Mental Health America of LA v.
AstraZeneca Pharmaceuticals
Filed 2/13/13
Mental Health America of LA v. AstraZeneca Pharmaceuticals CA2/7
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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
SECOND
APPELLATE DISTRICT
DIVISION
SEVEN
MENTAL HEALTH AMERICA OF LOS
ANGELES,
Cross-Complainant and Appellant,
v.
ASTRAZENECA PHARMACEUTICALS LP,
Cross-Defendant and Respondent.
B237803
(Los Angeles County
Super. Ct. No. YC060489)
APPEAL
from a judgment of the Superior Court of
County. Cary Nishimoto, Judge. Reversed.
Harrington, Foxx, Dubrow
& Canter, Edward R. Leonard, Edward W. Lukas Jr., John D. Tullis and Daniel
Kenney for Cross-Complainant and Appellant.
Kaye Scholer, Aton
Arbisser and Joshua Stambaugh for Cross-Defendant and Respondent.
___________________________________
INTRODUCTION
This appeal
had its inception in a wrongful death and
survival action brought by plaintiffs, William Schultz and Carol Schultz,
as a result of the death of their son.
The action was filed against the following defendants: Dr. Michael Schwartz, Avis Rent-A-Car and
numerous fictitious defendants, namely Does 1-60. Dr. Schwartz and Avis Rent-A-Car settled with
the plaintiffs and their Motion for Good Faith Settlement was approved by the
trial court on January 25, 2011. The
death of plaintiffs’ son occurred when Dr. Schwartz was driving to the airport
in Los Angeles in a rented vehicle to go to Phoenix, Arizona to give a lecture
to the staffs of mental health clinics in the Arizona counties of Maricopa and
Pinal. Appellant, Mental Health America
of Los Angeles (“MHAâ€), was brought into plaintiffs’ action as Doe No. 11 on
April 1, 2010, on the grounds that Dr. Schwartz was allegedly acting as an
employee of MHA at the time of the accident thereby making MHA responsible to
plaintiffs on the theory of respondeat
superior. MHA contends there was no
employment relationship with Dr. Schwartz at the time of the accident and he
was being paid by an entity known as AstraZeneca (“AstraZenecaâ€) which gave
rise to a legitimate claim for indemnity, contribution and declaratory relief
by MHA, which it raised by way of cross-complaint against AstraZeneca. The trial court found no duty was stated in
the cross-complaint and sustained the demurrer of cross-defendant AstraZeneca
without leave to amend, giving rise to this appeal by MHA. For the reasons hereafter stated we reverse
the judgment of the trial court.
FACTUAL AND PROCEDURAL BACKGROUND
between MHA and Dr. Schwartz.
MHA is a
private, nonprofit organization serving the communities of Los Angeles County
in helping people with mental illnesses reach their potential in the
community. MHA utilizes a service plan
known as the “Village Model.†Dr.
Schwartz entered into a contract with MHA on January 21, 2009, as an
independent contractor, to provide psychiatric services 3-4 days per week at
his discretion. He was paid by the hour
to serve as a psychiatrist for MHA. All
of Dr. Schwartz’ work as a psychiatrist occurred at the Long Beach, California
facility operated by MHA, or at the home of his patients in the Long Beach
area.
Dr.
Schwartz informed MHA that he would not be available to work on the day of the
subject accident and was not scheduled for work by MHA on that day. Although MHA has a business relationship with
an organization known as Magellan of Arizona, a mental health facility located
in Maricopa County, Arizona that provides mental health services for Maricopa
County, MHA has never paid Dr. Schwartz to speak on behalf of the MHA Village
Model of care to outside groups. Dr.
Schwartz has no involvement with MHA’s business relationship with Maricopa
County. Only specific MHA employees were
involved with MHA’s work with Magellan, and Dr. Schwartz never performed any
work on behalf of MHA with Magellan. MHA
never instructed, nor requested, that Dr. Schwartz speak with any mental health
clinic staff in Arizona, both Maricopa County and Pinal County, inclusive.
between AstraZeneca and Dr. Schwartz.
Dr.
Schwartz had a contract in 2009 with AstraZeneca, a pharmaceutical company, to
appear as a guest speaker to discuss AstraZeneca’s products with interested
physicians and nurses. In 2009, a sales
representative for AstraZeneca, Kathleen Carson, organized a guest speaker
program with the Pinal Hispanic Council in Arizona, a non-profit mental health
agency located in Pinal County, Arizona, to discuss AstraZeneca’s product,
Seroquel XR. Judith Yurgel,
representative of the Pinal Hispanic Council, agreed to the presentation and
requested a guest speaker who could also answer questions regarding the
“Village Model†of psychiatric services.
AstraZeneca contacted Dr. Schwartz, who agreed to be paid by AstraZeneca
to travel to Arizona, and give a one hour lecture on the drug Seroquel XR,
followed by questions and answers regarding the drug and the Village Model of
care. MHA did not consent to the
AstraZeneca lecture by Dr. Schwartz before the Pinal Hispanic Council. MHA was not a party to the contracts between
AstraZeneca and Dr. Schwartz, or the Pinal Hispanic Council. The lecture was scheduled for April 23,
2009. Dr. Schwartz notified MHA in
advance of this date that he would not be providing any of his contract services
to MHA on April 23, 2009.
April 23, 2009 Accident.
On April 23, 2009,
at the time immediately preceding the accident, Dr. Schwartz was driving to the
airport in Los Angeles in order to travel to Phoenix, Arizona, pursuant to his
contract with AstraZeneca, as a guest lecturer before the Pinal Hispanic
Council on that day. Dr. Schwartz was
not going to Arizona at the request of MHA, and was not working nor conducting
any business for or on behalf of MHA on the day of the accident. MHA did not pay for Dr. Schwartz to travel to
Arizona and did not pay for the rental car Dr. Schwartz was driving at the time
of the accident. Both of these expenses
were paid by AstraZeneca. MHA did not
sanction, approve, ratify or condone Dr. Schwartz’s trip to Arizona. All of Dr. Schwartz’s activities were under
the auspices of AstraZeneca. The only
activity Dr. Schwartz had scheduled for April 23, 2009, was to speak before the
Pinal Hispanic Council, pursuant to his contract with AstraZeneca.
Los
County Superior Court
As previously indicated,
plaintiffs filed their complaint in the Los Angeles County Superior Court as a
wrongful death and survivor action, as a result of the death of their son who
was struck by the car driven by Dr. Michael Schwartz which was rented from
Avis-Rent-a-Car. In addition to Dr.
Schwartz and Avis-Rent-A-Car being named as defendants, plaintiffs named
numerous fictitious defendants as Does 1-60.
Ultimately, Dr. Schwartz and Avis settled with plaintiffs and a good
faith settlement was approved by the trial court on January 25, 2011. MHA was brought into plaintiffs’ action as
fictitious defendant Doe No. 11, on April 1, 2010.
by MHA.
MHA filed a cross-complaint
against AstraZeneca dated July 14, 2011, alleging, among other things, that MHA
was entitled to indemnity, contribution, and declaratory relief against
AstraZeneca and numerous fictitious cross-defendants sued as Roes 1-50.
AstraZeneca
responded by serving a notice of appearance and demurrer to the
cross-complaint, both dated July 12, 2011.
The demurrer was heard on August 3, 2011, and following briefing by the
parties, the court sustained AstraZeneca’s demurrer and gave MHA 20 days leave
to amend. The basis for the trial
court’s ruling was that MHA had failed to allege facts to demonstrate a legal
duty of care or contractual obligation from cross-defendant, AstraZeneca, to
cross-complainant MHA and MHA had failed to identify and name the causes of
action in the body of the cross-complaint.
Amended Cross-Complaint.
On August 23, 2011, MHA filed its
First Amended Cross-Complaint (hereafter “FACCâ€) alleging causes of action
against AstraZeneca for indemnity, contribution, and declaratory relief, as
well as additional facts related to the hiring of Dr. Schwartz by AstraZeneca
to discuss the Village Model for the benefit of AstraZeneca.
On September 6, 2011, AstraZeneca
again demurred to the FACC of MHA.
Decision on AstraZeneca’s
demurrer to the FACC.
After briefing on the matter, the
trial court on October 4, 2011, sustained the demurrer of cross-defendant,
AstraZeneca, to MHA’s FACC without leave to amend. The basis for the court’s ruling was that MHA
had failed to allege facts to demonstrate a legal duty of care or contractual
obligation from AstraZeneca to MHA.
MHA filed a timely notice of appeal
contending that the court committed reversible error in sustaining the demurrer
without leave to amend.
APPELLATE CONTENTIONS
MHA contends, stated in capsule
format at this point, that the FACC was sufficient to allege that AstraZeneca
owed a duty of care to MHA and the trial court committed reversible error in
ruling AstraZeneca’s demurrer was sustained without leave to amend. MHA maintains that AstraZeneca’s failure to
notify MHA that it was providing Dr. Schwartz as a speaker and failure to
obtain MHA’s consent had the consequences of reasonably leading plaintiffs to
believe and assume that MHA should be included in its lawsuit as a Doe
defendant third party.
AstraZeneca contends that the duty
urged by MHA is unprecedented in its scope and would fundamentally change everyday
legal relations, alter the entire nature of respondeat superior liability, and
impose enormous burdens on any third party who might ask a particular employee
to visit a premises or any other location.
Accordingly, asserts AstraZeneca, the trial court committed no error and
the judgment should be affirmed.
STANDARD OF REVIEW
The standard of review on appeal
pertaining to the sustaining of a demurrer in the trial court is well
established. We set forth the principles
involved with brevity hereafter. On
appeal from an order dismissing an action after the sustaining of a demurrer
this court is required to independently review the pleading (hereafter the
FACC) and make a determination whether the facts alleged state a cause of
action under any possible legal theory.
(See McCall v. PacifiCare of Cal.,
Inc . (2001) 25 Cal.4th 412, 415.)
Additionally, this court is required to construe the complaint liberally
to determine whether, assuming the facts pleaded as true, a cause of action has
been stated. (Wallis v. Superior Court (1984) 160 Cal.App.3d 1109, 1115.) If we determine the facts pleaded will
support grounds on any legal theory of recovery, it is immaterial that the
pleader may have misconceived the theory or the appropriate cause of
action. (Gomez v. Volkswagen of America, Inc. (1985) 169 Cal.App.3d 921,
925.) Parties are entitled to any relief
warranted by the facts pleaded and a failure to ask for the proper relief will
not be deemed fatal. (
Cal.App.3d 624, 628.) Finally, in
conducting our review of the pleading, we give the complaint a reasonable
interpretation by reading it as a whole and its various parts in context. (Blank
v. Kirwan (1985) 39 Cal.3d 311, 318.)
DISCUSSION
We initially note that the arguments
of counsel for both parties to this appeal engage in an extensive discussion of
two California Supreme Court decisions in urging this court to resolve the
appeal in their respective favor. The
California decisions referred to are J’Aire
Corp. v. Gregory (1979) 24 Cal.3d 799 and Christensen v. Superior Court (1991) 54 Cal.3d 868. In analyzing the positions of counsel for the
respective parties it is necessary to observe that the issue of
high court requires this court to perform an analysis of what the FACC contains
with respect to the issue of duty. Our
analysis thus begins with the allegations contained in the FACC. We further note that AstraZeneca takes
umbrage with MHA’s use of facts collateral to the actual wording contained in
the FACC. AstraZeneca objects to use of
facts contained in documentation filed in conjunction with a summary judgment
motion by MHA against plaintiffs in its capacity as a defendant in that action. AstraZeneca’s objection is noted and appears
to be well taken. We confine our
analysis on the basis of what is stated in the FACC in accordance with the
authorities set forth in our discussion of the “standard of review,â€
Allegations in the FACC
pertaining to “duty.â€
MHA has pled the following facts
which are accurately summarized in AstraZeneca’s respondent’s brief on appeal
and quoted below. The heart of the
allegations are taken from paragraph 6 of the FACC, which is utilized to
support all causes of action in the FACC, through the device of incorporation
by reference. We have, however, taken
the liberty of inserting editorial additions for clarity.
“[AstraZeneca] is liable to the
[MHA] because [AstraZeneca] hired MICHAEL SCHWARTZ to give a lecture on both
[AstraZeneca]’s products and the [MHA]’s method of services, referred to as the
‘Village Model,’ to the Pinal Hispanic Council for the sole profit of
[AstraZeneca], and under the sole authority of [AstraZeneca], and in doing so,
[MHA] has been sued by Plaintiffs, and has suffered potential liability as a
result of [AstraZeneca]’s actions. . . .
“Plaintiffs’ suit against [MHA] is
based upon the belief that the [MHA] profited from [AstraZeneca]’s actions; the
belief that [MHA] benefited from [AstraZeneca’s] actions; the belief that the
[MHA] condoned, authorized, and/or consented to [AstraZeneca’s] actions; and
the belief that the [MHA] formed a business relationship with the Pinal
Hispanic Council solely on the basis of [AstraZeneca]’s actions.
. . .
“In hiring MICHAEL SCHWARTZ to
discuss the ‘Village Model, [AstraZeneca] lead [sic]
. . . others, including plaintiffs, to believe that [MHA]
condoned, authorized, and/or consented to MICHAEL SCHWARTZ discussing the
‘Village Model’ to the Pinal Hispanic Council. . . .
“In reality, [MHA] did not condone,
authorize, nor consent to MICHAEL SCHWARTZ discussing the ‘Village Model’ with
the Pinal Hispanic Council. . . .
“Throughout the first three causes
of action in the FACC, MHA repeatedly alleges that if MHA is found liable under
the allegations in Plaintiff’s Complaint, then the ‘negligent conduct of
[AstraZeneca] . . . proximately contributed to the damage as
alleged and described in the above-described Complaint.’
. . . (‘If it be found that this [MHA] was negligent under the
allegations contained in plaintiff’s Complaint . . . then
. . . the negligent conduct of [AstraZeneca], and each of them,
was active, primary, and affirmative . . . .’).) All three purported ‘causes of action’ allege
the same unspecified ‘negligent’ conduct, and the only difference between them
is in the remedy sought: indemnity, costs of defending the underlying
complaint, and contribution. . . .
“The Fourth Cause of Action seeks
declaratory relief regarding both MHA’s and AstraZeneca’s respective liability
in the case based entirely upon a comparative negligence theory. (See
[FACC] (‘The amount of negligence of [AstraZeneca] . . . which
contributed to plaintiffs’ damages, if any, should be declared
. . . . [AstraZeneca]
. . . [is] liable to cross-complainant on a comparative
negligence basis.’)[.]) The Fourth Cause
of Action relies exclusively upon the facts and legal theories set forth in the
first three causes of action set forth above.â€
The requirements set forth in J’Aire
Corp.
AstraZeneca contends that the
application to the facts involved in this appeal. AstraZeneca, however, contends that even if
failed to follow the dictates of J’Aire as
set forth in the six factors listed by our high court requiring
consideration. MHA, on the other hand,
is adamant that J‘Aire is applicable
as a practical and general matter and that MHA has fully complied with the six
factors set forth therein to be applied in cases like the present one under
scrutiny. We agree that the general
principles set forth in J’Aire are
applicable in this case.
With these preliminary thoughts in
mind, we proceed to determine whether the FACC contains allegations that
satisfy the six factors prescribed by our Supreme Court. In discussing and quoting from
described as pertaining to “plaintiffs and defendants†but we understand that
such references are equally applicable to “cross-complainants and
cross-defendants†as in this case. Our
Supreme Court has stated in J’Aire:
“[l]iability for negligent conduct may only be imposed where there is a duty of
care owed by the defendant to the plaintiff or to a class of which the
plaintiff is a member. [Citation.] . . . [A] duty of care may be
premised upon the general character of the activity in which the defendant
engaged, the relationship between the parties or even the interdependent nature
of human society. [Citation.] Whether a duty is owed is simply a shorthand
way of phrasing what is ‘“the essential question – whether the plaintiff’s
interests are entitled to legal protection against the defendant’s
conduct.’†[Citation].†(J’Aire
Corp. v. Gregory, supra, 24 Cal.3d at p. 803.)
To be more specific as to the
requirements set forth by the Supreme Court in J’Aire, six factors are to be considered as follows: (1) the extent
to which the transaction was intended to affect the plaintiff, (2) the
foreseeability of harm to the plaintiff, (3) the degree of certainty that the
plaintiff suffered injury, (4) the closeness of the connection between the
defendant’s conduct and the injury suffered, (5) the moral blame attached to
the defendant’s conduct and (6) the policy of preventing future harm. We now examine the FACC in light of the six factors
set forth in J’Aire.
(1)
The
extent to which the transaction was intended to affect MHA.
building which were affected by the contractor’s deficiencies in finishing
renovations. In J’Aire, our high court held that the tenants had standing to sue as
third parties regardless of the fact they were not parties to the contract
between the contractor and the property owner in view of their strategic position
in the disputed property as tenants.
MHA contends the reasoning of the
trial court was wrong when it stated: “[w]hile certainly Schwartz’s involvement
in the Village Model may have arisen during Schwartz’s lecture, it is certainly
more likely that a major pharmaceutical company such as cross-defendant would
hire Schwartz to speak primarily regarding its products. In any event, while it is possible that
Schwartz’s lecture would affect cross-complainant, whether the intent of the
lecture was to affect cross-complainant is unlikely.â€
MHA
maintains the court’s language evidences that it was weighing the fact itself,
which is improper, instead of simply determining whether this factor was
satisfied by allegations contained in its cross-complaint just as required by
AstraZeneca,
on the other hand, counters by opining that MHA has failed to include any
allegations in its FACC pertaining to any intent on the part of AstraZeneca
that it intended to affect MHA by its conduct.
Instead of pointing to any allegations in the FACC, AstraZeneca contends
MHA manufactures facts in support of this factor. We agree with AstraZeneca that the
cross-complaint is void of any facts which would support the first factor of
intentional conduct on the part of AstraZeneca to affect MHA and we so hold.
(2)
The forseeability of harm to MHA.
The second
factor listed by our Supreme Court in J’Aire
pertains to the question of the foreseeability of the harm to MHA. The Supreme Court noted that if the
defendant’s actions were intentional, then it naturally followed that the harm
was foreseeable. MHA additionally
contends it should be noted that “[t]o the extent that the existence of a duty
of care turns on conflicting evidence as to the reasonable foreseeability of
injury, the question may be one for the jury,†citing Raymond v. Paradise Unified School Dist. (1963) 218 Cal.App.2d 1 as
authority. MHA maintains the trial
court’s responsibility was not to decide the weight to be given on the issue of
foreseeability but rather to determine whether the facts were sufficiently pled
in the FACC. At the pleading stage, says
MHA, the trial court erred by making a determination as to foreseeability,
which, under J’Aire should either
flow from the fact that the act was intentional, or left to the jury at trial
as a question of fact.
MHA
concludes its comments on the second factor by stating it is undoubtedly
foreseeable that should a company hold an event and promise to both discuss the
company’s products and a third party’s service or product, that others would
believe that the third party was involved in a meaningful way with the
event. Again, MHA emphasizes AstraZeneca
purposefully sought out a speaker who could answer questions about the “Village
Model†to speak to the Pinal Hispanic Council as a part of AstraZeneca’s sales
pitch for its product Seroquel. It was
foreseeable that MHA could be affected by such actions and plaintiffs could
have reasonably presumed that MHA was involved and therefore liable for the
torts of MHA’s alleged employee, Dr. Schwartz.
MHA is emphatic in suggesting that there is no question that the
underlying lawsuit here is direct evidence that MHA could have and did suffer
harm because of AstraZeneca’s conduct.
If AstraZeneca had not requested that Dr. Schwartz come to Arizona then
Dr. Schwartz would not have been traveling to the airport at the time of the
subject accident, which means there would have been no accident and no lawsuit.
AstraZeneca
initially addresses the second factor by requesting this court to focus on the
actual allegations contained in the FACC.
AstraZeneca urges this court to observe that the FACC does not even
employ the word “foreseeable†or otherwise address forseeability as to MHA’s
allegation of alleged harm. AstraZeneca
urges it is simply not reasonably foreseeable that (1) Dr. Schwartz would not
tell MHA, his existing colleagues and operators of the “Village†that he was
going to promote their mental health practices; (2) MHA would have prohibited
Dr. Schwartz from attending the presentation if he did tell them; and (3) Dr.
Schwartz would get into a fatal accident on the way to the airport.
Moreover,
asserts AstraZeneca, it could not have been expected to anticipate that Dr.
Schwartz would be deemed an employee of MHA who was acting in the course and
scope of his employment when he had the accident. AstraZeneca further observes that MHA has
always maintained that this was not the case. Now, contends AstraZeneca, this
determination will never be made because MHA has settled the underlying claim
against it. Relying on
Cal.App.4th 89, 104-105, AstraZeneca opines that “when there is no room for a
reasonable difference of opinion [foreseeability] may be decided as a matter of
law.â€
This court
concludes that as to the second factor under J’Aire, the FACC does not
contain sufficient allegations of reasonable foreseeability of harm to MHA by
AstraZeneca’s actions, and we so hold.
(3)
The
degree of certainty that MHA suffered injury.
As relevant
to the third factor, the trial court noted that “[s]ince the gravamen of
[MHA’s] action is based on indemnity, this factor is not applicable
presently.†The trial court seemed to be
of the view that if MHA was not found liable on the underlying complaint
through respondeat superior, it would
not be injured in the manner alleged in the complaint, and MHA would have no
basis to seek indemnity or contribution from AstraZeneca. In other words, MHA has alleged that it only
faces potential liability in the underlying plaintiff’s action. In its cross-complaint, MHA complains that
“If cross-complainant is found to be responsible in any way under allegations
contained in plaintiff’s Complaint . . . then this cross-complainant is
informed and believes . . . that the conduct of [AstraZeneca] . . . proximately
contributed to the damage. . . .â€
This court
observes, as did the trial court, that MHA has now settled the underlying claim
against it by plaintiffs. Consequently,
it appears to this court that MHA has incurred an obligation to plaintiffs for
which it can claim contribution from AstraZeneca.
MHA has
also alleged in the FACC an alternative approach to liability and damages,
namely, that in view of the fact that it has already been sued, it has already
been damaged thereby giving rise to an entitlement to implied indemnity as well
as reasonable attorney’s fees and court costs in defending the underlying
action. AstraZeneca maintains, however,
that in a claim for implied indemnity an indemnitee can only recover attorney’s
fees against the indemnitor if the indemnitor was properly notified of the
demand to . . . provide a defense and did not avail itself of the opportunity
to do so and the trier of fact determined that the indemnitee was without fault
in the principal case which is the basis for the action in indemnity or that
the indemnittee had a final judgment entered in his or her favor granting a
summary judgment, a nonsuit, or a directed verdict. In stating this proposition AstraZeneca
relies on Code of Civil Procedure section 1021.6, subdivisions (b), and
(c). AstraZeneca asserts that neither of
these events has occurred, and therefore there is no basis for MHA to claim
that it has already been injured.
MHA
counters by relying on Code of Civil Procedure section 428.10 permitting any
defendant to join another alleged tortfeasor by cross-complaint seeking total
or partial indemnity without a requirement that the party seeking indemnity
must first pay any alleged damages owed beforehand. All that is required to defeat a special
demurrer, contends MHA, is that the essential facts of its case be pled with
reasonable precision and with particularity sufficiently specific to acquaint
defendant of the nature, source, and extent of the cause of action, relying on
Cal.App.2d 636, 643-644.
This court
finds that MHA properly relied on Code of Civil Procedure section 428.10 in
seeking indemnity from AstraZeneca and we so hold.
(4)
The closeness of the connection between the defendant’s conduct and the
injury suffered.
MHA
reiterates its contention that the trial court was engaged in an improper
determination of fact in its ruling involving the fourth factor. The language which MHA finds erroneous is
stated by the trial court as follows: “[t]here is minimal or no connection
between [cross-defendant’s] conduct and the injury suffered. There is minimal or no connection between any
injury suffered by cross-complainant or plaintiff and cross-defendant’s
conduct. Cross-def [sic] simply hired
Schwartz to speak. The fact that
Schwartz was involved in an auto accident on his way to the airport does not
reveal any close connection between the conduct of cross-def [sic] and the
injury.†MHA concludes by contending the
trial court exceeded its authority by making a determination that closeness did
not exist. Further, contends MHA, such a
determination by the court undercut its right to have fault allocated in
accordance with comparative fault established by the California Supreme Court
in American Motorcycle Assn. v. Superior
Court (1978) 20 Cal.3d 578 and as codified in Civil Code
AstraZeneca
counters by asserting that MHA is merely resting its case upon principles of
but-for causation. AstraZeneca maintains
MHA should instead be focusing on the actual correlation between AstraZeneca’s
conduct and MHA’s injury, and its claims that AstraZeneca is solely responsible
for MHA being brought into plaintiffs’ lawsuit because it hired Dr. Schwartz to
speak concerning the “Village Model†and faces potential liability. AstraZeneca repeats that this is merely a
but-for causation argument and does not satisfy the principles of
duty of care should be created in this case.
We are
persuaded that the contention advanced by MHA complaining that the trial court
engaged in an improper fact finding analysis when considering the fourth factor
under J’Aire has merit. However, the connection between AstraZeneca’s
conduct and MHA’s alleged harm can only be described as strained at best
militating against a favorable finding involving factor No. 4 and we so hold.
Moral blame attached to AstraZeneca’s conduct.
MHA’s argument is duplicative of
its contentions as stated pertaining to factor No. 4 of J’Aire, namely, the trial court exceeded its authority by
evaluating facts as to whether something is or is not likely, instead of
determining whether minimal pleading requirements were contained in the
FCAA. MHA contends that factor No. 5 was
satisfied by virtue of AstraZeneca’s dealing with the Pinal Hispanic Council in
setting up the guest lecture with Dr. Schwartz.
MHA asserts that in reality the guest lecture on Seroquel was a ruse to
provide a speaker who could also discuss the “Village Model.†Thus, urges MHA, AstraZeneca was seeking to
sell its products, regardless of any detriment to others, including MHA. The fact that AstraZeneca sought to grow its
brand by using another’s name, without permission, should not be tolerated and
is blameworthy.
AstraZeneca counters with the argument
that there are no allegations in the FACC that reference, either directly or
indirectly, an element of moral blameworthiness. The FACC merely states that AstraZeneca hired
Dr. Schwartz to speak as a guest lecturer, and MHA only observes and speculates
that AstraZeneca’s purpose behind its guest lectures is to sell its products to
prospective customers. However, argues
AstraZeneca, a statement that a company was interested in operating its
business is insufficient to create a duty owed to MHA under the circumstances
of this case. AstraZeneca argues further
that MHA is once again fabricating certain facts in support of its argument on
the fifth factor including the fact that Dr. Schwartz’s was hired on the grounds
that AstraZeneca would also provide a speaker who could discuss the Village
Model. AstraZeneca opines that there is
no such allegation in the FACC.
AstraZeneca urges that the trial court correctly found that any moral
blame in this situation is negligible or nonexistent. AstraZeneca urges, and we agree, that the
trial court correctly found that any moral blame in this situation is
negligible or nonexistent and we so hold.
The sixth and final factor pertains to prevention of future harm.
MHA is
critical of the trial court’s holding that “[a]ttaching a duty of care to
cross-defendant under these facts would not prevent any future incident
considering the lack of foreseeability.
Rather, it would open up potential liability to other companies who simply
wishes [sic] to have an individual speak on behalf of their company.†MHA
contends that the holding of the court on this factor constitutes an
oversimplification of the facts. MHA
reasons as follows: the presentation of Dr. Schwartz was not simply about the
drug Seroquel but was also connected with MHA’s “Village Modelâ€; AstraZeneca
sought to sell its products by using another company’s proprietary service
method to its advantage; had the lecture gone forward and false information
about the Village Model been shared, MHA would have a cause of action for
misrepresentation against AstraZeneca because its agents acted deliberately in
providing a guest speaker to discuss both Seroquel and the Village Model; as
such, the state has a strong policy in preventing this type of harm from
occurring to others; if companies who stand to benefit from use of a
third-party’s name, product, or service at an event are required to obtain
permission from that third-party, or at least disclaim the third-party’s
association with the event and involved companies, the situation present here
can be avoided; clearly this is not too much to ask and a policy requiring such
action would be in line with California’s Unfair Competition Law as found in
Civil Code section 17200 et seq.
AstraZeneca’s
counter argument is brief and can be stated as follows: if MHA is found liable
in the underlying action then the trier of fact will have made a determination
that MHA is an employer and must account for the actions of an employee acting
in the course and scope of employment.
Thus, the harm to MHA will have already been determined without regard
to AstraZeneca’s actions with the consequences that in such cases an untenable
burden would be placed on third parties to constantly and vigilantly inquire as
to the nature of each and every representative’s employment relationship and
will do nothing to abate this harm.
We are
persuaded that an untenable burden would indeed be placed on third parties as
contended by AstraZeneca. We find the
argument by MHA on the 6th factor under J’Aire
to be unpersuasive and we so hold.
We find
that only factor No. 3 pertaining to the degree of certainty that MHA suffered
injury has been demonstrated. With only
one of the six factors under J’Aire
having been established, we find no grounds to find a legal duty by AstraZeneca
to MHA and we so hold.
and impact of Christensen v. Superior Court on the duty issue.
As previously
indicated in this opinion, we find that MHA has not alleged sufficient facts in
the FACC to comply with the standards set forth by our high court in
Relying on our high court’s decision in Christensen v. Superior Court, supra, 54 Cal.3d 868, MHA does
appear to be adopting a fallback position in stating: “To the degree that this
Court finds that the first factor described in J’Aire, supra (i.e., the
extent to which the transaction was intended to affect the plaintiff), or other
described criteria, was not properly pleaded in MHA’s Cross-Complaint, other
California case law establishes that the test is a factors test, and that it is
not all inclusive. (See Christensen v. Superior Court, (1991) 54 Cal.3d 868, 885-886.)†MHA invites this court to make a comparison
of J’Aire with Christensen and come to a conclusion that Christensen in effect adds an additional factor, namely, the extent
of the burden to the defendant and consequences to the community of imposing a
duty to exercise care with resulting liability for breach, and the
availability, cost, and prevalence of insurance for the risk involved. MHA contends that its reasoning leads to the
conclusion that the burden on a defendant to request permission to use another
company’s proprietary information, or at least provide a disclaimer that the
other company is in no way involved is minimal.
MHA argues further that the community would benefit greatly from open
communication between companies with regard to the use of each other’s
proprietary information. It is unclear
how requiring parties to request permission or issue a disclaimer could be
detrimental.
AstraZeneca
counters by maintaining that the high court in Christiansen, contrary to MHA’s contentions, did indeed apply the
conclusions and the Christensen
decision serves to bolster the position taken by AstraZeneca in these proceedings. AstraZeneca reiterates the facts in
brought by relatives and representatives of decedents against mortuaries,
crematoria, and a biology supply company for mistreatment of the decedents’
remains, removing valuables from the decedents, commingling ashes with other
remains, and selling body parts to the biological supply company. In reviewing the question of which plaintiffs
had standing to sue, the Supreme Court ruled that the defendants owed a duty to
those close family members who were aware that funeral and/or crematory
services were being performed, and on whose behalf or for whose benefit the
services were rendered. The court held
that “Defendants here assumed a duty to the close relatives of the decedents
for whose benefit they were to provide funeral and/or related services.â€
AstraZeneca
maintains that the Christiansen court
did not engage in a lengthy discussion of the first factor, as it did with
other factors, but the decision explicitly cites to all of the
our high court’s decision. Thus, says
AstraZeneca, there is no reason for this court to ignore the utter lack of
intent on behalf of AstraZeneca to affect MHA under the circumstances in this
case. AstraZeneca concludes that the
principles in J’Aire that in order
for a duty to be owed, there must be a special relationship between parties and
the relationship between the mortuaries and the decedent’s relatives is a far
cry from the attenuated and legally insignificant relationship between two
unrelated entities such as AstraZeneca and MHA as set forth in the facts
contained in the FACC.
We conclude
that the Christiansen decision by the
California Supreme Court does not require this court to alter its opinion that
the FACC is factually insufficient to defeat the order of the trial court
sustaining AstraZeneca’s demurrer when the six factors under
facts of this case and we so hold.
FACC states a cause of action for equitable indemnity.
Although the trial court
correctly determined that AstraZeneca owed no duty to MHA, that is not the end
of the inquiry. The FACC alleged, as set
forth above, that MHA sought indemnity on an equitable basis, in the event it
were found to be liable to the plaintiff.
(FACC, para. 9.) A claim for
equitable indemnity properly lies, where, as here, two parties are sued as
joint tortfeasors, each alleged to owe a duty to the plaintiff. The fact that they owe no duty, or
contractual obligation, to each other, does not preclude an equitable
allocation of damages between them.
(See, e.g., Willdan v. Sialic
Contractors Corp. (2007) 158 Cal.App.4th 47, 55-56 citing
Diego (1989) 213 Cal.App.3d 419 [equitable indemnity entitles defendants to
“seek apportionment of loss between the wrongdoers in proportion to their
relative culpability . . . .â€].)
MHA properly alleged its entitlement to this relief, and on this basis,
the demurrer was improperly sustained.
DISPOSITION
The judgment is reversed and
remanded for further proceedings not inconsistent with this opinion. Appellant to recover
We concur:
PERLUSS,
P. J.
ZELON, J.
