Centeno v. Roseville Community Hospital

107 Cal. App. 3d 62, 167 Cal. Rptr. 183
California Court of Appeal·Decided November 6, 1979·No. 18109·Published·Cited by 23 cases

Opinion

107 Cal.App.3d 62 (1979)
167 Cal. Rptr. 183

RICARDO S. CENTENO, Plaintiff and Appellant,
v.
ROSEVILLE COMMUNITY HOSPITAL, Defendant and Respondent.

Docket No. 18109.

Court of Appeals of California, Third District.

November 6, 1979.

*65 COUNSEL

Brian McCarthy, Harry Gonick and Bruce Krell for Plaintiff and Appellant.

McDonough, Holland, Schwartz & Allen, McDonough, Holland & Allen, G. Richard Brown and Ann H. Morris for Defendant and Respondent.

OPINION

WARREN, J.[*]

Plaintiff, Ricardo S. Centeno, M.D., sought a declaratory judgment, injunctive relief and damages from defendant, Roseville Community Hospital. After trial without a jury, the trial court entered judgment for the hospital on all causes of action, and plaintiff appeals. We affirm.

*66 STATEMENT OF FACTS

After a series of problems had developed at the hospital in the providing of radiology services, and after a number of meetings were held with interested persons, the hospital administration and the board of directors entered into an exclusive radiology medical services contract with Roseville X-ray Medical Group, a partnership comprised of plaintiff and three hospital radiologists, Drs. Farkas, Perednia and Martin. The agreement was signed on December 16, 1974, and provided for review at 30 days, 90 days, 1 year, and annually thereafter.

Subsequently, plaintiff became embroiled in a controversy with his partners which culminated in his no longer being a member of the partnership. The hospital then refused to allow him to use their radiology facilities, claiming it had an exclusive contract with the remaining partners.

He sued the hospital, alleging in his complaint that: (1) the parties to the contract maliciously, unlawfully and wrongfully deprived him of his right to practice his profession; (2) he would suffer irreparable damage unless injunctive and declaratory relief was granted; (3) the hospital intentionally and maliciously interfered with his present and prospective economic and professional benefits and advantages by refusing to allow him full and complete radiological clinical privileges including use of the hospital's radiological, clinical and laboratory facilities.

He contends on appeal: (1) the contract is no longer in existence, and if so, it is so vague and uncertain as to be unenforceable; (2) the contract is violative of Business and Professions Code section 16600 as an unlawful restraint on his right to practice a profession; (3) the contract was not entered into with an adequate investigation and is not justified under a balancing of appropriate policy considerations; (4) the contract is unlawful as an improper delegation of the hospital's authority to choose medical staff members; and (5) he was denied due process of law when the hospital failed to hold a hearing and when it refused to allow him access to the radiology facilities at the hospital.

I

Plaintiff first contends that the contract either is no longer in existence, or if it is, it is so vague and uncertain that it is unenforceable.

*67 The contract was introduced into evidence and the testimony further establishes its execution and performance. Plaintiff's claim that the agreement was automatically terminated upon his withdrawal from the partnership is supported only by his own testimony and ignores conflicting evidence.

The minutes of the board of directors reveal that the signatories' intent was that the contract addendum provision holding "the Agreement between the Group and Hospital to be null and void upon the removal or negation of any one or all of the physicians' signatures below from said Agreement" was only intended to vitiate the agreement in the event a partnership arrangement could not be worked out between the doctors forming the Roseville X-ray Medical Group by February 15, 1975. Subsequent minutes reflect the continued intent of the hospital not to consider the agreement terminated upon the subsequent withdrawal of a signatory partner to the contract unless the desired radiological services were not being satisfactorily performed.

After plaintiff's withdrawal from the partnership, the hospital's board of directors elected to exercise the 120-day notice of termination provision and decided to have an evaluation made of the radiological medical group's performance before deciding whether to renew the contract.

After receipt of a favorable report by the American College of Radiology, the directors, with the concurrence of the remaining members of the Roseville X-ray Medical Group, voted on February 22, 1977, to renew the contract for a 5-year period with provisions for annual review and a 120-day notice termination clause. The contract was in the process of being reviewed for further renewal at the time of trial. Plaintiff has not pointed to any evidence showing that the contract was not again renewed or otherwise in force.

His additional contention that the agreement is so vague and uncertain as to be unenforceable is equally devoid of merit.

(1) "If a contract is capable of two constructions courts are bound to give such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if that can be done without violating the intention of the parties." (Rodriguez v. Barnett (1959) 52 Cal.2d 154, 160 [338 P.2d 907].)

*68 The contract clearly specifies the rights of the parties and, although not setting forth a definite termination date, clearly provides for a year-to-year term.

The renewal provision provides:

"4.04. TERM OF AGREEMENT. This agreement shall remain in full force and effect for a term of one (1) year from 12-16-74 and shall continue thereafter on a year-to-year basis unless terminated by either party, provided, however, that either of the parties hereto shall have the right and privilege of cancelling and terminating this agreement on one hundred twenty days' (120 days') written notice to the other and provided, further, that Hospital shall consult with the Executive Committee of the Medical Staff prior to giving notice of termination hereunder. Upon the expiration of said notice (one hundred twenty days from its delivery), this agreement shall be and become of no further force of [sic] effect whatsoever and each of the parties hereto shall be relieved and discharged herefrom."

This provision is certain enough to be enforceable. (Drzewiecki v. H & R Block, Inc. (1972) 24 Cal. App.3d 695, 700, 704-705 [101 Cal. Rptr. 169]; see Miller v. Stults (1956) 143 Cal. App.2d 592, 599-603 [300 P.2d 312]; Aaker v. Smith (1948) 87 Cal. App.2d 36, 43 [196 P.2d 150]; Civ. Code, §§ 1943, 1946; 3A Corbin on Contracts (1960 ed.) § 684, p. 224.)

II

In a series of related contentions, plaintiff argues that the contract is otherwise unenforceable. His attack on the agreement is based on the grounds that it was entered into without adequate investigation, that it is not justified under a standard of balancing of the hardship to the physician and the hardship to the hospital, and that it is violative of section 16600 of the Business and Professions Code.[1] We disagree.

A

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Centeno v. Roseville Community Hospital, 107 Cal. App. 3d 62, 167 Cal. Rptr. 183 (Cal. Ct. App. 1979).

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