Wheeler v. St. Joseph Hospital

In Wheeler v. St. Joseph Hospital (1976) 63 Cal. App. 3d 345 133 Cal. Rptr. 775, 84 A.L.R.3d 343, a medical member of the arbitration panel failed to disclose he had served as an expert witness for the law firm representing a party to the arbitration, and had testified in a court case on behalf of the firm while the arbitration hearings were proceeding. (Id. at p. 370.) The medical member's failure to reveal his relationship with the law firm required vacation of the arbitration award because, under the Commonwealth Corp. rule, it created an " 'impression of possible bias.' " (Id. at p. 372.) In Wheeler v. St. Joseph Hospital, the Fourth District refused to enforce an "Arbitration Option" provision contained in a hospital admission form. To signify nonagreement with the arbitration provision, a patient could either place his initials in the space provided or notify the hospital within 30 days of discharge. The plaintiff-wife stated that her husband had signed the admission form without reading it, no one at the hospital called their attention to the arbitration provision, and the plaintiffs were never provided with a copy of the agreement. The trial court ordered arbitration when Mr. Wheeler and his wife brought a medical malpractice suit. After arbitration on the merits resulted in an award for the defendants, the plaintiffs sought to vacate the award inter alia on the trial court's alleged abuse of discretion in ordering arbitration. On appeal, the court recognized that while arbitration is favored as a method for settling disputes, it is consensual in nature. When there is no agreement to arbitrate, an essential jurisdictional fact is missing and a court abuses its discretion if it compels arbitration. To compel arbitration there must be a voluntary agreement to arbitrate which is openly and fairly entered into. ( Id., at p. 356.) The court found that the hospital's "Conditions of Admission" was a contract of adhesion since it was a standardized form drafted by the hospital on a take-it-or-leave-it basis, negating any realistic choice by the plaintiffs. The enforceability of such a contract then depends upon whether the terms are beyond the reasonable expectations of an ordinary person or are oppressive or unconscionable. This is a particular problem in the medical services context which presents distinct problems of the patients' awareness. Normally in a contract of adhesion, conspicuousness and clarity may not be enough. If the provision would defeat the strong expectations of the weaker party, it may be necessary to point out the provision and explain its meaning. This is especially important during admission to a hospital which is an "anxious, stressful, and frequently a traumatic experience." ( Id., at pp. 359-360.) In its analysis the court noted that an emergency room patient cannot be expected to read, much less understand, a broad arbitration clause. Unless advised otherwise a patient will think she has no choice but to enter her physician's hospital and sign all the forms. ( Id., at p. 360.) The Court concluded "that in order to be binding, an arbitration clause incorporated in a hospital's 'CONDITIONS OF ADMISSION' form should be called to patient's attention and he should be given a reasonable explanation of its meaning and effect, including an explanation of any options available to the patient." Not only is Wheeler distinguishable given the circumstances peculiar to the hospital admission situation ( id. , at pp. 357-358), In Wheeler the court wrote that "The hospital's admission clerk need only direct the patient's attention to the arbitration provision, request him to read it, and give him a simple explanation of its purpose and effect, including the available options. Compliance will not require the presence of the hospital's house counsel in the admission office." ( Id. , at p. 361.)