Opinion ID: 1773893
Heading Depth: 1
Heading Rank: 7

Heading: employment and borrowed employee

Text: This Court has long recognized that a general or regular employee of one employer may become the borrowed employee of another with respect to some activities. [73] Whether this has in fact occurred hinges on whether the other employer or its agents have the right to direct and control the employee with respect to the details of the particular work at issue. The instruction in the Texas Pattern Jury Charge (which St. Joseph tracked in its requested instruction) generally summarizes the principle: An employee ceases to be an employee of his general employer if he becomes the borrowed employee of another. One who would otherwise be in the general employment of one employer is a borrowed employee of another employer if such other employer or his agents have the right to direct and control the details of the particular work inquired about. [74] If an employee of one becomes the borrowed employee of another, he is no longer considered an employee of the general employer for vicarious liability purposes. [75] St. Joseph pleaded that Villafani was acting as the Foundation's borrowed employee when he treated Wolff. At the close of evidence, St. Joseph moved for an instructed verdict asserting, in part, that to the extent Villafani might be considered its employee he [was], as a matter of law, a borrowed servant and subject to the right of control of other persons or entities. The trial court overruled the motion. At the close of evidence, the trial court prepared a charge inquiring whether Villafani was acting as an employee of St. Joseph, the Foundation, and/or a joint venture between them. In connection with those issues, the charge instructed the jury that: An employee is a person in the service of another with the understanding, express or implied, that such other person has the right to direct the details of the work and not merely the results to be accomplished. A person is not acting as an employee if he is acting as an independent contractor. An independent contractor is a person who, in pursuit of an independent business, undertakes to do specific work for another person, using his own means and methods without submitting himself to the control of such other person with respect to the details of the work, and who represents the will of such other person only as to the result of his work and not as to the means by which it is accomplished. A person may be the employee of more than one employer. [76] St. Joseph timely requested in writing and in substantially correct form an instruction on the law concerning a borrowed employee. The trial court refused St. Joseph's request and did not instruct the jury on borrowed employee. The jury found that, on the occasion in question, Villafani was acting as an employee of St. Joseph, the Foundation, and a joint venture between them. [77] Thereafter, St. Joseph moved for a judgment notwithstanding the verdict, asserting among other things that, as a matter of law, Villafani was the borrowed servant and subject to the right of control of other persons with respect to Stacy Wolff's medical care. The trial court, however, rendered judgment on the jury's verdict. In the court of appeals, St. Joseph argued the evidence showed it had no control over the details of Villafani's medical treatment of Wolff at Brackenridge, and that even if Villafani was its general employee, he was acting as the Foundation's borrowed employee when he treated Wolff. At the very least, St. Joseph complained, the evidence raised a fact issue on borrowed servant requiring the submission of its requested instruction. The court of appeals concluded any error in the trial court's refusal to submit the instruction was rendered harmless by the jury's joint enterprise finding, which it upheld. [78] Thus, the court of appeals did not reach the issue of whether Villafani was acting as the Foundation's borrowed employee as a matter of law. [79] Here, St. Joseph contends there is no evidence to support the jury's findings that Villafani was St. Joseph's general or regular employee or an employee of a joint venture composed of St. Joseph and the Foundation. As there is no evidence to support the finding that a joint venture existed between St. Joseph and the Foundation, the jury's finding that Villafani was an employee of that joint venture fails. We have already held there is no evidence of a joint enterprise between St. Joseph and the Foundation. Thus, St. Joseph cannot be held vicariously liable for Villafani's negligence based on the theory that it was part of a joint enterprise with the Foundation, which undisputedly was an employer of Villafani, [80] and we are left with the jury's finding that Villafani was St. Joseph's employee when he negligently treated Wolff. St. Joseph attacks this finding in several ways. First, St. Joseph and several amici argue that it was legally impossible for St. Joseph to be Villafani's employer because of statutory restrictions on the ability of corporations to practice medicine. Second, it contends there is no evidence Villafani was its employee when he treated Wolff because there is no evidence that St. Joseph had the right to direct the details of Villafani's work while he was on rotation with the Foundation at Brackenridge Hospital. To the contrary, St. Joseph argues the undisputed evidence establishes conclusively, or as a matter of law, that Villafani was acting as the Foundation's borrowed employee when he treated Wolff. [81]
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.
The common law has long recognized that liability for one person's fault may be imputed to another who is himself entirely without fault solely because of the relationship between them. [84] However, the concept of vicarious liability has resisted determined efforts to explain its basis or to precisely define its reach. Professors Prosser and Keeton set forth in their work on tort law a succinct summary of the principal justifications for imposing vicarious liability under modern-day common law: A multitude of very ingenious reasons have been offered for the vicarious liability of a master: he has a more or less fictitious control over the behavior of the servant; he has set the whole thing in motion, and is therefore responsible for what has happened; he has selected the servant and trusted him, and so should suffer for his wrongs, rather than an innocent stranger who has had no opportunity to protect himself; it is a great concession that any man should be permitted to employ another at all, and there should be a corresponding responsibility as the price to be paid for itor, more frankly and cynically, In hard fact, the reason for the employers' liability is the damages are taken from a deep pocket. None of these reasons is so self-sufficient as to carry conviction, although they are all in accord with the general common law notion that one who is in a position to exercise some general control over the situation must exercise it or bear the loss.... What has emerged as the modern justification for vicarious liability is a rule of policy, a deliberate allocation of a risk. The losses caused by the torts of employees, which as a practical matter are sure to occur in the conduct of the employer's enterprise, are placed upon that enterprise itself, as a required cost of doing business. They are placed upon the employer because, having engaged in an enterprise, which will on the basis of all past experience involve harm to others through the torts of employees, and sought to profit by it, it is just that he, rather than the innocent injured plaintiff, should bear them; and because he is better able to absorb them, and to distribute them, through prices, rates or liability insurance, to the public, and so to shift them to society, to the community at large. [85] In Dutcher v. Owens, this Court expressly recognized that [t]he theories of vicarious and joint and several liability are judicially created vehicles for enforcing remedies for wrongs committed. Justified on public policy grounds, they represent a deliberate allocation of risk. [86] Thus, as described by Prosser and Keeton, and as we recognized in Dutcher, the scope and extent of vicarious liability under the common law is clearly a policy determinationpure although not necessarily simple. The above discussion makes clear there are a number of factors affecting whether and when vicarious liability is appropriate. Paramount among those factors, however, is whether the person being held responsible can be said to have had a right to control the activities of the wrongdoer. This is best illustrated by the imposition of vicarious liability in the context of the employer-employee or master-servant context. The Restatement (Second) of Agency recognizes the historical importance of control in justifying the imposition of liability for the actions of another: The conception of the master's liability to third persons appears to be an outgrowth of the idea that within the time of service, the master can exercise control over the physical activities of the servant. From this, the idea of responsibility for the harm done by the servant's activities followed naturally. The assumption of control is a usual basis for imposing tort liability when the thing controlled causes harm. It is true that normally one in control of tangible things is not liable without fault. But in the law of master and servant the use of the fiction that the act of the servant is the act of the master has made it seem fair to subject the non-faulty employer to liability for the negligent and other faulty conduct of his servants. [87] Similarly, in Newspapers, Inc. v. Love, we acknowledged that the master's right of control over his servant is the major factor governing whether to extend vicarious liability to cover a certain fact situation: The doctrine which holds the master liable for the torts of his servant committed in the course of his employment is essentially a policy doctrine and except for acts personally directed by the principal, the liability of the master is founded upon the contractual arrangement with the servant, either expressed or implied which vests in him the right to control the details of the work. Certainly if the right of control of details has a contractual basis, the circumstance that no actual control was exercised will not absolve the master of liability. Conversely, an occasional assertion of control should not destroy a settled relationship agreed to by the parties. [88] Also, our 1998 decision in Baptist Memorial Hospital System v. Sampson succinctly sets forth the common law principle of respondeat superior and accurately expresses the importance of the control concept as a justification for imposing vicarious liability: Under the doctrine of respondeat superior, an employer is vicariously liable for the negligence of an agent or employee acting within the scope of his or her agency or employment, although the principal or employer has not personally committed a wrong. The most frequently proffered justification for imposing such liability is that the principal or employer has the right to control the means and methods of the agent or employee's work. Because an independent contractor has sole control over the means and methods of the work to be accomplished, however, the individual or entity that hires the independent contractor is generally not vicariously liable for the tort or negligence of that person. [89] We have even gone so far as to say that the right to control remains the `supreme test' for whether the master-servant relationship exists and thus whether the rule of vicarious liability applies. [90] Therefore, in the employment context, it is the right of control that commonly justifies imposing liability on the employer for the actions of the employee. Indeed, it is the absence of that right of control that commonly distinguishes between an employee and an independent contractor and negates vicarious liability for the actions of the latter. [91] Similarly, it is the shift of the right to direct and control the details of the work that transforms a general employee of one employer into a borrowed employee of another, rendering the new employer vicariously liable for the borrowed employee's actions. In sum, whether a wrongdoer stands in such a close relation to another that it is just to hold the other person liable under the common law for damages resulting from the wrongdoer's actions is a public policy question. The answer to that question depends in very large part, though not exclusively, on whether the person sought to be liablethough not at fault himselfcan be said to have such a degree of express or implied control over the actor to justify imposing on him the consequences of the actor's wrongful conduct.
We now turn to whether the record supports the jury's finding that Villafani was St. Joseph's employee when he treated Wolff. St. Joseph argues there is no evidence that it had the degree of control required to support the jury's finding that Villafani was its employee. St. Joseph further argues the evidence proves conclusively, or as a matter of law, that Villafani was the Foundation's borrowed employee when he treated Wolff because he was subject to the Foundation's direction and control as to the details of his patient treatment while he was on rotation at Brackenridge Hospital. Having reviewed the record, we conclude the evidence is undisputed that the Foundation or its agents had the right to direct and control the details of Villafani's medical treatment of Wolff. Thus, regardless of any evidence that Villafani was the general or regular employee of St. Joseph, he was acting as the borrowed employee of the Foundation as a matter of law when he treated Wolff. As detailed above, ACGME required St. Joseph, as the sponsoring institution, to assume final responsibility for the residency program and for the educational quality of that program. Thus, St. Joseph, as the sponsoring hospital, had control over the residents' academic training and exercised that control in the context of setting the parameters of the residents' responsibilities at various stages in their residency experience. Similarly, St. Joseph set Villafani's rotation schedule and could limit the number and kind of patients he saw and the kinds of procedures he performed. But with respect to the details of patient care at Brackenridge Hospital, St. Joseph's degree of control was quite different. As set forth earlier, the ACGME requirements unambiguously acknowledged and required residents such as Villafani to be supervisedforemost by the attending physician, but also by other, more senior residents. It is undisputed that while a resident was on rotation at Brackenridge, Harshaw, the Foundation's Director of Surgical Education under the Program Contract, was responsible for the residents through the Foundation's teaching staff, which Harshaw appointed subject to the approval of St. Joseph. As Director, Harshaw was also responsible for the residents' specific training assignments. If a resident did not meet the Foundation's standards, the Foundation could withdraw its approval of the resident and immediately suspend him or her from any activities at Brackenridge. It is also undisputed that Paragraph G of the Program Contract provided that St. Joseph would not control the details of the medical tasks performed by the residents when they are assigned to CTMF [the Foundation] save through consultation between and the mutual consent of the Academic Chief of General Surgery at St. Joseph Hospital and CTMF's Director of Surgical Education. Finally, it is undisputed that Harshaw, the Foundation's Director of Surgical Education, was also Wolff's attending physician. It was he who assigned Villafani to assist him in providing Wolff's medical treatment and who was responsible for overseeing and directing the details of that treatment. These undisputed facts establish conclusively, or as a matter of law, that Villafani was the Foundation's borrowed employee when he treated Wolff. Because the Foundation had the right to direct and control the details of Villafani's medical treatment of Wolff, St. Joseph cannot be vicariously liable as an employer for Villafani's actions. The Wolffs argue that the save through consultation and mutual consent language in Paragraph G of the Program Contract contradicts the above evidence and supports the jury's finding that Villafani was acting as St. Joseph's employee. We disagree. Paragraph G makes it clear that St. Joseph in Houston had no direct control over the details of the medical tasks performed by residents while they were assigned to the Foundation and treating patients at Brackenridge in Austin. According to the evidence, that control belonged to either Wolff's attending physician, who was responsible for overseeing her care directly, or the Foundation's Director of Surgical Education, who was responsible (directly or indirectly, through the Foundation's teaching staff) for overseeing the residents' care of patients at Brackenridge. In Wolff's case, these two persons were the sameHarshaw. The save through consultation and mutual consent clause does not change those facts or otherwise reestablish St. Joseph as an entity controlling the details of medical tasks performed by residents during their rotation at Brackenridge. Rather, it confirms that St. Joseph's involvement in the details of those residents' administration of medical treatment at Brackenridge was indirect only and was limited to consulting about those issues with Harshaw, who had ultimate control over those tasks. The dissent goes further than the Wolffs, contending that the Paragraph G language not only vested St. Joseph with control over the details of Villafani's medical treatment of Wolff, but also conclusively negated any possibility that Villafani was acting as the borrowed employee of the Foundation during that time. As noted above, we disagree with the dissent's reading of Paragraph G. [92]