Opinion ID: 834832
Heading Depth: 1
Heading Rank: 3

Heading: vicarious liability-medical malpractice

Text: This court has not previously addressed whether and under what circumstances vicarious liability for a physician's malpractice can be imputed to a putative principal on an apparent agency theory. Where the agency principles that we have outlined are satisfied, however, there is no reason why vicarious liability should not attach. The more significant question is how those tests should apply in the context of professional malpractice and, in particular, what must be shown to satisfy the requirement that a putative principal have a rightor an apparent rightof control over the tortious conduct of a medical professional. Because other courts have grappled extensively with vicarious liability in this context, we turn to the developed body of case law in other jurisdictions, which we consider helpful to our analysis. Until recent decades, the requirement that the principal have a right (or apparent right) of control over an agent's injury-causing conduct has precluded vicarious liability for the malpractice of physicians and similar professionals. Traditionally, courts reasoned that medical professionals, because of the skill and judgment they exercised, were not subject either legally or practically to sufficient control by other persons or entities to expose those persons or entities to vicarious liability for a medical professional's negligence. See Bing v. Thunig, 2 N.Y.2d 656, 661-63, 163 N.Y.S.2d 3, 143 N.E.2d 3 (1957) (describing historical view of courts that physicians, due to the nature of their professional expertise, were not subject to hospital's right of control). That was true even when a physician was an employee of a hospital or other entity. See, e.g., Iterman v. Baker, 214 Ind. 308, 316-18, 15 N.E.2d 365 (1938) (so holding); see generally Bing, 2 N.Y.2d at 661-63, 163 N.Y.S.2d 3, 143 N.E.2d 3 (describing traditional view). That thinking has given way, almost universally, to the recognition that entities that employ physicians both can, and in fact do, significantly control the overall delivery of medical services by such professionals, even if the entity does not direct a professional's discrete actions in treating individual patients. Hospitals are prime examples. Modern-day hospitals no longer are mere situses for medical services, as they once were, but instead are direct providers of medical care. Sword v. NKC Hosp., Inc., 714 N.E.2d 142, 151 (Ind.1999) (so observing; citing other authorities). In that changed role, hospitals regularly employ a large staff of physicians, nurses and interns, as well as administrative and manual workers, and they charge patients for medical care and treatment[.] Bing, 2 N.Y.2d at 666, 163 N.Y.S.2d 3, 143 N.E.2d 3. To ensure the quality of the medical services that they offer and provide, hospitals supervise and direct the general manner in which their employees deliver medical services on their behalf through such means as hiring criteria, training, formal practice guidelines, hierarchical supervision structures, peer review groups and disciplinary measures. Harris v. Miller, 335 N.C. 379, 390, 438 S.E.2d 731 (1994) (footnote omitted; citing authorities). [9] As a result, most jurisdictions now hold that an entity that employs a physician is subject to vicarious liability for that physician-employee's malpractice if the negligent act was committed in the course and scope of the employment. See, e.g., Dias v. Brigham Med. Assoc., Inc., 438 Mass. 317, 322-23, 780 N.E.2d 447 (2002) (applying traditional respondeat superior liability to employer of a physician; citing cases). [10] A question left unanswered by those holdings has been whether a hospital or other entity can be held vicariously liable for a physician's malpractice on an apparent agency theory. The issue has arisen most commonly in circumstances where a hospital or other entity retains physicians as independent contractors, rather than as employees, and then offers and delivers medical services on its own behalf through those independent contractors. Most jurisdictions considering vicarious liability in that context have concluded that liability for a doctor's negligence should be imputed to a [putative principal] when apparent authority, as defined in that jurisdiction, is established. Estate of Cordero v. Christ Hosp., 403 N.J.Super. 306, 313, 958 A.2d 101 (2008) (so observing in hospital context; citing representative cases); see generally Kashishian v. Port, 167 Wis.2d 24, 42-44, 481 N.W.2d 277 (1992) (characterizing vicarious liability for hospitals on apparent agency theory as a growing trend; citing cases). Drawing from familiar agency principles, courts typically have focused on two requirements as keys to imposing vicarious tort liability for a physician's malpractice on an apparent agency theory: first, whether the putative principal (such as a hospital) held out the physician as an employee or other agent to deliver medical services on the principal's behalf and subject to the principal's oversight or other control; second, whether the injured plaintiff reasonably relied on that holding out by looking to the principal as the provider of the care, and dealing with the physician as the principal's agent for that purpose. See Sword, 714 N.E.2d at 150-51 (synthesizing hospital cases); Petrovich v. Share Health Plan, 296 Ill.App.3d 849, 855-61, 231 Ill.Dec. 364, 696 N.E.2d 356 (1998) (using same two key considerations to determine vicarious liability of health maintenance organization for physician malpractice). Cases involving hospitals have presented circumstances that most commonly have given rise to a basis for a finding of vicarious liability on an apparent agency theory. For the holding out element, the cases have almost invariably looked to the fact that modern-day hospitals are engaged in directly providing medical care and services, rather than merely providing a situs where medical professionals do so in furtherance of their individual medical practices. As part of their changed role as direct health care providers, hospitals are now run like businesses and promote themselves based on the superior quality of the health care they offer. See, e.g., Kashishian, 167 Wis.2d at 41-44, 481 N.W.2d 277 (so observing; citing cases and authorities). To that end, hospitals pervasively engage in sophisticated advertising and public relations campaigns designed to compete with other facilities and providers, and to attract the patronage of the public in the communities that they serve. Id. at 38, 481 N.W.2d 277 (describing hospitals as spending billions to nurture their images as full care health facilities). Even without commercial advertising, hospitals cultivate high visibility in their communities to present themselves as vital to community health rather than as mere facilities in which private physicians practice their professions. See Hannola v. City of Lakewood, 68 Ohio App.2d 61, 66, 426 N.E.2d 1187 (1980) (describing how hospitals promote themselves as direct medical providers of quality care through fund-raising campaigns, community relations programs, public service programs, press releases, and the like). In effect, hospitals invite the public to rely on their competence in the delivery of at least certain kinds of health care services. Through that holding out, a hospital cultivates an image that causes the public to assume, correctly or not, that the hospital exerts some measure of control over the medical activities integral to the hospital setting. Id. at 66 426 N.E.2d 1187 (internal quotation marks omitted) (discussing emergency room services). [11] With regard to the second elementreasonable reliancethe cases have focused on whether the plaintiff looked to and relied on the hospital as the direct provider of the medical services rendered. The fact that the patient relies on the reputation of the hospital itself as a care provider, and does not make an independent selection as to which physicians the patient will obtain care from, provides the factual basis for the reliance needed for the apparent authority analysis. Pamperin, 144 Wis.2d at 205-12, 423 N.W.2d 848 (internal quotation marks omitted) (discussing cases and so holding); see also Estate of Cordero, 403 N.J.Super. at 318-19, 958 A.2d 101 (canvassing cases and holding that reliance could be found based on fact that patient looked to hospital for care and physician was chosen by hospital). Conversely, the mere fact that medical services are provided on a hospital's premises is not enough to create vicarious liability. For example, if a patient seeks medical services from a physician who has staff privileges at a hospital and who uses the hospital merely as the situs for the physician's own medical practice, the necessary reliance on the hospital as a direct provider of care is lacking. See Houghland v. Grant, 119 N.M. 422, 428-29, 891 P.2d 563 (1995) (comparing physicians who contract to provide services on behalf of hospital to physicians with staff privileges engaged in independent medical practices; citing cases). [12] To be sure, vicarious liability for physician malpractice has not been limited to the hospital context; at least some courts have extended it to other entities as well, such as health maintenance organizations (HMO) and nonhospital patient treatment facilities. See, e.g., Boyd v. Albert Einstein Med. Ctr., 377 Pa.Super. 609, 616, 547 A.2d 1229 (1988) (HMO); Petrovich, 296 Ill.App.3d at 855, 231 Ill.Dec. 364, 696 N.E.2d 356 (HMO); Malanowski v. Jabamoni, 293 Ill.App.3d 720, 727, 228 Ill.Dec. 34, 688 N.E.2d 732 (1997) (university outpatient center). The factual circumstances of those cases, however, have brought them well within the reasoning of the hospital line of authority. Boyd is illustrative. There, the HMO had contractually committed to provide health care services and benefits to subscribers. It provided those services through a limited selection of primary physicians who were screened by the HMO and who had to comply with the HMO's rules; the HMO gave subscribers no choice of with whom to consult for specialist care. All fees for services were paid directly to the HMO, not to the physicians. The court in Boyd concluded that there was a factual question as to whether the physicians, although independent contractors, were apparent agents of the HMO because the patient in that case had submitted herself to the care of the physicians at the HMO's invitation and subject to significant apparent control on the HMO's part. Boyd, 377 Pa.Super. at 621, 547 A.2d 1229. Other cases extending vicarious liability to entities other than hospitals have required similar representations by the entity, similar indicia of control by the entity, and similar reliance by the patient on the entity as the provider of medical care. See, e.g., George v. Fadiani, 772 A.2d 1065 (R.I.2001) (factual question on apparent agency for dental services clinic where incorporated entity held itself out as a provider of dental services; selection of an appointment with specialist was done by clinic staff; billings were made on clinic stationary and through clinic staff; and clinic controlled compensation of dental providers). In sum, the weight of authority in other jurisdictions is that, in a proper case, a hospital or other entity can be held vicariously liable for a physician's negligence on an apparent authority theory. We agree with those authorities. [13] We also agree on the essential touchstones for the imposition of vicarious liability in this context. The key questions are: (1) whether the putative principal held itself out, expressly or implicitly, as a direct provider of medical care so as to lead a reasonable person to conclude that the negligent actor who delivered the care was the principal's employee or agent in doing so; and (2) whether the plaintiff relied on those representations by looking to the putative principal, rather than to a specific physician, as the provider of the care, and not just as a situs in which a physician of the plaintiff's choosing provided the care. See, e.g., Kashishian, 167 Wis.2d at 44, 481 N.W.2d 277 (outlining elements); Sword, 714 N.E.2d at 150-51 (same). [14]