Baker v. HedstromBaker v. Hedstrom
Tyler John Atkins
Randi McGinn
Albuquerque, NM
Law Offices of Felicia C. Weingartner, P.C.
Felicia C. Weingartner
Albuquerque, NM
The Kauffman Firm
Cid Dagward Lopez
Albuquerque, NM
The Vargas Law Firm, L.L.C.
Ray M. Vargas, II
Erin O’Connell
Albuquerque, NM
Law Office of Stephen Durkovich
Stephen G. Durkovich
Santa Fe, NM
for Petitioners
Hinkle, Hensley, Shanor & Martin, L.L.P.
Dana Simmons Hardy
William P. Slattery
Albuquerque, NM
Lorenz Law
Alice Tomlinson Lorenz
Albuquerque, NM
Sharp Law Firm
Lynn S. Sharp
Albuquerque, NM
Butt, Thornton & Baehr, P.C.
Emily A. Franke
W. Ann Maggiore
Albuquerque, NM
Miller Stratvert, P.A.
Jennifer D. Hall
Albuquerque, NM
Krehbiel Law Office, P.C.
Lorri Krehbiel
Albuquerque, NM
Allen, Shepherd, Lewis, Syra & Chapman, P.A.
Edward W. Shepherd
Albuquerque, NM
Serpe, Jones, Andrews, Callendar & Bell, P.L.L.C.
Melanie L. Frassanito
Houston, TX
for Respondents
OPINION
VIGIL, Justice.
{1} This appeal concerns whether defendant professional corporations and a limited liability company are “health care providers” as defined by the Medical Malpractice Act (“MMA” or “the Act“),
I. FACTS AND PROCEDURAL HISTORY
{2} This appeal involves three consolidated cases—Baker v. Hedstrom, Gordon v. ABQ Health Partners, LLC, and Campos v. Conder—in which individual plaintiffs brought suits for damages caused by the medical malpractice of their doctors and the business organizations under which each doctor operated.
{3} In Baker, Plaintiff Bryanna Baker filed suit in the Fourth Judicial District Court against her doctors for medical malpractice after they failed to disclose the results of a test revealing that she had a medical condition that could be dangerous to both mother and child if she became pregnant. She subsequently became pregnant and suffered a heart attack that went undiagnosed for two days, resulting in a miscarriage and permanent heart damage. Baker also sued the professional corporations under which each doctor operated, which were formed under the Professional Corporation Act,
{4} In Gordon, Plaintiff Lorrice Gordon filed suit in the Second Judicial District Court, alleging that her doctor negligently performed an appendectomy that caused a small bowel obstruction for which she required additional surgery. She also sued the doctor‘s employer, ABQ Health Partners, LLC, a foreign limited liability company organized under the laws of Delaware, under the doctrine of respondeat superior.
{5} Finally, in Campos, Plaintiff Paul Campos, the personal representative of the estate of Cheri Wilson, filed suit in the First Judicial District Court against the doctor who had removed Wilson‘s gall bladder and her primary care physician, who provided follow-up care, for malpractice after they allegedly failed to diagnose a bile leak caused during the gall bladder surgery. Wilson subsequently died due to the undiagnosed bile leak. Each doctor practiced under a professional corporation formed under the Professional Corporation Act, and Campos also sued these corporations under the doctrine of respondeat superior.
{6} Baker moved for summary judgment on her claim against the defendant business entities, arguing that they could not benefit from the damages cap under the MMA because they did not meet the MMA‘s definition of “health care provider.” The district court denied Baker‘s summary judgment motion and certified the issue of whether the defendant corporations were qualified health care providers for interlocutory appeal.
{7} In Gordon, Defendant ABQ Health Partners, LLC filed a motion to dismiss or stay, arguing that it was a qualified health care provider covered by the MMA and Gordon failed to comply with the requirements of the MMA. The district court denied the motion and certified the case for interlocutory appeal on whether ABQ Health Partners, LLC qualified as a healthcare provider.
{8} The district court in Campos found that the defendant corporations were qualified health care providers, but stayed the litigation in anticipation of an interlocutory appeal. Campos then applied for an interlocutory appeal on whether “the Legislature‘s decision not to include professional corporations as ‘health care providers’ in the MMA is given binding force in district courts across the State of New Mexico.”
{9} The Court of Appeals granted all three interlocutory appeals and consolidated them because they each raised a similar question. Baker, 2012-NMCA-073, ¶ 6. The Court ultimately concluded that the plain language of the definition of “health care provider” in
II. DISCUSSION
A. Standard of Review and Rules of Statutory Construction
{10} Our task is to determine whether the Legislature intended Defendants to be eligible to qualify as “health care providers” under the MMA so as to receive the Act‘s benefits. See
{11} “When construing statutes, our guiding principle is to determine and give effect to legislative intent.” El Paso Elec. Co. v. N.M. Pub. Regulation Comm‘n, 2010-NMSC-048, ¶ 7, 149 N.M. 174, 246 P.3d 443 (internal quotation marks and citations omitted), accord Jordan v. Allstate Ins. Co., 2010-NMSC-051, ¶ 15, 149 N.M. 162, 245 P.3d 1214 (“This Court‘s primary goal when interpreting statutes is to further legislative intent.“). We “us[e] the plain language of the statute as the primary indicator of legislative intent[.]” State v. Willie, 2009-NMSC-037, ¶ 9, 146 N.M. 481, 212 P.3d 369 (second alteration in original) (internal quotation marks and citation omitted). However, “[i]f the plain meaning of the statute is doubtful, ambiguous, or [if] an adherence to the literal use of the words would lead to injustice, absurdity or contradiction, we will construe the statute according to its obvious spirit or reason.” Id. (second alteration in original) (internal quotation marks and citation omitted).
B. The Definition of “Health Care Provider” Includes Professional Medical Organizations As Expressed in the Purpose of the Act and the Language in the Act
{12} Plaintiffs argue that the plain meaning of the definition of “health care provider” excludes Defendants. We first examine Plaintiffs’ interpretation in the context of the Legislature‘s purpose for enacting the MMA and, like the Court of Appeals, conclude that their interpretation is irreconcilable with the Act‘s purpose. See Baker, 2012-NMCA-073, ¶ 29.
{13} However, we then diverge from the Court of Appeals’ approach by disagreeing with Plaintiffs’ argument that the definition of “health care provider,” if interpreted literally, excludes Defendants. Although the language in the definition is ambiguous, our interpretation of this language supports our conclusion that the Legislature intended to cover professional medical organizations that qualify under the Act.
1. The Legislature‘s Stated Purpose for Enacting the MMA Supports Including Professional Medical Organizations as “Health Care Providers”
{14} Plaintiffs ask this Court to conclude that the Legislature did not intend Defendants
to be covered by the Act because “the plain language of the definition of a ‘health care provider‘” expressly excludes Defendants. The MMA defines “health care provider” as “a person, corporation, organization,
{15} We must examine Plaintiffs’ interpretation in the context of the statute as a whole, including the purposes and consequences of the Act. See N.M. Pharm. Ass’n v. State, 1987-NMSC-054, ¶ 8, 106 N.M. 73, 738 P.2d 1318 (“In interpreting statutes, we should read the entire statute as a whole so that each provision may be considered in relation to every other part.“). If Plaintiffs’ interpretation leads to absurdities, or if it conflicts with the Legislature‘s purpose for enacting the MMA, then we cannot conclude that their interpretation reflects legislative intent. See Rutherford v. Chaves Cnty., 2003-NMSC-010, ¶ 24, 133 N.M. 756, 69 P.3d 1199 (“Statutes are to be read in a way that facilitates their operation and the achievement of their goals.“); accord Eldridge v. Circle K Corp., 1997-NMCA-022, ¶ 29, 123 N.M. 145, 934 P.2d 1074 (“[O]ur task is not to apply language literally when it would lead to counterproductive, inconsistent, and absurd results; we must harmonize the statutory language to achieve the overall legislative purpose.“). In examining the provisions of the MMA, we adhere to Justice Montgomery‘s wise words of caution in applying the plain meaning rule, acknowledging that ambiguity may be lurking in even seemingly plain words if they conflict with the overall legislative intent. “[The plain meaning rule‘s] beguiling simplicity may mask a host of reasons why a statute, apparently clear and unambiguous on its face, may . . . give rise to legitimate . . . differences of opinion concerning the statute‘s meaning.” State ex. rel. Helman v. Gallegos, 1994-NMSC-023, ¶ 23, 117 N.M. 346, 871 P.2d 1352.
{16} Thus, we begin by considering the purpose of the MMA. The Legislature‘s stated purpose for enacting the MMA was “to promote the health and welfare of the people of New Mexico by making available professional liability insurance for health care providers in New Mexico.”
was triggered by the announced withdrawal of the insurance company underwriting the medical society‘s professional liability program in which ninety percent of medical practitioners and health care institutions
participated. A result of this concern was the Medical Malpractice Act. . . . Availability of health care depends on providing incentives to persons to furnish health care services. If the practitioner must bear the cost of the patient‘s injury, there is a powerful disincentive to furnishing services at all. This disincentive may be met by making professional liability insurance available.
Otero v. Zouhar, 1984-NMCA-054, ¶ 15, 102 N.M. 493, 697 P.2d 493 (citing Ruth L. Kovnat, Medical Malpractice Legislation in New Mexico, 7 N.M. L. Rev. 5, 6, 7 n.6, 8 n.10 & n.11 (1976-77)), reversed on other grounds by Grantland v. Lea Reg’l Hosp., Inc., 1985-NMSC-021, 102 N.M. 482, 697 P.2d 582.
{17} To give effect to the purpose of the MMA, the Legislature created a balanced scheme to encourage health care providers to opt into the Act by conferring certain benefits to them, which it then balanced with the benefits it provided to their patients. “[T]he Legislature made professional liability insurance available to health care providers but conditioned availability to that insurance on a quid pro quo: health care providers could
{18} In exchange, the Act limits the health care provider‘s liability to $200,000, and any judgments in excess of that amount are paid out of the patient‘s compensation fund.
646, 41 P.3d 914 (“[T]he necessity for [a medical review commission] determination prior to the filing of a medical malpractice claim remains a mandatory procedural threshold that must be crossed in the ordinary case.“).
{19} In exchange for the burdens placed on patients who receive medical care from qualified health care providers, the Act provides the following benefits to them: the ability to recover from the patient‘s compensation fund,
{20} By providing benefits and imposing burdens, the Legislature created a system that inspires widespread participation to ensure that patients would have adequate access to health care services and that they would have a process through which they can recover for any malpractice claims. See Cummings v. X-Ray Assocs. of N.M., P.C., 1996-NMSC-035, ¶¶ 29-30, 121 N.M. 821, 918 P.2d 1321 (“The [L]egislature provided a number of incentives to assure participation by health care providers in the burdens of qualification under the Medical Malpractice Act. . . . [B]y offering to qualified health care providers certain benefits that are not available to those who are not qualified, the [L]egislature furthers its stated goal of assuring adequate malpractice insurance coverage in the New Mexico medical profession.“); Moncor Trust Co. ex rel. Flynn v. Feil, 1987-NMCA-015, ¶ 9, 105 N.M. 444, 733 P.2d 1327 (“An obvious goal of the [L]egislature in enacting this legislation was to address certain factors adversely affecting the cost of medical malpractice insurance, to encourage continued availability of professional medical services, and to provide incentives for the furnishing of professional liability insurance.“).
{21} In light of the Act‘s purpose, we can discern no reason why the Legislature would intend to cover individual medical professionals under the Act while excluding the business organizations that they operate under
malpractice arise. Plaintiffs’ interpretation conflicts with both the Legislature‘s stated purpose and its goal to assure that providers of health care are adequately covered in New Mexico. “We will not construe a statute to defeat [its] intended purpose.” Padilla v. Montano, 1993-NMCA-127, ¶ 23, 116 N.M. 398, 862 P.2d 1257. Therefore, we determine that the Legislature recognized that individual medical professionals may operate as a corporation or some other type of legal entity, and by doing so, the legal entity shall likewise be entitled to qualify under the Act.
2. The Definition of “Health Care Provider” Demonstrates that the Legislature Intended to Cover, Not Exclude, Professional Health Care Organizations
{22} Not only is Plaintiffs’ plain meaning interpretation of the definition of “health care provider” incompatible with the purpose of the MMA, it also ignores a key term in the definition that renders the definition ambiguous. We resolve this ambiguity in Defendants’ favor.
{23} Plaintiffs argued to the Court of Appeals that “the plain meaning of
{24} Plaintiffs’ interpretation of the definition conspicuously omits any discussion of the term “professional services.” See
{25} Since the MMA does not define the term “professional services,” we first explore whether it has an ordinary meaning in the context of the definition of “health care provider.” State v. Tsosie, 2011-NMCA-115, ¶ 19, 150 N.M. 754, 266 P.3d 34 (“‘When a term is not defined in a statute, we must construe it, giving those words their ordinary meaning absent clear and express legislative intention to the contrary.‘” (quoting State v. Johnson, 2009-NMSC-049, ¶ 10, 147 N.M. 177, 218 P.3d 863)). We conclude that the term “professional services” has no clear ordinary meaning that reveals a difference in the Legislature‘s view between health care providers licensed to provide health care as doctors of medicine, doctors of osteopathy, chiropractors, podiatrists, nurse anesthetists, or physician‘s assistants versus those licensed or certified to provide professional services as doctors of medicine, doctors of osteopathy, chiropractors, podiatrists, nurse anesthetists, or physician‘s assistants.
{26} However, previous legislation provides guidance in determining the Legislature‘s purpose for including the term “professional services.” We accept Defendants’ invitation to examine the definition of “professional services” in the Professional Corporation Act, which dictates when corporations can provide services that its individual members must be licensed or otherwise legally authorized to provide. See
{27} The Professional Corporation Act defines “professional service[s]” as:
[A]ny type of personal service to the public which requires, as a condition precedent to the rendering of such service, the obtaining of a license or other legal authorization and which, prior to the passage of the Professional Corporation Act and by reason of law, could not be performed by a corporation. The term includes, but is not necessarily limited to, the personal services rendered by certified public accountants, registered public accountants, chiropractors, optometrists, dentists, osteopaths, podiatrists, architects, veterinarians, doctors of medicine, doctors of dentistry, physicians and surgeons, attorneys-at-law and life insurance agents.
{28} Defendants assert that the Legislature‘s inclusion of “professional services” in the MMA‘s definition of “health care provider” indicates an attitude favorable toward incorporation by professionals, including medical professionals. We agree. The Legislature enacted the Professional Corporation Act in 1963—thirteen years before it enacted the MMA. Since we presume that the Legislature was aware of its own prior enactments, we must presume that its use of the Professional Corporation Act‘s term was purposeful. See Citation Bingo, Ltd. v. Otten, 1996-NMSC-003, ¶ 21, 121 N.M. 205, 910 P.2d 271 (“[W]e presume that the [L]egislature was aware of existing statutory and
{29} Plaintiffs argue that if the Legislature had intended to cover professional corporations incorporated under the Professional Corporation Act, it would have explicitly mentioned that corporate business entities were covered. However, if the Legislature had explicitly mentioned the Professional Corporation Act or “corporate business entities,” it would have included only professional corporations, to the exclusion of various other types of legal organizations under which medical professionals may choose to operate. The Legislature‘s inclusion of the term “organization” in addition to “corporation” in the statute indicates that it did not intend the definition to be so limiting. See
{30} Plaintiffs further argue that the Legislature could not have intended to cover business entities because business entities cannot be licensed by the State to provide health care or professional services as doctors of medicine, doctors of osteopathy, chiropractors, podiatrists, nurse anesthetists, or physician‘s assistants. Plaintiffs are correct that there is no state mechanism by which professional organizations such as Defendants are licensed or certified to provide such health care. However, we reject Plaintiffs’ conclusion that because of this, Defendants would not be eligible to qualify as “health care providers” under the Act. We refuse to parse the Legislature‘s words in such a literal and mechanical manner. See Cummings, 1996-NMSC-035, ¶ 45 (“[The plain meaning] rule does not require a mechanical, literal interpretation of the statutory language.“). “We will not rest our
conclusions upon the plain meaning of the language if the intention of the [L]egislature suggests a meaning different from that suggested by the literal language of the law.” Id. Plaintiffs’ interpretation disregards the effect of the Legislature‘s inclusion of the term “professional services” in the Act. We determine that the Legislature was simply imprecise with its language. The Legislature would not have contemplated covering health care providers rendering “professional services” like those listed in
{31} Rather, we conclude that it is the licensure or certification of the individual that must be of concern to the Legislature. Indeed, any procedure to license or certify the corporation or organization to provide professional services would be redundant since, under the doctrine of respondeat superior, the legal organization as the passive tortfeasor is only liable to the extent of the legal liability of the individual medical professional who is the active tortfeasor. See Harrison v. Lucero, 1974-NMCA-085, ¶ 12, 86 N.M. 581, 525 P.2d 941 (“[T]he exoneration of the servant removes the foundation upon
C. The Legislature Intended the MMA to Cover Professional Medical Organizations Sued Under the Doctrine of Respondeat Superior
{32} All of the defendant professional medical organizations in these cases were sued for vicarious liability of their employees under the doctrine of respondeat superior. See Restatement (Third) of Agency: Respondeat Superior § 2.04 (2006) (“An employer is subject to liability for torts committed by employees while acting within the scope of their employment.“). When individual professionals operate under the umbrella of a legal business entity, they also become employees of that entity. See Restatement (Third) of Torts: Apportionment of Liability § 7 cmt. j (2000) (explaining that the employer and the employee are treated as one entity for purposes of assigning liability). Because corporations act through their employees, corporations may be held vicariously liable for the negligence of their employees who injure someone while in the course and scope of their employment. See
Restatement (Third) of Agency § 2.04.
{33} Plaintiffs’ argue that the MMA covers individuals but excludes the professional medical organizations for which they are employed. Although these covered individuals may be sued for acts of malpractice, the fact that the professional medical organizations are not covered by the Act leads to absurd results that the Legislature could not have intended and also conflicts with the doctrine of respondeat superior language as it is used in the MMA.
1. The Definition of “Health Care Provider” Must Be Interpreted So As to Avoid Absurd Results
{34} The MMA only covers claims for medical malpractice. See
{35} Under Plaintiffs’ interpretation of the Act, the Legislature intended these individual medical professional to be eligible to opt
{36} One of the doctors in the consolidated cases before us operates under a professional corporation that she formed and of which she is the sole member. There is no dispute that she may qualify as a health care provider under the Act, in her individual capacity. Plaintiffs,
however, argue that her corporation cannot qualify as a health care provider—even though it is also being sued vicariously for her alleged malpractice. Under Plaintiffs’ theory, the doctor‘s patients can sue her corporation in district court for the same alleged malpractice for which she is covered by the MMA. Plaintiffs can sue the corporation without complying with any of the provisions of the Act, and the doctor would not receive any benefits to which she is entitled in her individual capacity. The Legislature could not have intended to strip individual medical professionals of the MMA‘s protections simply because they choose to operate as a business corporation, professional corporation, limited liability corporation, or any other legal form of business organization. See State v. Padilla, 2006-NMCA-107, ¶ 11, 140 N.M. 333, 142 P.3d 921 (“We avoid any construction that would be ‘absurd, unreasonable, or contrary to the spirit of the statute.‘” (quoting State v. Smith, 2004-NMSC-032, ¶ 10, 136 N.M. 372, 98 P.3d 1022)), reversed on other grounds by State v. Padilla, 2008-NMSC-006, ¶ 34, 143 N.M. 310, 176 P.3d 299; accord Padilla v. Montano, 1993-NMCA-127, ¶ 23 (“Legislative enactments are to be interpreted to accord with common sense and reason. We will not construe a statute to defeat the intended purpose or achieve an absurd result.” (citation omitted)). Provided that medical business organizations meet all of the conditions to qualify as health care providers, we can discern no reason why the Legislature would have excluded them from the protections of the Act.
2. The Doctrine of Respondeat Superior Provisions in the MMA Reflect the Legislature‘s Intent to Cover Professional Medical Organizations like Defendants Who Are Sued Under that Doctrine
{37} The language in the Act provides further support that the Legislature intended to cover professional medical organizations being sued under the doctrine of respondeat superior. The MMA recognizes that a claim may be brought against a health care provider under the doctrine of respondeat superior in
In instances where applications are received employing the theory of respondeat superior or some other derivative theory of recovery, the director shall forward such applications to the state professional societies, associations or licensing boards of both the individual health care provider whose alleged malpractice caused the application to be filed, and the health care provider named a respondent as employer, master or principal.
{38} Also, the selection of the panel that hears the merits of a malpractice claim before the medical review commission is different when the doctrine of respondeat superior is implicated. See
superior be brought under the Act. Plaintiffs’ argument that none of the provisions in the Act apply to Defendants leads us to conclude that, in Plaintiffs’ view, the doctrine of respondeat superior provisions in the Act only apply to hospitals and outpatient facilities as employers. However, the language utilized by the Legislature demonstrates that it did not intend the application of these provisions to be so limited. The Legislature could have specifically mentioned hospitals and outpatient facilities when it referred to the third panel member in
III. CONCLUSION
{40} We hold that legal organizations offering the professional medical services listed in
{41} IT IS SO ORDERED.
BARBARA J. VIGIL, Justice
WE CONCUR:
PETRA JIMENEZ MAES, Chief Justice
RICHARD C. BOSSON, Justice
EDWARD L. CHÁVEZ, Justice
CYNTHIA A. FRY, Judge Sitting by designation
Topic Index for Baker v. Hedstrom, No. 33,635
APPEAL AND ERROR
Standard of Review
STATUTES
Interpretation
Legislative Intent
Rules of Construction
NEGLIGENCE
Respondeat Superior
TORTS
Medical Malpractice