County of Contra Costa v. Kaiser Foundation Health Plan, Inc

In County of Contra Costa v. Kaiser Foundation Health Plan, Inc. (1996) 47 Cal.App.4th 237, a pedestrian injured by a car sued the driver, the county, and the transit authority. She also raised a medical malpractice action against her treating health care provider, who moved to compel arbitration of the pedestrian's action as well as the indemnity cross-action brought against the provider by the other defendants. The trial court and appellate court agreed the arbitration agreement did not bind the cross-claimants, who had not signed the arbitration agreement and they had not agreed to be bound by its terms. The court discussed the limited circumstances in which nonsignators can be bound by an arbitration agreement. It concluded: "In essence, an action to compel arbitration is a suit in equity to compel specific performance of that contract. Absent a written agreement--or a preexisting relationship or authority to contract for another that might substitute for an arbitration agreement--courts sitting in equity may not compel third party nonsignatories to arbitrate their disputes. We are aware that other appellate courts read the underlying contracts more broadly, finding that a medical malpractice arbitration clause applies to any claim arising out of the contracted-for services, regardless of whether they are asserted by the patient or a third party. (See Bolanos v. Khalatian, supra, 231 Cal.App.3d at p. 1591; Gross ... , supra, 206 Cal.App.3d at p. 781 loss of consortium.) However, these cases, in our view, ignore the constitutional and procedural rights of the nonsignatory third parties who had no prior connection to a signatory party to the arbitration agreement. (See Rhodes ... , supra, 76 Cal.App.3d at pp. 609-610.)" (County of Contra Costa, supra, 47 Cal.App.4th at p. 245.)