Gregory PHELPS, Marlene L. Phelps, Estate of Adam Phelps, Deceased, by his Special Administrator, Gregory G. Phelps, Caroline Phelps and Kyle Phelps, minors, by their Guardian ad Litem, William M. Cannon, Plaintiffs-Respondents-Cross-Appellants, v. PHYSICIANS INSURANCE CO. OF WISCONSIN, INC., a Wisconsin insurance corporation and Matthew Lindemann, M.D., Defendants-Appellants-Cross-Respondents-Petitioners.
No. 2006AP2599
Supreme Court of Wisconsin
July 10, 2009
2009 WI 74; 768 N.W.2d 615
Oral argument March 5, 2009.
For the plaintiffs-respondents-cross-appellants there were briefs by William M. Cannon, Sarah F. Kaas, Edward E. Robinson, and Cannon & Dunphy, S.C., Brookfield, and oral argument by William M. Cannon.
An amicus curiae brief was filed by Martha H. Heidt and Bye, Goff, Rhode & Skow, Ltd., River Falls, on behalf of the Wisconsin Association for Justice.
An amicus curiae brief was filed by Timothy J. Muldowney, Robert J. Dreps, Jennifer L. Peterson, and Godfrey & Kahn SC, Madison; Ruth Heitz and Wisconsin Medical Society, Madison; and Leonard Nelson and AMA Litigation Center, Chicago, on behalf of the Wisconsin Medical Society and the American Medical Association.
¶ 1. PATIENCE DRAKE ROGGENSACK, J. We review a published decision of the court of appeals,1 which reversed in part and affirmed in part a decision of the circuit court.2 There are two questions presented for our review: (1) whether Dr. Matthew Lindemann (Lindemann) was a borrowed employee of St. Joseph‘s Hospital of Milwaukee (St. Joseph‘s), and was therefore an employee of a health care provider subject to
I. BACKGROUND
A. Factual Summary
¶ 2. This is a long, drawn-out litigation that has been wandering through the Wisconsin court system for more than eight years. The underlying facts have been the source of three separate published appellate opinions. See Phelps v. Physicians Ins. Co. of Wis., Inc., 2004 WI App 91, ¶ 1, 273 Wis. 2d 667, 681 N.W.2d 571 (Phelps I); Phelps v. Physicians Ins. Co. of Wis., Inc., 2005 WI 85, ¶¶ 5-13, 282 Wis. 2d 69, 698 N.W.2d 643 (Phelps II); Phelps v. Physicians Ins. Co. of Wis., Inc., 2008 WI App 6, ¶¶ 2-11, 307 Wis. 2d 184, 744 N.W.2d 880 (Phelps III). Our summary of the relevant facts here largely restates the factual summaries in those prior decisions.
¶ 3. Marlene Phelps (Marlene) discovered that she was pregnant with twins in June 1998. Due to
¶ 4. In the early morning of November 24, 1998, Marlene was awakened by constant suprapubic pain. The on-call resident, Lindemann, was contacted. Lindemann was an unlicensed first-year resident and an employee of the Medical College of Wisconsin Affiliated Hospitals, Inc. (Affiliated Hospitals entity). His primary duty at this time was to assess and report findings and differential diagnoses on St. Joseph‘s patients to a senior resident or to the attending obstetrician.
¶ 5. Lindemann ordered lactated Ringer‘s solution to be administered to Marlene at 2:40 a.m., for suspected contractions. It did not alleviate Marlene‘s pain. At 3:00 a.m., Lindemann made a differential diagnosis of her pain that included bladder infection, labor and placental abruption. He ordered a urinalysis in regard to a potential bladder infection. The results of that test were negative.
¶ 6. At 4:15 a.m., Marlene requested that the attending nurse call Lindemann again due to continued pain. Fetal heart monitoring showed that the twins’ heart rates were within normal ranges. Lindemann informed Marlene that he would take an ultrasound so he could consult a senior resident about her condition.
¶ 7. After the ultrasound, potent narcotics were administered to Marlene at 4:50 a.m. and 5:20 a.m., on Lindemann‘s orders, but he was neither seen nor heard
¶ 8. Marlene was still in pain when Lindemann examined her again at 6:00 a.m. At 6:45 a.m., Marlene‘s husband, Gregory, arrived at the hospital. Marlene informed Gregory that she needed to defecate and asked for assistance to get to the commode. At 7:00 a.m., while sitting on the commode, she reached down and felt toes extending from her.
¶ 9. Gregory rushed to the nurses’ desk where he found another doctor, who delivered Adam Phelps at 7:20 a.m. Adam was immediately rushed to the neonatal intensive care unit where hospital staff attempted to resuscitate him. The efforts were unsuccessful, and he was pronounced dead at 7:36 a.m. Adam‘s death was caused by asphyxia due to umbilical cord entrapment and placental abruption, which impaired his oxygen supply.
¶ 10. While hospital staff were attempting to resuscitate Adam, Marlene was taken to the operating room. The second twin, Kyle, was delivered at 7:43 a.m. Afterward, the treating physicians questioned Lindemann about his decisions, his whereabouts and his diagnosis.
B. Procedural History
1. Prior appeal
¶ 11. Gregory and Marlene, along with their two surviving children, Kyle and Caroline (collectively, the Phelpses), sued Lindemann and his insurer, Physician‘s Insurance Company of Wisconsin (Physicians), St.
¶ 12. The Honorable Michael P. Sullivan presided over the initial trial proceedings. Prior to trial, Judge Sullivan dismissed the Affiliated Hospitals entity from the case, concluding that even though Lindemann was an employee of the Affiliated Hospitals entity, he was not the Affiliated Hospitals entity‘s “servant” because the Affiliated Hospitals entity did not control or supervise his medical decisions performed at St. Joseph‘s. Therefore, the Affiliated Hospitals entity could not be held liable on a theory of respondeat superior. This decision was not appealed. The Phelpses then moved for a declaratory ruling that St. Joseph‘s was Lindemann‘s employer. Before Judge Sullivan could rule, however, the Phelpses and St. Joseph‘s settled, and St. Joseph‘s was dismissed from the litigation.
¶ 13. The day before trial, Judge Sullivan struck Lindemann‘s jury demand because Lindemann‘s lawyer had been late in paying the jury fee. A bench trial was then held. Judge Sullivan found Lindemann 80% causally negligent and St. Joseph‘s 20% causally negligent. Judge Sullivan awarded the Phelpses $990,000, to be distributed as follows: (1) $500,000 total to Gregory and Marlene for the wrongful death of Adam; (2) $200,000 each to Gregory and Marlene for emotional distress; and (3) $45,000 each to Kyle and Caroline for the loss of society and companionship of their mother, Marlene.
¶ 14. Lindemann and Physicians appealed. The court of appeals held that Judge Sullivan had erred when he struck Lindemann‘s jury demand, and remanded for a new trial. Phelps I, 273 Wis. 2d 667, ¶ 18.
¶ 15. Lindemann and Physicians had argued to the circuit court and the court of appeals that
¶ 16. We granted the parties’ cross-petitions for review. Phelps II, 282 Wis. 2d 69, ¶¶ 2-3. We reversed that aspect of the decision of the court of appeals granting defendants a new trial based on their failure to timely pay the jury fee. Id., ¶ 36. Furthermore, while we agreed with the court of appeals that the applicable standard of care to apply to Lindemann was that of a first-year, unlicensed resident, we concluded that the circuit court properly exercised its discretion in allocating 80% of the negligence to Lindemann. Id., ¶ 47.
¶ 17. We reversed the court of appeals’ decision to remand the case to the circuit court for further findings of fact regarding whether some evidence should have been excluded under the peer review privilege. Id., ¶ 54. Instead, we concluded, as a matter of law, that the peer review privilege did not apply to the facts of the case. Id., ¶¶ 52-54.
¶ 18. Finally, we affirmed that aspect of the court of appeals’ decision concluding that Lindemann was not a health care provider under
2. Present appeal
¶ 19. On remand, the circuit court applied the test we set forth in Seaman Body Corp. v. Industrial Commission of Wisconsin, 204 Wis. 157, 235 N.W. 433 (1931), to determine whether Lindemann was a borrowed employee. The circuit court made findings of fact, based on written submissions relating to whether: (1) Lindemann consented to work for St. Joseph‘s; (2) Lindemann entered upon the work of St. Joseph‘s pursuant to either an express or an implied agreement to do so; (3) St. Joseph‘s had primary control over the details of Lindemann‘s work at St. Joseph‘s; and (4) Lindemann‘s work was performed primarily for the benefit of St. Joseph‘s. Based on the findings it made from these evidentiary submissions, the circuit court concluded that Lindemann was a borrowed employee, and was therefore an employee of a health care provider. These conclusions subjected the Phelpses’ claims to the noneconomic damages caps set forth in
¶ 20. The Phelpses moved for reconsideration. They argued that Lindemann could not be a borrowed employee because (1) the circuit court‘s factual finding that Lindemann consented to work for St. Joseph‘s was erroneous; and (2) the circuit court made no finding
¶ 21. The circuit court denied the motion, reiterating its finding that even though Lindemann did not expressly consent to work for St. Joseph‘s, he impliedly did so. In addition, the circuit court concluded that an employer need not relinquish full and exclusive control over the employee to the borrowing employer in order for the employee to be considered a borrowed employee. As a result, the circuit court stood by its decision concluding that Lindemann was a borrowed employee of St. Joseph‘s.
¶ 22. Between the filing of the Phelpses’ initial complaint and before the circuit court decisions on the borrowed employee question, we decided several cases potentially affecting the outcome of this case. See Ferdon v. Wis. Patients Comp. Fund, 2005 WI 125, 284 Wis. 2d 573, 701 N.W.2d 440; Pierce v. Physicians Ins. Co. of Wis., Inc., 2005 WI 14, 278 Wis. 2d 82, 692 N.W.2d 558; Maurin v. Hall, 2004 WI 100, 274 Wis. 2d 28, 682 N.W.2d 866.
¶ 23. In civil cases, we generally presume that our rulings apply to pending litigation. Wenke v. Gehl Co., 2004 WI 103, ¶ 69, 274 Wis. 2d 220, 682 N.W.2d 405.5 The circuit court decided that it was its responsibility, within the scope of our remand, to determine the effect of Ferdon, Pierce and Maurin on the Phelpses’ claims,6
¶ 24. In Maurin, we held that
¶ 26. Though the same result appeared mandated for Marlene‘s bystander claim, the circuit court concluded that our decision in Pierce created different footings for her claim. In Pierce, we concluded that a mother in childbirth, such as Marlene, experiences emotional distress damages in a manner different from that of a third person who merely witnesses the childbirth, such as Gregory. Pierce, 278 Wis. 2d 82, ¶ 15. Specifically, a mother in childbirth suffers injuries as a participant or victim of the medical malpractice, and her injuries are distinct from witnessing the injury to and death of her child. Id. As a result, a mother can pursue a separate claim for medical malpractice. Id., ¶ 1. In light of Pierce, the circuit court determined that
¶ 27. About a month after the circuit court issued its decision on damages, we issued our decision in Bartholomew v. Wisconsin Patients Compensation Fund, 2006 WI 91, 293 Wis. 2d 38, 717 N.W.2d 216. In Bartholomew, we overruled Maurin. A majority of the court, via different rationales, concluded that the legislature had intended to adopt two damages caps, “a medical malpractice cap for noneconomic damages for predeath claims and a wrongful death cap for noneconomic damages for postdeath loss of society and companionship. Claimants [could] thus recover for the different damages up to the separate limits of the applicable respective cap.” Bartholomew, 293 Wis. 2d 38, ¶ 127.
¶ 28. In light of Bartholomew, the Phelpses filed a motion for reconsideration, requesting that Gregory‘s $200,000 award for damages due to the negligent infliction of emotional distress to a bystander be reinstated. The circuit court granted the motion. Though the court acknowledged some difficulty in determining whether a bystander claim “is a predeath or postdeath claim,” the court concluded that such a claim ought to be considered a predeath claim, because “[t]he history of... wrongful death claims... is limited to something else.” As a result, the circuit court held that the noneconomic damages cap in
¶ 30. The court of appeals reversed the circuit court‘s ruling that Lindemann was a borrowed employee. Phelps III, 307 Wis. 2d 184, ¶ 1. In so doing, the court of appeals concluded that the clearly erroneous standard of review did not apply to the circuit court‘s findings of fact, because those findings were based on a paper record. Id., ¶ 20 (citing State ex rel. Sieloff v. Golz, 80 Wis. 2d 225, 241, 258 N.W.2d 700 (1977)). Instead, the court of appeals reviewed the circuit court‘s findings de novo. Id.
¶ 31. In applying the borrowed employee test from Seaman, the court of appeals found that (1) Lindemann never consented to be St. Joseph‘s employee, id., ¶ 25; (2) Lindemann was not performing the work of St. Joseph‘s, id., ¶¶ 26-27; (3) St. Joseph‘s did not control the details of Lindemann‘s work, id., ¶ 28; and (4) Lindemann‘s work primarily benefited the Affiliated Hospitals entity, not St. Joseph‘s, id., ¶ 29.
¶ 32. Because the court of appeals concluded that all of the Seaman factors weighed against Lindemann being a borrowed employee, it concluded that he was not. As a result, Lindemann was not an employee of a health care provider under
¶ 33. We granted the defendants’ petition for review. In addition to the questions posed by the parties regarding Lindemann‘s status as a borrowed employee and the effect of that classification on Gregory‘s damages award under
(1) Does
Wis. Stat. ch. 655 bar bystander negligent infliction of emotional distress claims made against health care providers?(2) Did the defendant waive (forfeit) the right to have this issue decided in this court?
We now reverse the decision of the court of appeals.
II. DISCUSSION
A. Standard of Review
¶ 34. As the procedural history of this case indicates, determining whether Lindemann was a borrowed employee required the circuit court to make factual findings. See Phelps II, 282 Wis. 2d 69, ¶ 4 n.4 (“[B]ecause we cannot find facts, we remand to the circuit court the issue of whether Dr. Lindemann was a ‘borrowed employee’ of St. Joseph‘s Hospital.“) We uphold a circuit court‘s findings of fact unless they are clearly erroneous. Steinbach v. Green Lake Sanitary Dist., 2006 WI 63, ¶ 10, 291 Wis. 2d 11, 715 N.W.2d 195.
¶ 35. Once the facts relevant to the borrowed employee determination are found by the circuit court, application of the Seaman test to those facts is a question of law. Phelps II, 282 Wis. 2d 69, ¶ 100 (Prosser, J., concurring); see also Estate of Hegarty v. Beauchaine, 2006 WI App 248, ¶¶ 66-75, 297 Wis. 2d 70, 727 N.W.2d 857. We decide questions of law independently. Linden v. Cascade Stone Co., Inc., 2005 WI 113, ¶ 5, 283 Wis. 2d 606, 699 N.W.2d 189; Mrozek v. Intra Fin. Corp., 2005 WI 73, ¶ 15, 281 Wis. 2d 448, 699 N.W.2d 54; Cole v. Hubanks, 2004 WI 74, ¶ 5, 272 Wis. 2d 539, 681 N.W.2d 147.
¶ 36. In addition to deciding the borrowed employee question, we interpret and apply
B. Borrowed Employee
¶ 37. In order to determine whether Lindemann was the borrowed employee of St. Joseph‘s, the circuit court was required to make findings of fact. The circuit court‘s findings were based on the parties’ written submissions. Because the basis from which the circuit court found facts was written exhibits and submissions, the court of appeals concluded that the circuit court‘s findings of fact should be reviewed de novo. Phelps III, 307 Wis. 2d 184, ¶ 20 (citing Golz, 80 Wis. 2d at 241).
¶ 38. Here, the circuit court was not concerned with the sufficiency of the evidence. The circuit court was concerned with the meaning of the evidence. It is within the purview of the fact finder to say what facts the evidence supports, which involves determining the meaning of disputed factual inferences from the evidence presented.10 Landrey v. United Servs. Auto. Ass‘n, 49 Wis. 2d 150, 157, 181 N.W.2d 407 (1970)
Second, Justice Bradley‘s assertion that precedent is clear on the effect of the exception, Justice Bradley‘s dissent, ¶¶ 72-73, is erroneous. Veierstahler expressly noted that Wisconsin “law is in conflict as to our standard of review of factual determinations or inferences made by a [circuit] court based upon a documentary record.” Veierstahler, 183 Wis. 2d at 101 n.7 (citing Pfeifer, 121 Wis. 2d at 570 (applying the “reasonableness” standard); Golz, 80 Wis. 2d at 241 (applying the de novo standard)). We do not resolve this conflict here, though, because we are reviewing the circuit court‘s resolution of disputed facts, not inferences drawn from undisputed facts.
Finally, although one rationale for the clearly erroneous standard of review is that “the [circuit court] is in a [better] position to pass on the credibility of the witnesses and the weight to be given to their testimony,” Vogt, Inc. v. International Brotherhood of Teamsters, 270 Wis. 315, 71 N.W.2d 359 (1955),
¶ 39. Furthermore, a finding of fact is clearly erroneous when “it is against the great weight and clear preponderance of the evidence.” State v. Arias, 2008 WI 84, ¶ 12, 311 Wis. 2d 358, 752 N.W.2d 748 (quoting State v. Sykes, 2005 WI 48, ¶ 21 n.7, 279 Wis. 2d 742, 695 N.W.2d 277). Therefore, although evidence may have presented competing factual inferences, the circuit court‘s findings are to be sustained if they do not go “against the great weight and clear preponderance of the evidence.” Id.; Steinbach, 291 Wis. 2d 11, ¶ 10.
¶ 40. The parties do not challenge the finding of the first circuit court11 that Lindemann was employed by the Affiliated Hospitals entity, and that under the applicable statutory scheme at the time of Lindemann‘s negligence, the Affiliated Hospitals entity was not a on reargument, 270 Wis. 321b, 321i, 74 N.W.2d 749 (1956), another important basis is the efficient use of judicial resources. As the United States Supreme Court has explained:
[E]ven where the [trial] judge‘s full knowledge of the factual setting can be acquired by the appellate court, that acquisition will often come at unusual expense, requiring the court to undertake the unaccustomed task of reviewing the entire record, not just to determine whether there existed the usual minimum support for the merits determination made by the factfinder below, but to determine whether urging of the opposite merits determination was substantially justified.
Pierce v. Underwood, 487 U.S. 552, 560 (1988). It saves the citizens of Wisconsin time and money for us to apply the clearly erroneous standard to the circuit court‘s findings, even when they are based solely on documentary evidence. We acknowledge the value inherent in this efficient use of judicial resources.
¶ 41. We determine whether Lindemann was a borrowed employee of St. Joseph‘s by answering the following questions:
(1) Did the employee actually or impliedly consent to work for a special employer? (2) Whose was the work he was performing at the time of injury? (3) Whose was the right to control the details of the work being performed? (4) For whose benefit primarily was the work being done?
1. Employee consent
¶ 42. In regard to the first question posed by the Seaman test, whether Lindemann actually or impliedly consented to work for St. Joseph‘s, the circuit court made the following finding of fact:
I find that Doctor Lindemann clearly consented to work for St. Joseph‘s Hospital. I‘m not sure how long he was there for but he went to work there and was in any reasonable sense of the phrase working for the hospital. That‘s embodied in another subsequent finding perhaps, but in terms of his consent, he clearly consented to this both by engaging in the trainee program and in responding to the particular assignment to St. Joseph‘s. That‘s what he was going there to do. [The Affiliated Hospitals entity] had no direct interest in serving the patients of St. Joseph‘s, other than that it would provide a training opportunity for medical students or medical residents.
This finding is not “against the great weight and clear preponderance of the evidence.” Arias, 311 Wis. 2d 358, ¶ 12 (quoting Sykes, 279 Wis. 2d 741, ¶ 21 n.7). It is difficult to imagine how Lindemann could not have consented to work for St. Joseph‘s when everything that he did took place there in furtherance of St. Joseph‘s purposes.
¶ 43. However, the court of appeals made a contrary finding of fact, asserting “[t]here is no evidence that Dr. Lindemann left [the Affiliated Hospitals entity]‘s employment and agreed to become a St. Joseph‘s employee.” Phelps III, 307 Wis. 2d 184, ¶ 31. The court of appeals’ factual finding contradicts the circuit court‘s finding of fact that Lindemann consented to work for St. Joseph‘s, which finding of the circuit court can be overturned only if it was clearly erroneous. As quoted above from the circuit court‘s finding, there was sufficient evidence in the record from which the circuit court could properly find that Lindemann had consented to work for St. Joseph‘s. Furthermore, it is not necessary, as the court of appeals erroneously
¶ 44. When the Phelpses moved for reconsideration of the circuit court‘s finding on this point, while still before the circuit court, they argued that there could be no consent because there was no express contract between Lindemann and St. Joseph‘s. However, there is no requirement of an express contract between a borrowed employee and a borrowing employer. Seaman, 204 Wis. at 163. As we stated in Seaman, the question is, “Did the employee actually or impliedly consent to work for a special employer?” Id. The circuit court recognized this distinction:
While in some respects Lindemann remained an employee of [the Affiliated Hospitals entity], I found that he consented, perhaps not expressly but certainly quite clearly, to also become an employee of St. Joseph‘s Hospital.
¶ 45. Furthermore, although there may not have been an express agreement between Lindemann and St. Joseph‘s, there was an express agreement between the Affiliated Hospitals entity and St. Joseph‘s. “[T]he existence of an arrangement or understanding between a general employer and a borrowing employer is relevant to the issue of an employee‘s consent to enter into a new employment relationship with the borrowing employer.” Borneman v. Corwyn Transp., Ltd., 219 Wis. 2d 346, 360, 580 N.W.2d 253 (1998). Therefore, this agreement further supports the circuit court‘s finding that Lindemann consented to work for St. Joseph‘s, which finding is not clearly erroneous.
2. Work performed
¶ 46. In regard to the second question posed by the Seaman test, whether Lindemann was performing St. Joseph‘s work at the time of injury, the circuit court explained, “I find that [Lindemann] did actually enter[] upon the work of St. Joseph‘s Hospital.... [T]here was an implied contract for [Lindemann] to do certain things at St. Joseph‘s day after day on a full-time basis.”
¶ 47. The court of appeals made a contrary finding of fact here too, i.e., that Lindemann did not perform the work of St. Joseph‘s, because “Dr. Lindemann provided medical services similar to those provided by private physicians who are not St. Joseph‘s employees.” Phelps III, 307 Wis. 2d 184, ¶ 31. Again, this finding of fact stems from the court of appeals’ erroneous decision to independently make findings of fact, rather than reviewing the circuit court‘s findings to determine whether the circuit court‘s findings were clearly erroneous.
¶ 48. Here, applying the correct standard of review, we conclude that the circuit court‘s factual finding, that Lindemann performed the work of St. Joseph‘s, is not clearly erroneous. Lindemann was an unlicensed first-year medical resident. He was not authorized to work at any location other than St. Joseph‘s. While at St. Joseph‘s, Lindemann cared for patients admitted to St. Joseph‘s. St. Joseph‘s purpose for existence was to treat the patients admitted to its
3. Right to control
¶ 49. In regard to whether St. Joseph‘s had the right to control the details of Lindemann‘s work, the circuit court found as follows:
I find that St. Joseph‘s had primary control over the details of [Lindemann‘s] work to be performed and to determine how the work should be done. . . .
I find that on any reasonable day-to-day basis in terms of hours and work to be performed and assignments that this was controlled by St. Joseph‘s Hospital. There‘s no evidence about any specific involvement by [the Affiliated Hospitals entity] in the day-to-day details of Lindemann‘s work....
The details of the work on a day-to-day basis were clearly controlled by St. Joseph‘s, at least that‘s the overwhelming inference that I have from what I have read, that [St. Joseph‘s] decided when and where he worked and what patients he was working with and what forms he would use and that sort of day-to-day business.
[The Affiliated Hospitals entity] directed which hospital Dr. Lindemann worked at and paid him. Dr. Lindemann and [the Affiliated Hospitals entity] had a written contract, and [the Affiliated Hospitals entity] had the sole right to terminate him. [The Affiliated Hospitals entity] never relinquished any control over Dr. Lindemann. Indeed, as noted, while at St. Joseph‘s no hospital employee supervised Dr. Lindemann, and Dr. Lindemann was never given a handbook or any rules setting out St. Joseph‘s procedures. Thus, the right to control Dr. Lindemann remained in the hands of [the Affiliated Hospitals entity]‘s program director, [Affiliated Hospitals entity] senior residents and private physicians.
Phelps III, 307 Wis. 2d 184, ¶ 31. The court of appeals supported its finding by citing evidence in the record. However, this independent search of the record for evidence in support of a factual finding contrary to the circuit court‘s finding of fact is not the proper role of an appellate court.
¶ 51. Instead, under the proper standard of review, appellate courts are to uphold a circuit court‘s findings of fact unless those findings go “against the great weight and clear preponderance of the evidence.” Arias, 311 Wis. 2d 358, ¶ 12 (quoting Sykes, 279 Wis. 2d 742, ¶ 21 n.7). Here, we once again conclude that the circuit court‘s finding of fact is not clearly erroneous. The record is replete with evidence that St.
[Phelpses’ Attorney] While you were at St. Joseph‘s Hospital, was it your understanding you were required to comply with the policies and procedures of St. Joseph‘s Hospital in providing professional care and services to patients at St. Joseph‘s Hospital?
[Lindemann] Yes.
[Phelpses’ Attorney] And did St. Joseph‘s Hospital have the right to control your day-to-day activities in terms of interaction with patients at St. Joseph‘s Hospital?
[Lindemann] Yes.
In addition, Dr. Mahendr S. Kochar, Executive Director of the Affiliated Hospitals entity, stated in his affidavit:
While [the Affiliated Hospitals entity] is the technical and legal employer of the residents, [the Affiliated Hospitals entity] has no responsibility for training or supervision and control of the residents at the various hospitals where they are placed.... [The Affiliated Hospitals entity] is, in essence a conduit to facilitate payments, and has no supervisory or control role over the residents.
...
[The Affiliated Hospitals entity] has no knowledge of the specific responsibilities of Dr. Lindemann or any other residents at various hospitals including St. Joseph‘s Hospital.
Finally, Patricia Kaldor (Kaldor), the president of St. Joseph‘s, testified in her deposition as follows:
[Phelpses’ Attorney] Are residents who work at St. Joseph‘s Hospital required to follow policies and procedures of St. Joseph‘s Hospital?
[Kaldor] Yes.
¶ 52. When the Phelpses moved for reconsideration of the circuit court‘s decision on the borrowed employee question, they argued that in order for a borrowing employer to control the details of the borrowed employee‘s performance, the loaning employer must relinquish full and exclusive control of the borrowed employee. Edwards v. Cutler-Hammer, Inc., 272 Wis. 54, 64, 74 N.W.2d 606 (1956) (“If [the loaning master] can show that he has loaned the servant to another and surrendered to the borrower all direction and control over him, then the borrower becomes the master, who is alone liable for the acts of the servant.” (quoting Anderson v. Abramson, 13 N.W.2d 315, 316 (Iowa 1944))). The circuit court responded as follows:
The design of the residency program contemplated that the hospital would control the routine “details of [Lindemann‘s] work.” It also contemplated that [the Affiliated Hospitals entity] would not control or supervise Lindemann‘s medical judgment. In an affidavit, the Executive Director of [the Affiliated Hospitals entity] assert[ed] that [the Affiliated Hospitals entity] ha[d] no responsibility for training or supervision and control of the residents or the various hospitals where they are placed.... According to the affidavit [of the Executive Director], a first year resident would be “under the supervision and control of the patient‘s attending physician.” This evidence is not controverted in any material way, and it, perhaps along with other similar evidence, formed the basis on which Judge Sullivan dismissed [the Affiliated Hospitals entity] from this case, finding that it did not control Lindemann‘s performance as a physician.
Under the borrowed servant rule, the borrowing master, not the loaning master, is liable for the negligent acts of a loaned servant if the loaned servant becomes the servant of the borrowing master[,]... even though the loaned servant remains in the employ of the loaning master and is acting within the scope of his employment with the loaning master.
Id. at 142. As the circuit court‘s discussion indicates, its finding that St. Joseph‘s had the right to control Lindemann‘s daily activities as he cared for St. Joseph‘s patients is supported by the record. The only employer who reasonably could be seen to have exercised control over the details of Lindemann‘s work was St. Joseph‘s. We therefore conclude that the circuit court‘s finding, that St. Joseph‘s had the right to control the details of Lindemann‘s work, is not clearly erroneous.
4. Primary benefit
¶ 54. In regard to whether Lindemann‘s work was performed for St. Joseph‘s primary benefit, the circuit court explained:
I find that [Lindemann‘s work] was being done primarily for the benefit of St. Joseph‘s. Obviously any employee works for their own benefit. Obviously to the extent that [the Affiliated Hospitals entity] wanted to run a program and provide training opportunities, there was a benefit to [the Affiliated Hospitals entity].
But when one looks at the tasks and work performed by this person, that work was primarily for the benefit of St. Joseph‘s Hospital.
¶ 55. Once again, the court of appeals made a contrary finding of fact and asserted that Lindemann‘s work did not primarily benefit St. Joseph‘s because “Dr. Lindemann‘s services benefitted the patients of the hospital and the private physicians[;] most of all, Dr. Lindemann‘s work aided [the Affiliated Hospitals entity] in its mission to train first-year residents in order to become licensed physicians.” Phelps III, 307 Wis. 2d 184, ¶ 31. This discussion fails to review the circuit court‘s finding of fact under the clearly erroneous standard, which, when applied, requires the reviewing court to uphold the circuit court‘s findings unless they go “against the great weight and clear preponderance of the evidence.” Arias, 311 Wis. 2d 358, ¶ 12 (quoting Sykes, 279 Wis. 2d 742, ¶ 21 n.7).
¶ 56. Applying the correct standard of review, however, we once again conclude that the circuit court‘s finding is not clearly erroneous. We note that this factor, i.e., for whose benefit the work was primarily performed, is largely derivative of the other factual findings. Lindemann‘s conduct was controlled by St. Joseph‘s policies and procedures; he worked to carry out the very purpose of St. Joseph‘s existence; and his consent to work for St. Joseph‘s is apparent through his conduct. To say that Lindemann was not working for St. Joseph‘s primary benefit would be to say that no employee works for his or her employer‘s primary benefit. Therefore, the circuit court‘s finding of fact on this point does not go “against the great weight and
5. Conclusion
¶ 57. Because we have upheld all of the circuit court‘s findings of fact regarding whether Lindemann was a borrowed employee, we conclude that Lindemann was a borrowed employee, under the test established in Seaman. The circuit court‘s finding makes clear that, under the first factor, Lindemann consented to work for St. Joseph‘s. Seaman, 204 Wis. at 163. Under the second factor, the circuit court‘s finding demonstrates that Lindemann was performing the work of St. Joseph‘s at the time of the injury. Id. Under the third factor, St. Joseph‘s had the right to control the details of the work Lindemann performed. Id. Finally, Lindemann‘s work was performed primarily for the benefit of St. Joseph‘s, thereby satisfying the fourth Seaman factor. Id.
¶ 58. Seaman explains that when facts are found sufficient to satisfy the four factual parts of its test, the “relation of employer and employee exists as between a special employer to whom an employee is loaned.” Id. Here, we conclude that sufficient facts were found by the circuit court for us to conclude, as a matter of law, that the relationship of borrowing employer and borrowed employee existed between St. Joseph‘s Hospital and Lindemann when the Phelpses’ claims arose.
¶ 59. That the court of appeals reached a contrary result, Phelps III, 307 Wis. 2d 184, ¶ 31, stems from its failure to apply the appropriate standard of review to the circuit court‘s findings of fact and from its erroneous view that an employee must leave the employ of a
¶ 60. Because Lindemann was St. Joseph‘s borrowed employee, “[t]he relation of employer and employee exist[ed]” between Lindemann and St. Joseph‘s, Seaman, 204 Wis. at 163, and accordingly, Lindemann was an employee of a health care provider within the meaning of
C. Effect of Wis. Stat. ch. 655
¶ 61. After we granted defendants’ petition for review, we requested supplemental briefing from the parties to address whether
¶ 62. We had the opportunity to address this very question in Finnegan, but a majority of the court could not agree. See Finnegan v. Patients Comp. Fund, 2003 WI 98, ¶ 2, 263 Wis. 2d 574, 666 N.W.2d 797 (lead opinion of Sykes, J.). Today, we expressly adopt Justice Sykes’ lead opinion in Finnegan, and hold that
[N]either
Wis. Stat. § 655.005 norWis. Stat. § 655.007 specifically describes a [bystander] type claim for emotional distress or confers standing on a bystander to bring such a claim in a medical malpractice lawsuit.Section 655.005(1) refers to all claims or derivative claims “for damages for bodily injury or death,” and Wis. Stat. § 655.007 refers to the claims of patients and the derivative claims of specified relatives “for injury or death on account of malpractice.” Emotional distress claims arising from witnessing an injury-causing event as a related bystander constitute an entirely different class of claim and are not mentioned.The statutes specify that a relative‘s claim must be derivative to fall within the scope of allowable medical malpractice recovery, and only certain relatives are included. See
Wis. Stat. § 655.007 (“[A]ny spouse, parent, minor sibling or child of the patient having a derivative claim for injury or death on account of malpractice is subject to this chapter.“);Wis. Stat. § 655.005(1) (“Any person listed in s. 655.007 having a claim or a derivative claim against a health care provider... is subject to this chapter.“). Our jurisprudence outlines the types of claims that are considered derivative. Claims for the loss of society, companionship, and consortium are derivative even though they technically “belong” to the close relative making the claim. Korth v. Am. Family Ins. Co., 115 Wis. 2d 326, 331, 340 N.W.2d 494 (1983) (a parent‘s claim for loss of society and companionship with a child is derivative); Peeples v. Sargent, 77 Wis. 2d 612, 643, 253 N.W.2d 459 (1977) ([A] claim for loss of consortium is [a] derivative personal injury right which does not pass to [the] bankruptcy trustee[.]); Richie v. Am. Family Mut. Ins. Co., 140 Wis. 2d 51, 56, 409 N.W.2d 146 (Ct. App. 1987) ([A] claim for loss of consortium is derivative in that “it derives from physical or mental injuries suffered by a family member.“).
Id., ¶¶ 25-26 (lead opinion of Sykes, J.).
¶ 63. The lead opinion in Finnegan explained that a claim for the negligent infliction of emotional distress to a bystander is a direct, not a derivative, claim,
Finnegan, 263 Wis. 2d 574, ¶¶ 27-28 (lead opinion of Sykes, J.).[A] claim for negligent infliction of emotional distress is not considered derivative; although it arises from a shared set of underlying facts, as do loss of society, companionship, or consortium claims[. N]egligent infliction of emotional distress is an independent tort injury suffered by the bystander himself or herself as a result of the shock of having witnessed an extraordinary and traumatic event. [Bowen v. Lumbermens Mut. Cas. Co., 183 Wis. 2d 627, 657-58, 517 N.W.2d 432 (1994)].... A [bystander] claim for negligent infliction of emotional distress does not depend on the primary tort victim‘s ability to make the claim.
A plaintiff who sues for negligent infliction of emotional distress... is asserting that he or she has been the victim of an independent tort, not that he or she has a separate but dependent damages claim deriving from a tort injury to another, as in a derivative claim such as loss of consortium or society and companionship.... Unlike a... bystander claim, a derivative claim for loss of consortium or loss of society and companionship does not have its own elements distinct from the negligence claim to which it attaches; juries are instructed that loss of consortium or loss of society and companionship are categories of damages, not separate negligence inquiries....
¶ 64. ”
¶ 65. As Justice Sykes explained:
Because
Chapter 655 exclusively governs all claims arising out of medical malpractice [against health care providers and their employees], and because the legislature did not include [bystander] claims inWis. Stat. §§ 655.005(1) or655.007 , . . . negligent infliction of emotional distress claims arising out of medical malpractice are not actionable under Wisconsin law.
¶ 66. Lindemann was a borrowed employee of St. Joseph‘s; therefore, he was an employee of a health care
III. CONCLUSION
¶ 67. We conclude that Lindemann was a borrowed employee of St. Joseph‘s, and was therefore an employee of a health care provider under
By the Court.—The decision of the court of appeals is reversed, and the cause is remanded to the circuit court.
¶ 68. ANN WALSH BRADLEY, J. (dissenting). Appellate standards of review define the roles of appellate courts and are often outcome determinative. Here, by applying an incorrect standard of review, the majority reaches an erroneous conclusion.
¶ 69. I write separately because (1) the majority fails to apply the correct appellate standard for review of a paper record; (2) it erroneously concludes that Dr. Lindemann was a borrowed employee; (3) unlike the majority, I conclude that
I
¶ 70. The majority correctly explains the usual standard for reviewing a circuit court‘s decision: The circuit court‘s findings of facts are upheld unless they are clearly erroneous, but the application of the test to the facts presents a question of law which this court reviews independently.
¶ 71. Nevertheless, the usual clearly erroneous standard for reviewing a circuit court‘s factual findings
¶ 72. The basis for deferring to a circuit court‘s factual findings disappears when the circuit court does not see or hear witnesses’ testimony. Vogt, Inc. v. Int‘l Bhd. Teamsters, 270 Wis. 315, 71 N.W.2d 359 (1955), on reargument, 270 Wis. 321b, 321i, 74 N.W.2d 749 (1956). Numerous Wisconsin cases have recognized that when a circuit court‘s inferences and findings of fact are based solely on a paper record rather than on an evaluation of oral testimony, an appellate court does not apply the clearly erroneous standard of review to the circuit court‘s factual findings.1 This exception to the usual rule is called the documentary exception.
¶ 73.
The majority asserts that the law is in conflict regarding the standard for reviewing a circuit court‘s factual findings and inferences based on a documentary record. See majority op., ¶ 38 n.10. It contends that Pfeifer, a court of appeals decision, demonstrates this conflict. Pfeifer does not support the majority‘s position. It cited Golz with approval and rejected the clearly erroneous standard applied by the majority today. See 121 Wis. 2d at 570, 571 n.1.
¶ 74.
¶ 75. The majority‘s mistake in selecting the wrong standard of review is exacerbated by its application of that standard. It confuses facts and law throughout its analysis of the borrowed employee issue. It correctly recognizes that when matters of historical and evidentiary fact are undisputed or have been found by the court, “application of the Seaman test to those facts is a question of law” that this court reviews independently. See majority op., ¶ 35.
¶ 76. Although the majority insists that the underlying facts are disputed, majority op., ¶ 38 n.10, a close look at the majority‘s analysis reveals that what is really disputed are the legal consequences of the facts.2 The majority erroneously treats each element of the Seaman3 test as a question of fact and defers to the circuit court‘s “findings” regarding each element.4
¶ 77.
II
¶ 78. I turn next to the question of whether Dr. Lindemann was a borrowed employee of St. Joseph‘s hospital. In order to reach the result that Dr. Lindemann was a borrowed employee, the majority necessarily had to apply the clearly erroneous standard to the circuit court‘s conclusions of law. By contrast, the court of appeals persuasively marshaled the evidence, applied the Seaman test to the facts, and ultimately concluded that Dr. Lindemann was not a borrowed employee.
¶ 79. Because we have stated that consent is “the most critical inquiry in the Seaman test,” Borneman v. Corwyn Transport, Ltd., 219 Wis. 2d 346, 356, 580 N.W.2d 253 (1998), I begin with an examination of the consent factor. The court of appeals determined that the most persuasive evidence regarding the consent factor was “Dr. Lindemann‘s own testimony and the admissions of St. Joseph‘s Hospital.” Phelps v. Physicians Ins. Co. Wis., 2008 WI App 6, ¶ 25, 307 Wis. 2d 184, 744 N.W.2d 880. In response to requests for admission, “St. Joseph‘s denied being Dr. Lindemann‘s employer, denied having the right to control or supervise Dr. Lindemann and denied being legally responsible for Dr. Lindemann‘s health care services.” Id.
¶ 80.
¶ 81. With regard to the work performed factor, the court must determine whether there was “[a]ctual entry by the employee upon the work of and for the special employer pursuant to an express or implied contract so to do.” Borneman, 219 Wis. 2d at 353. The court of appeals explained that not every private physician who sees hospitalized patients becomes an employee of the hospital and that St. Joseph‘s did not choose to make residents employees. Rather, St. Joseph‘s contracted with MCWAH and its program director, who paid, assigned, and evaluated residents. Phelps, 307 Wis. 2d 184, ¶ 27. The majority, however, merely concludes that “Lindemann assisted St. Joseph‘s in fulfilling its health care purpose by caring for St. Joseph‘s patients[.]” Majority op., ¶ 48.
¶ 82. With regard to the right to control, the court of appeals concluded that St. Joseph‘s did not control the details of Dr. Lindemann‘s work. Phelps, 307 Wis. 2d 184, ¶ 28.
¶ 83. I need go no further to analyze the Seaman factors. It is clear that the court of appeals got it right and that the Seaman test has not been met. I agree with the following conclusion of the court of appeals:
In sum, after addressing the Seaman factors for a “borrowed employee,” we conclude that the test has not been met. There is no evidence that Dr. Lindemann left MCWAH‘s employment and agreed to become a St. Joseph‘s employee. Dr. Lindemann provided medical services similar to those provided by private physicians who are not St. Joseph‘s employees. MCWAH directed which hospital Dr. Lindemann worked at and paid him. Dr. Lindemann and MCWAH had a written contract, and MCWAH had the sole right to terminate him. MCWAH never relinquished any control over Dr. Lindemann. Indeed, as noted, while at St. Joseph‘s no hospital employee supervised Dr. Lindemann, and Dr. Lindemann was never given a handbook or any rules setting out St. Joseph‘s procedures. Thus, the right to control Dr. Lindemann remained in the hands of MCWAH‘S program director, MCWAH senior residents and private physicians. Finally, Dr. Lindemann‘s services benefitted the patients of the hospital and the private physicians but most of all, Dr. Lindemann‘s work aided MCWAH in its mission to train first-year residents in order to become licensed physicians. Therefore, Dr. Lindemann was not a “borrowed employee.”
III
¶ 84. I turn now to the majority opinion‘s conclusion that
¶ 85.
¶ 86. On rereading the Finnegan concurrence authored by Chief Justice Abrahamson5 and the Finnegan dissent authored by Justice Bablitch and joined by Justice Crooks,6 I am persuaded that either reasoning is reasonable and a cause of action exists for negligent infliction of emotional distress resulting from medical malpractice.
¶ 87. This is a bystander case and a tortfeasor‘s liability is governed by Bowen v. Lumbermens Mutual Casualty Co., 183 Wis. 2d 627, 517 N.W.2d 432 (1994). In Bowen this court set forth three factors for determining whether a plaintiff could recover on his or her bystander claim for negligent infliction of emotional distress: (1) “the injury suffered by the victim must have been fatal or severe“; (2) “the victim and the plaintiff must be related as spouses, parent-child, grandparent-grandchild or siblings“; and (3) “the plaintiff must have observed an extraordinary event, namely the incident and injury or the scene soon after the incident with the injured victim at the scene.” Id. at 633.
¶ 88. In bystander cases, a court rules on these factors on a case-by-case basis. The parties dispute
¶ 89. In Finnegan, 263 Wis. 2d 574, ¶ 54, the majority declared that the “hallmark of negligent infliction of emotional distress is a contemporaneous or nearly contemporaneous sensory perception of a sudden, traumatic, injury-producing event.” Gregory Phelps arrived on the scene soon after Lindemann‘s negligence became causal of Adam‘s injuries. Phelps witnessed the spontaneous delivery of Adam. He witnessed the injuries and death of his son. I conclude that Phelps had a first-hand observation of the traumatic, injury-producing event.
¶ 90. For the reasons set forth above, I respectfully dissent.
¶ 91. I am authorized to state that Chief Justice SHIRLEY S. ABRAHAMSON joins this dissent.
Notes
The total noneconomic damages recoverable for bodily injury or death, including any action or proceeding based on contribution or indemnification, may not exceed the limit under par. (d) for each occurrence on or after May 25, 1995, from all health care providers and all employes of health care providers acting within the scope of their employment and providing health care services who are found negligent and from the patients compensation fund.
(Emphasis added.)
See majority op., ¶ 44 (deferring to the circuit court‘s “finding” that Lindemann consented to work for St. Joseph‘s); id., ¶ 46 (deferring to the circuit court‘s “finding” that Lindemann was doing the work of St. Joseph‘s); id., ¶ 51 (deferring to the circuit court‘s “finding” . . . that St. Joseph‘s controlled the details of Lindemann‘s work); id., ¶ 56 (deferring to the circuit court‘s “finding” that Lindemann‘s work was performed for St. Joseph‘s primary benefit).