Opinion ID: 2067628
Heading Depth: 3
Heading Rank: 1

Heading: Holding Out

Text: The element of holding out means that the HMO, or its agent, acted in a manner that would lead a reasonable person to conclude that the physician who was alleged to be negligent was an agent or employee of the HMO. See Gilbert, 156 Ill.2d at 525, 190 Ill.Dec. 758, 622 N.E.2d 788, quoting Pamperin v. Trinity Memorial Hospital, 144 Wis.2d 188, 207-08, 423 N.W.2d 848, 855-56 (1988). Where the acts of the agent create the appearance of authority, a plaintiff must also prove that the HMO had knowledge of and acquiesced in those acts. See Gilbert, 156 Ill.2d at 525, 190 Ill.Dec. 758, 622 N.E.2d 788, quoting Pamperin, 144 Wis.2d at 207-08, 423 N.W.2d at 855-56. Significantly, the holding-out element does not require the HMO to make an express representation that the physician alleged to be negligent is its agent or employee. Rather, this element is met where the HMO holds itself out as the provider of health care without informing the patient that the care is given by independent contractors. See Gilbert, 156 Ill.2d at 525, 190 Ill.Dec. 758, 622 N.E.2d 788 (determining, in the context of the hospital emergency room, that the holding-out element is met where the hospital holds itself out as the provider of emergency room care without informing the patient that the care is given by independent contractors). Vicarious liability under the apparent authority doctrine will not attach, however, if the patient knew or should have known that the physician providing treatment is an independent contractor. See Gilbert, 156 Ill.2d at 522, 524, 190 Ill.Dec. 758, 622 N.E.2d 788. Here, Share contends that the independent-contractor provisions in the two master agreements and the benefits contract conclusively establish, as a matter of law, that Share did not hold out Drs. Kowalski and Friedman to be Share's agents. Although all three of these contracts clearly express that the physicians are independent contractors and not agents of Share, we disagree with Share's contention for the reasons explained below. First, the two master agreements at issue are private contractual agreements between Share and Illinois Masonic, with Dr. Kowalski as a signatory, and between Share and Dr. Friedman. The record contains no indication that plaintiff knew or should have known of these private contractual agreements between Share and its physicians. Gilbert expressly rejected the notion that such private contractual agreements can control a claim of apparent agency. Gilbert, 156 Ill.2d at 521, 190 Ill.Dec. 758, 622 N.E.2d 788. As explained there, `[A]ppearances speak much louder than the words of whatever private contractual arrangements the physicians and the hospital may have entered into, unbeknownst to the public, in an attempt to insulate the hospital from liability for the negligence, if any, of the physicians.' Gilbert, 156 Ill.2d at 521, 190 Ill.Dec. 758, 622 N.E.2d 788, quoting Brown v. Coastal Emergency Services, Inc., 181 Ga.App. 893, 898, 354 S.E.2d 632, 637 (1987), aff'd, 257 Ga. 507, 361 S.E.2d 164 (1987). We hold that this same rationale applies to private contractual agreements between physicians and an HMO. See also 2A C.J.S. Agency § 165, at 805 (1972) (noting the general rule that apparent authority is not affected by private instructions or limitations). Because there is no dispute that the master agreements at bar were unknown to plaintiff, they cannot be used to defeat her apparent agency claim. Share also relies on the benefits contract. Plaintiff was not a party or a signatory to this contract. The benefits contract contains a subscriber certificate, which states that Share physicians are independent contractors. Share claims that this language alone conclusively overcomes plaintiff's apparent agency claim. We do not agree. Whether a person has notice of a physician's status as an independent contractor, or is put on notice by the circumstances, is a question of fact. See Gilbert, 156 Ill.2d at 524, 190 Ill.Dec. 758, 622 N.E.2d 788. In this case, plaintiff testified at her evidence deposition that she did not recall receiving the subscriber certificate. Share responded only that it customarily provides members with this information. Share has never claimed to know whether Share actually provided plaintiff with this information. Thus, a question of fact exists as to whether Share gave this information to plaintiff. If this information was not provided to plaintiff, it cannot be used to defeat her apparent agency claim. Share nonetheless maintains that plaintiff's testimony that she received a whole stack of information from Share upon her enrollment proves that plaintiff received the subscriber certificate. Share is not entitled to summary judgment on the basis of this testimony. Even if Share did send this single disclaimer of an agency relationship to plaintiff within a whole stack of information, this fact would not conclusively resolve plaintiff's claim. As we discuss below, the record contains evidence that Share held itself out as the provider of health care without informing plaintiff that the care was given by independent contractors. A trier of fact must therefore be permitted to weigh the conflicting evidence and decide this issue based on the totality of the circumstances. Only a trier of fact can properly determine whether plaintiff had notice of the physicians' status as independent contractors, or was put on notice by the circumstances. Evidence in the record supports plaintiff's contentions that Share held itself out to its members as the provider of health care, and that plaintiff was not aware that her physicians were independent contractors. Notably, plaintiff stated that, at the time that she received treatment, plaintiff believed that Drs. Kowalski and Friedman were Share employees. Plaintiff was not aware of the type of relationship that her physicians had with Share. Moreover, Share's member handbook contains evidence that Share held itself out to plaintiff as the provider of her health care. The handbook stated to Share members that Share will provide all your healthcare needs and comprehensive high quality services. The handbook did not contain any provision that identified Share physicians as independent contractors or nonemployees of Share. Instead, the handbook referred to the physicians as your Share physician, Share physicians and our staff. Share also referred to the physicians' offices as Your Share physician's office. The record shows that Share provided this handbook to each of its enrolled members, including plaintiff. Representations made in the handbook are thus directly attributable to Share and were intended by Share to be communicated to its members. Share argues that plaintiff is not entitled to rely on any statements made in the member handbook because, according to Share, plaintiff admitted that she never read that handbook. Share contends that plaintiff cannot justifiably rely on something of which she was not even aware. Share misrepresents plaintiff's testimony. Although plaintiff admitted that she did not read the member handbook from cover to cover, she testified that she read portions of the handbook as she needed the information. Plaintiff also stated that she relied on the information contained in the handbook while Drs. Kowalski and Friedman treated her, and she believed those physicians to be employees of Share. Consequently, Share's contention fails. We hold that the above testimony by plaintiff and Share's member handbook support the conclusion that Share held itself out to plaintiff as the provider of her health care, without informing her that the care was actually provided by independent contractors. Therefore, a triable issue of fact exists as to the holding-out element. We need not resolve whether any other evidence in the record also supports plaintiff's claim. Our task here is to review whether Share is entitled to summary judgment on this element. We hold that Share is not.