Source: https://www.oklahomainjurylaw.com/blog/2013/04/ostensible-agency-apparent-agency-in-medical-malpractice.shtml
Timestamp: 2019-04-22 19:08:53+00:00

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One of the goals of the tort system is to impose legal responsibility on certain individuals (tortfeasors) for certain conduct in order to remedy past harms and deter prospective behavior.
Generally, the negligence of one individual cannot be assigned to another. However, with every rule there are exceptions. There are several tort and agency doctrines that impose responsibility upon one person for the failure of another, when a special legal relationship exists that creates a duty to exercise a standard of care that a reasonably prudent person would use in the same or similar circumstances. Examples of doctrines that fall within this category include: respondeat superior, apparent/ostensible agency and agency by estoppel.
The legal doctrine of vicarious liability is when liability is assigned to an individual for an injury to another person who did not cause the injury but who has a particular legal relationship to the person who did act negligently. Some of the legal relationships included in this category are relationships between an employer/employee, husband/wife, and parent/child.
The common law doctrine of respondeat superior makes an employer vicariously liable for the acts or omissions of an employee acting within the scope of his employment. Thus, the employer is liable to a third party for damages resulting from an employee's negligence because the employee is held to be an agent of the employer. The rule rests on the premise that, when exercising delegated authority, the employee stands under the complete control of the employer. Texaco, Inc. v. Layton, Okla., 395 P.2d 393, 396-397 (Okla. 1964).
For example, if a cab driver, who is an employee of a taxi company, negligently hits another person's car while transporting a passenger, then the cab company will generally be liable for the damage caused to the third party's vehicle and any injuries to the passenger that the cab driver was transporting.
When a hospital is alleged to be liable for a physician's negligent conduct, the analysis is usually dependent on the employment classification of the physician. Traditionally, hospitals will staff their facilities with employees (nurse, technicians, resident physicians) and independent contractors.
The majority of physicians practicing within a hospital are independent contractors in which a hospital cannot be held liable to third parties based on respondeat superior. Section 2 of the Restatement (Second) of Agency defines an independent contractor as one who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of an undertaking. Restatement (Second) § 2 (1957).
Principals may not be held liable for the negligent conduct of independent contractors due to the lack of control in the relationship. Independent contractor relationship is largely based on the autonomy of their work because they are not influenced by the principal's control. When a patient is treated by a physician who is an independent contractor, in the facilities of a hospital, the treatment a patient receives is conceptualized as the result of the physician's independent medical judgment that a hospital lacks control over. Thus in theory, a hospital should not be held liable for the negligent conduct of these physicians who are practicing in their facilities.
A hospital will contract for services of independent contractor physicians for the very purpose of insulating the hospital from liability. And as more hospitals have escaped liability in greater frequency, courts have relaxed agency principles to hold hospitals liable for the tortious conduct of independent contractors. The courts have been motivated to do this based on the public perception of hospitals as complete-care institutions.
"Modern hospitals have spent billions of dollars on marketing to nurture the image that they are full-care, modern facilities. Billboards, television commercials and newspaper ads tell the public to look to its local hospital for every manner of care..."
Courts have reasoned that since hospitals have created the impression that they provide medical services directly to the public which creates a likelihood that patients will look to the hospital, as an institution, rather than an individual physician for care. Burless v. West Virginia Univ. Hosp., Inc., 601 S.E.2d 85, 94 n. 8 (W. Va. 2004). The increasing number of courts recognizing this rationale demonstrates that such social reliance is deserving of legal protection. The means by which courts have found hospital liability for independent contractor physicians has been through an agency approach of either agency by estoppel or ostensible/apparent agency.
While a person may be designated an independent contractor in relation to the person hiring them, an agency relationship may result in certain circumstances.
Apparent authority results from a manifestation by the principal to a third person that another is his agent. The manifestation may be made directly to the third person or to the community at large by signs or advertising. But, "apparent authority exists only to the extent that it is reasonable for the third person dealing with the agent to believe the agent is authorized." Smith v. St. Francis Hosp., Inc., 1983 OK CIV APP 58, 676 P.2d 279, 282.
However, the Oklahoma Supreme Court has held the existence of actual authority between principal and agent is "not a prerequisite to establishing apparent authority." Stephens v. Yamaha Motor Co., Ltd. 627 P.2d 439,441 (Okla.1981).
As a general rule, Oklahoma does not extend respondeat superior to a hospital where its physician renders an independent medical opinion and is an independent contractor. Van Cleave v. Irby, 1951 OK 182, 233 P.2d 963. However, Oklahoma has joined other jurisdictions that make an exception to this general rule by invoking the doctrine of ostensible agency or agency by estoppel. Under the exception, a hospital may not deny responsibility for the negligent acts of its agents solely because the agent physicians are independent contractors. Weldon v. Seminole Mun. Hosp., 1985 OK 94, 709 P.2d 1058.
In Smith v. St. Francis Hosp., Inc., the Oklahoma Court of Appeals set out the ostensible agency or agency by estoppel exception. Smith, 1983 OK CIV APP 58, ¶12, 676 P.2d at 282.To determine whether a physician was a hospital's ostensible agent, the Court considers whether, the patient, at the time of admittance, looks to the hospital solely for treatment of his physical ailments, with no belief that the physicians were acting on their own behalf rather than as agents of the hospital. Roth v. Mercy Health Ctr, Inc., 2011 OK 2, ¶32, 246 P.3d 1079, 1090 (citing Smith, 676 P.2d at 282).
In conducting this inquiry, Oklahoma courts have considered various factors such as whether there was a pre-existing relationship between the patient and the treating physician, Smith, 676 P.2d at 282-283, whether the hospital pays the physician a salary or bills for the physician's services. Weldon, 709 P.2d at 1060.
Whether the physicians practiced exclusively at the hospital, whether the physician's forms/questionnaires bore the hospital's logo. Dragotta v. Southhampton Hosp., 39 A.D.3d 697, 833 (N.Y. Sup. Ct. 2007).
Whether the hospital or the patient specifically chose the particular physician or if the hospital assigned the physician for a patient's surgery. Jones v. Tallahassee Mem'l Reg'l Healthcare, Inc., 923 So. 2d 1245 (Fla. Dist. Ct. App. 2006).
Whether the patient went to the hospital seeking medical services and is forced to rely on the hospital's choice of physician to render those services. Thomas v. Raleigh General Hosp., 358 S.E.2d 85 (W. Va. 2004).
Often, as in Roth, the ultimate issue to be decided in these circumstances is whether the patient looked to the hospital to provide medical care, or as just the location to be treated by the physician. Since reasonable minds could have different interpretations of the facts to deciding the ultimate issue, it is a question of fact and to be resolved by the jury. Roth, 246 P.3d at 1090 (quoting Reed v. Anderson, 1927 OK 334, ¶4, 259 P. 855, 856) ("Because issues of agency are generally questions of fact, resolution through summary judgment is disfavored").

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