383 P.2d 441, 445-46, (Cal. 1963)
Hugo Tunkl brought this action to recover damages for personal injuries alleged to have resulted from the negligence of two physicians in the employ of the University of California Los Angeles Medical Center.1 The hospital was operated and maintained by the Regents of the University of California as a nonprofit charitable institution.2 Mr. Tunkl died after suit was brought, and his surviving wife, as executrix, was substituted as plaintiff.3
The University of California at Los Angeles Medical Center admitted Tunkl as a patient on June 11, 1956.4 The Regents maintain the hospital for the primary purpose of aiding and developing a program of research and education in the field of medicine.5 Patients are selected and admitted if the study and treatment of their condition would tend to achieve these purposes.6 Upon his entry to the hospital, Tunkl signed a document setting forth the “Conditions of Admission.”7 The crucial condition number six reads as follows: “Release: The hospital is a nonprofit, charitable institution. In consideration of the hospital and allied services to be rendered and the rates charged therefor, the patient or his legal representative agrees to and hereby releases The Regents of the University of California, and the hospital from any and all liability for the negligent or wrongful acts or omissions of its employees, if the hospital has used due care in selecting its employees.”8
Plaintiff stipulated that the hospital had selected its employees with due care.9 The trial court ordered that the issue of the validity of the exculpatory clause be first submitted to the jury and that, if the jury found that the provision did not bind plaintiff, a second jury try the issue of alleged malpractice.10 When, on the preliminary issue, the jury returned a verdict sustaining the validity of the executed release, the court entered judgment in favor of the Regents.11 Plaintiff appeals from the judgment.12
Whether an agreement between a hospital and an entering patient affects the public interest such that the exculpatory provision included within it must be invalid under Civil Code section 1668?13
Civil Code section 1668 declares that all contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law.14 Exculpatory provisions may stand only if the contract does not involve the public interest.15 A transaction affects the public interest when it exhibits some or all of the following characteristics.16 It concerns a business suitable for public regulation.17 The party seeking exculpation performs a service of great importance to the public that is often a practical necessity.18 The party holds itself out as willing to perform the service for any member of the public who seeks it or meets established standards.19 The party possesses a decisive advantage of bargaining strength.20 The party confronts the public with a standardized adhesion contract of exculpation without provision for paying additional fees to obtain protection against negligence.21 The purchaser's person or property is placed under the control of the seller subject to the risk of carelessness.22
Yes. The agreement between Hugo Tunkl and the Regents of the University of California at the UCLA Medical Center affects the public interest under the factors set forth in the rule.23 The hospital is suitable for public regulation under the Health and Safety Code.24 Its services constitute a practical and crucial necessity for members of the public in need of specialized medical care.25
The hospital holds itself out to perform those services for qualified members of the public.26 It exercises a decisive advantage in bargaining by presenting the standardized Conditions of Admission form containing the release clause with no opportunity for negotiation or alternative protection.27 Tunkl placed himself under the hospital's control upon admission and thereby subjected himself to the risk of its employees' carelessness.28 Because the contract affects the public interest, the exculpatory provision is invalid under Civil Code section 1668.29
The exculpatory provision in the hospital admission contract is invalid under Civil Code section 1668 because the agreement affects the public interest.30
Whether the public interest invalidates the exculpatory provision as to the charitable patient but not a paying one?31
The duty of due care owed by a hospital to its patients emanates from both contract and tort and imports no discrimination based upon economic status.32 Retention of charitable immunity for the nonpaying patient is the least defensible distinction because the charitable patient is least able to bear the burden and has no choice in the matter.33
No. The Regents operated the UCLA Medical Center as a nonprofit charitable institution whose primary purpose was research and education, and Tunkl was admitted on that basis without any payment distinction affecting the duty of care.34 The hospital's duty to exercise due care applies equally to charitable and paying patients.35 Immunizing the hospital from negligence as to the charitable patient because he does not pay would be as abhorrent to medical ethics as it is to legal principle.36 The exculpatory provision is therefore invalid as to Tunkl regardless of his status as a patient at the charitable research hospital.37
The public interest invalidates the exculpatory provision equally for charitable patients and paying patients.38
Whether the hospital can obtain exemption from liability for the negligence of its employees but not its own negligence?39
A corporation necessarily acts through agents in everything it does, including the selection of its employees.40 Courts have drawn no distinction between a corporation's own liability and vicarious liability resulting from negligence of agents in contracts involving common carriers, public utilities, bailees, and similar parties.41 If a right of action against the negligent agent exists, the hospital may be subrogated to that right after paying a judgment.42
No. The Regents stipulated that the hospital had selected its employees with due care, yet the release purported to exempt the hospital from liability for the negligent acts or omissions of those employees.43 Because the hospital necessarily acts through agents, no distinction exists between its own negligence and vicarious liability for employee negligence.44 The exculpatory clause therefore cannot stand as to the negligence of the two physicians who treated Tunkl.45
The hospital cannot obtain exemption from liability for the negligence of its employees.46