The opinion
Filed 1/2924 Tayefeh v. Kern Medical Center CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
FARZIN TAYEFEH et al.,
F085103
Plaintiffs and Appellants,
(Super. Ct. No. BCV-15-100647)
v.
KERN MEDICAL CENTER et al., OPINION
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Kern County. Eric Bradshaw,
Judge.
Fenton Law Group, Benjamin J. Fenton and Dennis E. Lee for Plaintiffs and
Appellants.
Hall Hieatt Connely & Bowen, Mark B. Connely and Stephanie A. Bowen for
Defendants and Respondents.
-ooOoo-
INTRODUCTION
Plaintiff and appellant Farzin Tayefeh, M.D. (Tayefeh), along with Farzin
Tayefeh, M.D., Inc. (collectively, plaintiffs), appeal from a judgment in favor of
defendants and respondents Kern Medical Center (KMC) and the County of Kern
(collectively, defendants). The parties dispute whether KMC’s bylaws allowed for the
termination of Tayefeh’s temporary hospital privileges without hearing and appellate
rights. Following a bench trial, the court found KMC did not violate its medical staff
bylaws1 in terminating Tayefeh’s temporary privileges at KMC without hearing and
appellate rights, plaintiffs had not proven any damages caused by KMC as a result of the
privilege termination, and defendants are immune from liability even if KMC had
violated the bylaws and caused plaintiffs damages.
On appeal, plaintiffs argue the trial court erred as a matter of law in construing and
applying KMC’s bylaws to the facts of the case, in finding no damages, and in
concluding KMC was immune from liability. Finding no error, we affirm.
BACKGROUND
A general legal framework provides context for the parties’ dispute regarding
KMC’s bylaws and the termination of Tayefeh’s temporary privileges.
I. General Legal Background
Along with numerous statutory and regulatory laws designed to address the
interests of patients, physicians, and hospitals, as well as concomitant public policy
concerns, hospitals are statutorily obligated to report to the Medical Board of California
(MBC)2 certain adverse actions taken by a peer review body with respect to denying,
1 All further references to bylaws are to the KMC medical staff bylaws unless indicated
otherwise.
2 The MBC is a consumer protection agency within the Department of Consumer Affairs
consisting of a 15-member board of eight physicians and seven public members appointed by the
Governor, the Speaker of the Assembly, and the Senate Rules Committee. (Arnett v. Dal Cielo
(1996) 14 Cal.4th 4, 7; Bus. & Prof. Code, §§ 101, subd. (b), 2001, subds. (a)–(c).) The
2.
terminating, suspending, or reducing a physician’s staff privileges. Specifically,
section 805 requires that a report be filed with the applicable licensing agency when, as a
result of an action of a peer review body, “A licentiate’s membership, staff privileges, or
employment is terminated or revoked for a medical disciplinary cause or reason[]” or
“Restrictions are imposed, …, on staff privileges, membership, or employment for a
cumulative total of 30 days or more for any 12-month period, for a medical disciplinary
cause or reason.” (Id., subd. (b)(2), (3).) Staff privileges are defined to include, among
other things, temporary privileges. (Id., subd. (a)(4).) The statute defines “‘Medical
disciplinary cause or reason’ [to] mean[] that aspect of a licentiate’s competence or
professional conduct that is reasonably likely to be detrimental to patient safety or to the
delivery of patient care.” (Id., subd. (a)(6).)
In addition to the duty to report such adverse actions to the MBC, hospitals also
have a duty to provide certain protections to a physician in proceedings regarding his or
her staff privileges—a duty which was originally grounded in the common law doctrine
of fair procedure. (El-Attar v. Hollywood Presbyterian Medical Center (2013) 56 Cal.4th
976, 986 (El-Attar); see Anton v. San Antonio Community Hosp. (1977) 19 Cal.3d 802,
815 [“a physician may neither be refused admission to, nor expelled from, the staff of a
hospital, whether public or private, in the absence of a procedure comporting with the
minimum common law requirements of procedural due process”].)
In 1989, California implemented a peer review process to “‘protect the health and
welfare of the people of California by excluding through the peer review mechanism
“those healing arts practitioners who provide substandard care or who engage in
professional misconduct”’” and the Legislature codified the common law fair procedures
purposes of the MBC are to protect consumers from incompetent, grossly negligent, unlicensed,
impaired, or unethical practitioners, among other things. (Arnett v. Dal Cielo, supra, at p. 7.)
All statutory references are to the Business and Professions Code unless indicated
otherwise.
3.
a hospital must afford practitioners in the peer review process in sections 809 to 809.8.
(El-Attar, supra, 56 Cal.4th at p. 988.)
The specific type of notice and hearing fair process rights that physicians are to be
provided during peer review processes are codified under sections 809.1–809.4, but those
sections do not apply to county and state hospitals as KMC was during the relevant time
period (§ 809.7). Nonetheless, county and state hospitals are obligated to provide fair
procedures and due process to physicians through notice and an opportunity to be heard
in matters affecting membership privileges. (Ibid.)
To comply with these requirements, California law requires an acute care
hospital’s medical staff to adopt written bylaws that establish formal procedures for
evaluating “staff applications and credentials, appointments, reappointments, assignment
of clinical privileges, appeals mechanisms and such other subjects or conditions which
the medical staff and government body deem appropriate.” (Cal. Code Regs., tit. 22,
§ 70703, subd. (b).) The medical staff is required to provide a means of enforcing its
bylaws, including adoption of a peer review process, which is subject to the minimal
procedural standards set by the statutes and by the law entitling physicians to fair
procedure. (Smith v. Selma Community Hospital (2008) 164 Cal.App.4th 1478, 1482.)
Hospitals are obligated to materially comply with the medical staff bylaws (El-Attar,
supra, 56 Cal.4th at pp. 990–991; see § 809.6, subd. (a)), and hospital governing boards
are prohibited from acting in an arbitrary or capricious manner with respect to peer
review matters (§ 809.05, subd. (a)).
Pursuant to these obligations, KMC’s bylaws provide for ongoing monitoring and
quality assessment of the medical staff, and describe peer review and corrective action
procedures that may be taken against the medical staff. A physician who applies for or is
awarded full staff membership may not have his or her hospital privileges denied,
reduced, suspended, or terminated for any reason without hearing and appellate
procedures as provided in the bylaws. However, a physician awarded only temporary
4.
staff privileges, as opposed to full staff membership privileges, is subject to KMC’s
bylaws provision 7.5-4(C), which provides as follows:
“Temporary privileges may at any time be terminated, with or
without cause, by the president of staff, the chair of the department, or the
medical director after conferring with either of the foregoing. The
practitioner shall be entitled to the hearing and appellate rights
afforded in Article XIII of these bylaws only if temporary privileges
are terminated or suspended for medical disciplinary cause or reason.
In all other cases, the individual shall not be entitled to any hearing and
appellate rights based upon an adverse action involving temporary
privileges. All persons requesting or receiving temporary privileges shall
be bound by the bylaws, rules and regulations of the medical staff. All
practitioners with temporary privileges will be subject to the proctoring
procedure of the medical staff.” (Boldface added.)
In article XII, provision 12.2–5(K), which sets out actions that may be taken by
the medical executive committee in peer review processes, the bylaws utilize the standard
medical disciplinary cause or reason as defined in section 805, subdivision (a)(6): “If
the medical executive committee takes any action that would give rise to a hearing
pursuant to Bylaws, Section 13.2, it shall also make a determination whether the action is
a ‘medical disciplinary’ action or an ‘administrative disciplinary’ action. A medical
disciplinary action is one taken for cause or reason that involves that aspect of a
practitioner’s competence or professional conduct that is reasonably likely to be
detrimental to patient safety or to the delivery of patient care. All other actions are
deemed administrative disciplinary actions. In some cases, the reason may involve both
medical disciplinary and administrative disciplinary cause or reason, in which case, the
matter shall be deemed medical disciplinary for hearing purposes pursuant to Bylaws,
Article 13, Hearing and Appellate Reviews.”
In 2015, KMC abruptly terminated Tayefeh’s hospital privileges after it
discovered an MBC accusation had been filed against Tayefeh seeking revocation or
suspension of his medical license that he had not previously disclosed to KMC. Plaintiffs
argue the basis for terminating Tayefeh’s privileges was a medical disciplinary cause or
5.
reason under bylaws provision 7.5–4(C), which triggered hearing and appellate rights that
were not afforded to Tayefeh; they seek damages in tort for KMC’s purported failure to
provide Tayefeh hearing and appellate rights provided in the bylaws.
II. Factual Background
Tayefeh and his spouse are both anesthesiologists. Tayefeh’s spouse (A.B.) was
involved in a vehicle accident in November 2011 after he purportedly ran a red light and
struck another vehicle while driving under the influence (DUI). A.B. was charged for
DUI, and, in March 2012, a charge for exhibition of speed under Vehicle Code
section 23109, subdivision (c), was added. A.B. pleaded nolo contendere to the latter
charge, and the remaining charges were dismissed. An investigation of A.B. was
initiated by the MBC, and the agency filed an accusation against A.B. in June 2013
seeking revocation or suspension of his medical license.
The MBC’s allegations against A.B. detailed that Tayefeh and A.B. had been
cross-prescribing each other various controlled substances including Xanax, Ambien, and
hydrocodone. A.B. was accused of gross negligence in his care of Tayefeh for, among
other things, cross-prescribing controlled substances to Tayefeh while maintaining a
personal relationship with him and without conducting physical examinations or
maintaining complete and accurate records. On October 14, 2014, a stipulated settlement
and disciplinary order was entered wherein A.B. admitted the complete truth and
accuracy of each and every allegation in the accusation. The disciplinary order revoked
A.B.’s medical license, stayed that revocation, and placed A.B. on probation for three
years subject to various terms and conditions. Tayefeh was interviewed by the MBC on
May 8, 2012, and again on November 18, 2013, regarding his treatment of A.B. Tayefeh
appeared with counsel for the second interview.
In the fall of 2014, Tayefeh began searching for a new anesthesiology position
after the hospital where he was working in San Diego lost a contract with an insurance
provider and became over-staffed. Tayefeh applied for an anesthesiologist position
6.
through Resource Anesthesiology Associates of California, PC (Somnia), a private group
of anesthesiologists that had an exclusive agreement with KMC to send qualified
anesthesiologists to provide services to KMC. Tayefeh signed a two-year independent
contractor professional services agreement with Somnia in November 2014. Under the
agreement, Tayefeh was to be paid a weekly amount based on 56 hours of work per week
at the hospital, but the agreement was subject to immediate termination if, among other
things, Tayefeh failed to obtain clinical privileges from KMC, or his privileges were
suspended or revoked by KMC.
Tayefeh then completed KMC’s “APPLICATION FOR PATIENT-SPECIFIC
AND LOCUM TENENS TEMPORARY PRIVILEGES.” The application sought
information about whether he had ever had his license to practice medicine in any
jurisdiction denied, limited, restricted, suspended, revoked, not renewed, or subject to
probationary conditions, or whether he had been fined or received a letter of reprimand
from a licensing agency, or whether he was subject to such a pending action. He
answered “No” to this question.
As part of the application, Tayefeh received and agreed to by bound by the KMC
medical staff bylaws. Section 6.4–2(K) of the bylaws provides that by applying for
appointment to the medical staff, the applicant agrees that if membership and privileges
are granted, the applicant has “an ongoing and continuous duty to report to the medical
staff office within ten (10) days any and all information that would otherwise correct,
change, modify or add to any information provided in the application or most recent
reappointment application when such correction, change, modification or addition may
reflect adversely on current qualifications or membership or privileges.”
Tayefeh’s privileges application was granted for the period of January 5, 2015,
through March 4, 2015. At trial, KMC’s medical staff coordinator, Tracy Subriar,
testified Tayefeh had applied for, and was granted only, temporary privileges. She
explained this was typical for anesthesiologists who entered into independent contractor
7.
agreements with Somnia; they initially applied for temporary privileges, the approval of
which was an abbreviated process that could be completed in four to six weeks, and the
only people who had to sign off on granting these privileges were the chair of the
anesthesiology department and the president of the medical staff. If the anesthesiologist
with temporary privileges performed well, he or she would be given a further application
to apply for full staff membership privileges, which was a much lengthier and in-depth
process that Tayefeh never underwent.
After Tayefeh was granted privileges in December 2014, he found an apartment in
Bakersfield and began providing services at KMC on January 5, 2015. Meanwhile,
however, springing from the MBC’s investigation of Tayefeh and his spouse’s cross-
prescribing activities, the MBC filed an accusation against Tayefeh on December 31,
2014, which was mailed to Tayefeh’s Los Angeles address. The MBC notified KMC of
the accusation against Tayefeh on January 21, 2015. According to Tayefeh, at the time
he applied for privileges with KMC in November 2014, he had no idea the MBC was
investigating him or that the MBC would challenge his license. Although he had twice
been interviewed by the MBC regarding his treatment of A.B., the most recent of which
had been in November 2013 for which Tayefeh had legal counsel, Tayefeh thought the
interviews related solely to the investigation and accusation against A.B. Moreover,
Tayefeh testified, the accusation was sent to his Los Angeles address, so he had no idea it
had been filed until KMC was notified.
As soon as KMC was notified of the accusation on January 21, 2015, KMC’s
Chief Medical Officer, Glenn Goldis; Chief Executive Officer, Russell Judd; and
Dr. Arash Heidari, President of the Medical Staff, discussed the MBC accusation. Goldis
testified he recommended to the group, and they agreed, to terminate Tayefeh’s
temporary privileges due to his failure to disclose the accusation, which they all believed
was not a medical disciplinary cause or reason under KMC bylaws provision 7.5-4(C).
Goldis subsequently met with Dr. Chou Yang, the chair of the anesthesiology
8.
department, and informed him that Tayefeh’s privileges had been terminated based on the
nature of the MBC accusation and the fact Tayefeh did not disclose the accusation to
KMC. Goldis asked Yang to inform Somnia that Tayefeh no longer had privileges at
KMC, he would need to be removed from clinical duties, and Somnia would not be able
to use Tayefeh’s services to fulfill its contract with KMC.3 At Yang’s request, Goldis
sent an e-mail to Yang confirming these details and stated Tayefeh’s privileges were
being terminated based on the nature of the MBC’s accusation and his failure to notify
KMC of the accusation. Goldis’s e-mail also indicated that, “[i]n accordance with KMC
bylaws, Dr. Tayefeh is not entitled to any hearing or appellate rights.” At the time,
Goldis did not know that Tayefeh was unaware the accusation had been filed.
At Goldis’s direction, Yang met with Tayefeh at the end of the day to deliver that
information and the two discussed the nature of the accusation. Tayefeh denied he had
any knowledge of being under investigation by the MBC, and when asked by Yang about
the specific nature of the accusation, Tayefeh commented that he did not think it was a
“big deal” to write prescriptions for family members, friends or acquaintances, which
surprised Yang. Had Yang been aware of the accusation, he would not have signed
Tayefeh’s application for temporary privileges. According to Tayefeh, he was notified in
the middle of a case that Yang wished to see him; after asking Tayefeh to leave the
operating room, he was abruptly released from service. Tayefeh testified he was told
nothing about why he was being asked to leave KMC, and he had no recollection of
discussing the accusation with Yang.
Somnia subsequently sent a letter to Tayefeh stating the independent contractor
relationship between them was terminated effective January 27, 2015, under
3 Like Tayefeh, Yang provided services to KMC through Somnia, and had been designated
the chair of the anesthesiology department. Somnia’s agreement with KMC required Somnia to
designate a department chairperson who had overall responsibility for the administration of
services under the agreement with KMC, pursuant to KMC medical staff bylaws, rules and
regulations.
9.
section 6.3.i.9 of the professional services agreement between Somnia and Farzin
Tayefeh, M.D., Inc., which provided the agreement could be terminated for cause if
Tayefeh’s clinical privileges were revoked.
Tayefeh filed suit against defendants alleging several claims, including one under
section 809 et seq. and a common law claim for violation of Tayefeh’s right to fair
procedure. Following demurrer proceedings, plaintiffs’ only remaining claim was one
for damages and framed under section 809 et seq. At summary judgment, Tayefeh
characterized the claim as a violation of section 809.6, subdivisions (a) and (b), based on
KMC’s alleged failure to provide Tayefeh hearing and appellate rights under the bylaws
in terminating his hospital privileges.
At the hearing on KMC’s summary judgment motion, the trial court explained that
conflicting evidence created a disputed issue of fact as to the meaning of the phrase
medical disciplinary cause or reason in bylaws provision 7.5–4(C). The case proceeded
to trial, where expert testimony was offered by KMC as to the meaning of medical
disciplinary cause or reason contained in the bylaws. Plaintiffs’ expert, however, was
deemed unqualified and was precluded from testifying. The question of interpretation of
the bylaws was given to the jury to resolve, which initially deadlocked before reaching a
nine-to-three verdict finding KMC had not materially violated the bylaws. Plaintiffs
appealed, arguing the trial court erred by excluding their expert witness as unqualified.
We agreed with plaintiffs, reversed the judgment, and remanded the case for further
proceedings. (Tayefeh v. Kern Medical Center (Oct. 5, 2020, F077060) [nonpub.opn.]
(Tayefeh I).)4
4 On our own motion, we take judicial notice of the record on appeal filed with this court in
Tayefeh I. (Evid. Code, §§ 451, subd. (a), 452, subd. (d), 459, subd. (a); see Dwan v. Dixon
(1963) 216 Cal.App.2d 260, 265 [“a court may take judicial notice of the contents of its own
records”].)
10.
On remand, the parties agreed to a court trial. One of the central issues was
whether Tayefeh’s privileges were terminated for a medical disciplinary cause or reason,
which would entitle him to hearing and appellate rights under the bylaws. This issue
turned on the meaning and application of medical disciplinary cause or reason as
provided in the bylaws.
In addition to fact and percipient witness testimony admitted at trial, experts
testified on the meaning and application of the phrase medical disciplinary cause or
reason as used in the bylaws to frame hearing and appellate rights upon termination of
temporary privileges under bylaws provision 7.5–4(C). Plaintiffs’ expert, Arthur Chenen,
explained that as understood in the community, a medical disciplinary cause or reason
extends to any conduct by a physician, even conduct outside a clinical situation, that is
reasonably likely to be detrimental to patient safety or the delivery of patient care,
regardless of whether it involves patient safety or delivery of patient care at KMC. To be
a medical disciplinary cause or reason, the basis for termination must “typically” have
some nexus to patient care of some kind. Chenen testified a medical disciplinary cause or
reason encompasses such things as “dissatisf[action] with the doctor’s medical practice,
honesty, prescribing practices, whether in the hospital or somewhere else,” and these
bases for termination of privileges would trigger hearing rights.
Allan Pont, M.D., KMC’s expert, testified the basis for KMC’s termination of
Tayefeh’s privileges was not a medical disciplinary cause or reason. According to Pont,
a medical disciplinary cause or reason is something that involves the care of a patient,
and a nonmedical reason is any other issue that does not involve the care of a patient.
Pont indicated a medical disciplinary reason involves a physician showing some sort of
incompetence toward patients. In his opinion, the termination of Tayefeh’s privileges in
these circumstances did not amount to a medical disciplinary cause or reason. On cross-
examination, Pont explained that dishonesty of a physician is a professional conduct
issue, but termination of privileges on that basis is not a medical disciplinary cause or
11.
reason as that phrase is understood. A medical disciplinary cause or reason is meant to
differentiate clinical situations from nonclinical situations.
Following trial, the court issued a tentative decision; as ordered, KMC proposed a
consistent statement of decision, which the trial court subsequently signed. The trial
court found Tayefeh had applied for and received only temporary privileges, and that
Tayefeh’s privileges were terminated solely because he had failed to disclose the
accusation to KMC. The trial court credited Pont’s testimony as to the meaning of
medical disciplinary cause or reason, and concluded termination based on a failure to
disclose was not a medical disciplinary cause or reason under the circumstances of the
case. Moreover, the trial court found plaintiffs had not proven any damages caused by
KMC, and concluded, alternatively, KMC was immune from liability under Government
Code sections 815.2 and 820.2.
Plaintiffs appeal again, arguing the trial court erred as a matter of law in
concluding Tayefeh’s privileges were not terminated for a medical disciplinary cause or
reason, and argue the trial court erred in finding that plaintiffs had not proven any
damages. Plaintiffs also maintain the trial court erred in finding KMC was immune from
liability.
DISCUSSION
This case proceeded to trial on a single claim for wrongful termination of hospital
privileges, framed around KMC’s obligation to materially comply with its own bylaws
(§ 809.6, subd. (a)) and to provide due process of law (§ 809.7). The parties agreed in
their closing trial briefs that plaintiffs’ claim of wrongful termination of hospital
privileges sounds in tort. The generic elements of a tort claim are “wrongdoing,
causation, and harm.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.)
Thus, to establish entitlement to relief, plaintiffs were required to prove that KMC’s duty
under the bylaws to provide a hearing and appellate rights was materially breached by
KMC—either intentionally or negligently—and caused plaintiffs damages. (See
12.
generally Ortega v. Kmart Corp. (2001) 26 Cal.4th 1200, 1205 [to establish liability on a
negligence theory, the plaintiff must prove duty, breach, causation and damages]; see also
Evid. Code, § 500 [party has the burden of proof as to each fact the existence or
nonexistence of which is essential to the claim for relief the party is asserting].)
The trial court decided each element of plaintiffs’ claim in favor of KMC, finding
plaintiffs had not established KMC materially breached the bylaws and, alternatively,
even assuming a material breach, that plaintiffs had failed to prove any damages, let
alone any damages caused by KMC. Plaintiffs argue the trial court erred as a matter of
law in construing KMC’s bylaws and in finding no damages were proven. KMC
maintains the trial court’s construction and application of the bylaws and its findings as to
damages are reviewed for substantial evidence, and both were amply supported.
I. Material Breach of the Bylaws
A. Meaning and Scope of the Bylaws
The trial court found Tayefeh applied for and received only temporary privileges
from KMC. Thus, whether KMC materially violated the bylaws hinged on whether
KMC terminated Tayefeh’s temporary privileges for a reason that amounted to a medical
disciplinary cause or reason, which was the threshold for triggering hearing and
appellate rights as provided under bylaws provision 7.5–4(C).
Based on the parties’ arguments presented during the bench trial, and as we
explained in Tayefeh I, the parties have differing interpretations of the term medical
disciplinary cause or reason. The bylaws define medical disciplinary cause or reason in
bylaws provision 12.2–5(K) as one taken for cause or reason that involves that aspect of a
practitioner’s competence or professional conduct that is reasonably likely to be
detrimental to patient safety or to the delivery of patient care. KMC contends this
encompasses only professional conduct related to some type of clinical situation relevant
to patient care at KMC. KMC offered the testimony of Pont to support this
understanding and application. Plaintiffs, on the other hand, argue the scope of medical
13.
disciplinary cause or reason may include discipline for any professional conduct inside or
outside a clinical situation that has a nexus to patient safety or care. Plaintiffs offered
Chenen’s testimony to support this interpretation.
KMC’s bylaws frame hearing and appellate rights for revocation of temporary
privileges around the medical disciplinary cause or reason standard articulated in
section 805, subdivision (a)(6).5 In Tayefeh I, after supplemental briefing about how the
bylaws should be interpreted in light of section 805, we concluded the construction
question presented in this very narrow context was not one of statutory interpretation, but
involved an interpretation of a written instrument (the bylaws) to which contract
interpretation principles applied.6 We noted that because a hospital’s reporting
obligations under section 805 are framed around the same standard (medical disciplinary
cause or reason), any reasonable interpretation of the bylaws had to be consistent with the
policy objectives and purposes underpinning section 805. In other words, no reasonable
interpretation of medical disciplinary cause or reason as used in the bylaws could
undercut or dilute KMC’s reporting obligations under section 805.
Pursuant to this interpretational framework, we deemed plaintiffs’ expert qualified
to offer an opinion on the meaning and scope of medical disciplinary cause or reason as a
matter of industry custom and usage; the matter was remanded to the trial court for
further proceedings and a bench trial followed. On retrial, the trial court admitted
conflicting expert testimony as to the meaning of the bylaws and their application to the
facts surrounding Tayefeh’s privilege termination, decided all factual issues in KMC’s
5 Even though section 805 is relevant to the interpretive issue, the parties’ dispute is not
whether KMC violated its reporting obligation under section 805.
6 At the first trial, the interpretation and application of medical disciplinary cause or reason
was submitted to the jury to resolve as a disputed factual issue, and the jury was instructed on
contract interpretation principles to decipher its meaning in light of expert testimony admitted on
the issue.
14.
favor, and concluded KMC had not violated the bylaws by failing to afford Tayefeh
hearing and appellate rights.
Without acknowledging this context or how we analyzed the interpretation issue in
Tayefeh I, plaintiffs argue the construction and application of the bylaws is a mixed
question of law and fact subject to de novo review. Although it is not entirely clear why,
plaintiffs contend that what constitutes a medical disciplinary cause or reason is an issue
of law, and because the dispositive facts are undisputed, the trial court’s determination is
reviewed de novo. KMC maintains the trial court’s decision must be examined under the
substantial evidence standard as the trial court’s construction of the bylaws turned on
conflicting expert testimony, and points out that the doctrine of implied findings applies
under Code of Civil Procedure sections 632 and 634 because plaintiffs did not object to
the trial court’s statement of decision.7
When a claim for relief depends on the interpretation of a written instrument,
courts apply well-established rules of construction to construe the document. (See, e.g.,
Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 753–754 (Smith)
[applying contract interpretation principles to deduce the meaning of hospital bylaws in
reviewing grant of injunctive relief, but emphasizing that doing so may be dependent on
the nature of the provisions and bylaws at issue]; Singh v. Singh (2004) 114 Cal.App.4th
1264, 1294 (Singh) [interpreting nonprofit religious corporation bylaws under contract
interpretation principles to determine whether board of directors had life terms]; In re
Marriage of Fonstein (1976) 17 Cal.3d 738, 746–747 [contract interpretation principles
applied to interpret husband’s law practice’s partnership agreement to ascertain division
7 The doctrine of implied findings requires the appellate court to infer the trial court made
all factual findings necessary to support the judgment. The doctrine applies when a statement of
decision is requested under Code of Civil Procedure section 632 and, pursuant to Code of Civil
Procedure section 634, the appellant fails to bring any ambiguities or omissions in the statement
of the decision to the trial court’s attention by objecting. (Fladeboe v. American Isuzu Motors
Inc. (2007) 150 Cal.App.4th 42, 58–59 (Fladeboe).)
15.
of certain marital assets upon divorce]; McLear-Gary v. Scott (2018) 25 Cal.App.5th 145,
157–159 [contract interpretation principles applied to interpret written covenants,
conditions, and restrictions to determine existence and scope of easement].)
When there is an ambiguity as to the meaning of a writing that turns on the
credibility of conflicting extrinsic evidence, as here, the interpretation presents a question
of fact that is resolved by the trier of fact. (Parsons v. Bristol Development Co. (1965) 62
Cal.2d 861, 865–866; Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1351.) Upon
review in such instances, the appellate court must accept any reasonable interpretation
adopted by the trial court. (Parsons, supra, at p. 866.) In this case, the scope and
meaning of medical disciplinary cause or reason as defined in the bylaws turned on
conflicting expert testimony, which the trial court resolved in KMC’s favor by crediting
Pont. Pont’s testimony established he is a board certified physician in endocrinology and
internal medicine. He has been a part of various hospital administrations, including
acting as Chief Medical Officer and Vice President for Medical Affairs at California
Pacific Medical Center in San Francisco. He has been involved in negotiating multiple
exclusive provider agreements between hospitals and contracting groups; he has been
personally involved in many peer review proceedings in hospitals where physician
privileges were at issue, including a situation that resulted in terminating a physician’s
locum tenens privileges, like that with KMC and Dr. Tayefeh.
Pont testified that to constitute a medical disciplinary cause or reason, the at-issue
professional conduct had to be related to a clinical situation. Crediting this testimony,
and in conjunction with the definition of medical disciplinary cause or reason supplied in
bylaws provision 12.2–5(K), the trial court implicitly construed the scope of medical
disciplinary cause or reason as limited to discipline for conduct involving a clinical
situation that is reasonably likely to be detrimental to patient safety or the delivery of
patient care. This is a reasonable interpretation of the scope of medical disciplinary cause
16.
or reason as defined in the bylaws, and it is notably consistent with how that phrase has
been understood and applied under section 805.
Abrams v. St. John’s Hospital & Health Center (1994) 25 Cal.App.4th 628
(Abrams) is illustrative. In Abrams, a hospital had an exclusive agreement for pathology
services (a closed department arrangement) with a medical corporation for which
Dr. Abrams was the director. (Id. at p. 632.) When Abrams made statements during a
medical malpractice deposition the hospital regarded as erroneous, the hospital
terminated the exclusive contract under a without-cause provision therein, and this
triggered the automatic termination of hospital staff membership and privileges of
Abrams and his staff doctors. (Id. at p. 634.) Uncontradicted deposition testimony of the
hospital’s chief executive officer indicated the decision to terminate the contract was not
based on quality care issues or Abrams’s medical competence; rather, the chief executive
officer testified it put into question his professional integrity, honesty, professional
judgment and the ability to run the pathology department. (Ibid.)
On appeal from the denial of a preliminary injunction sought by Abrams and his
medical corporation, the appellate court concluded Abrams had contracted away any
medical staff hearing rights he had with respect to the termination of his privileges. The
court noted section 809.6, subdivision (c), prohibits contract waivers of a health care
provider’s rights to review final peer review actions proposing discipline amounting to a
medical disciplinary cause or reason under section 805, but summarily concluded
Abrams’s privileges were not terminated for a medical disciplinary cause or reason, and
section 805 simply did “not come into play.” (Abrams, supra, 25 Cal.App.4th at p. 639.)
Abrams’s clinical skills were undisputedly not in question, and the perceived
dishonesty at issue was completely unrelated to any clinical situation and thus could not
constitute a medical disciplinary cause or reason. (Abrams, supra, 25 Cal.App.4th at
p. 634.) The fact that Abrams involved an exclusive contract termination does not render
that case inapposite as plaintiffs argue. As the Abrams court noted, because section 805
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was not triggered, the court had no reason to address whether section 809.6’s prohibition
on contract waivers of a physician’s hearing and appellate rights would ever impact
contractual relationships involving closed departments. (Id. at p. 639.)
On the opposite end of the spectrum, when the undisputed facts underlying a
hospital’s decision to terminate privileges involve a physician’s conduct in a clinical
situation that is unquestionably detrimental to the delivery of patient care, the
termination is squarely based on a medical disciplinary cause or reason within the
meaning of section 805. (Alaama v. Presbyterian Intercommunity Hospital, Inc. (2019)
40 Cal.App.5th 55 (Alaama).) Alaama involved a bad-tempered doctor who signed a
written behavior agreement with the hospital following episodes of verbally and
physically inappropriate and unprofessional behavior. (Id. at p. 58.) After the agreement
was signed, Alaama was involved in a situation where nurses and technicians were trying
to reach a medically distressed patient to provide him with a bed, but Alaama refused to
move the cart where he was charting and precluded staff from assisting the patient. (Id.
at p. 59.) As a result of this incident, Alaama’s privileges were revoked without a
hearing, and the hospital determined it would not have to file a section 805 report because
no action had been taken for a medical disciplinary cause or reason. (Alaama, supra, at
pp. 60–61.) The medical executive committee stated Alaama’s privileges were
terminated because Alaama had failed to address the safety concerns and patient care
needs expressed by the operating room staff, and a letter from the chief of staff to Alaama
explained that Alaama had violated the agreement by inhibiting the hospital staff from
providing a bed for a vomiting patient. (Id. at p. 66.)
On appeal from the trial court’s subsequent denial of a writ sought by Alaama, the
hospital tried to characterize the basis for privilege termination as a violation of the
agreement’s requirement that Alaama discuss patient concerns expressed to him by the
staff. (Alaama, supra, 40 Cal.App.5th at p. 66.) The hospital argued that because the
patient was not actually in danger, the episode did not involve conduct that was
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reasonably likely to be detrimental to patient safety or to the delivery of patient care and
could not constitute a medical disciplinary cause or reason for reporting purposes under
section 805 such that it triggered notice and hearing rights under section 809.1. (Alaama,
supra, at p. 66.) In rejecting this argument, the appellate court explained that even if
Alaama’s conduct was not dangerous to patient safety, the hospital ignored the
undisputed fact that Alaama had hindered the delivery of patient care by preventing
hospital staff from providing a patient with a bed, which fell squarely within the
definition of medical disciplinary cause or reason provided in section 805,
subdivision (a)(6). (Alaama, supra, at p. 66.)
Abrams and Alaama present a consistent understanding of medical disciplinary
cause or reason to what Pont described in his testimony and support the reasonableness
of the meaning the trial court adopted—to constitute a medical disciplinary cause or
reason as that phrase is defined in the bylaws and in section 805, subdivision (a)(6), the
basis for the termination must relate to professional conduct in a clinical situation that is
reasonably likely to be detrimental to patient safety or the delivery of patient care.
Plaintiffs maintain a termination of privileges for a failure to disclose is effectively
a termination for dishonesty, which has been frequently held to implicate patient safety
even when the dishonesty at issue occurs outside a clinical situation. Plaintiffs argue that
as a matter of law any narrow interpretation of medical disciplinary cause or reason that
does not include termination for dishonest professional conduct is incorrect and
unreasonable. Plaintiffs rely on Ellison, but this case does not persuasively advance
plaintiffs’ argument.
Ellison involved a hospital board’s decision, after several layers of peer review
proceedings, to terminate a physician’s privileges for displaying a serious lack of candor,
honesty and integrity in answering questions about his training and background during
peer review proceedings where his clinical skills were in question. (Ellison v. Sequoia
Health Services (2010) 183 Cal.App.4th 1486, 1498 (Ellison).) Following subsequent
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writ proceedings, the appellate court upheld the board’s decision as being a reasonable
reconsideration of the penalty imposed by an intermediate peer review decision. (Ibid.)
The court explained the medical staff bylaws permitted the board to exercise its
independent judgment as to what constitutes a reasonable penalty for unethical behavior.
In electing to terminate Ellison’s privileges, the board “reasonably determined that
Ellison’s failure to honestly and completely respond to the questions about his board
certification examinations and his reasons for leaving [his] residency was behavior that
could jeopardize patient safety in the future.” (Ibid.) The court found this reasonable
because “[a] physician who conceals information about himself to protect his reputation
might well withhold information about a case if it reflected negatively upon his skills as a
practitioner.” (Ibid.)
While the hospital board concluded the physician’s lack of candor and honesty
could potentially jeopardize patients’ safety in the future such that it justified privilege
termination, whether the termination was one for medical disciplinary cause or reason
was not considered. (Ellison, supra, 183 Cal.App.4th at p. 1498.) Moreover, Ellison’s
dishonesty about his training and medical residency background went to the very heart of
what concerned the hospital about his clinical skills as demonstrated in clinical situations.
(Ibid.) In that way, Ellison’s dishonesty was directly linked to clinical situations where
the hospital already had concerns about his patient care (id. at p. 1490), and the facts of
Ellison do not undercut a construction of medical disciplinary cause or reason to be
limited to professional conduct related to a clinical situation that is reasonably likely to be
detrimental to patient safety or to the delivery of patient care.
Plaintiffs also rely on medical license revocation cases that involved criminal
convictions for the proposition that a physician’s nonclinical conduct outside a clinical
situation can implicate patient safety. (Windham v. Board of Medical Quality Assurance
(1980) 104 Cal.App.3d 461, 470 [income tax fraud reflects on physician’s qualifications
to practice medicine]; Griffiths v. Superior Court (2002) 96 Cal.App.4th 757, 770 [three
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DUI convictions rationally relate to patient safety, providing logical connection to fitness
to practice medicine].) Like Ellison, these cases do not involve any interpretation or
application of the phrase medical disciplinary cause or reason. Rather, they recognize
that criminal conduct occurring outside the practice of medicine may form the basis for
imposing licensing discipline because such conduct reflects on a licensee’s fitness and
qualifications to practice medicine. (Griffiths, supra, at p. 773; Windham, supra, at
pp. 469–470.) The nexus between a physician’s conduct and the fitness and
qualifications to practice medicine is broader in licensing discipline cases, and does not
involve the reasonably likely nexus required for discipline amounting to a medical
disciplinary cause or reason. (Windham, supra, at pp. 470–471 [nexus under § 490
requires crime be substantially related to qualifications, functions or duties of profession
for which license sought to be revoked or suspended was issued]; Griffiths, supra, at
pp. 770–771 [nexus between conviction and physician’s fitness or competence to practice
medicine requires a logical connection between the two].) These discipline cases do not
provide a persuasive basis for construing the scope of medical disciplinary cause or
reason under the bylaws.
In sum, the trial court’s implicit construction of the bylaws is not undermined or
unreasonable in light of decisional authority considering section 805 or licensing
discipline issues, and is supported by Pont’s testimony, which constitutes substantial
evidence.
B. Application of the Bylaws to the Facts
Turning to the application of the construed bylaws to the facts here, determining
the meaning of a writing may be treated as distinct from the application of that meaning
to the facts presented. (Scheenstra v. California Dairies, Inc. (2013) 213 Cal.App.4th
370, 390–391 (Scheenstra), citing Smith, supra, 182 Cal.App.4th at p. 754, fn. 17.) Here,
the trial court had to determine the precise reason why Tayefeh’s temporary privileges
were terminated before deciding whether that reason(s) amounted to a medical
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disciplinary cause or reason. Although plaintiffs argue it was undisputed that there were
two grounds for terminating Tayefeh’s privileges, the trial evidence was in conflict in this
regard.
When Goldis conferred with Judd and Heidari about the accusation against
Tayefeh, Goldis testified he recommended that KMC discontinue Tayefeh’s temporary
privileges because “the information that was disclosed to [KMC] from the [MBC] was
prior to unknown to us, and it was [Goldis’s] understanding at the time and still is that
Dr. Tayefeh had an obligation to notify [KMC] of any such potential action against him.
When we were surprised by this information it—we realized that what he had indicated
on his application was contrary to this information and therefore we believed that at the
time and I [Goldis] still believe to this day that the—that he may not have intentionally
but in fact misrepresented himself on his application.”
After the group made the decision to terminate Tayefeh’s privileges, Goldis spoke
with Yang. Yang testified Goldis told him that, after discussing the matter with Judd and
Heidari, based on the nature of the accusation and the fact that Tayefeh had not disclosed
that he was under investigation, KMC was going to suspend his temporary privileges.
Goldis asked that Yang relay that information to Somnia, but Yang asked Goldis to send
that request in writing so that Yang could forward it on to Somnia.
Goldis then sent an e-mail to Yang as follows:
“Pursuant to our conversation today re: Farzin Tayefeh, MD, please
notify Somnia that we are releasing Dr. Tayefeh from KMC effective
immediately. [¶] This decision is based on the nature of the accusation
filed to the [MBC] Case # 10-2013-234880. In addition, Dr. Tayefeh failed
to notify KMC Medical Staff Office of the accusation before he began
Locum services.
“Therefore, please make sure any scheduled shifts for Dr. Tayefeh
are covered and notify Somnia that his Locums privileges with KMC are
terminated. In accordance with KMC bylaws, Dr. Tayefeh is not entitled to
any hearing or appellate rights.”
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At trial, Goldis explained “[t]he statement in the e-mail to Dr. Yang refers to the
fact that I was concerned about the nature of the accusation but it was not the basis of my
decision.”
This conflict as to the basis of the termination presented an issue of fact for the
trial court to decide. “[W]hen the facts to which a [written instrument] must be applied
are disputed or require the weighing of evidence, the application of that provision
presents a question of fact” and is reviewed for substantial evidence. (Scheenstra, supra,
213 Cal.App.4th at p. 391, fn. 15; see Singh, supra, 114 Cal.App.4th at p. 1294 [“If the
evidence is conflicting, we must accept that which supports the trial court’s decision and
make all reasonable inferences in support of the judgment.”].) The trial court found that
“Goldis credibly testified that the decision to terminate [Tayefeh’s] temporary privileges
was based on [Tayefeh’s] failure to disclose to KMC the Medical Board Investigation
and Accusation, a non-medical reason having nothing to do with [Tayefeh’s] clinical skill
or practice at KMC.” In the factual findings section, the trial court explained the reason
for the termination was “based on the fact KMC was unaware of the MBC matter,
[Tayefeh] should have disclosed it but failed to do so, and the termination was due solely
to a non-medical cause, having nothing to do with [Tayefeh’s] clinical skills or patient
care at KMC [citation].” The trial court expressly concluded “[Tayefeh’s] non-disclosure
was the reason his temporary privileges were immediately terminated, and the reason
why no hearing was required under the bylaws.”
Goldis’s testimony, although in tension with the e-mail he sent to Yang,
constitutes substantial evidence to support the trial court’s finding. (Antelope Valley
Groundwater Cases (2020) 59 Cal.App.5th 241, 260 [testimony of a single witness,
unless impossible or inherently improbable, will be sufficient to support challenged
findings].) The trial court considered Goldis’s e-mail’s reference to the nature of the
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accusation, but rejected this as the basis for the termination.8 The trial court’s finding the
privileges termination was based solely on Tayefeh’s failure to disclose the accusation (as
opposed to the nature of the accusation) was supported by substantial evidence even
though the court could have drawn different inferences and conclusions from the
evidence. (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 631 [where
substantial evidence is present, no matter how slight it may appear in comparison with
the contradictory evidence, the judgment must be upheld].)
Finding this to be the termination basis, the trial court concluded it was not a
medical disciplinary cause or reason. There was no evidence the failure to disclose was
related to a clinical situation. Even viewed as an act of dishonesty, the conduct bore no
relationship to a clinical situation like in Ellison, where the physician was not honest and
candid about his training and background after specific clinical situations raised questions
in peer review proceedings about his training and experience. Rather, as the trial court
noted, the facts were more akin to Abrams, where the physician’s perceived dishonesty
had nothing to do with any clinical situation or the physician’s clinical skills. Moreover,
even if the failure to disclose could somehow be linked to a clinical situation in an
abstract sense, there is no factual basis to conclude the conduct was reasonably likely to
be detrimental to patient safety or to the delivery of patient care. The failure to timely
disclose the accusation itself did not bear on Tayefeh’s clinical skills, especially given the
uncontradicted testimony of Yang and Goldis indicating KMC had absolutely no
concerns about Tayefeh’s clinical skills or abilities. And, although disputed by Chenen,
8 While the trial court discussed the nature of the accusation referenced in Goldis’s e-mail
to Yang, it did so to explain why that would not constitute a medical disciplinary cause or reason
even if it had made up the basis for the termination. To the extent there is any ambiguity in the
trial court’s statement of decision regarding the basis for the termination, that ambiguity must be
resolved in favor of the prevailing party because plaintiffs did not object to the statement of
decision. (Fladeboe, supra, 150 Cal.App.4th at p. 60 [appellate court will infer trial court made
implied factual findings favorable to the prevailing party on all issues, including the omitted or
ambiguously resolved issues]; Code Civ. Proc., § 634.)
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the trial court credited Pont’s testimony that terminating privileges for the failure to
disclose an MBC accusation would not amount to a medical disciplinary cause or reason.
The trial court’s conclusion that terminating privileges for the failure to disclose did not
amount to a medical disciplinary cause or reason was reasonable and factually supported.
Plaintiffs argue the trial court erred as a matter of law in finding that Tayefeh was
required to disclose the MBC investigation in his application and under the bylaws
because, according to plaintiffs, the MBC investigation was not a pending action until it
became a filed accusation.9 Whether the failure to disclose the investigation (as opposed
to the MBC accusation itself) was required by the privileges application (or even the
bylaws) is irrelevant. Bylaws provision 7.5–4(C) allowed KMC to terminate Tayefeh’s
temporary privileges without any cause—Tayefeh’s disclosure failure did not need to
violate the bylaws for KMC to be entitled to terminate temporary privileges. Moreover,
the failure to disclose the accusation timely was a violation of bylaws provision 6.4–
2(K).
In sum, the trial court’s construction of the bylaws was reasonable in view of the
conflicting expert evidence, the relevant facts found by the trial court are supported by
substantial evidence, and there was no error of law or fact in the trial court’s application
of the construed bylaws to the relevant facts.
II. Damages
Plaintiffs argue the trial court erred in finding they had not proven any damages.
Consistent with the general rule imposing on a party the burden of proving the
existence or nonexistence of each fact essential to a claim for defense (Evid. Code,
§ 500), plaintiffs had the burden of proving a material breach of KMC’s duties under the
9 The privileges application Tayefeh completed asked whether his license to practice
medicine had been limited, restricted, suspended, revoked, not renewed or subject to any such
actions, or whether he had been fined or received a letter of reprimand or whether such action
was pending. Plaintiffs argue the MBC investigation does not fall into any of these categories,
and Tayefeh properly answered no to this attestation question on his application.
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bylaws, causation, and the existence and extent of any damages suffered. (See generally
Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 813 [observing that a plaintiff in any
tort case bears the burden of proving by a preponderance of the evidence both the
existence and the amount of damages proximately caused by the defendant’s tortious acts
or omissions].)
Here, the trial court expressly concluded Tayefeh had not proven any damages.
The trial court explained that Tayefeh’s temporary privileges would have expired on
March 4, 2015, if they had not been terminated on January 21, 2015, and would not have
been renewed. Thus, the only lost earnings potentially suffered and attributable to
KMC’s purported wrongful termination were those between January 22, 2015, and
March 4, 2015. The trial court found that Tayefeh had presented no evidence regarding
the days he was scheduled to work during that time period. As for the damages for
emotional harm plaintiffs claimed, the trial court found that Tayefeh’s testimony
regarding his emotional distress was not convincing, and any turmoil or emotional
distress Tayefeh claimed to have sustained in the past was “transient, fleeting and trivial.”
Where the factfinder rules a party has not met its burden of proof at trial, the
standard of review is not substantial evidence, but “‘whether the evidence compels a
finding in favor of the appellant as a matter of law,’” and specifically, “‘whether the
appellant’s evidence was (1) “uncontradicted and unimpeached” and (2) “of such a
character and weight as to leave no room for a judicial determination that it was
insufficient to support a finding.” [Citation.]’” (Dreyer’s Grand Ice Cream, Inc. v.
County of Kern (2013) 218 Cal.App.4th 828, 838; see Sonic Manufacturing
Technologies, Inc. v. AAE Systems, Inc. (2011) 196 Cal.App.4th 456, 466.)
Plaintiffs fail to acknowledge the standard of review related to the trial court’s
finding that plaintiffs did not meet their burden of proof as to damages, and they point to
no evidence that requires an award of damages as a matter of law. Plaintiffs offered no
evidence Tayefeh was scheduled to work between February 22, 2015, and March 4, 2015,
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to establish any income loss for that period. Plaintiffs argue the fact that Tayefeh’s
temporary privileges were otherwise set to expire on March 4, 2015, does not cut off any
loss of income after that date. However, the evidence established KMC would not have
renewed Tayefeh’s privileges after March 4, 2015, due to the existence of the MBC
accusation—Yang testified he would not have approved Tayefeh’s initial temporary
privileges had he known about the accusation, and Tayefeh himself testified it was his
understanding no hospital would grant him privileges during the pendency of the
accusation. Nothing contradicted this evidence, let alone established lost income as a
matter of law from February 22, 2015, through the end of the contract term with Somnia.
There is no basis to reverse the trial court’s finding as to damages.
As a result, even if the trial court erred in concluding there was no material breach
of the bylaws (which it did not), there can be no prejudice in light of plaintiffs’ failure to
prove entitlement to any damages. Because the trial court’s conclusion that plaintiffs did
not prove their wrongful termination claim must be affirmed, we do not reach the trial
court’s alternative conclusion that defendants were immune from liability under
Government Code sections 815.2 and 820.2.
DISPOSITION
The court’s judgment is affirmed. Defendants are entitled to their costs on appeal.
(Cal. Rules of Court, rule 8.278(a)(2).)
MEEHAN, J.
WE CONCUR:
LEVY, Acting P. J.
FRANSON, J.
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