Filed 6/23/20 Goodrich v. Medical Board of Cal. CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

KAREN ELAINE GOODRICH,

Plaintiff and Appellant,

v.

MEDICAL BOARD OF CALIFORNIA,

Defendant and Respondent.

A157191

(San Francisco County

Super. Ct. No. CGC-18-563876)

In 2014, plaintiff Karen Elaine Goodrich, M.D., entered a stipulated settlement with the Medical Board of California (Board) under which her license was briefly suspended. Goodrich never sought judicial review of the stipulated settlement, which the Board adopted as its decision. Nearly four years later, however, she brought this lawsuit against the Board, alleging that publicly available information about the disciplinary proceeding prevented her from continuing to practice medicine. After twice dismissing Goodrich’s complaint with leave to amend, the trial court sustained the Board’s third demurrer without leave to amend and entered judgment in the Board’s favor.

On appeal, Goodrich claims that the trial court erred by dismissing her causes of action (1) for recission of the stipulated settlement; (2) for failure to include explanatory statements when disseminating information about the stipulated settlement under Business and Professions Code section 803.1, subdivision (d) (section 803.1(d)); and (3) for failure to destroy records relating to the licensing proceeding under section 828. She also claims that the court abused its discretion by not granting her leave to amend these claims. We affirm.

I.
FACTUAL AND PROCEDURAL
BACKGROUND

The facts are taken from Goodrich’s complaints and the documents subject to judicial notice. Goodrich is licensed and certified by the Board in obstetrics and gynecology. In late 2013, the Board issued an accusation alleging that she failed to comply with a Board order under section 820 requiring her to undergo a mental examination. The section 820 order was issued after the Board received a complaint that Goodrich lost her medical privileges at Sierra Vista Regional Medical Center (Sierra Vista) in San Luis Obispo “following concerns related to mental impairment and her refusal to undergo a fitness for duty evaluation.” Specifically, the accusation stated that the Board received information “demonstrating that [Goodrich] may be suffering from a substance addiction disorder and/or other mental impairment that may affect her ability to practice medicine safely.”

Goodrich informed the Board she was experiencing medical issues related to a head injury sustained in a car accident and “difficulties with personal safety[,] including concerns for stalking by an unknown assailant and the killing of one of her pets outside of her solo practice . . . office.” She also denied any use of controlled substances and submitted negative drug tests. She did not comply with the section 820 order because she believed “[t]he mental evaluation demanded . . . was not medically correct . . . [or] necessary” in light of her “actual underlying circumstances.”

In January 2014, while represented by counsel, Goodrich accepted a Stipulated Settlement and Disciplinary Order (stipulated settlement) under which she agreed to immediate suspension of her medical license pending her completion of “a full psychiatric and medical examination . . . to determine whether she [was] impaired in her ability to practice medicine safely.” The stipulated settlement provided that if she was cleared to practice safely, her license would be reinstated.

On March 5, 2014, the Board adopted the stipulated settlement as its decision (Board decision), which became effective five days later. Goodrich subsequently completed an examination that “confirmed that she was never unsafe to practice medicine,” and her suspension ended on June 23, 2014. In a letter dated the following day, the Attorney General’s Office stated that based on “its review of the evaluation reports following the mental and neurological evaluations of Dr. Goodrich,” it had “advised the Board to close the matter for insufficient evidence and to lift the suspension.” Goodrich did not seek judicial review of the Board decision.

In January 2018, Goodrich initiated this lawsuit by filing a complaint alleging a cause of action for rescission of the stipulated settlement. She claimed that despite complying with the stipulated settlement and having her license reinstated, she was unable to practice medicine. Specifically, she alleged she could not “return to the position she held in Sacramento with a large obstetrics and gynecology group . . . because she was not able to reinstate required insurance contracts for provider reimbursement, and she was not able to obtain other employment as a physician . . . due to information that appears in the public records maintained by [the Board], and which has appeared continuously on [the Board’s] website except for a single brief two-month period in 2014.”

The Board demurred to the complaint, and in May 2018 the trial court sustained the demurrer after a hearing. The court held that the complaint effectively sought judicial review of the Board decision and was therefore time-barred. The court also concluded that public records related to the accusation and Board decision could not be lawfully expunged and that Goodrich’s suit against Sierra Vista collaterally estopped her argument to the extent Goodrich claimed that the accusation lacked substantial evidence. The court did, however, grant Goodrich leave to amend to bring claims for relief “that [did] not seek to challenge or vacate” the Board decision, based on her argument at the hearing that she wanted to enforce aspects of the stipulated settlement the Board allegedly breached.

The following month, in June 2018, Goodrich filed a first amended complaint. Several of her new allegations related to the accusation and the stipulated settlement, as well as the lawsuit against Sierra Vista. As to her contention that the Board had disseminated inaccurate information about her, she offered as an example that a particular insurance company was told she was “on probation” and therefore refused to accept her as a provider. In her prayer for relief, Goodrich sought a judgment ordering the Board “to post the legally and contractually required disclaimers and explanatory statements authorized by . . . section 803.1(d) on the public records stating that [she] is fully safe to practice medicine, and removal from the public record and nondisclosure of false statements regarding [her] health and withdrawal of [a] false report to the National Practitioner’s Data Bank that [she] is unsafe to practice medicine.” (Italics omitted.)

The Board demurred to the first amended complaint, and a hearing on the demurrer was held in August 2018. At the hearing, Goodrich clarified that in addition to a claim under section 803.1(d), she also alleged claims under section 805, subdivision (f), for failure to post exculpatory information she provided, and under section 828 for the Board’s dissemination of untruthful investigative reports, both on the website and directly to other parties.

The trial court sustained the demurrer, concluding that “[f]or the most part, the first amended [c]omplaint is a re-packaging of the legally insufficient and time-barred allegations alleged in the originally filed complaint.” It determined that the claim under section 803.1(d) was barred because (1) it still constituted an attack on the Board decision, and (2) the statute did not create a mandatory duty. The court also concluded that section 805 was inapplicable because it addresses hospital peer review, not Board proceedings. The court granted Goodrich leave to amend to allege facts supporting a claim under section 828 based on the improper disclosure of investigative records.

Goodrich filed a second amended complaint in September 2018, alleging a cause of action under section 828 to require the Board to destroy, remove from the public record, or withdraw various “licensing agency records” involving the fitness-for-duty proceedings and “false statements” about her purported mental illness and substance abuse. The Board demurred, and the trial court sustained the demurrer without leave to amend in February 2019. The court determined that the complaint did “not allege any facts showing any breach of confidentiality of the records contained within the . . . Board’s investigative files” and did not identify “which such records were supposedly disclosed or provided by the . . . Board, when, or, to whom.” The court also concluded that Goodrich had failed to meet her burden to show that she could amend the complaint to state a valid claim. Judgment in favor of the Board was entered in April 2019.

II.
DISCUSSION

A. The Board’s Motion to Dismiss the Appeal Is Denied.

Initially, the Board contends that we lack jurisdiction over this appeal, because Goodrich’s “only avenue for appellate review of the superior court judgment concerning a Board decision” is through a petition for an extraordinary writ, not a direct appeal. We are not persuaded.

Review of a superior court decision “revoking, suspending, or restricting a [medical] license” must be “pursuant to a petition for an extraordinary writ.” (§ 2337; Sela v. Medical Bd. of California (2015) 237 Cal.App.4th 221, 227–228 (Sela).) According to the Board, the judgment here qualifies as a decision “revoking, suspending, or restricting” Goodrich’s license, because her “complaints and amended complaints ask the court to rescind the Board’s decision suspending her license and to undo the various consequences that flowed from the decision.”

We agree that the Board decision itself cannot be reviewed except through a writ of administrative mandate in the trial court and, in turn, an extraordinary writ in this court. (Sela, supra, 237 Cal.App.4th at p. 228.) And as the trial court determined, the time for judicial review of the decision is long past, since in this context a petition for a writ of administrative mandate must be brought “within 30 days after the last day on which reconsideration can be ordered.” (Gov. Code, § 11523; see Vo v. Board of Medical Quality Assurance (1991) 235 Cal.App.3d 820, 824–825.) As we discuss further below, these circumstances prevent Goodrich from challenging the Board decision and thus significantly limit the relief she may seek in the instant lawsuit.

These circumstances also establish, however, that the trial court’s judgment is not an order “revoking, suspending, or restricting” Goodrich’s license. Since the Board decision suspending her license is final and can no longer be altered or undone by judicial review, the judgment dismissing her lawsuit does not affect the suspension of her license, whether by continuing it or otherwise. (See Sela, supra, 237 Cal.App.4th at pp. 229–230.) The fact that Goodrich’s complaints “relate to” the Board decision suspending her license is insufficient. Because we agree with the Board that Goodrich is barred from challenging the decision through this lawsuit, we must disagree with the Board that this court lacks jurisdiction to review the judgment, since the judgment does not affect the decision.

Finally, even if the Board were correct that Goodrich had to seek review of the judgment by filing a petition for an extraordinary writ in this court, we would exercise our discretion to treat the appeal as such a petition. (See Zabetian v. Medical Board (2000) 80 Cal.App.4th 462, 466 [appellate court has discretion to treat appeal as extraordinary writ petition in “unusual circumstances”]; see also Olson v. Cory (1983) 35 Cal.3d 390, 401 [unusual circumstances existed where resolution of appealability issue was “far from clear”].) As a result, we decline to dismiss the appeal.

B. The Trial Court Properly Dismissed Goodrich’s Claims.

Goodrich contends that the trial court erred by sustaining the demurrers as to (1) the rescission cause of action alleged in the original complaint; (2) the cause of action under section 803.1(d) alleged in the first amended complaint; and (3) the cause of action under section 828 alleged in the first and second amended complaints. She also contends that the court abused its discretion by ultimately not granting her leave to amend these claims. We reject these arguments.

The rules governing our review of the trial court’s orders are well settled. In reviewing an order sustaining a demurrer, “we examine the complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory,” without regard to how a claim for relief is titled. (Lee v. Hanley (2015) 61 Cal.4th 1225, 1230; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.) We also independently review any issues of statutory interpretation the order implicates. (California Apartment Assn. v. City of Fremont (2002) 97 Cal.App.4th 693, 699.) We accept as true “all material facts properly pleaded, but do not assume the truth of contentions, deductions[,] or conclusions of law.” (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.) In addition, we consider matters that may be judicially noticed, and a “ ‘ “complaint otherwise good on its face is subject to demurrer when facts judicially noticed render it defective.” ’ ” (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.)

When a demurrer is sustained without leave to amend, “we review the determination that no amendment could cure the defect in the complaint for an abuse of discretion. [Citation.] The trial court abuses its discretion if there is a reasonable possibility that the plaintiff could cure the defect by amendment. [Citation.] The plaintiff has the burden of proving that amendment would cure the legal defect, and may meet this burden on appeal.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1468.)
1. The rescission cause of action

Goodrich argues that the original complaint sufficiently alleged a cause of action for rescission of the stipulated settlement based on mistake, undue influence, and unconscionability. Respectively, she contends that (1) there was either a unilateral or mutual mistake of fact about the effects of the stipulated settlement, because “her ability to practice medicine (without reputational harm from online information) was a basic (and the primary) assumption as to the reason for entering [it]”; (2) “she signed the [stipulated settlement] under duress without truly consenting to its terms and effect”; and (3) the stipulated settlement was both procedurally unconscionable, in that its terms unduly favored the Board, and substantively unconscionable, in that it “essentially had the effect of her never practicing medicine again.”

“Subject to any applicable statutory framework and the public interest, generally administrative proceeding stipulations for settlement, just as civil proceeding settlements, are governed by contract principles. [Citation.] As other contracts, a stipulation for settlement may be rescinded if it was procured through fraud, duress, undue influence or mistake. (Civ. Code, § 1689, subd. (b)(1).)” (Stermer v. Board of Dental Examiners (2002) 95 Cal.App.4th 128, 133 (Stermer).) “Rescission extinguishes the contract (Civ. Code, § 1688), terminates further liability, and restores the parties to their former positions by requiring them to return whatever consideration they have received.” (Sharabianlou v. Karp (2010) 181 Cal.App.4th 1133, 1145; see Nmsbpcsldhb v. County of Fresno (2007) 152 Cal.App.4th 954, 959 [rescission retroactively terminates contract].)

The trial court sustained the Board’s demurrer to the rescission cause of action on the basis that the claim effectively sought to overturn the Board decision, which Goodrich never sought review of through a writ of administrative mandate and was long final. We agree with the court that rescission of the stipulated settlement is unavailable as a remedy because undoing it would necessarily undo the decision, which is no longer subject to judicial review. Thus, even if Goodrich otherwise stated a cause of action for rescission on one or more of the theories she articulates, the demurrer was properly sustained without leave to amend because she cannot now obtain rescission through a lawsuit against the Board.

Goodrich addresses the trial court’s rationale for dismissing the rescission claim only when she argues that dismissal of that claim with prejudice was an abuse of discretion. She claims “[t]he fact the [stipulated settlement] was incorporated into the [Board decision] should not serve as a bar to [her] ability to allege causes of action for rescission given [her] allegation the . . . Board included terms post-[s]ettlement related to her knowledge of the impact of the [s]ettlement and her purported waiver to address unsubstantiated allegations contained in the [s]ettlement.” The allegation she refers to is in an August 2015 letter from her to the Board, which is attached to the original complaint. In the letter, she contends that “[t]he signed settlement agreement was altered” because the version she signed did not include an acknowledgment or waiver of her rights.

This allegation does not support a cause of action for rescission based on fraud. Civil Code section 1689 authorizes rescission of contracts “obtained through fraud.” (Orozco v. WPV San Jose, LLC (2019) 36 Cal.App.5th 375, 402, italics added.) “ ‘ “ ‘In the usual case of fraud, where the promisor knows what he [or she] is signing but his [or her] consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.’ ” ’ ” (Id. at pp. 402–403.) The allegation that the Board added terms to the stipulated settlement after Goodrich signed it does not support the settlement’s rescission, because it does not call into question her consent at the time of signing or any other aspect of the validity of the contract she signed. Rather, if anything, this allegation supports a cause of action to reform the stipulated settlement to remove the terms she claims were fraudulently added. (See Civ. Code, § 3399; see also Tomas v. Vaughn (1944) 63 Cal.App.2d 188, 195 [reformation appropriate where party’s failure to familiarize self with contract’s terms is due to other party’s fraudulent representations that “the terms thereof are different from those actually contained in the instrument”].) But such reformation would not help Goodrich obtain the basic relief she seeks. We conclude the trial court properly dismissed the rescission cause of action without leave to amend.

2. The section 803.1(d) cause of action

Goodrich next contends that the trial court erred by dismissing her cause of action under section 803.1(d) without leave to amend. Again, we are not persuaded.

Section 803.1(d) can be split into two portions. First, the provision states that the Board “may formulate appropriate disclaimers or explanatory statements to be included with any information released, and may by regulation establish categories of information that need not be disclosed to an inquiring member of the public because that information is unreliable or not sufficiently related to the licensee’s professional practice.” Second, the provision states that the Board “shall include the following statement when disclosing information concerning a settlement:”

“Some studies have shown that there is no significant correlation between malpractice history and a licensee’s competence. At the same time, the State of California believes that consumers should have access to malpractice information. In these profiles, the State of California has given you information about both the malpractice settlement history for the licensee’s specialty and the licensee’s history of settlement payments only if in the last 10 years, the licensee, if in a low-risk specialty, has three or more settlements or the licensee, if in a high-risk specialty, has four or more settlements. The State of California has excluded some class action lawsuits because those cases are commonly related to systems issues such as product liability, rather than questions of individual professional competence and because they are brought on a class basis where the economic incentive for settlement is great. The State of California has placed payment amounts into three statistical categories: below average, average, and above average compared to others in the licensee’s specialty. To make the best health care decisions, you should view this information in perspective. You could miss an opportunity for high-quality care by selecting a licensee based solely on malpractice history.

“When considering malpractice data, please keep in mind:

“Malpractice histories tend to vary by specialty. Some specialties are more likely than others to be the subject of litigation. This report compares licensees only to the members of their specialty, not to all licensees, in order to make an individual licensee’s history more meaningful.

“This report reflects data only for settlements made on or after January 1, 2003. Moreover, it includes information concerning those settlements for a 10-year period only. Therefore, you should know that a licensee may have made settlements in the 10 years immediately preceding January 1, 2003, that are not included in this report. After January 1, 2013, for licensees practicing less than 10 years, the data covers their total years of practice. You should take into account the effective date of settlement disclosure as well as how long the licensee has been in practice when considering malpractice averages.

“The incident causing the malpractice claim may have happened years before a payment is finally made. Sometimes, it takes a long time for a malpractice lawsuit to settle. Some licensees work primarily with high-risk patients. These licensees may have malpractice settlement histories that are higher than average because they specialize in cases or patients who are at very high risk for problems.

“Settlement of a claim may occur for a variety of reasons that do not necessarily reflect negatively on the professional competence or conduct of the licensee. A payment in settlement of a medical malpractice action or claim should not be construed as creating a presumption that medical malpractice has occurred.

“You may wish to discuss information in this report and the general issue of malpractice with the licensee.”

The trial court concluded that Goodrich could not allege a claim under section 803.1(d) because the provision imposes only a discretionary duty on the Board. “The California Tort Claims Act provides that a public entity is not liable for injury arising from an act or omission except as provided by statute. [Citations.] Under Government Code section 815.6, . . . ‘a public entity is liable for an injury proximately caused by its failure to discharge a mandatory duty designed to protect against the risk of a particular kind of injury . . . .’ [Citations.] Whether a particular statute is intended to impose a mandatory duty, rather than a mere obligation to perform a discretionary function, is a question of statutory interpretation for the courts.” (Creason v. Department of Health Services (1998) 18 Cal.4th 623, 630–631.)

Goodrich makes no serious argument that the first portion of section 803.1(d), which provides that the Board “may” provide disclaimers when it releases information about a physician and “may” decide to exempt certain categories of information from disclosure, creates a mandatory duty. To the contrary, the use of the word “may” plainly authorizes, but does not require, the Board to provide or withhold certain information and therefore establishes only a discretionary duty.

Instead, Goodrich focuses on one sentence in the long statement that section 803.1(d) directs the Board to include when it discloses information concerning a settlement. This sentence states, “Settlement of a claim may occur for a variety of reasons that do not necessarily reflect negatively on the professional competence or conduct of the licensee.” (§ 803.1(d).) Although we will assume, without deciding, that the Board has a mandatory duty to provide the statement “when disclosing information concerning a settlement,” that duty is inapplicable here. As the full text of the statement makes clear, it applies only to the disclosure of information about settlement of a malpractice claim. It would make no sense to require the Board to include the full statement every time it disclosed information about stipulated settlements that, like the one here, do not involve malpractice.

This interpretation is confirmed by subdivision (b) of section 803.1, which is the only other portion of the statute that refers to “settlements.” (See Phelps v. Stostad (1997) 16 Cal.4th 23, 32 [statutory language must be construed in context and harmonized with other parts of statutory framework].) That subdivision requires that, in addition to providing information about its own enforcement actions, the Board disclose “settlements in [its] possession, custody, or control. . . . For the purposes of this paragraph, ‘settlement’ means a settlement of an action described in paragraph (1) entered into by the licensee on or after January 1, 2003, in an amount of thirty thousand dollars ($30,000) or more.” (§ 803.1, subd. (b)(2)(A).) In turn, paragraph (1) of the subdivision requires the disclosure of civil judgments and arbitration awards “of a claim or action for damages for death or personal injury caused by the licensee’s negligence, error, or omission in practice, or by rendering unauthorized professional services.” (§ 803.1, subd. (b)(1).) Settlements of malpractice claims are the only “settlements” the Board need disclose, separate and apart from its enforcement actions, under subdivision (b) of the statute. Thus, it makes no sense to interpret subdivision (d), which requires an explanatory statement upon disclosure of a “settlement,” to require such a statement in connection with disclosure of a broader array of “settlements” than those defined in subdivision (b). In short, the Board has no mandatory duty under section 803.1(d) that is implicated here.

Goodrich also cursorily asserts that the trial court abused its discretion by not giving her leave to amend “to allege facts related to the . . . Board’s mandatory duty pursuant to [s]ection 803.1[, subdivisions ](b)(6) and (d).” She does not identify what those facts might be, and she does not provide any argument or authority to support the notion that she can allege a claim under section 803.1, subdivision (b)(6), which requires the disclosure of information about hospital disciplinary actions. As a result, she fails to demonstrate any abuse of discretion.

3. The section 828 cause of action

Finally, Goodrich claims that the trial court erred by dismissing her section 828 claim without leave to amend. We disagree.

Section 828 provides that if the Board “determines, pursuant to proceedings conducted under Section 820 [relating to physical or mental competence to practice], that there is insufficient evidence to bring an action against the licentiate pursuant to Section 822 [to impose discipline], then all licensing agency records of the proceedings, including the order for the examination, investigative reports, if any, and the report of the physicians and surgeons or psychologists, shall be kept confidential and are not subject to discovery or subpoena. If no further proceedings are conducted to determine the licentiate[’]s fitness to practice during a period of five years from the date of the determination by the licensing agency of the proceeding pursuant to Section 820, then the licensing agency shall purge and destroy all records pertaining to the proceedings.”

Goodrich first alleged a cause of action under section 828 in the first amended complaint. At the hearing on the demurrer to that complaint, she specifically claimed the Board violated the statute by “not excluding licensing agency records from the materials that are made available to others.” The trial court concluded the complaint did not allege sufficient facts to support the claim but granted leave to amend, directing her to “identify what records were required to be excluded” from disclosure outside the Board but were not. Subsequently, the court dismissed with prejudice the section 828 count realleged in the second amended complaint because it did not identify which records “were improperly disclosed to third parties, and to whom, and when.”

On appeal, Goodrich does not claim that she has sufficiently alleged such facts or could do so if she had another opportunity to amend. Rather, she contends there was another aspect of the section 828 claim that should not have been dismissed at all: that the Board should not have posted “certain information on its website,” namely the accusation, the stipulated settlement, and the Board decision. She argues that if given leave to amend, she would “specifically identify the [a]ccusation, [stipulated s]ettlement, and [Board d]ecision as the documents the . . . Board should have purged and destroyed” under section 828.

The problem for Goodrich is the trial court’s holding in dismissing the original complaint that “[t]he public records regarding the . . . accusation and the subsequent order cannot be expunged because the . . . Board is required to public[ly] disclose such information by law.” (Citing §§ 803.1, subd. (a)(3), 2027, subd. (b)(2); Cal. Code Regs., tit. 16, § 1354.5, subd. (b).) Goodrich makes no attempt to explain why this ruling was erroneous, and she has therefore forfeited any challenge to it. (See Ivanoff v. Bank of America, N.A. (2017) 9 Cal.App.5th 719, 729, fn. 1.) Thus, she fails to demonstrate the court erred by dismissing the section 828 claim.

III.
DISPOSITION

The judgment is affirmed.

 

_________________________

Humes, P.J.

WE CONCUR:

_________________________

Margulies, J.

_________________________

Sanchez, J.

Goodrich v. Medical Board of California A157191