Burgess v. Kaiser Foundation Hospitals

Opinion

KING, J.—

I. Introduction

In this case of contractual arbitration we hold that when a dispute arises over the appointment of an arbitrator, or between an arbitrator and one of the parties concerning the arbitrator’s fee, the remedy is to petition the court to resolve the dispute. Delay in seeking such relief which prevents the arbitration from going forward does not toll the five-year dismissal period for lack of reasonable diligence in bringing a claim to arbitration.

II. Background

Kaiser Foundation Hospitals provided obstetric medical services for Wendy Ann Burgess, who was bom on February 27,1981. Her parents, Ann Elizabeth Burgess Randall and Steven Rial Burgess, claim that as a result of medical negligence Wendy suffered oxygen deprivation during her birth, resulting in personal injury (including epilepsy and heart problems), the cause of which was not ascertained until 1986.

On April 24, 1986, the Burgesses served Kaiser with a demand for arbitration pursuant to the parties’ “Individual Medical and Hospital Service

[1080]

Agreement,” which contained an arbitration provision. The parties stipulated to arbitration on June 10, 1986.

The arbitration clause called for each party to designate an arbitrator, with the two arbitrators to select a third, neutral arbitrator. The Burgesses designated their arbitrator on June 11, 1986, and Kaiser designated its arbitrator on June 20, 1986. The two party arbitrators, however, did not select the neutral arbitrator until April 5, 1989.

On April 19, 1989, the Burgesses demanded an exchange of expert trial witness information. (Code Civ. Proc., § 2034.) In June 1990, Kaiser designated eight experts.

On April 16, 1990, the neutral arbitrator scheduled the arbitration to take place from July 25, 1990, through July 27, 1990. Two days later, on April 18, he notified counsel by letter that he would require each side to make a nonrefundable deposit of $1,000 toward his fees. The letter stated as follows: “My fee for services as the neutral arbitrator in the above matter is $250.00 per hour. I will require a $1,000.00 reservation fee to be paid by each party on or before June 1, 1990. The reservation fee will be applied toward my hourly fees when the arbitration proceeds as scheduled. In the event that the arbitration is rescheduled, an additional reservation fee will be required.”