Case Title: Atkinson v. Sachno

Citation: 

Docket Number: 000934

State: virginia

Court: Virginia Supreme Court

Date: 2001-03-02T00:00:00Z

Document:
Present:  Carrico, C.J., Lacy, Keenan, Koontz, Kinser, and 
Lemons, JJ. 
 
MARGARET L. ATKINSON 
 
 
 
 
 
 
 
OPINION BY 
v. Record No. 000934 
     JUSTICE LAWRENCE L. KOONTZ, JR. 
 
 
 
 
 
 
    March 2, 2001 
ROMAN SACHNO, JR., M.D. 
 
FROM THE CIRCUIT COURT OF THE CITY OF STAUNTON 
Humes J. Franklin, Jr., Judge 
 
In this medical malpractice case, we consider whether the 
trial court properly held that a physician providing consultant 
services for an agency of the Commonwealth was not an 
independent contractor and was entitled to the protection of the 
doctrine of sovereign immunity from liability for his alleged 
acts of negligence. 
BACKGROUND 
The material facts are not in dispute.  Dr. Roman Sachno, 
Jr., is a licensed physician specializing in internal medicine 
in a private practice in Staunton, Virginia.  Since 1972, Dr. 
Sachno has contracted with Disability Determination Services 
(DDS), a division of the Virginia Department of Vocational 
Rehabilitation, to serve as a consultant physician.  Pursuant to 
this contract, Dr. Sachno performs various examinations of 
claimants for DDS, which is responsible for making disability 
determinations for claimants applying for Social Security and 
Supplemental Security Income disability benefits. 
When DDS determines that the available medical evidence 
needed to make a disability determination is insufficient, it 
refers the claimant to a consultant physician to undergo a 
special “consultative examination” to obtain the needed medical 
information.  The contract provides that the specific “type of 
examination (complete or limited) and/or test(s) purchased 
depends upon the specific additional evidence needed for 
adjudication after DDS has obtained all available medical 
evidence of record.”  (Emphasis added).  DDS does not provide 
treatment or therapeutic services.  Thus, the consultant 
physicians are utilized by DDS for the limited purpose of 
obtaining additional medical evidence to assist DDS in 
determining a claimant’s eligibility for disability benefits. 
Pursuant to the detailed consultant procedures contained in 
the contract, DDS schedules appointments with Dr. Sachno for 
claimants to undergo the consultative examinations.  Although 
Dr. Sachno is not required to accept any referrals from DDS, he 
has agreed to perform two or three of these examinations per 
week.  After an examination is scheduled, DDS sends an 
authorization letter to Dr. Sachno detailing the examination 
and/or tests to be conducted by him.  If Dr. Sachno determines 
that further diagnostic tests are necessary, he is required to 
obtain authorization from DDS before performing such tests.  
 
2
Without specific authorization from DDS, he is not compensated 
for conducting additional tests. 
In addition to the authorization letter, DDS provides Dr. 
Sachno with “consultative examination requirements” which set 
forth the various protocols and tests that must be performed in 
specific examinations.  Dr. Sachno is instructed to examine the 
claimant in accordance with the protocols applicable to specific 
examinations referred to in the authorization letter.  The 
protocols and designated tests merely outline what additional 
evidence is needed to adjudicate the disability claim.  For 
example, the protocols and examination outline for the 
assessment of a claimant's respiratory status requires the 
physician to complete a detailed history and physical 
examination of the patient, including a report of (1) height and 
weight, without shoes; (2) ancillary studies as indicated on the 
authorization; (3) diagnosis; (4) treatment and response; and 
(5) prognosis.  The consultant physician is free to delegate 
certain parts of the examination to qualified support staff. 
Dr. Sachno examines claimants referred by DDS in his 
private office, using his own medical equipment.  DDS does not 
assist, directly or indirectly, Dr. Sachno in carrying out these 
examinations.  After a particular examination is completed, Dr. 
Sachno submits a report detailing the results of the examination 
to DDS.  These reports are considered the property of the Social 
 
3
Security Administration.  Dr. Sachno then bills DDS for each 
examination that he has completed.  He is paid a fixed fee by 
the Commonwealth for the examination of each claimant referred 
to him by DDS under a maximum fee schedule provided by DDS.  
Claimants do not pay a fee to Dr. Sachno.  No taxes or other 
withholdings are deducted from the checks Dr. Sachno receives 
from the Commonwealth for his services.  Dr. Sachno does not 
receive any benefits, such as health insurance, and he will not 
receive retirement benefits from the Commonwealth as a result of 
his contract with DDS. 
It was in the capacity as a consultant physician that Dr. 
Sachno examined Margaret L. Atkinson, the plaintiff below.  
Atkinson had applied for Social Security disability benefits, 
and DDS had referred her to Dr. Sachno in order to verify her 
inability to perform work-related activities.  Dr. Sachno was 
requested to evaluate Atkinson’s respiratory and arthritic 
impairments.  Dr. Sachno’s examination of Atkinson included, 
among other things, ordering a chest X-ray.  This X-ray 
reflected a possible 12mm nodule which the radiologist reported 
as not ruling out “an active process including metastatic 
disease.”  Dr. Sachno did not advise Atkinson regarding the 
results of this X-ray and the contents of the accompanying 
report that he received from the radiologist.  Approximately 
five months later, Atkinson was diagnosed with lung cancer.  
 
4
Thereafter, Atkinson filed a motion for judgment against Dr. 
Sachno for medical malpractice alleging that he negligently 
failed to advise her of the results of the chest X-ray.  Dr. 
Sachno responded by filing a plea of sovereign immunity. 
Following the receipt of briefs, the trial court conducted 
a hearing on the plea of sovereign immunity.  Atkinson argued 
that Dr. Sachno, based upon the undisputed facts, is an 
independent contractor and not an employee of the Commonwealth 
who may be entitled to the protection of sovereign immunity.  
The trial court initially ruled that “[i]ndependent contractors 
are not entitled to the protection of sovereign immunity” and 
then proceeded to determine whether Dr. Sachno was an employee 
of the Commonwealth or an independent contractor.  Relying 
primarily upon the four-part test for determining whether a 
master and servant relationship exists that this Court approved 
in Hadeed v. Medic-24, Ltd., 237 Va. 277, 288, 377 S.E.2d 589, 
594-95 (1989), the trial court ruled, as a matter of law, that 
Dr. Sachno is not an independent contractor. 
 
After deciding that Dr. Sachno was not an independent 
contractor, and by implication that he is therefore an employee 
of the Commonwealth, the trial court applied the test 
established in James v. Jane, 221 Va. 43, 53, 282 S.E.2d 864, 
869 (1980), to determine whether Dr. Sachno is entitled to the 
protection of sovereign immunity.  The trial court concluded 
 
5
that Dr. Sachno is entitled to sovereign immunity and sustained 
his plea.  By final order entered on February 15, 2000, the 
trial court dismissed Atkinson’s claim with prejudice.  We 
awarded Atkinson this appeal. 
DISCUSSION 
The doctrine of sovereign immunity is indeed alive and well 
in Virginia.  City of Virginia Beach v. Carmichael Development 
Company, 259 Va. 493, 499, 527 S.E.2d 778, 781 (2000); Messina 
v. Burden, 228 Va. 301, 307, 321 S.E.2d 657, 660 (1984).  
Furthermore, in order for the purposes of the doctrine to be 
fully realized, the immunity afforded by the doctrine cannot be 
limited to the sovereign only.  The cloak of immunity must be 
extended to “some people who help run the government . . . for 
the state can only act through individuals.”  Messina, 228 Va. 
at 308, 321 S.E.2d at 661. 
The determination that a particular individual is entitled 
to the protection of sovereign immunity frequently involves 
unique factual considerations when that individual is a 
physician.  See, e.g., Benjamin v. University Internal Medicine 
Foundation, 254 Va. 400, 403, 492 S.E.2d 651, 652 (1997); Lee v. 
Bourgeois, 252 Va. 328, 331, 477 S.E.2d 495, 497 (1996).  
Essentially this is so because while the Commonwealth may have 
an interest and involvement in the function performed by the 
physician to accomplish a governmental objective, the means and 
 
6
methods used by the physician to exercise his or her required 
professional skill and judgment with regard to patients is not 
readily subject to the control and direction of others.  That 
control, or lack of it, is the most significant factor in such 
cases in resolving issues of sovereign immunity and respondeat 
superior, which are, however, separate and distinct legal 
concepts. 
In James, we refused to grant immunity to a physician who 
was a full-time member of the faculty of a Commonwealth medical 
school.  221 Va. at 55, 282 S.E.2d at 870.  In that case, we 
established a four-part test to determine whether a physician 
who was an employee of the Commonwealth was entitled to the 
protection of sovereign immunity.  Id. at 53, 282 S.E.2d at 869. 
Subsequently, we applied that test in Lohr v. Larsen, 246 Va. 
81, 85, 431 S.E.2d 642, 644 (1993).  Application of the James 
test, however, presupposes that the physician seeking the 
protection of sovereign immunity is an employee or agent of the 
Commonwealth.  In other words, the James test is not applicable 
if the individual is an independent contractor and, thus, not an 
employee or agent of the Commonwealth.∗  Contrary to Dr. Sachno’s 
                     
∗In McDonald v. Hampton Training School for Nurses, 254 Va. 
79, 486 S.E.2d 299 (1997), we observed that the trial court 
incorrectly relied upon the sovereign immunity cases of James 
and Messina in concluding that a physician was an independent 
contractor.  McDonald, 254 Va. at 81 n.1, 486 S.E.2d at 301 n.1.  
 
 
7
assertions in this case, the trial court properly ruled that 
independent contractors are not entitled to the protection of 
sovereign immunity.  So that no doubt will exist on that issue, 
we expressly hold that while some employees or agents of the 
Commonwealth may be entitled to the protection of sovereign 
immunity, all independent contractors are excluded from that 
protection. 
Accordingly, the dispositive question in this appeal is 
whether Dr. Sachno is an employee or agent of the Commonwealth, 
or is an independent contractor.  We defined an independent 
contractor in Epperson v. De Jarnette, 164 Va. 482, 486, 180 
S.E. 412, 413 (1935).  There we stated that an independent 
contractor is  
[a] person who is employed to do a piece of work 
without restriction as to the means to be employed, and 
who employs his own labor and undertakes to do the work 
according to his own ideas, or in accordance with plans 
furnished by the person for whom the work is done, to 
whom the owner looks only for results. 
 
Id. 
 
Whether a person is an independent contractor or an 
employee is generally a question of fact for a jury; however, 
when “the evidence admits of but one conclusion, the question is 
                                                                  
We specifically rejected the applicability of James and Messina 
to issues regarding respondeat superior, thus limiting their 
application to sovereign immunity issues.  Id. 
 
 
8
one of law.”  Hadeed, 237 Va. at 288, 377 S.E.2d at 594.  This 
case presents such a question of law. 
We recognize that there are abundant tests and criteria 
that can be used to determine whether the relationship between 
the individual and the Commonwealth is that of an independent 
contractor or an employee.  See Ross v. Schneider, 181 Va. 931, 
939, 27 S.E.2d 154, 157 (1943)(noting numerous criteria to 
determine relationship); The Texas Co. v. Zeigler, 177 Va. 557, 
566, 14 S.E.2d 704, 707 (1941)(recognizing that many potential 
tests exist for determining whether a person should be 
classified as an independent contractor).  A survey of the many 
tests and cases “makes it clear that the individual 
circumstances of each case play an important part in answering 
the query.”  The Texas Co., 177 Va. at 566, 14 S.E.2d at 707. 
In Hadeed, a case involving the issue of a physician’s 
status as an employee or independent contractor, we used four 
factors to resolve that issue:  (1) selection and engagement; 
(2) payment of compensation; (3) power of dismissal; and (4) 
power to control the work of the individual.  It is well 
established that the fourth factor, the power of control, is 
determinative.  237 Va. at 288, 377 S.E.2d at 594-95.  We will 
apply the Hadeed analysis here. 
The following facts are pertinent to that analysis.  Dr. 
Sachno conducts his full-time practice of internal medicine in 
 
9
his private office, using his own equipment, and employing his 
own support staff.  The number of examinations he may perform in 
a given week for DDS is not substantial when compared to the 
volume of his regular patients.  Dr. Sachno is not obligated to 
accept any referrals from DDS.  He is paid a fixed fee for the 
examination of each claimant referred to him by DDS.  No 
withholdings of any form are deducted from his compensation 
received from the Commonwealth for conducting these 
examinations.  Dr. Sachno considers himself to be “an 
independent physician that is asked to do certain work for the 
State.”  These facts weigh heavily in support of the conclusion 
that Dr. Sachno is an independent contractor and not an employee 
or agent of the Commonwealth.  However, consideration of the 
fourth factor, the power of control, established in Hadeed 
compels that conclusion in this case. 
The numerous regulations, protocols, and procedures under 
which Dr. Sachno must perform the various examinations and tests 
sought by DDS merely ensure that the specific and objective 
medical evidence needed by DDS is obtained.  Indeed, the 
contract between Dr. Sachno and DDS provides that the type of 
examination and/or tests “purchased” by DDS depends upon the 
specific additional medical evidence needed by DDS to resolve a 
particular disability claim.  In this context, Dr. Sachno 
essentially provides a product to DDS:  a report detailing the 
 
10
results of the requested examinations and/or tests, and 
providing objective medical evidence, if any, of a claimed 
impairment.  Accordingly, the various regulations, protocols, 
and procedures under which Dr. Sachno produces that report, or 
product, do not constitute control by DDS of the means and 
methods by which he performs the examinations and tests.  
Rather, Dr. Sachno exercises his professional judgment in making 
the medical assessments of a particular claimant’s condition in 
order to accurately produce the report requested by DDS.  See 
McDonald, 254 Va. at 86, 486 S.E.2d at 303 (exercise of 
professional judgment by a physician is a factor in determining 
extent of control). 
Finally, that Dr. Sachno is required to obtain additional 
authorization before performing any diagnostic test not 
specifically listed in the authorization letter is the result of 
pragmatic and monetary concerns, and is not evidence that DDS 
controls, or has the right to control, the means and methods by 
which Dr. Sachno performs the examinations and tests that are 
authorized.  The DDS justifies this requirement on the basis 
that frequently the information obtainable from additional tests 
is already in a claimant’s file and, thus, additional tests 
would cause an unnecessary duplication of expense. 
“It is only by consideration of all the facts 
pertaining to the relationship in any case, including 
the provisions of the contract, the actual conduct of 
 
11
the parties, and the conditions of the business in 
which they are engaged, that it can be determined 
whether the [individual] is endowed with that control 
over his own methods and means of doing the work which 
is the test of an independent contractor.” 
 
The Texas Co., 177 Va. at 568, 14 S.E.2d at 708 (quoting Gulf 
Refining Co. v. Brown, 93 F.2d 870, 873 (4th Cir. 1938)). 
Because the evidence in this case “admits of but one 
conclusion” under Hadeed, we hold, as a matter of law, that Dr. 
Sachno is an independent contractor, and not an employee or 
agent of the Commonwealth.  We further hold that because Dr. 
Sachno is an independent contractor he is not entitled to the 
protection of sovereign immunity with regard to Atkinson’s claim 
against him for medical malpractice. 
CONCLUSION 
For the reasons stated above, the trial court erred in 
sustaining Dr. Sachno’s plea of sovereign immunity.  
Accordingly, the final order dismissing the case will be 
reversed, and the case remanded to the trial court for further 
proceedings consistent with the views expressed in this opinion. 
Reversed and remanded. 
 
12