Mansdorf v. California Physicians' Service, Inc.

Opinion

KINGSLEY, Acting P. J.

Plaintiff appeals from a judgment of dismissal entered after an order sustaining a demurrer to her complaint. We reverse the judgment.

Plaintiff was a subscriber to a health service plan operated by defendant. The policy issued to her contained an arbitration clause reading as follows:

“In the event of a dispute between the Subscriber and Blue Shield, with respect to any of the terms, conditions, or benefits of this Agreement, the dispute shall be settled as follows:

“(1) A dispute concerning the therapeutic justification for any services rendered to the Subscriber shall be resolved by the decision of the appropriate review committee of that medical society which is a component society of the California Medical Association for the geographical area in which such services were provided, or, in the event that such services were provided outside of the State of California, then by such component society in the area where the Subscriber resides or last resided in the State of California.

“All such disputes shall be settled in this manner before any arbitration proceeding under paragraph (2) below is undertaken by or against Blue Shield.

“(2) All other disputes, including disputes with respect to the decisions of the medical society reached by such society in accordance with the provisions of Paragraph (1) above, shall be resolved as follows: the

[415]

Subscriber, by written notice to Blue Shield, shall request that an arbitration proceeding be initiated for the settlement of such disputes in accordance with the Rules of the American Arbitration Association. It is also agreed that judgment upon any award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

“All such disputes shall be settled in this manner before any action at law is taken by or against Blue Shield.”

She was injured in an accident and incurred charges for medical bills, hospitalization and nurses’ services. She submitted a claim for those expenses to defendant, which rejected them. Plaintiff then proceeded to arbitration as provided in the policy, receiving an award in her favor in the amount of $7,142. According to her complaint in the present.action, defendant paid to her only $6,999, withholding $125 as her share of the arbitration costs. She then filed the present action alleging bad faith on the part of defendant in refusing to pay her claim or to settle it for a reduced amount. A general demurrer to that complaint was sustained; plaintiff elected to stand on her complaint and the action was dismissed. This appeal followed.