Opinion ID: 1773893
Heading Depth: 2
Heading Rank: 2

Heading: Corporate Practice of Medicine

Text: We first address the legal argument that St. Joseph cannot be vicariously liable as an employer for Villafani's conduct because of Texas law concerning the corporate practice of medicine. St. Joseph and several amici [82] argue that, because a corporation cannot be licensed to practice medicine in Texas, incorporated hospitals like St. Joseph cannot direct the details of work of a physician engaged in the practice of medicine; thus, they cannot be vicariously liable as an employer for a physician's malpractice. St. Joseph and the amici rely on several cases in support of this argument, but we decline to recount them in detail. We reject the legal argument, however, because it does not recognize the distinction between prohibition and prevention. The law may prohibit the corporate practice of medicine, but it does not render such activity a factual impossibility. A statute prohibiting an incorporated hospital from employing a physician does not prevent the parties from factually accomplishing that very act in violation of the law any more than a statute prohibiting a crime makes the crime factually impossible to commit. Regardless of whether it was proper for Villafani to be St. Joseph's employee, if he in fact was so when he treated Wolff, then as his employer St. Joseph is vicariously liable for his actions unless, as discussed below, Villafani was the Foundation's borrowed servant. As recognized in the Restatement (Second) of Agency: The fact that the state regulates the conduct of an employee through the operation of statutes requiring licenses or specific acts to be done or not to be done does not prevent the employer from having such control over the employee as to constitute him a servant. [83] Thus, we conclude that Texas law concerning the corporate practice of medicine does not render Villafani's employment by St. Joseph a factual impossibility. We now turn to St. Joseph's argument that: (1) there was no evidence that Villafani was an employee when he treated Wolff; and (2) the evidence established conclusively, or as a matter of law, that Villafani was acting as the Foundation's borrowed employee. Before we address these arguments, we recount the importance of the element of control as a justification for imposing vicarious liability.