Sierra Vista Hosp. v. Superior Court of San Luis Obispo Cty.

In the early part of 1963 Evelyn Shaffer was a patient in the Sierra Vista Hospital in San Luis Obispo apparently under the care of a Dr. Prier. Sometime after her release from the hospital she and her husband filed an action in the respondent court against Dr. Prier and the hospital, among others, seeking to recover damages resulting from their alleged negligence.

After the action was at issue, plaintiffs’ attorneys served an interrogatory asking the hospital whether any investigations or other reports were “prepared, compiled, submitted or

In August 1966 plaintiffs noticed a motion for an order requiring the hospital to produce the incident report of March 1963 for inspection by their attorneys. The motion was made on the ground that the report “is not privileged . . . and constitutes evidence which is relevant to the subject matter” of the action and material to the issues to be filed. The court granted plaintiffs’ motion on November 9 and a week later signed the order here under review requiring the hospital to produce the report for inspection.

Petitioner contends that the order for the production of the incident report constitutes an abuse of the court’s discretion. We agree. “In a legal sense discretion is abused whenever in the exercise of its discretion the court exceeds the bounds of reason, all of the circumstances before it being considered.” (Berry v. Chaplin, 74 Cal.App.2d 669 , 672 [ 169 P.2d 453 ], quoted with approval in State Farm etc. Ins. Co. v. Superior Court, 47 Cal.2d 428 , 432 [ 304 P.2d 13 ].) In view of our conclusion that the report is privileged, the order is also in excess of the court’s jurisdiction. Section 2031, Code of Civil Procedure, expressly limits inspection to matters that are “not privileged.” Section 2016, subdivision (b), provides that “All matters which are privileged against disclosure upon the trial under the law of this State are privileged against disclosure through any discovery procedure.”

The primary question before us is whether the incident report is privileged within the meaning of section 2031, Code

The petitioner, Sierra Vista Hospital, is a corporation. As such, it is entitled to claim the same protection of the attorney-client privilege in a proper case as that enjoyed by a natural person. (D. I. Chadbourne, Inc. v. Superior Court, 60 Cal.2d 723 , 736 [ 36 Cal.Rptr. 468 , 388 P.2d 700 ] ; People ex rel. Dept. of Public Works v. Glen Arms Estate, Inc., 230 Cal.App.2d 841 , 856 [ 41 Cal.Rptr. 303 ].) These eases hold that a corporation shall “not be given greater privileges than are enjoyed by a natural person merely because it must utilize a person in order to speak.” In all such eases, however, the power of a reviewing court is limited. As the court said in Chadbourne (p. 729), if the facts support the contention that the communication involved “was privileged as a matter of law, respondent court was required to deny the motion for inspection (§2016, subd. (b)). If, however, the claimed privilege does not appear as a matter of law, but presented a question of fact, then the determination of the trial court may not be set aside. When the facts, or reasonable inferences from the facts, shown in support of or in opposition to the claim of privilege are in conflict, the determination of whether the evidence supports one conclusion or the other is for the trial court, and a reviewing court may not disturb such finding if there is any substantial evidence to support it (Holm v. Superior Court, 42 Cal.2d 500 , 507 [ 267 P.2d 1025 , 268 P.2d 722 ]; San Diego Professional Assn. v. Superior Court, 58 Cal.2d 194 , 202 [ 23 Cal.Rptr. 384 , 373 P.2d 448 , 397

The determinative facts of this case are undisputed. The only evidence submitted in support of the motion was a transcript of the deposition of Travis Wilson, the hospital administrator. The declaration of plaintiffs’ attorney filed in support of the motion does not allege any facts within his knowledge bearing on the question of privilege. The court also had before it the declaration of Travis Wilson and the declaration of Malcolm Archbald, one of the petitioners’ attorneys, in opposition to the motion. Copies of these several documents are a part of the record here.

It appears from the Wilson declaration that his duties as administrator of the hospital are those of general business manager, that all of the personnel of the hospital are under Ms direction, and that it is “one of my specific duties to protect the Hospital from any cause that might subject the Hospital to any kind of legal action or liability.” From the time of Ms employment in September 1959, when the hospital commenced operations, it has carried liability insurance with Truck Insurance Exchange, which has always supplied him with printed forms on which to make a confidential report of all ‘ ‘ incidents. ’ ’ He was instructed by the insurance company to use this form to report all incidents which might result in litigation against the hospital and send the reports to the insurance company to be transmitted to and used by the attorney representing the hospital in the event of litigation.

With respect to the incident involving the plaintiff Evelyn Shaffer, Wilson alleged in Ms declaration that on March 1, 1963, when she Avas a patient in the hospital, he received information of an incident which led him to believe that she “would possibly file a suit for damages against the hospital arising out of that incident.” In order to obtain information to defend such a lawsuit, he directed Irene Brown, the director of nursing services at the hospital, to gather information for use in preparing a report of the incident for the insurance company. The incident report was prepared in part by

There can be no doubt that the incident report involved here fairly meets all these requirements and is privileged. This being so it “does not lose its privilege,” to quote further from Chadbourne, “merely because it was obtained, with the knowledge and consent of the employer, by an agent of the employer acting under such agency; 8. For such purpose an insurance company with which the employer carries indemnity insurance, and its duly appointed agents, are agents of the employer corporation; but the extent to which this doctrine may be carried, and the number of hands through which the communication may travel without losing confidentiality must always depend on reason and the particular facts of the case.” Here the report did not lose confidentiality by traveling from the hospital administrator to the hospital’s attorney directly through the agency of its insurance carrier.

The record also shows that the report was intended to be confidential. “ [I]n all corporate employer-employee situations,” according to Chadbourne, “it must be borne in mind that it is the intent of the person from whom the information emanates that originally governs its confidentiality (and hence its privilege); thus where the employee who has not been expressly directed by his employer to make a statement, does not know that his statement is sought on a confidential basis (or knowing that fact does not intend it to be confidential), the intent of the party receiving and transmitting that statement cannot control the question of privilege;

It appears from the memorandum filed by the trial court that its decision to grant plaintiffs’ motion was based on its conclusion “that the preparation [of the incident report] for the purpose of preparing to defend against possible litigation was not the dominant purpose.” The court said that in reaching this conclusion it relied on the declaration of plaintiffs and a reading of Wilson’s deposition taken long after the filing of the action.

The rule in such eases is stated in Chadbourne, at page 737: “6. When the corporate employer has more than one purpose in directing such an employee to make such report or statement, the dominant purpose will control, unless the secondary use is such that confidentiality has been waived; . . .” We find nothing in the evidence before the trial court which even remotely suggests that the hospital had more than the one purpose in preparing the incident report discussed above. On the contrary, as we have already pointed

It appears to us from the undisputed facts relied on by petitioner in support of its claim of privilege that the incident report is privileged as a matter of law. The respondent court was therefore required to deny plaintiffs' motion for inspection.

Let a peremptory writ issue prohibiting the respondent court from enforcing its order of November 15, 1966, in action number 28814, requiring petitioner to produce for plaintiffs’ inspection, the incident report dated March 5, 1963, signed by Irene Brown and W. Travis Wilson.

Both, P. J., and Herndon, J., concurred.