Case Information
*1
[This opinion has been published in
Ohio Official Reports
at
C LARK , A DMR ., A PPELLANT v . OUTHVIEW H OSPITAL AND F AMILY H EALTH ENTER , A PPELLEE .
[Cite as
Clark v. Southview Hosp. & Family Health Ctr.
,
under the doctrine of agency by estoppel for the negligence of independent medical practitioners operating in the hosptial, when.
A hospital may be held liable under the doctrine of agency by estoppel for the
negligence of independent medical practitioners practicing in the hospital
when: (1) it holds itself out to the public as a provider of medical services;
and (2) in the absence of notice or knowledge to the contrary, the patient
looks to the hospital, as opposed to the individual practitioner, to provide
competent medical care. (
Albain v. Flower Hosp.
[1990], 50 Ohio St. 3d
251,
__________________ At approximately 6:00 a.m. on the morning of August 25, 1986, twenty-six-year-old Kimberly Sierra arrived at the emergency room at appellee Southview Hospital and Family Health Center ("Southview") suffering from an asthma attack. She drove to the hospital with her eighteen-month-old daughter from her house in West Carrollton. The most direct route from Kimberly's house to Southview would have taken her directly past Sycamore Hospital. Kimberly was pronounced dead at 11:16 a.m. that morning at Southview, allegedly as a proximate result of negligent medical care provided by Dr. Thomas Mucci, D.O., the emergency-room physician on duty at Southview. At that time, Dr. Mucci was president and sole shareholder of TMES,
Inc. ("TMES"). Pursuаnt to an agreement in effect on August 25, 1986 between TMES and Dayton Osteopathic Hospital, d.b.a. Southview, TMES was obligated to provide qualified physicians to staff the emergency department at Southview twenty-four hours per day. The agreement provided that "[t]he relationship between [Southview and TMES] shall be that of independent contractor." On August 21, 1987, Kimberly's mother, appellant Edna K. Clark, administrator of Kimberly's estate, filed a complaint, later amended, in the Montgomery County Court of Common Pleas, which alleged, in part, the wrongful death of Kimberly as a result of medical negligence on the part of Southview through its agents and/or employees, Dr. Mucci and TMES. It is undisputed that prior to trial, appellant settled her claims against Dr. Mucci and TMES, and dismissed these defendants frоm the case. On April 16, 1991, the case proceeded to trial by jury against
Southview. During her case-in-chief, appellant testified that on the morning of August 25, 1986, while vacationing in South Carolina, she received a telephone call from her aunt who told her that Kimberly was in the hospital and in critical condition. Although her aunt did not know what hospital Kimberly was in, appellant immediately telephoned the emergency room at Southview because she knew that Kimberly would go there if she had any control of herself at the time. Appellant had told her daughter that if she ever encountered any problems, appellant wanted her to go to Southview because it had doctors on duty there twenty-four hours a day. Prior to August 25, 1986, appellant had been told by the administrative dеpartment at Southview that "the hospital had doctors there twenty- fours hours a day in their emergency room and [that] they were fully equipped." As a result of this statement, and having read various promotional and marketing materials concerning the services that were available at Southview, appellant believed that the emergency-room physicians at Southview "worked for the hospital [and] were hospital doctors." She told Kimberly "the same thing that I believed [about the physicians] from the first time I was ever in the emergency room at Southview." At no time was appellant informed to the contrary. The promotional and marketing materials of Southview which were
admitted into evidence consisted of various pamphlets, brochures and an "Emergеncy Handbook & Physician Directory." Also admitted into evidence were various newspaper advertisements and the contents of radio and television advertisements. As relevant here, the promotional literature contains statements such as: "We welcome the opportunity to serve our community in this way, to supplement our full range of inpatient and outpatient medical care"; "You'll find facts about the hospitals' emergency departments"; "Southview ***feature[s] attractive new emergency department[] with the latest technology and equipment [which] can handle all major medical emergencies"; "At***Southview's emergency department[], we treat whole people, not just diseases and traumatic injuries"; "Get more information аbout our emergency facilities"; "Paramedics call the emergency department from the scene, and by the time the patient is stabilized and brought to the hospital, the surgical team is ready"; "Southview Hospital[] provide[s] the full range of patient care"; and "Our business is your good health, not just the cure of ill health." The promotional literature does not reveal the existence of TMES or the fact that the emergency department at Southview is staffed by independent physicians under a contract. At the conclusion of appellant's evidence, and again at the close of all
the evidence, Southview moved for a directed verdict on the issue of agency by estoppel, which motion the trial court denied. At the conclusion of the trial, the jury returned a general verdict in
favor of appellant in the amount of $1,004,603.94. In its answers to interrogatories, the jury found that Southview had made representations, both directly and indirectly, leading Kimberly to believe that Dr. Mucci was an agent or employee of Southview, and that Kimberly had thereby been induced to rely upon that relationship to seek emergency services at Southview on August 25, 1986. Judgment was entered on the verdict in the amount of $729,603.94, reflecting a setoff of the $275,000 received by appellant in her settlement with Dr. Mucci and TMES.
{¶ 8} The court of appeals reversed the judgment of the trial court, finding that a directed verdict should have been granted in Southview's favor, and entered judgment for Southview. The court found in part that reasonable minds could not conclude from the evidence that Dr. Mucci or TMES was an apparent agent of Southview. The cause is now before this court pursuant to the allowance of a
motion to certify the record.
__________________
Stocklin & Simpson Co., L.P.A. , Valerie Stocklin and Jay M. Simpson , for
appellant.
Freund, Freeze & Arnold , Neil F. Freund and Mary E. Lentz , for appellee. Bricker & Eckler , James J. Hughes, Jr. , and Catherine M. Ballard , urging affirmance for amicus curiae , Ohio Hospital Association.
Wolske & Blue and Michael S. Miller , urging reversal for amicus curiae , Ohio Academy of Trial Lawyers.
__________________
A LICE R OBIE R ESNICK , J. We must determine whether the trial court should have directed a
verdict in favor of Southview on the issue of agency by estoppel. Civ. R. 50(A)(4) provides that:
"When a motion for a directed verdict has been properly made, the trial court, after construing the evidence most strongly in favor of the party against whom the motion is directed, finds that upon any determinative issue reasonable minds could come to but one conclusion upon the evidence submitted and that conclusion is adverse to such party, the court shall sustain the motion and direct a verdict for the moving party as to that issue."
"By the same token, if there is substantial competent evidence to support
the party against whom the motion is made, upon which evidence reasonable minds
might reach different conclusions, the motion must be denied."
Hawkins v. Ivy
(1977),
St. 3d 251,
"A hospital may, in narrowly defined situations, under the doctrine of agency by estoppel, be held liable for the negligent acts of a physician to whom it has granted staff privileges. In order to establish such liability, a plaintiff must show that: (1) the hospital made representations leading the plaintiff to believe that the negligent physician was operating as an agent under the hospital's authority, and (2) the plaintiff was thereby induced to rely upon the ostensible agency relationship." In attempting to apply to the facts of this case, we find
ourselves questioning the very basis of the holding in paragraph four of the
syllabus. Concomitantly, we are not unmindful of the doctrine of
stare decisis
which dictates adherence to judicial decisions.
Stare decisis
, however, was not
intended "to effect a 'petrifying rigidity,' but to assure the justice that flows from
certainty and stability. If, instead, adherence to precedent offers not justice but
unfairness, not certainty but doubt and confusion, it loses its right to survive, and
no principle constrains us to follow it."
Bing v. Thunig
(1957),
holding in
Albain
as it is applicable to the instant case. In adopting an agency-by-
estoppel exception, we noted in
Albain
that the majority of jurisdictions which have
recognized this type of hospital vicarious liability has done so based on either
Section 267 of the Restatement of the Law 2d, Agency (1958) 578, or Section 429
of the Restatement of the Law 2d, Torts (1965) 421. In adopting Section 267, we
stated that "Section 267 poses a stricter standard, and requires actual reliance***."
Id.
at 262,
doctrine could apply, without any discussion or analysis of how the multitude of
cases from other jurisdictions has applied Sections 267 or 429 to vicarious hospital
liability. Rather, based on a law review, Comment, Hospital Liability for Physician
Malpractice: The Impact of
Hannola v. City of Lakewood
(1986), 47 Ohio St. L.J.
1077, and a severely criticized dissenting opinion in
Pamperin v. Trinity Mem.
Hosp.
(1988),
"'[I]f the individual looked to the hospital to provide him with medical
treatment and there has been a representation by the hospital that medical treatment
would be afforded by the physicians working therein, an agency by estoppel can be
found.'" ,
the first element required under paragraph four of our syllabus,
viz.
, that the plaintiff
must show that the hospital made representations leading her to believe that the
negligent physician was operating as an agent under the hospital's authority.
Id.
at
263,
above passage was not meant to summarize what we articulated as the first prong of agency by estoppel. Rather, it was advanced as the total set of requirements imposed upon a plaintiff relying on the doctrine to establish liability of the hospital. In the very next paragraph, the court in Grewe explained that:
"[T]he critical question is whether the plaintiff, at the time of his admission
to the hospital, was looking to the hospital for treatment of his physical ailments or
merely viewed the hоspital as the situs where his physician would treat him for his
problems. A relevant factor in this determination involves resolution of the
question of whether the hospital provided the plaintiff with [the treating physician]
or whether the plaintiff and [the treating physician] had a patient-physician
relationship independent of the hospital setting."
Id.
,
patient/plaintiff's duty to inquire as to the employment relationship between the
hospital and the physician it provides. Rather, it is the hospital's duty "'to put
[plaintiff] on notice that the [treatment was not rendered as] an integral part of [the
hospital], and it cannot be seriously contended that [plaintiff], when he was being
carried from room to room suffering excruciating pain, should have inquired
whether
the
individual
doctors who
examinеd
him
are
employees***or***independent contractors.'"
Id.
at 253, 273 N.W.2d at 434,
quoting
Stanhope v. Los Angeles College of Chiropractic
(1942), 54 Cal. App.2d
141, 146,
{¶ 21}
Yet, in direct contrast to the very case we relied upon in adopting
paragraph four of our syllabus in
Albain
, we proceeded to reject plaintiff's averment
in
Albain
that upon her arrival at the hospital she believed "that [the hospital] would
provide me with a physician." We found that plaintiff "did not believe that a
physician
who was an employee of the hospital
would be provided her" because the
treating physician "never discussed her employment status with [plaintiff] in any
manner." (Emphasis
sic
.)
Id.
at 264,
she was induced to rely upon the apparent-agency relationship. In fact we applied this element in a way that is contrary to the holding of cases in all other jurisdictions that we have found which adopted and applied the doctrine in actions against hospitals. See discussion infra . We stressed that "[a]s to this second element *** the question is ***
not
whether the plaintiff relied on the reputation of the hospital." (Emphasis
sic
.)
Id.
at 263,
would have refused care had she known of the independent status of the treating physician, we have created an exception that is so illusory that it forces the emergency patient to demonstrate that she would have chosen to risk further complications or death rather than be treated by a physician of whose independence she had been unaware. In addition, Albain imposed the burden that the pаtient ascertain and understand the contractual arrangement between the hospital and treating physician, while simultaneously holding that her belief upon arrival that the hospital would provide her with a physician is insufficient. Thus it is virtually impossible for the plaintiff, especially in a wrongful-death case, to establish reliance as required in . It is no wonder that among the many cases from other jurisdictions
dealing with this issue, we were unable to find a single case in support of such a
narrow interpretation of agency by estoppel in a hospital setting. In fact,
Albain
is
so much an aberration that its requirements, proposed elsewhere, have been called
"astonishing," "absurd," "unfair," criticized for creating a "false dichotomy"
between reliance on the apparent agency relationship and the hospital's reputation,
and scoffed at for focusing on notice that comes "too little, too late."
Paintsville
Hosp. Co. v. Rose
(Ky. 1985),
choose not to reexamine Albain , we can find evidence of reliance in the fact that Kimberly drove directly by Sycamore Hospital in order to be treated at Southview. If we were to do as appellant suggests, then the outcome would be different had she suffered the asthma attack at a place geographically closer to Southview than to Sycamore Hospital. It is disconcerting at best that the fortuity of geographic proximity should determine the outcome under a doctrine so deeply rooted in public policy. Because of the history surrounding the growth of hospital liability
and strong public policy arguments, we choose to revisit paragraph four of the syllabus of . At common law, hospitals enjoyed immunity from liability even for the negligent acts of their employees. The concept is said to have originated in mid-Nineteenth Century England and was based on the theory that charitable funds could not be diverted from the use intended by their donors. American courts imported the "trust fund" theory and added others to justify the exemption of hospitals from tort liability, even long after the theory was discarded in England. The other theories included implied waiver, public policy and the idea that respondeat superior is not appropriatе because the hospital derived no benefit from the physician's services. See, generally, Note, Independent Duty of a Hospital to Prevent Physicians' Malpractice (1973), 15 Ariz. L.Rev. 953, 954-956. As one court has stated:
"[S]ince [a hospital] ministers to those who cannot pay as well as those who
can, thus acting as a good Samaritan, justice and sound public policy alike dictate
that it should be exempt from the liability attaching to masters whose only aim is
to engage in enterprises of profit or of self-interest***."
Morrison v. Henke
(1917),
hospitals in
Taylor v. Protestant Hosp. Assn.
(1911),
"Experience has shown that the ends of justice are best secured by holding the master responsible for injuries caused by the wrongful acts of his servant done in the prosecution of his private ends and for his benefit.
"Doubtless the rule will be extended to meet the requirements of manifold
new conditions brought about by growth and advance. Courts are constantly
confronted with the necessity of extending established principles to new conditions.
But in this case it is sought to extend the rule to masters different from others and
who do not come within its reason, and to hold a public charity involving no private
profit responsible for the negligence of servants employed solely for a public use
and a public benefit. We think such extension is not justified. Public policy should
and does encourage enterprises with the aims and purposes of defendant and
requires that they should be exempted from the operation of the rule"
Id.
at 103,
time:
"The hospital of the early mid-nineteenth century would not be recognizable as such to a modern observer. 'Respectable' people who fell sick or who were injured were treated by their doctors at home; only the lowest classes of society sought help in the 'hospital,' which was most often a separate wing on the almshouse. As late as 1873, there were only 178 hospitals in the United States, with a total of 50,000 beds. These hospitals were private charities, and their trustees were usually unable to raise sufficient funding to provide a pleasant stay. The hospital of the time was dirty, crowded and full of contagious disease. The 'nurses' were usually former patients. Doctors, who were not paid, tended the ill for a few hours per week out of a sense of charity mixed with the knowledge that they could 'practice' their cures on the poor and charge young medical students for instruction in the healing arts. These young 'house doctors' also worked without pay, practicing cures on the ill." Note, supra , 1990 Wis. L.Rev. at 1131. As the role of the hospital in society changed, the justifications
underlying charitable immunity eroded. At first, courts drew a distinction between
medical and administrative acts of employees, imposing liability on the hospital for
the latter but not the former. See
Schloendorff v. Soc. of New York Hosp.
(1914),
211 N.Y. 125, 105 N.E.92. This distinction represented a judicial policy of
compromise between the doctrines of
respondeat superior
and charitable
immunity. See
Bing v. Thunig
,
supra
, at 662,
"The conception that the hospital does not undertake to treat the patient,
does not undertake to act through its doctors and nurses, but undertakes instead
simply to procure them to act upon their own responsibility, no longer reflects the
fact. Present-day hospitals, as their manner of operation plainly demonstrates, do
far more than furnish facilities for treatment. They regularly employ on a salary
basis a large staff of physicians, nurses and interns, as well as administrative and
manual workers, and they charge patients for medical care and treatment, collecting
for such services, if necessary, by legal action. Certainly, the person who avails
himself of 'hospital facilities' expects that the hospital will attempt to cure him, not
that its nurses or other employees will act on their own responsibility."
Id.
at 666,
Avellone v. St. John's Hosp.
(1956),
forefront was whether and under what circumstances a hospital could be held liable for the negligence of those independent physicians. In Cooper v. Sisters of Charity of Cincinnati, Inc. (1971), 27 Ohio
St. 2d 242, 254, 56 O.O. 2d 146, 152,
reliance upon the employment relationship between the proprietor and the lessee.
Rather, the focus shifted to reliance upon the relationship between the proprietor's
advertisement and the article purchased. In fact, we agreed with the court of appeals
in that case that "'prospective purchasers going to the company's place of business
had a right to
assume
that the company was selling [the advertised article] in the
absence of knowledge to the contrary.'" (Emphasis added.)
Id.
at 181, 20 O.O. at
234,
directly to the plaintiff in order for the doctrine to apply. "'[R]epresentations need
not be made to the plaintiff directly***[;] "[i]t is sufficient if the representation is
made to a third person to be communicated to the plaintiff, or to*** a class of
persons of whom the plaintiff is one, or even
if it is made to the public generally
with a view to its being acted on
, and the plaintiff as one of the public acts on it
***."'" (Emphasis
sic
.)
Id.
at 182, 20 O.O at 235,
independent medical practitioners, we stress that such notice, to be effective, must come at a meaningful time. [1] A review of the record in this case reveals substantial competent
evidence upon which reasonable minds could conclude, as the jury did, that 1. It has been suggested, particularly by the dissent in Pamperin v. Trinity Mem. Hosp. , supra , 144 Wis. 2d at 217-218, 222, 423 N.W.2d at 860, 861, that hospitаls could escape liability for the negligence of their independent contractors by posting signs in their emergency rooms regarding the legal relationship of persons rendering medical assistance. The dissent, however, misconstrues the concept of notice. Such "notice" will rarely provide the patient with the ability to choose at a meaningful time:
"The plaintiff, who by definition is injured and under stress, is relying upon the hospital to
provide the services that the hospital has held out that it can provide. The plaintiff's reliance upon
the hospital's competence has been demonstrated by her walking (or being wheeled) into the
emergency room. Simply informing her that some doctors and staff have a different technical
relationship with the hоspital than the one she expected does not lessen the reasonableness of her
reliance upon the hospital. Even if the patient understood the difference between an employee and
an independent-contractor relationship, informing her of the nature of the relationship after she
arrives is too late. The purpose of any notice requirement is to impart knowledge sufficient to enable
the plaintiff to exercise an informed choice. The signs suggested by the dissent are too little, too
late." Note
supra
,
reversed, and the judgment of the trial court entered upon the verdict is reinstated.
Judgment reversed.
D OUGLAS , F.E. S WEENEY , and P FEIFER , JJ., concur.
M OYER , C.J., A.W. WEENEY and W RIGHT , JJ., dissent.
__________________
M OYER , C.J., dissenting.
I respectfully dissent. In its attempt to mitigate the perceived
harshness of
Albain v. Flower Hosp.
(1990),
acts of its staff physicians under the doctrine of agency by estoppel. Id. at paragraph four of the syllabus. To establish such liability, Albain required the plaintiff to prove that "(1) the hospital made representations leading the plaintiff to believe that the negligent physician was operating as an agent under the hospital's authority, and (2) the plaintiff was thereby induced to rely upon the ostensible agency relationship." In my view, the instant case presents a set of facts that could be found to satisfy the Albain test for agency by estoppel and demonstrates that there is no need to overrule paragraph four of the syllabus. As the majority points out, the evidence in this case established that
Southview Hospital, through its advertising materiаls, held itself out as a hospital with an emergency room that possessed "the latest technology and equipment" and that could "handle all major medical emergencies." Prior to her medical emergency, plaintiff had made a specific decision to go to the Southview Hospital emergency room if she were to have a medical crisis. She apparently passed directly by a closer hospital on her way to Southview. As I read Albain , a reasonable trier of fact could have, based on this and other evidence at trial, found Southview liable through agency by estoppel. Instead, the majority overrules paragraph four of the Albain syllabus
and substitutes a new test for agency by estoppel. Thus, a majority of the court persists in its eagerness to overrule recent and well-reasoned precedent. The court justifies its departure from the doctrine of stare decisis in this case by implying that the standards enunciated in will lead to "unfairness, *** doubt and confusion." At a time when the rising cost of medical care surpasses most other
issues on national agendas, a majority of this court has acted to substantially
increase the acts of doctors for which hospitals will be required to provide
insurance. The test the majority has established will unfortunately increase the cost
of providing medical services and create more unfairness, doubt and confusion than
it resolves. Numerous questions arise when one tries to analyze and predict the
consequences of the newly announced standard. For example, whаt does it mean
for a hospital to "hold itself out" to the public as a provider of medical services?
Does not every medical hospital do so when it erects a sign saying "hospital" on its
premises? The majority cites approvingly to
Rubbo v. Hughes Provision Co.
(1941),
"notice or knowledge to the contrary?" The majority has indicated that a sign in the emergency room is nоt sufficient. Will disclaimers in the hospital's brochures and advertisements be sufficient? Will a hospital be able to insulate itself by promoting, for instance, "the excellent care provided by its independent staff physicians?" In addition, the final element of the majority's new test, which
requires that the plaintiff look to the hospital as opposed to the individual physician to provide competent care, is entirely subjective. Once a plaintiff testifies that he or she "looked to the hospital" as opposed to the individual practitioner, a hospital defendant will have almost no effective means to disprove the plaintiff's subjective state of mind. The majority criticizes for requiring the plaintiff to prove reliance in a wrongful death case, stating that it would be "virtually impоssible." The newly announced test, however, which depends exclusively on the decedent's state of mind at the time he or she received medical care, presents the very same problem of proof. Finally, to what extent must the plaintiff's "looking to the hospital" be a direct result of the hospital's representations as opposed to the plaintiff's ambient information—or disinformation—about how hospitals are structured and operate in general? More doubt and confusion will arise when the majority's holding is
applied in other factual settings. For example, some large department stores rent space in their stores to purveyors of individual lines of products, such as cosmetics. In doing so, does a department store hold itself out to thе public as a "provider" of cosmetics, subjecting it to liability for the negligent acts of the independent contractors on its premises? The majority asserts, and I agree, that stare decisis should not prevail
when precedent leads to injustice and unfairness. I also agree that the role of hospitals in society has changed dramatically over time. Nevertheless, I do not agree that merely because hospitals have come more to resemble businesses than charitable institutions, this court should dramatically weaken their ability to limit contractually their liability for their independent agents. This court should not force hospitals to be excess insurers of their staff physicians. Nor has plaintiff shown that, in the great majority of malpractice cases, the physician's insurance will be inаdequate to cover the full amount of damages. Estoppel is an equitable doctrine that, according to Black's Law
Dictionary (6 Ed.1990) 551, mandates that "[a] party is prevented by his own acts
from claiming a right to detriment of other party who was entitled to rely on such
conduct and has acted accordingly." (Citing
Graham v. Asbury
[1975], 112 Ariz.
184, 185-186,
making hospitals liable in all instances and making them liable in none. The majority criticizes because it "abrogated the very exception [it] claimed to create." The fact that the instant case may be decided favorably to the plaintiff under Albain, however, demonstrates otherwise. Moreover, I believe that the majority has committed the same fault to the opposite extreme: it has created a rule that swallows the exception. If the Albain standard unduly limits the class of potential plaintiffs,
the more jurisprudentially sound approach would be to modify, interpret or soften
the holding of that case instead of conducting the radical surgery performed by the
majority opinion. For example, this court could choose not to follow the dicta in
that the plaintiff prove that he or she would have refused treatment had he
or she known of the agency relationship.
A.W. WEENEY and W RIGHT , JJ., concur in the foregoing dissenting
opinion.
__________________
W RIGHT , J., dissenting.
{¶ 53} My former colleague, Justice Ralph Locher, certainly said it right. The battle cry in this era of burgeoning litigation is " sue, sue, sue !" [2] "Deep pocket" suits are upon us but for little purpose.
{¶ 54} The majority's pejorative description of stare decisis as "'"petrifying rigidity,"'" in this particular context defiеs comment. I say this because the precedent overturned today merely states that if a hospital employs an intern, resident or any other medical practitioner, it must answer in damages for their actions on the job. Conversely, if a doctor is working as an independent contractor within a hospital and the medical facility does not hold itself out as that doctor's employer , the hospital should not be joined in an action for malpractice against the doctor. Today, the majority rejects this precedent. From this day on no malpractice action evolving out of an incident
within a hospital will be brought without joining the medical facility as a co- defendant and this will include the costs of defense attendant thereto. In this period of burgeoning costs to the medical consumer the
majority has surely taken a step backwards. I concur in the Chief Justice's commentary and vigorously dissent.
__________________
2. See Justice Locher's dissent in Nottingdale Homeowners' Assn., Inc. v. Darby (1987), 33 Ohio
St.3d 32, 37,