485, & n. 5 (1994).) Section 809.9 was the centerpiece of the fee discussion in the next case we examine, Bode v. Los Angeles Met. Med. Center, Case No. B208687 (2d Dist., Div. 8 May 26, 2010) (unpublished).
Above: Graduate register nurse receives instructions in anesthesiology from a doctor. 1946. Library of Congress.
In Bode, an anesthesiologist successfully challenged, through various mandate actions and an earlier appeal, a hospital’s decision to suspend and not renew her temporary privileges based on allegations over a missing vial of Demerol. Even though the issue was far from clear based on ambiguous statutory language, the trial and appellate courts subsequently determined that the hospital, not the anesthesiologist, bore the burden of proof. The trial court found that the hospital’s contrary position on the burden-of-proof issue was frivolous, and intimated (but did not rule) that it was taken in bad faith. It awarded anesthesiologist fees of $45,728.75 out of a requested $191,000, an amount equaling those claimed by her in connection with the prosecution of the second mandate action. Both sides appealed, the hospital claiming the fee award was entirely unwarranted and anesthesiologist claiming that her fees had been unlimited unjustly because she was entitled to fees for work expended in nonjudicial, peer review proceedings.
Result? Reversal of the fee award and a remand.
The Second District, Division 8 found that the fee award could not be justified based on the frivolousness rationale embraced by the lower court, given that the burden of proof issue was far from clear while it was being clarified through the judicial system. However, the trial court’s bad faith musings led the appellate panel to remand for a determination as to whether a fee award was warranted because hospital acted in bad faith.
With respect to anesthesiologist’s cross-appeal, the appellate court agreed that section 809.9 only allows for an award of fees incurred in judicial proceedings only (hence, the reason for the Legislature using the word “suit”), such that fees were not recoverable for her prosecution of peer review proceedings. By contrast, the reviewing court cited statutes where the Legislature expressly provided for recovery of fees in administrative hearings to show that the silence in section 809.9 was determinative. (E.g., Code Civ. Proc., § 1028.5; Gov. Code, § 38773.5(b); Gov. Code, § 25845(c).)