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SMITH v. ADVENTIST HEALTH SYSTEM/WEST
JEFFREY V. BROWN, Justice.
We originally issued our opinion affirming the trial court's judgment on August 31, 2010. Appellant Circle X Land Cattle Company, Ltd., moved for rehearing. We overrule the motion for rehearing, vacate our August 31 judgment, withdraw our previous opinion, and issue this substitute opinion in its place. Our disposition of the appeal is unchanged.
This case arises out of a school district's condemnation of thirty acres of ranch land in Robertson County. Circle X is appealing the trial court's grant of Mumford Independent School District's motion for partial summary judgment. Circle X contends the school district failed to meet its burden to prove as a matter of law it was entitled to the summary judgment because it did not establish there was a public purpose for the condemnation or that the condemnation of all thirty acres was necessary. Circle X argues that its response to the motion for partial summary judgment raised fact issues about whether the school district acted arbitrarily or capriciously in condemning the land. Finally, Circle X complains the trial court erred in including in its judgment a clause stating Circle X does not have the right to ingress and egress on the condemned property for the purpose of exploring, developing, drilling, or mining for oil and gas. We affirm.
I
In 2002, Mumford Independent School District and Robertson County expressed their desire to acquire thirty acres of land to develop a sports and recreation complex. When the county decided to withdraw from the deal, the school district did not proceed with the acquisition. But the school district revisited the idea three years later, and on August 11, 2005, its board of trustees voted to start condemnation proceedings. A panel of three special commissioners reviewed the district's petition and approved the condemnation of thirty acres of Circle X's land. Circle X sued in district court claiming the school district had acted arbitrarily and capriciously in deciding to condemn the land.
The school district filed a motion for partial summary judgment, which the trial court denied. But after the district moved for reconsideration, the trial court granted the motion. After the partial summary judgment was granted, the school district and Circle X agreed on the amount of just compensation for the thirty acres. The trial court then signed a final judgment in favor of the district. This appeal followed.
II
We review the trial court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). Here, the appellee moved for a traditional summary judgment. See Tex.R. Civ. P. 166a(c). The party moving for a traditional summary judgment has the burden to show that no material fact issue exists and that it is entitled to summary judgment as a matter of law. Tex.R. Civ. P. 166a(c); M.D. Anderson Hosp. Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000) (per curiam). We will assume that all evidence favorable to the non-movant is true and indulge every reasonable inference in favor of the non-movant. KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). A non-movant has the burden to respond to a traditional summary-judgment motion if the movant conclusively (1) establishes each element of its cause of action or defense, or (2) negates at least one element of the non-movant's cause of action or defense. See Little v. Tex. Dep't of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004); Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984).
Although the school district claims in its brief that it moved for both a traditional and a no-evidence summary judgment, the motion itself is ambiguous. Compare Tex.R. Civ. P. 166a(c), with Tex.R. Civ. P. 166a(i). Circle X contends that because the district's motion was ambiguous, we should construe it as a traditional motion for summary judgment. The two summary-judgment standards are distinct; therefore, we must determine which type of summary judgment is at issue. Grimes v. Reynolds, 252 S.W.3d 554, 558 (Tex. App.-Houston [14th Dist.] 2008, no pet.). In Grimes v. Reynolds, we held "[s]ince a motion that does not clearly and unambiguously state it is being filed under Rule 166a(i) does not give the non-movant notice that the movant is seeking a no-evidence summary judgment, we will construe it as a traditional motion under Rule 166a(c)." Id. Here, as in Grimes, we will construe the summary judgment to be a traditional motion.
Furthermore, during oral argument, the school district's counsel conceded the motion for partial summary judgment invoked only the traditional summary-judgment standard.
Additionally, when a motion for reconsideration or new trial is filed after a summary-judgment motion is heard and ruled upon, the trial court may ordinarily consider only the record as it existed before hearing the motion the first time. See Auten v. DJ Clark, Inc., 209 S.W.3d 695, 702 (Tex.App.-Houston [14th Dist.] 2006, no pet.); Chapman v. Mitsui Eng'g Shipbuilding Co., 781 S.W.2d 312, 315 (Tex.App.-Houston [1st Dist.] 1989, writ denied). However, the trial court may consider evidence submitted with a motion for reconsideration so long as it affirmatively indicates in the record that it accepted or considered the evidence. Auten, 209 S.W.3d at 702; see also Tex.R. Civ. P. 166a(c) (summary-judgment evidence must be timely filed, "except on leave of court").
Here, after the trial court originally denied the school district's motion for partial summary judgment, it granted the motion to reconsider and rendered partial summary judgment. The court's order reflects that in so doing, it "considered the affidavits and exhibits submitted by Condemnor and Condemnee on the [motion for reconsideration] and the arguments and authority of counsel." The trial court, therefore, considered the arguments and evidence presented in the motion to reconsider and response. Thus, we may review the same to determine whether the trial court erred in ultimately granting the school district's motion for partial summary judgment. See Stephens v. Dolcefino, 126 S.W.3d 120, 133-34 (Tex.App.-Houston [1st Dist.] 2003), pet. denied, 181 S.W.3d 741 (Tex. 2005).
Neither party has complained that the trial court considered any evidence that it should not have. Both parties supplemented the summary-judgment record at the motion-for-reconsideration stage without objecting to any untimeliness of the other's filings or any lack of notice.
A Condemnation
The school district's eminent-domain powers are statutorily derived from section 11.155 of the Texas Education Code. See Tex. Educ. Code § 11.155. Section 11.155(a) provides that "[a]n independent school district may, by exercise of the right of eminent domain, acquire the fee simple title to real property for the purpose of securing sites on which to construct school buildings or for any other purpose necessary for the district." Id. § 11.155(a). A district court may determine all issues, including the authority to condemn property and assess damages, in any proceeding for eminent domain involving a political subdivision of the state. Tex. Prop. Code Ann. § 21.003 (Vernon 2004).
One prominent exception to this general rule is Harris County, where the legislature has vested this authority exclusively in the county civil courts at law. Tex. Gov't Code § 25.1032(c) (Vernon 2004); Taub v. Aquila Sw. Pipeline Corp., 93 S.W.3d 451, 456 (Tex. App.-Houston [14th Dist.] 2002, no pet.).
The Texas Supreme Court has held that private property may be taken only for public use. Borden v. Trespalacios Rice Irrigation Co., 98 Tex. 494, 86 S.W. 11, 15 (1905). What is public use is a question of law. Tenngasco Gas Gathering Co. v. Fischer, 653 S.W.2d 469, 474 (Tex.App.-Corpus Christi 1983, writ ref'd n.r.e.). But when the legislature delegates to an entity the power to condemn, and the entity condemns the property for public use, the extent to which the property is taken is a legislative question. Block House Mun. Util. Dist. v. City of Leander, 291 S.W.3d 537, 541 (Tex.App.-Austin 2009, no pet.); see Hous. Auth. of City of Dallas v. Higginbotham, 135 Tex. 158, 143 S.W.2d 79, 85-86 (1940); Harris County Hosp. Dist. v. Textac Partners I, 257 S.W.3d 303, 316 (Tex.App.-Houston [14th Dist.] 2008, no pet.). In other words, the legislative declaration that the use is presumptively public is binding on courts unless the use is "clearly and palpably" private. Higginbotham, 143 S.W.2d at 83. The entity's power to condemn is subject to judicial review, however, when there is a showing of bad faith, arbitrary or capricious action, or abuse of discretion. Block House Mun. Util. Dist., 291 S.W.3d at 541; see Malcomson Rd. Util. Dist. v. Newsom, 171 S.W.3d 257, 268-69 (Tex.App.-Houston [1st Dist.] 2005, pet. denied).
The term "public use" has been defined various ways, and the Texas Supreme Court has construed "public use" liberally. See Coastal States Gas Producing Co. v. Pate, 158 Tex. 171, 309 S.W.2d 828, 833 (1958). Nevertheless, "public use" need not be defined liberally to encompass the taking of land for public education. The preeminent importance our state places on public education dates back to the days of the Republic of Texas. See Repub. Tex. Const., of 1836, General Provisions, § 5, reprinted in 1 H.P.N. Gammel, The Laws of Texas 1822-1897, at 1069, 1078-79 (Austin, Gammel Book Co. 1898). We are aware of and sensitive to the constitutional controversies that erupt when courts define "public use" too liberally; but as there are few public uses more legitimate than the construction of facilities for public education, no such concern arises here, aside from the evidentiary determination we address below. "It is admitted by all that the cultivated mind is the guardian genius of democracy and, while guided and controlled by virtue, is the noblest attribute of man." Mirabeau B. Lamar, "the father of Texas education," address to Congress, 1838, quoted in Steven A. Jent, A Browser's Book of Texas Quotations 46 (2001).
The Texas Supreme Court also has held that when a statute vests a governmental agency with discretionary authority to condemn, the agency's determination of public necessity is presumptively correct. FKM P'ship, Ltd. v. Bd. of Regents of the Univ. of Houston Sys., 255 S.W.3d 619, 629 (Tex. 2008). The condemnor generally determines how much land to take. Zboyan v. Far Hills Util. Dist., 221 S.W.3d 924, 930 (Tex.App.-Beaumont 2007, no pet.) If a statute delegating the eminent-domain power does not require proof of necessity, as is the case here, the condemnor need only show that its governing authority determined that the taking was necessary. See Pizzitola v. Houston Indep. Sch. Dist., No. 13-05-249-CV, 2006 WL 1360838, at *5 (Tex.App.-Corpus Christi May 18, 2006, no pet.) (mem.op.); Anderson v. Teco Pipeline Co., 985 S.W.2d 559, 565 (Tex. App.-San Antonio 1999, pet. denied).
As with the "public use" requirement, this determination is conclusive unless there is a showing of bad faith, arbitrary or capricious action, or abuse of discretion. See FKM P'ship, Ltd., 255 S.W.3d at 629; Coastal Indus. Water Auth. v. Celanese Corp., 592 S.W.2d 597, 600 (Tex. 1979). It is the nonmovant's burden, as the objecting party, to demonstrate that the school district's action was arbitrary and capricious. Pizzitola, 2006 WL 1360838, at *5 (citing Austin v. City of Lubbock, 618 S.W.2d 552, 555 (Tex.Civ.App.-Amarillo 1981), rev'd on other grounds, 628 S.W.2d 49 (Tex. 1982)). A condemnee can make this showing if he can negate any reasonable basis the condemnor had in determining what and how much land to condemn. Newsom, 171 S.W.3d at 269.
However, the existence of another feasible plan not requiring condemnation is no evidence of an abuse of discretion. Zboyan, 221 S.W.3d, at 930. Additionally, it is not arbitrary or capricious to base a condemnation on a reasoned prediction of future need or demand. Pizzitola, 2006 WL 1360838, at *5 (citing Anderson v. Clajon Gas Co., 677 S.W.2d 702, 705 (Tex.App.-Houston [1st Dist.] 1984, no writ)). A condemnor also does not abuse its authority if it later changes its plans for the use of the land, and sells or devotes the excess to private use. Vilbig v. Hous. Auth. of City of Dallas, 287 S.W.2d 323, 330-31 (Tex.Civ. App.-Dallas 1955, writ ref'd n.r.e.). Furthermore, nothing in the condemnation statute prohibits the condemnor from altering its specific plan for the property after the commissioners' hearing even if the new plan allegedly prejudices the landowner. See PR Invs. Specialty Retailers, Inc. v. State, 251 S.W.3d 472, 476-79 (Tex. 2008); see also Blasingame v. Krueger, 800 S.W.2d 391, 393-94 (Tex. App.-Houston [14th Dist.] 1990, no writ) (explaining evidence at a trial de novo is not limited to the evidence introduced at the commissioners' hearing).
1
In its first issue, Circle X contends the school district failed to meet its summary-judgment burden to conclusively establish that its governing body determined that Circle X's land was being taken for school purposes and that it was necessary. Specifically, Circle X contends that the only viable evidence the school district presented about the condemnation proceeding was the minutes reflecting the board of trustees' decision to condemn the property. The minutes reflect that "the Board approved to start condemnation procedures (eminent domain) on 30 acres of land presently owned by Holmes Estate." Circle X argues these minutes are vague and state no purpose for the condemnation. Circle X also contends that, like pleadings, Circle X's affidavits cannot be evidence of an official action.
This contention is the thrust of Circle X's argument in its motion for rehearing. Circle X maintains that when summary-judgment motions are heard in eminent-domain cases, only official proceedings, such as orders, resolutions, and minutes, may suffice as evidence of a condemning entity's official action. In making this argument, Circle X relies on Whittington v. City of Austin, 174 S.W.3d 889, 900 (Tex.App.-Austin 2005, pet. denied), and Horton v. Mills County, 468 S.W.2d 876, 877-78 (Tex.Civ.App.-Austin 1971, no writ). Yet neither Whittington nor Horton holds that affidavits in which qualified affiants attest to official acts are incapable of demonstrating public use or necessity. Indeed, in Whittington the only evidence of the public use the condemning entity offered was its pleadings, which plainly cannot be used as summary-judgment evidence. Whittington, 174 S.W.3d at 900. Furthermore, neither the statute under which the school district condemned Circle X's land, Tex. Educ. Code § 11.155, nor the eminent-domain statute itself, Tex. Prop. Code §§ 21.011 — .016, states any specific requirement for the type of evidence necessary to prevail either at trial or on summary judgment. We will not add such a requirement here; it is not our realm to legislate, but only to apply the law. Finally, as set forth below, this court and others have long held evidence like that the school district submitted in this case sufficient to show the lawful exercise of eminent domain.
Although the minutes do not expressly state the condemnation's purpose or necessity, the trial court properly considered all the evidence, including the affidavits, in concluding that the district in fact determined that the condemnation was for school purposes and a necessity. See Houston Lighting Power Co. v. Fisher, 559 S.W.2d 682, 685-86 (Tex.Civ.App.-Houston [14th Dist.] 1977, writ ref'd n.r.e.) (concluding that affidavits and depositions of condemnor entity's officers demonstrated that entity's board of directors made requisite determination of convenience and necessity); Pizzitola, 2006 WL 1360838, at *4-5 (reviewing, in addition to resolution, affidavits describing that the taking was appropriate, necessary, and in furtherance of a public purpose in concluding school district had articulated a reasonable and necessary public purpose for condemnation); see also Boucher v. Tex. Turnpike Auth., 317 S.W.2d 594, 601-02 (Tex.Civ. App.-Texarkana 1958, no writ) (holding affidavit of condemning entity's engineer, along with certified copies of resolutions showing entity's approval of a survey and appraisal and instructions to acquire property "by purchase, if possible, and if not, by condemnation" supported partial summary judgment in favor of condemnor against landowner alleging fraud and bad faith).
The district's evidence in support of its motion for partial summary judgment included affidavits of Superintendent Bienski; Fred Patterson, a licensed architect employed by the district; and Anthony Scamardo, president of the district's board of trustees. The district also submitted Patterson's architectural drawings of the district's new facilities and an email from an architecture firm to Bienski explaining why the district needed to condemn thirty acres. Additionally, attached to its motion for reconsideration, the district included a supplemental affidavit and more drawings by Patterson. The district contends Bienski's, Scamardo's, and Patterson's affidavits all demonstrate the purposes of the land acquisition are within the meaning contemplated by the Texas Education Code.
In Bienski's first affidavit, he notes the increase in the student population and the need for physical-education and sports facilities. He also attests the board of trustees wanted to use the land "for the future development of school facilities (e.g. classrooms)." Bienski goes on to explain that Patterson believed the project required a minimum of thirty acres. In his second affidavit, Bienski describes how and when the board of trustees decided to condemn the property. According to Bienski, the board expected an increase in future enrollment and decided a new high school was needed to accommodate the growth. Bienski adds: "From my experience, training and knowledge, I was aware that there were recommendations that a high school campus would have a minimum requirement of thirty (30) acres . . . Based on this information, I recommended [that the board] purchase and[,] in the absence of purchase, seek by condemnation the thirty (30) acre tract."
In Patterson's first affidavit, he emphasizes that the optimum size for a high school is thirty acres and includes the drawings of the district's proposed new facilities. He also states that he understands the board intends to use the land for the proposed sports and physical-education facilities. But he adds that if the district were unable to use the land for that purpose, Bienski told him it would be used for other educational purposes. In Patterson's supplemental affidavit, he mentions the board's plan to build a high school and includes a drawing featuring the new facility. Ultimately, Patterson attests to two proposed purposes for the condemned land — sports and recreation in the first affidavit and a new school in the second. Either purpose would be legitimate. See, e.g., Lin v. Houston Cmty. Coll. Sys., 948 S.W.2d 328, 333-34 (Tex. App.-Amarillo 1997, writ denied) (explaining although the school pleaded the condemnation purpose was only for "school purposes," this was sufficient to allege its intended use).
Scamardo attests that on August 11, 2005, the board voted to condemn the thirty acres based on the long-range plans and educational needs of the district. According to Scamardo, the district's need for outdoor sports facilities was immediate. But he adds that the board also sought the land for a future new high school. Additionally, he explains that based on the growth in the student population, the board of trustees also wanted to construct a separate high school.
To summarize, the school district's summary-judgment evidence includes: (1) minutes reflecting the board of trustees' decision to condemn the 30 acres; (2) Superintendent Bienski's affidavits; (3) Patterson's affidavits; and (4) board president Scamardo's affidavit. In their affidavits, Bienski and Scamardo both attest to (1) specific facts about efforts the board made to determine the need for the condemnation, and (2) the board's official act — ordering the condemnation to satisfy legitimate needs and purposes of the district. Circle X objected to none of the district's evidence. We conclude this evidence conclusively shows that the district in fact determined that condemning Circle X's land was for a school purpose and necessary. We therefore overrule Circle X's first issue.
Because Circle X did not object to the district's affidavits, they are deemed to satisfy Rule 166a's requirement that affidavits "set forth such facts as would be admissible in evidence." See Tex.R. Civ. P. 166a(f); see also Dolenz v. A.B., 742 S.W.2d 82, 83-84 n. 2 (Tex.App.-Dallas 1987, writ denied). To the extent Circle X contends the affidavits are incompetent to prove official acts by the school district's board — because of some defect of form — Circle X should have objected and obtained rulings on those objections in the trial court. Id. As it stands, the affidavits are evidence of exactly what the school district needs evidence of: an official determination by the district's board "that the taking was necessary to advance its intended public use." Whittington, 174 S.W.3d at 904.
2
In its second issue, Circle X contends that it raised a fact issue concerning whether the district acted arbitrarily and capriciously when it approved the start of condemnation proceedings because: (1) a federal court had enjoined the district from accepting transfer students; (2) the land's only purpose was for sports facilities, which did not warrant taking all thirty acres; and (3) even if the purpose were for constructing a high school, there is still no evidence to support the need for all thirty acres. Circle X argues that the school district never intended to use the land for anything other than sports and recreation.
Circle X's summary-judgment evidence included the affidavit of Garcia Thibodeaux, a reporter for the Hearne Democrat. In his affidavit, Thibodeaux recounts a newspaper article he wrote in 2002, a copy of which is attached to his affidavit. The article featured a statement by Paul Bienski, the district's superintendent. Bienski conceded that the district did not need the entire sports complex — just the baseball and softball fields. Circle X's proof also included the affidavit of Jim Singleton, a licensed architect, who opined that 5.5 acres would be enough for just baseball and softball fields. But even if the initial use of Circle X's land may have been for sporting facilities, it is not arbitrary or capricious for the district to acquire land in anticipation of future needs. See Pizzitola, 2006 WL 1360838, at *5.
Another justification the district gave was the need for a new high school. Circle X argues there is no evidence to support such a need. And even if there were, Circle X continues, there is no evidence a new school would require thirty acres. Circle X maintains a federal-court ruling extinguished the district's new-high-school rationale. For many years leading up to the condemnation, a majority of the district's students were transferred from the Hearne Independent School District. Once a federal district court enjoined such transfers, Circle X argues, the district could no longer prove that it was growing or in need of new classroom space. Circle X also included in its summary-judgment evidence the affidavits of Tommy Cowan, a licensed architect, and Gary Marek, a facility and transportation manager for the Texas Education Agency. Both affiants disputed the notion that a new high school for the district would require thirty acres.
Circle X's reliance on the Cowan and Marek affidavits is unavailing. Both affidavits dispute the existence of an industry standard requiring thirty acres for any new high school. But neither addressed the circumstances of this case specifically enough to raise a fact issue concerning whether the district had acted in an arbitrary and capricious manner. Moreover, it does not matter that the district changed its plan from a thirty-acre sports complex to a thirty-acre sports complex and new high school; nothing in the condemnation statute prohibits the condemnor from changing its specific plan for the property after the commissioners' hearing, even if the change allegedly prejudices the landowner. PR Invs. Specialty Retailers, Inc., 251 S.W.3d at 476-79. The amount of land remained the same and the new intended use was still allowable under the statute — "for the purpose of securing sites on which to construct school buildings or for any other purpose necessary for the district." See Tex. Educ. Code Ann. § 11.155(a).
We conclude that Circle X failed to satisfy its burden to show the district's taking was arbitrary and capricious. Accordingly, we overrule Circle X's second issue.
B Ingress and Egress
Circle X also argues the language in the trial court's judgment concerning its right to ingress and egress for the purpose of exploring, developing, drilling, or mining for oil and gas is not supported by any evidence. Because it does not own the mineral rights, Circle X contends the language is inappropriate and should be stricken from the judgment. The district responds that if Circle X does not have any minerals rights, then the language has no effect and is harmless.
Circle X complains the language is confusing and allows the district to preclude any right of use of the surface for mineral development; however, the language still pertains only to the ingress and egress rights, if any, that Circle X owns. The final judgment provides:
Condemnor shall be vested with and shall have and recover of and from Condemnee all the fee simple absolute title and all right, title and interest for the purposes authorized under Section 11.155(a) of the Texas Education Code, providing that there is excluded from said estate all oil, gas and sulfur, which can removed from beneath the land, if any, without any rights whatsoever remaining to Condemnee of ingress and egress to and from the surface of the land for the purpose of exploring, developing, drilling, or mining same so as not to interfere with the improvements placed by Condemnor on said surface estate.
If Circle X is not the mineral owner, and therefore does not have any right to ingress or egress for development, exploring, drilling, or mining oil and gas, then this language in the judgment does not negatively affect Circle X. The language likewise does not negatively affect the actual owner of the mineral rights, because it expressly applies only to the condemnee — Circle X. Though it is inarticulately worded, we read the judgment to exclude Circle X's right, if any, to ingress and egress on the property for purposes of development, exploring, drilling, or mining oil and gas.
Because Circle X has no such right anyway, and because it has not cited any authority compelling us to alter the language, we overrule Circle X's third issue. Tex.R.App. P. 38.1(i).
* * *
For the foregoing reasons, we affirm the trial court's judgment.
ss124 Cal.Rptr.2d 530, 52 P.3d 703].) Courts determine whether the two conditions have been met by using a two-step inquiry that involves shifting burdens.
1. A rising from protected activity
Initially, the party filing the motion to strike has the burden of showing that the cause of action arises from a protected activity — that is, an act in furtherance of the right of petition or free speech. ( Zamos v. Stroud (2004) 32 Cal.4th 958, 965 [ 12 Cal.Rptr.3d 54, 87 P3d 802].)
Disputes over whether the moving party has carried this burden tend to involve one or both of two questions: Did the moving party's act constitute protected activity? Did the cause of action arise from the protected activity?
The analysis of the first of these questions is aided by the definition set forth in subdivision (e) of section 425.16: "As used in this section, `act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue' includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest."
Thus, a moving party can meet his or her initial burden by demonstrating that the act underlying the plaintiffs cause of action fits one of the categories included in section 425.16, subdivision (e). ( Navellier v. Sletten, supra, 29 Cal.4th at p. 88.)
The analysis of the second question, which concerns the strength of the connection between the protected activity and the lawsuit, is aided by the California Supreme Court's decision in City of Cotati v. Cashman (2002) 29 Cal.4th 69 [ 124 Cal.Rptr.2d 519, 52 P3d 695]. In that case, the owners of mobilehome parks had filed a federal action challenging a rent stabilization ordinance applicable to such parks. ( Id. at p. 71.) In response, the city filed a state court action seeking declaratory relief that the ordinance was constitutional and valid. ( Ibid.)
The Supreme Court considered whether the city's state court action constituted a SLAPP. ( City of Cotati v. Cashman, supra, 29 Cal.4th at p. 72.) It addressed the meaning of the statutory phrase "cause of action . . . arising from" (§ 425.16, subd. (b)(1)), and refused to construe "arising from" to mean "in response to." ( City of Cotati v. Cashman, supra, at p. 77.) Instead, the court determined that the phrase "arising from" means simply that "the defendant's act underlying the plaintiff's cause of action must itself have been an act in furtherance of the right of petition or free speech. [Citation.] In the anti-SLAPP context, the critical point is whether the plaintiffs cause of action itself was based on an act in furtherance of the defendant's right of petition or free speech. [Citations.]" ( Id. at p. 78.)
Accordingly, a court must review the activity or facts that underlie the cause of action challenged by the anti-SLAPP motion. ( City of Cotati v. Cashman, supra, 29 Cal.4th at p. 79.) Applying its interpretation to the facts presented in City of Cotati, the court concluded that the city's cause of action for declaratory relief arose out of the challenged ordinance rather than from the owners' federal lawsuit. Thus, the city's action was not a SLAPP. ( Id. at pp. 74, 80.)
2. Probability of prevailing
If the moving party has carried its initial burden, the complaining party then has the burden of demonstrating a probability of prevailing on the claim. ( Zamos v. Stroud, supra, 32 Cal.4th at p. 965.) To satisfy this burden, the complaining party "`"must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited." [Citations.]' "( Rusheen v. Cohen, supra, 37 Cal.4th at p. 1056.) In other words, the complaining party need only show that (1) its pleading stated a legally sufficient claim and (2) it has enough evidence to prove the claim.
C. Standard of Review
"Review of an order granting or denying a motion to strike under section 425.16 is de novo." ( Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3 [ 46 Cal.Rptr.3d 638, 139 P.3d 30].)
A court that reviews a special motion to strike is required by statute to "consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." (§ 425.16, subd. (b)(2).) When considering the declarations and affidavits submitted, the court does not weigh credibility or compare the weight of the evidence. ( Soukup v. Law Offices of Herbert Hafif supra, 39 Cal.4th at p. 269, fn. 3.) "Rather, the court's responsibility is to accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant's evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law." ( HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212 [ 12 Cal.Rptr.3d 786].)
II. The 2004 Summary Suspension
A. Background
1. Events preceding the 2004 summary suspension by SCH
In mid-2003, the judicial review committee of the Hanford hospitals was reviewing charges against Smith for substandard care, abusive behavior, and falsification of records at those hospitals. During that time, Selma Community Hospital notified Smith that its governing board had ratified the approval of Smith's reappointment to its medical staff for the two-year period ending June 25, 2005.
Later, the judicial review committee of the Hanford hospitals upheld the summary suspension of Smith's privileges at those hospitals and recommended the termination of his membership and privileges. In early 2004, the governing boards of each of the Hanford hospitals sustained the findings and conclusions of the judicial review committee, and the governing boards' decisions became the final administrative decisions in the peer review proceedings of those hospitals. In March 2004, Smith provided Selma Community Hospital with a copy of the final administrative decisions.
On March 15, 2004, Smith met with Darrick Wells, M.D., who was the chief of staff at Selma Community Hospital. Dr. Wells told Smith that his privileges would be summarily suspended if he did not resign his membership or request a leave of absence. Smith did neither.
2. The summary suspension
On March 23, 2004, Dr. Wells sent Smith a letter advising him that the medical executive committee of Selma Community Hospital had summarily suspended his staff membership and clinic privileges at the hospital, effective at 12:01 a.m. on March 27, 2004. The letter stated the basis for the summary suspension were the findings and conclusions from the peer review proceedings at the Hanford hospitals. The letter also stated that the medical executive committee would review and consider the suspension at its next meeting and Smith could attend that meeting.
The meeting of the medical executive committee referenced in the letter was held on March 18, 2004. The minutes of that meeting are among the exhibits Smith presented to support his opposition to the motions to strike. Smith attended that meeting, stated his position, and left before the committee voted to summarily suspend.
At the April 8, 2004, meeting of the medical executive committee of Selma Community Hospital, Smith was given an opportunity to address the committee regarding the summary suspension. After Smith left, the committee considered a motion to continue Smith's summary suspension and to recommend the termination of his membership and clinical privileges at Selma Community Hospital. The minutes indicate that the motion passed unanimously, with Dr. Bruno Garcia abstaining due to a conflict of interest.
3. Smith's lawsuit and the temporary restraining order
Smith responded to the summary suspension by filing a lawsuit against Selma Community Hospital and Adventist Health System/West in Fresno Superior Court ( Smith v. Selma Community Hospital (2005, No. 04CECG01188)) (case No. 04CECG01188) and requesting a temporary restraining order. On April 29, 2004, Smith obtained a temporary restraining order enjoining Selma Community Hospital from taking any action to suspend, restrict or otherwise impede Smith's staff membership or privileges.
On May 5, 2004, the medical executive committee of Selma Community Hospital held a meeting that was attended by Rawson (the hospital's president, who also was the president of the Hanford hospitals), a representative of Selma Community Hospital's governing board, and Zeismer, the hospital's director of administration. SCH's medical executive committee approved making an offer, contingent upon Smith dismissing his lawsuit against SCH in its entirety, to (1) rescind Smith's summary suspension; (2) rescind the recommendation to terminate his medical staff membership and clinical privileges; (3) not use the findings of the judicial review committee in the Hanford proceedings as the basis for (a) future corrective action or (b) denial of reappointment to SCH; (4) base future corrective action against Smith on events occurring after May 5, 2004; and (5) submit corrected reports to the Medical Board of California and the National Practitioner Data Bank. Smith did not accept the offer.
4. SCH rescinds the summary suspension
At the June 4, 2004, meeting of Selma Community Hospital's medical executive committee, Dr. Wells informed the committee that Smith had rejected the settlement offer. The medical executive committee discussed the situation, voted unanimously to rescind the summary suspension (which was no longer actually operating because of the temporary restraining order), and voted to continue with the recommendation to terminate Smith's medical staff membership and clinical privileges.
The following summarizes the history of this recommendation as it worked its way through the hospital's administrative process and the court system: First, the recommendation was rejected by the judicial review committee, which was not persuaded it was reasonable and warranted. Second, the recommendation was adopted by the governing board of Selma Community Hospital when it reversed the judicial review committee. Third, the recommendation was addressed in a mandamus proceeding, Fresno Superior Court case No. 05CECG02293 ( Smith v. Selma Community Hospital (2006, No. 05CECG02293)). The trial court overruled the governing board's decision to adopt the recommendation. Fourth, this court affirmed the trial court's decision in Smith v. Selma Community Hospital, supra, 164 Cal.App.4th 1478. Consequently, the final result of the internal administrative proceeding and the judicial mandamus proceeding was that Smith prevailed and the decision of the judicial review committee to reject the recommendation was upheld.
5. Smith's lawsuit is dismissed
In addition to rescinding the summary suspension, Selma Community Hospital and Adventist Health System/West responded to Fresno Superior Court case No. 04CECG01188 by filing a demurrer and motion to strike. They argued that Smith's claims for injunctive relief and tort damages arising from the allegedly improper summary suspension were barred by his failure to exhaust administrative remedies.
The superior court took the matter under submission on June 30, 2004, and, the next day, issued a written order sustaining the demurrer. The court rejected the argument that the temporary restraining order should be interpreted to mean that it was proper for Smith to resort to the court because there were no internal remedies to exhaust. The court stated that the ruling on the temporary restraining order contemplated that administrative proceedings would proceed. The court also rejected the argument that there was no need to exhaust administrative remedies because the summary suspension had been rescinded. The court stated: "But that argument ignores the fact that [Smith's] causes of action are premised (in part) upon the theory that the prior administrative actions were taken without sufficient justification or grounds, but were instead based on improper motives. Accordingly, [Smith's] hearing regarding his staff privileges and the merits of whether there is cause for termination thereof should proceed through the administrative process to completion before [Smith] may pursue tort damages. [¶] It seems plain that [Smith] should be required to exhaust the internal remedies in the present case prior to filing suit for damages in court. As Defendants correctly note, `all of [Smith's] causes of action are premised on the theory that the administrative actions taken thus far are based on improper motives and were unjustified. As such, Smith is required by the doctrine of exhaustion to first adjudicate his claims using available administrative remedies.'"
Based on this rationale, the court concluded: "The demurrer on the ground of failure to exhaust internal remedies should be sustained as to the entire Complaint, without leave to amend." The resulting judgment of dismissal effectively ended case No. 04CECG01188 because Smith dismissed his appeal shortly after filing it.
6. Subsequent lawsuits involving the 2004 summary suspension
In February 2006, Smith filed a second lawsuit ( Smith v. Selma Community Hospital (Super. Ct. Fresno County, 2006, No. 06CECG00620)) seeking damages for the 2004 summary suspension. This complaint was dismissed by Smith without prejudice when the parties entered a tolling agreement. The tolling agreement, which operated until December 6, 2008, stated it was the intention of the parties that at the end of the agreement their respective positions would be as they were on May 26, 2005.
Smith's third lawsuit claiming damages caused by the 2004 summary suspension is the present lawsuit. Smith included the claim in the first amended complaint he filed in October 2008. The claim is among those targeted by defendants' special motions to strike.
B. Defendants' Showing Regarding Protected Activity
Defendants have the burden of showing that Smith's claim concerning the 2004 summary suspension arose from a protected activity. ( Zamos v. Stroud, supra, 32 Cal.4th at p. 965.)
In Kibler v. Northern Inyo County Local Hospital Dist. (2006) 39 Cal.4th 192 [ 46 Cal.Rptr.3d 41, 138 P.3d 193] ( Kibler), a hospital had summarily suspended the physician's staff privileges for about two weeks and reinstated them after a written agreement was signed in which the physician agreed to refrain from hostile or violent conduct towards other hospital personnel and not keep or carry a firearm on hospital premises. ( Id. at p. 196.) The physician subsequently sued the hospital and certain physicians and nurses for damages under theories that included defamation, abuse of process, and interference with his practice of medicine. ( Ibid.) The defendants filed an anti-SLAPP motion. The trial court granted the motion, agreeing with the defendant hospital "that [the physician's] lawsuit arose out of the hospital's peer review proceeding against [the physician] and that hospital peer review was an `official proceeding' qualifying for the anti-SLAPP statute's motion to strike." ( Kibler, at p. 197.) The California Supreme Court affirmed, concluding that a hospital peer review proceeding qualified as an "`official proceeding authorized by law'" within the meaning of section 425.16, subdivision (e)(2). ( Kibler, at p. 199.)
Because Kibler involved a summary suspension and Smith's claim concerns his 2004 summary suspension, we will assume for purposes of this appeal that (1) defendants' acts relating to that suspension of Smith were protected activity for purposes of the anti-SLAPP statute and (2) Smith's claim arose from that protected activity. Because of this assumption, we need not address Smith's contention that the acts upon which his claims are based are not constitutionally protected acts because, unlike Kibler, which involved a defamation claim, the basis of his claim is not "any written or oral statement or writing made in connection with an issue under consideration" by the peer review proceeding. (§ 425.16, subd. (e)(2).)
C. Smith's Probability of Prevailing
The next step in our inquiry is to consider whether Smith, the complaining party, has carried his burden of demonstrating a probability of prevailing on the claim based on the 2004 summary suspension. ( Zamos v. Stroud, supra, 32 Cal.4th at p. 965.)
Defendants contend that Smith cannot establish the requisite level of merit because (1) he cannot show that he exhausted his internal and judicial remedies relating to the claim, (2) the claim is barred by res judicata or collateral estoppel, and (3) the claim is barred by statutory privileges set forth in the Civil Code.
See footnote, ante, page 40.
Defendants contend that Smith "never exhausted his internal remedies with respect to [the 2004] summary suspension" and therefore "cannot prevail on his damages claim for the 2004 summary suspension. . . ."
We begin our analysis of this contention by examining what internal remedies were available to Smith once Selma Community Hospital rescinded the summary suspension on June 4, 2004.
The term "remedy" is defined as the "means of enforcing a right or preventing or redressing a wrong; legal or equitable relief." (Black's Law Dict. (9th ed. 2009) p. 1407.) Black's Law Dictionary also quotes the following statement from Laycock, Modern American Remedies (3d ed. 2002) 1:
"A remedy is anything a court can do for a litigant who has been wronged or is about to be wronged. The two most common remedies are judgments that plaintiffs are entitled to collect sums of money from defendants and orders to defendants to refrain from their wrongful conduct or to undo its consequences."
Similarly, "relief" is defined as the "redress or benefit, esp. equitable in nature (such as an injunction or specific performance), that a party asks of a court." (Black's Law Dict., supra, at p. 1404.) These definitions form the foundation from which we will address the question whether any internal remedies were available to Smith. Specifically, we will consider whether internal procedures offered Smith a remedy in the form of (1) money damages to redress the allegedly wrongful suspension, (2) an order or directive that would undo the consequences of the allegedly wrongful suspension, or (3) some other type of relief.
Defendants' appellate briefing does not identify an internal remedy for the 2004 suspension that was available to Smith after the summary suspension was rescinded by the Selma Community Hospital's medical executive committee. Defendants' support for their motions to strike includes the declaration of Rawson, which attached as an exhibit the "Selma Community Hospital Medical Staff Bylaws/Rules Regulations" that were in effect at the time of the 2004 summary suspension of Smith's privileges. We have located, and defendants have cited, no provision of the Selma Community Hospital medical staff bylaws that authorizes some type of relief for a physician whose summary suspension has been rescinded.
Furthermore, to the extent that Smith's claim concerning the 2004 summary suspension is viewed in terms of a legal theory that the administrative actions were taken without sufficient justification or grounds and were based on improper motives (rather than viewed as a claim for redress for the days during which his clinical privileges were suspended), Smith pursued to completion the administrative process in which that legal theory could be raised. Specifically, that was one of his theories for challenging the June 4, 2004, recommendation of the medical executive committee of Selma Community Hospital to terminate Smith's medical staff membership and clinical privileges.
In its July 1, 2004, order sustaining defendants' demurrer, the Fresno Superior Court observed "that [Smith's] causes of action are premised (in part) upon the theory that the prior administrative actions were taken without sufficient justification or grounds, but were instead based on improper motives."
Smith pursued that theory (as well as others) through the internal procedures and in a judicial mandamus proceeding. He won his judicial mandamus proceeding on other grounds. (See Smith v. Selma Community Hospital, supra, 164 Cal.App.4th 1478 [this court affirmed writ of mandate that directed Smith's privileges be reinstated].) Accordingly, Smith did exhaust the administrative and mandamus procedures in which he could assert that legal theory.
We conclude that the argument that Smith failed to exhaust internal and judicial mandamus procedures and remedies lacks merit because Smith did pursue those procedures to the extent they were available.
2. Res judicata and collateral estoppel fn_
Defendants contend that Smith's claim arising from the 2004 summary suspension is barred by res judicata and collateral estoppel based on the Fresno Superior Court order of July 1, 2004, that stated their demurrer "on the ground of failure to exhaust internal remedies should be sustained as to the entire Complaint, without leave to amend."
As explained earlier, after the demurrer was sustained and the judgment of dismissal entered, Smith did pursue the internal administrative procedures in which he could assert the theory that the administrative actions were taken without sufficient justification or grounds and were based on improper motives. The July 1, 2004, order sustaining the demurrer was based on the availability of an internal procedure in which Smith could pursue that theory. Thus, the court's determination that internal remedies were not exhausted in the middle of 2004 does not decide the issue of whether any internal remedy remained to be exhausted when this lawsuit was filed in 2009. Accordingly, res judicata and collateral estoppel do not operate to bar Smith's present claim concerning the 2004 summary suspension.
3. Qualified privilege in Civil Code section 43.8 fn_
Civil Code section 43.8 confers a privilege on "any person" who makes a communication "to any hospital, hospital medical staff, [or] peer review committee . . . when the communication is intended to aid in the evaluation of the qualifications, fitness, character, or insurability of a practitioner of the healing . . . arts."
In Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, the California Supreme Court concluded that this privilege was qualified, not absolute. ( Id. at p. 713.) In reaching this conclusion, the court interpreted the statutory phrase "intended to aid in the evaluation" to mean that the communicator acted with a subjective purpose or goal to help or assist in the evaluation. ( Id. at p. 720.)
Here, Rawson contends (1) he communicated only with the intent to aid the evaluation of Smith and (2) Smith has not "demonstrated with admissible evidence anything that would defeat the privilege." In support of this contention, Rawson submitted his own declaration stating that when he discussed issues involving Smith with the medical staff of Selma Community Hospital, he did so in his capacity as chief executive officer and a member of the medical executive committee, with the intent of aiding in the evaluations of Smith and with the understanding that his communications were confidential.
Under the applicable standard of review, this court's responsibility is to evaluate Rawson's evidence to determine if it has defeated the evidence submitted by Smith as a matter of law. ( HMS Capital, Inc. v. Lawyers Title Co., supra, 118 Cal.App.4th at p. 212.) Based on our evaluation of the evidence, we conclude that Smith's position has not been defeated as a matter of law.
First, Rawson's declaration regarding his own intent or state of mind must be regarded as credible before it has a chance of defeating Smith's evidence. Ordinarily, appellate courts describe the credibility of a witness as a factual question that lies exclusively within the province of the trier of fact. ( Bradley v. Perrodin (2003) 106 Cal.App.4th 1153, 1166.) In the context of an anti-SLAPP motion, courts do not weigh the credibility or comparative probative strength of the competing evidence. ( Wilson v. Parker, Covert Chidester (2002) 28 Cal.4th 811, 821.) Consequently, we cannot conclude that Rawson's anti-SLAPP motion succeeds because his declaration is credible and outweighs the evidence submitted by Smith.
Second, and most importantly, we consider whether Smith has submitted sufficient circumstantial evidence from which a reasonable trier of fact could infer that Rawson acted with improper motives rather than the intent to aid in the evaluation of Smith's qualifications and fitness as a physician. The evidence submitted by Smith includes the settlement proposal made to Smith before the Selma Community Hospital medical executive committee rescinded the 2004 summary suspension and, as well, information about the conflicting or competitive financial interests between him and the affiliates of Adventist Health System/West.
Defendants' objections to (1) the minutes of the meetings of the medical executive committee of Selma Community Hospital (exhibits 7, 13, 21, 26 and 30 to Hensleigh's declaration) and (2) the transcripts of Smith's testimony before the Medical Board of California (exhibits 2 and 3 to Hensleigh's declaration) are overruled.
This court discussed the settlement negotiations in Smith v. Selma Community Hospital, supra, 164 Cal.App.4th at page 1511, and concluded that they were "relevant because reasonable inferences can be drawn from them regarding the SCH medical executive committee's motivation. . . ." In this case, that evidence is also relevant to the motivation of Rawson, who was the president and chief executive officer of Selma Community Hospital and also a nonphysician member of its medical executive committee. In making the settlement offer, the medical executive committee was willing (a) to rescind the recommendation to terminate Smith's privileges, (b) not to use the findings of the judicial review committee of the Hanford hospitals as a basis for future corrective action or for the denial of Smith's reappointment at Selma Community Hospital, and (c) to base future corrective action only on events occurring after the date of its offer. The inconsistent nature of this offer and concerns about patient safety support the inference that those involved were motivated by a desire to inflict damage on Smith because of his failure to sell his practice and clinics to Adventist Health on its renegotiated terms, his litigation against Adventist Health and its affiliates, and his competition with Adventist Health.
Thus, we conclude that Smith has submitted sufficient circumstantial evidence regarding Rawson's intent to support a reasonable trier of fact's conclusion that the qualified privilege in Civil Code section 43.8 does not apply.
4. Qualified privilege in subdivision (c) of Civil Code section 47 fn_
Civil Code section 47 includes a privilege for communications between persons with a mutual interest in the subject matter: "A privileged publication or broadcast is one made: [¶] . . . [¶] (c) In a communication, without malice, to a person interested therein, (1) by one who is also interested. . . ." This privilege sometimes is referred to as the conditional common-interest privilege. (E.g., Noel v. River Hills Wilsons, Inc. (2003) 113 Cal.App.4th 1363, 1368.)
The malice referenced in the statute is established by a showing that the publication was motivated by hatred or ill will toward the plaintiff or by a showing that the defendant lacked reasonable grounds for belief in the truth of the publication and therefore acted in reckless disregard of the plaintiff's rights. ( Sanborn v. Chronicle Pub. Co. (1976) 18 Cal.3d 406, 413.)
The circumstantial evidence submitted by Smith regarding Rawson's intent or motivation relevant to the qualified privilege established by Civil Code section 43.8 also is sufficient to support a finding by a reasonable trier of fact that Rawson is not protected by the common-interest privilege set forth in subdivision (c) of Civil Code section 47.
5. The absolute privilege under Civil Code section 47
Civil Code section 47 states: "A privileged publication or broadcast is one made: [¶] . . . [¶] (b) . . . (4) in the initiation or course of any other proceeding authorized by law and reviewable pursuant to [statutory mandamus]
In Kibler, the California Supreme Court discussed the legislation that amended subdivision (b) of Civil Code section 47 and how that provision compared to section 425.16, subdivision (e)(2), which references an "official proceeding authorized by law." The court stated that subdivision (b) of Civil Code section 47 was amended "to clarify that Civil Code section 47's official-proceedings privilege applied to those proceedings authorized by law that are reviewable by administrative mandate, such as hospital peer review." ( Kibler, supra, 39 Cal.4th at p. 202.) The court also stated that the legislative history reflected the Legislature's view that the Civil Code section 47 privilege applied to quasi-judicial proceedings conducted by a medical peer review authority. ( Kibler, at p. 202.) Based on the Kibler court's discussion of Civil Code section 47, subdivision (b), we conclude that the statutory phrase "any other proceeding authorized by law and reviewable pursuant to [statutory mandamus]" includes the 2004 peer review proceeding at Selma Community Hospital that resulted in the summary suspension of Smith's privileges.
Accordingly, whether the absolute privilege bars Smith's claims concerning the 2004 summary suspension depends on the meaning and application of the term "publication or broadcast." We note that the term "publication or broadcast" is used in all four of the privileges listed in subdivision (b) of Civil Code section 47.
In Rusheen v. Cohen, supra, 37 Cal.4th 1048, the California Supreme Court considered the litigation privilege established by the statutory language concerning a publication or broadcast made in "any . . . judicial proceeding . . . ." (Civ. Code, § 47, subd. (b).) Because the privilege protected only publications and broadcasts, the court stated that the threshold issue was whether the defendant's conduct was communicative or noncommunicative. ( Rusheen v. Cohen, supra, at p. 1058.) "The distinction between communicative and noncommunicative conduct hinges on the gravamen of the action. [Citations.] That is, the key in determining whether the privilege applies is whether the injury allegedly resulted from an act that was communicative in its essential nature." ( Ibid.)
In Rusheen v. Cohen, Rusheen sued Cohen for abuse of process, alleging that Cohen filed a false declaration regarding personal service of a summons, complaint and order declaring Rusheen a vexatious litigant. ( Rusheen v. Cohen, supra, 37 Cal.4th at p. 1054.) Relying on the declaration of service, Cohen obtained a default judgment and began to execute on Rusheen's property. ( Id. at pp. 1053-1054.) The court evaluated the question whether the gravamen of the action was communicative or not by examining Cohen's conduct (1) in filing the allegedly false proof of service and (2) executing on the judgment. First, the court concluded that filing an allegedly false declaration of service of process was a communicative act that fell within the litigation privilege. ( Id. at p. 1058.) Second, the court indicated that the only theory for why the conduct of executing on the judgment was wrong was based on the allegation that Cohen and his alleged coconspirators filed a perjured declaration of service. As a result, the court concluded "the gravamen of the action was not the levying act, but the procurement of the judgment based on the use of allegedly perjured declarations of service." ( Id. at p. 1062.) Thus, the court concluded, the litigation privilege covered the communicative act (filing the allegedly false declaration) and extended to necessarily related noncommunicative acts (levying on property). ( Ibid.)
Here, defendants argue that (1) the proceeding-reviewable-by-mandate privilege should be applied broadly, (2) the peer review process is fundamentally a communicative process, and (3) in the context of peer review, it makes little or no sense to separate action from the larger communicative process that produces such action. Defendants acknowledge that, if adopted, their position would effectively eliminate the actions for damages discussed in Westlake Community Hosp. v. Superior Court (1976) 17 Cal.3d 465 [ 131 Cal.Rptr. 90, 551 P.2d 410]. In that case, the California Supreme Court reached two conclusions: "First, we have determined that although a doctor who has been denied hospital staff privileges must exhaust all available internal remedies before instituting any judicial action, including an action seeking only damages, the affidavits in the instant case do not establish that Los Robles [Hospital] provided an available remedy which plaintiff failed to exhaust. Second, we have concluded that because Los Robles [Hospital] undertook the exclusion without notice or hearing, plaintiff is not precluded from immediately instituting a tort action for damages sustained as a result of such exclusion." ( Id. at p. 485.)
The first of these conclusions indicates that a doctor may sue for damages resulting from the wrongful denial of hospital privileges after the doctor has exhausted available internal remedies.
We conclude that the privilege contained in subdivision (b) of Civil Code section 47 should not be interpreted so broadly that it eliminates these actions for damages.
First, defendants have provided no legislative history or any other material indicating that the Legislature intended the proceeding-reviewable-by-mandate privilege to wipe out the actions for damages described in Westlake Community Hosp. v. Superior Court.
Second, as a matter of statutory construction, applying the privilege to all acts related to peer review proceedings would read the term "publication or broadcast" out of the privilege set forth in subdivision (b)(4) of Civil Code section 47.
Third, because of the similarities between litigation and a peer review proceeding, it would be difficult to reconcile (1) the conclusion that all acts related to a peer review proceeding are communicative in nature with (2) the determination in Rusheen v. Cohen, supra, 37 Cal.4th 1048 that the act of executing on a judgment by levying on property was noncommunicative. ( Id. at p. 1062.)
Fourth, the broad application of the privilege also would do away with the inquiry that looks at the gravamen of the action test to determine whether the injury resulted from an act that was communicative. ( Rusheen v. Cohen, supra, 37 Cal.4th at p. 1055.)
Fifth, such a broad application of the privilege would render the qualified privileges relating to peer review proceedings superfluous. (See Civ. Code, §§ 43.7, 43.8.)
Rather than broadly applying the proceeding-reviewable-by-mandate privilege to all claims alleging a wrongful suspension of privileges after a peer review proceeding, we conclude that such claims should be reviewed on a case-by-case basis under the test that determines whether the gravamen of the action was communicative. ( Rusheen v. Cohen, supra, 37 Cal.4th at p. 1058.) Under this test, the key inquiry is "whether the injury allegedly resulted from an act that was communicative in its essential nature." ( Ibid.)
In conducting this inquiry, we first look at the injury alleged by Smith. That injury was the loss of revenue while he did not have hospital privileges. Smith's declaration states that while the summary suspension was in effect during March and April of 2004, he "lost around $30,000 in reimbursement for the deliveries, post natal care and well born baby care, with a combined net revenue loss for [him and his companies] of around $27,000." Second, we identify the act or conduct that caused this injury. Here, the act that caused Smith's loss of revenue was the summary suspension. Third, we examine Smith's theories as to why the act of suspending him was wrongful. Smith's first legal theory or cause of action alleges that the suspension was "done with the sole purpose and intention of causing SMITH damage and depriving SMITH of his lawful right to practice his occupation." Similarly, Smith's theory of unfair competition alleges that defendants misused the peer review process to gain an advantage over competitors. Thus, the act of suspending Smith's privileges is alleged to be wrong because of defendants' underlying purpose.
Defendants' evidentiary objection to this portion of the declaration on the grounds of lack of foundation is overruled.
Next, we compare the allegedly wrongful suspension of Smith's privileges with the illustrations of communicative and noncommunicative conduct provided in Rusheen v. Cohen, supra, 37 Cal.4th 1048. The examples of communicative acts provided in that case included (1) attorney prelitigation solicitations of potential clients, (2) filing pleadings in litigation, (3) testimonial use of illegally overheard conversations, and (4) filing allegedly false declarations. ( Id. at p. 1058.) Examples of noncommunicative acts included (1) prelitigation illegal recording of confidential telephone conversations, (2) eavesdropping on telephone conversations, and (3) a physician's negligent examination of a patient that caused a back injury. ( Ibid.)
We conclude that the summary suspension of Smith for allegedly wrongful purposes was a noncommunicative act. The suspension itself is more like the act of levying on property (a noncommunicative act) than the filing of a false declaration (a communicative act). We recognize that communicative acts necessarily were related to the act of suspending Smith's privileges. For example, sending Smith the March 23, 2004, letter informing him of the suspension was a communicative act. Sending the letter, however, was not the wrongful act or the gravamen of the action, and it does not convert the wrongful act (suspension) into a communication.
6. Summary regarding the merits of Smith's claims
Based on the foregoing discussion of exhaustion of remedies, res judicata, collateral estoppel, and qualified and absolute privileges, we conclude that Smith has demonstrated that his claim concerning the 2004 summary suspension has sufficient merit to withstand the anti-SLAPP motions filed by defendants.
III. The 2007 Screenout of Smith's Reapplication
A. Summary of Claim
In October 2007, Smith submitted a reapplication for privileges to CMStaff. In December 2007, Smith was informed that the reapplication could not be accepted or considered because he had not satisfied the 36-month waiting period set forth in section 4.5-10 of the Bylaws. That section provides: "An applicant who has received a final adverse decision regarding appointment shall not be eligible to reapply to the medical staff for a period of 36 months." (Italics added.) Defendants took the position that the term "final adverse decision" referred to the final decision of a judicial proceeding and the 2004 decisions of the governing boards of the Hanford hospitals were not "final" because a writ proceeding was pending in court. In contrast, Smith argued the term referred to the final administrative decision of the hospital governing boards.
Smith's first amended complaint alleged that defendants misinterpreted section 4.5-10 of the Bylaws to deprive him of privileges and cause damage to him and his companies. In addition to the misinterpretation, the first amended complaint also alleged that defendants misapplied their interpretation to him by taking inconsistent positions. On the one hand, they claimed the 2004 decisions of the governing boards of the Hanford hospitals were not "final" because of the pending lawsuit. On the other hand, they claimed Smith was ineligible pursuant to section 4.5-10 of the Bylaws — a provision that bases ineligibility upon the receipt of a final adverse decision.
B. Trial Court's Order on the Anti-SLAPP Motions
The trial court's order denying the special motions to strike set forth its determinations that (1) Smith's original complaint sought to enforce the Bylaws and the review of his reapplication, (2) there was no available administrative review of the decision to screen out Smith's reapplication, (3) Smith's claim that the screenout resulted from a misinterpretation of section 4.5-10 of the Bylaws was not based on an act in furtherance of protected peer review activity, and (4) the allegations regarding Smith's exclusion from routine peer review activities and the meetings of the CMStaff were merely collateral to the main focus of his complaint.
Based on these determinations, the trial court found that the first amended complaint was not based on communications or conduct subject to a special motion to strike and, as a result, the burden did not shift to Smith to prove his lawsuit had a probability of success.
The trial court's order also noted that when it issued a preliminary injunction to Smith it "found that Smith had a probability of success on the merits of the 36 month dispute . . . ." The preliminary injunction and the determination regarding Smith's probability of success on the interpretation of the Bylaws was upheld on appeal. ( Smith v. Adventist Health System/West, supra, 182 Cal.App.4th at pp. 750-756.)
C. Defendants' Showing Regarding Protected Activity
1. Involvement of a peer review committee
Defendants challenge the trial court's determination that they did not meet their burden of showing that Smith's claim concerning the 2007 screenout of his reapplication arose from protected activity. Defendants contend peer review activity is protected by the anti-SLAPP statute and the causes of action addressing Smith's 2007 reapplication arose from peer review activity. Specifically, defendants assert that Smith's "claim as to the 36-month rule alleges that a peer review committee (the Consolidated Staff MEC) misinterpreted, misapplied and denied Smith a hearing regarding a medical staff bylaw [citation] that [set forth the waiting period.]" Based on their view of Smith's allegations, defendants contend that the "entirety of the claims alleged in the [first amended complaint] fall squarely within the scope of Kibler and involve the public interest."
Defendants' contentions directly contradict the trial court's explicit finding that Smith's reapplication was screened out due to the 36-month waiting period and "never was sent to the department, credentialing committee or the Medical Executive Committee." To resolve this disagreement, we will consider whether defendants established their assertion of fact that it was CMStaff's medical executive committee that interpreted the Bylaws and determined that Smith was not eligible.
First, the December 4, 2007, letter from Reiber to Smith notifying Smith of his ineligibility does not identify who interpreted the Bylaws and determined the meaning of the term "final adverse decision" or who decided that interpretation applied to Smith's situation. ( Smith v. Adventist Health System/West, supra, 182 Cal.App.4th at p. 750, fn. 14.)
Second, the record contains no documents that show what occurred at the December 4, 2007, meeting of the medical executive committee of the CMStaff referenced in the letter. For example, the record includes no minutes that reflect the committee considered and voted on how to interpret the Bylaws.
Third, the declaration of Zeismer does not identify who interpreted section 4.5-10 of the Bylaws. Paragraph 19 of her declaration states: "[Smith's October 2007] application was not accepted, and the Medical Executive Committee sent Dr. Smith a letter dated December 4, 2007, informing him that his application had not been accepted. . . ." As with the letter itself, Zeismer's declaration does not identify who interpreted the Bylaws or the procedures used to obtain that interpretation.
Fourth, the declaration of Reiber states that some applications for reappointment do not get beyond an initial screening of the information provided. The declaration also states: "Some applications are deemed incomplete and never reach any Medical Staff department or committee, much less the [medical executive committee] or the Governing Boards. See Bylaws section 4.5-3 . . . . Failure to meet threshold criteria for consideration, such as current licensure, adequate professional liability insurance, or as here, sufficient time following an adverse appointment decision, also may prevent an application from being processed further." (Underscoring added.)
The declaration of Reiber, as well as the absence of evidence to the contrary, provides adequate support for the trial court's explicit finding that Smith's reapplication was screened out due to the 36-month waiting period and "never was sent to the department, credentialing committee or the Medical Executive Committee." Therefore, we conclude that defendants have failed to establish the factual premise for their argument that a peer review committee interpreted the Bylaws and determined Smith was not eligible.
2. Any other official proceeding authorized by law
Despite defendants' failure to establish that a peer review committee interpreted the Bylaws and decided Smith was ineligible, we will consider whether defendants have demonstrated that the procedure resulting in the interpretation and screening out of Smith's reapplication qualified as "any other official proceeding authorized by law" under paragraph (1) or (2) of subdivision (e) of section 425.16. In other words, does the consideration of the Bylaws' threshold criterion regarding the passage of time since an adverse appointment decision constitute an official proceeding authorized by law?
In Kibler, the court concluded that the peer review proceeding that resulted in the summary suspension of a physician constituted an "official proceeding" under the anti-SLAPP statute. ( Kibler, supra, 39 Cal.4th at p. 200.) The court reached this conclusion because the procedures followed were required by Business and Professions Code section 805 et seq., a comprehensive statutory scheme that governs hospital peer review proceedings. ( Kibler, at p. 199.) In addition, the court determined there were other attributes of the proceeding in question that supported its conclusion-specifically, (1) the hospital was required to report decisions that revoked or restricted a physician's staff privileges to the Medical Board of California (the licensing body) and (2) the decision was subject to judicial review by administrative mandate. ( Id. at p. 200.)
In contrast to a summary suspension, the screening out of Smith's reapplication (1) was not shown by defendants to have been done pursuant to procedures governed by the Business and Professions Code, (2) did not require a report be made to the Medical Board of California, and (3) was not accompanied by the right to an administrative hearing and the further right to have the results of the administrative hearing judicially reviewed by administrative mandate. Consequently, we conclude that defendants failed to establish that the screening out of Smith's reapplication constituted an "official proceeding" for purposes of the anti-SLAPP statute.
Defendants' reliance on Business and Professions Code section 2282.5 is not persuasive because, among other things, neither the second nor third criterion was met.
3. Summary
The trial court correctly concluded that the sequence of actions that resulted in defendants' screening out Smith's reapplication was not taken in the context of an "official proceeding authorized by law" and, therefore, those actions were not protected activity for purposes of the anti-SLAPP statute. Based on this determination, we conclude the burden did not shift to Smith to show his claims concerning the screenout had a probability of succeeding and we need not address whether he satisfied that burden. Furthermore, we need not address the evidentiary objections that related to evidence submitted by Smith to carry that burden.
IV. Other Mattersfn_
Defendants' joint motion for judicial notice filed on July 28, 2009, is granted.
On April 23, 2010, Smith filed objections to defendants' reply appendix, which contained the October 2008 request for judicial notice filed by Adventist Health and Rawson in support of their opposition to Smith's motion for leave to file first amended complaint. This document is part of defendants' joint appendix. Therefore, we overrule Smith's objections.
On August 20, 2010, Smith filed a motion requesting judicial notice of the appellants' appendix filed in Smith v. Selma Community Hospital, supra, 188 Cal.App.4th 1, the appeal in which the preliminary injunction granted in Smith's favor was affirmed. The request was made to support arguments contained in a simultaneously filed letter regarding application of the doctrine of law of the case to this appeal. Adventist Health responded to Smith's arguments regarding the law of the case in a letter and, on August 31, 2010, filed a motion for judicial notice of the referee's June 24, 2010, "Final Statement of Decision Following Appeal and Remand" in the lawsuit involving the attempted sale of Smith's practice and clinics. (See Central Valley General Hospital v. Smith, supra, 162 Cal.App.4th 501.)
Because we have not reached the arguments regarding the doctrine of law of the case, Smith's August 20, 2010, motion requesting judicial notice and Adventist Health's August 31, 2010, motion for judicial notice are denied.
DISPOSITIONThe trial court's February 19, 2009, order denying defendants' special motions to strike is affirmed. Plaintiffs shall recover their costs on appeal.
Levy, Acting P. J., and Hill, J., concurred.
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