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Groom v. Health Net8/9/2000
CERTIFIED FOR PUBLICATION
APPEAL from an order of the Superior Court of Los Angeles County, William J. McVittie, Judge.
Reversed with directions.
INTRODUCTION
Plaintiff and respondent Sarah Groom (Groom) sued defendants and appellants Health Net and Health Systems International, Inc. (collectively Health Net) and others not party to this appeal. Groom, a subscriber of a health plan administered by Health Net, a duly-organized health maintenance organization (HMO), alleges that as a result of Health Net's refusal or failure to timely provide a neurological examination, a prescription drug, and an MR angiogram and cardiac workup, Groom suffered a disabling stroke.
After demurring to Groom's original, first amended, second amended, and third amended complaints, Health Net moved to compel arbitration of the dispute pursuant to the arbitration clause contained in the health plan. (Code Civ. Proc., § 1281.2.) The trial court denied Health Net's petition to compel arbitration, concluding that Health Net waived its right to compel arbitration when it "entered the litigation arena" by demurring and waited for almost one year before "seek to remove this suit to arbitration." Health Net appeals from the order denying the petition to compel arbitration. (Code Civ. Proc., § 1294, subd. (a).)
We reverse on the ground that Health Net's participation in litigation by way of demurrers did not, in the absence of prejudice to Groom, waive Health Net's right to enforce the arbitration agreement between the parties.
factual and procedural background
Health Net is an HMO which provides prepaid medical coverage to its subscribers. Groom became enrolled in the plan under a group agreement between Health Net and St. Anne's Maternity Home. The plan's evidence of coverage booklet provides that " n the event of any dispute or controversy concerning the construction, interpretation, performance, or breach of this Evidence of Coverage arising between the Employer, a Subscriber or eligible Family Member, or the heir-at-law or personal representative of such person, as the case may be, and Health Net or any Participating Medical Group, such dispute or controversy shall be submitted to arbitration under the appropriate rules of the American Arbitration Association. . . . This binding arbitration provision does not apply to claims, disputes, or controversies relating solely to alleged professional negligence (medical malpractice)."
Groom filed her original complaint on May 20, 1996. It named Health Net and the medical corporations and doctors who actually provided medical services to her. It alleged nine causes of action, seven against all defendants. These were: (1) medical malpractice, (2) breach of the covenant of good faith and fair dealing, (3) breach of contract, ((4) and (5) related only to the medical providers), (6) breach of fiduciary duty, (7) negligent infliction of emotional distress, (8) intentional infliction of emotional distress, and (9) unfair business practices for which injunctive and equitable relief was sought pursuant to Business and Professions Code section 17200.
Health Net demurred on grounds that: (as to 1) medical malpractice does not lie against Health Net who is not a provider of medical services licensed to practice medicine; (as to 2) breach of the covenant of good faith and fair dealing was not set forth with sufficient specificity as to the contract obligations breached nor were facts alleged which raised tort liability as distinguished from mere breach of contract; (as to 3) breach of contract was not sufficiently described because the contract's terms were not spelled out; (as
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