Eads v. Borman
277 P.3d 503
Or.2012Background
- Willamette Spine Center, LLC leased and branded a building and signage as a medical center; tenants included physicians and LLCs under Willamette Spine Center branding.
- Plaintiff treated at the Willamette Spine Center building, ultimately undergoing surgeries by Dr. Borman in a hospital, not in the building.
- Plaintiff alleged the LLC held itself out as a group medical entity and that Borman acted as its apparent agent, making the LLC vicariously liable for malpractice.
- Trial court granted summary judgment for the LLC; Court of Appeals affirmed; petition for review granted to assess apparent agency in medical malpractice context.
- Major issue: whether the LLC’s signs, branding, and referrals created apparent authority such that the LLC could be liable for Borman’s negligent surgery.
- Record showed no centralized staff or management for Willamette Spine Center; providers kept independent practices with individual billing and contact information.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LLC held out as direct provider of care via apparent authority | Eads—signage, branding, and Freeman’s referrals show apparent authority. | LLC acted as landlord; no control or holding out as direct provider. | Affirmative: LLC did not hold itself out as direct medical provider; no basis for apparent authority. |
| Whether plaintiff reasonably relied on LLC representations | Plaintiff relied on Willamette Spine Center as a unified provider. | Reliance on individual providers, not a central entity. | No reasonable reliance on LLC as a provider; reliance on individual physicians insufficient. |
| What standard governs apparent authority for medical malpractice liability | Restatement-based approach shows liability when appearance of control and reliance exist. | Need explicit or implicit holding out by principal with control over medical services. | Court adopts apparent authority framework; requires principal’s representations and reasonable reliance traceable to principal. |
| Whether nonemployee physician conduct can render principal vicariously liable | Hospital-type entities can be liable for independent contractors under apparent authority. | Liability requires control or direct employment-like oversight over the specific act. | Liability requires right of control similar to employer over the specific tortious act. |
| Whether evidence created a question for a jury on LLC’s vicarious liability | Signage, branding, and referrals create a triable issue. | Record shows landlord-tenant relationship; no principal control of clinical acts. | Record inadequate to submit apparent-authority theory to a jury; summary judgment proper. |
Key Cases Cited
- Vaughn v. First Transit, Inc., 346 Or. 128 (2009) (apparent authority and control requirements for vicarious liability)
- Taylor v. Ramsay-Gerding Construction Co., 345 Or. 403 (2008) (appearance of consent and reliance in apparent authority analysis)
- Jones v. Nunley, 274 Or. 591 (1976) (keys: principal representations and third-party reliance in apparent authority)
- Badger v. Paulson Investment Co., Inc., 311 Or. 14 (1991) (apparent authority test; reliance and traceability to principal)
- Jensen v. Medley, 336 Or. 222 (2003) (right of control over specific injury-causing conduct needed for nonemployee liability)