Lead Opinion
OPINION
Diana and Carl Sword appeal from the entry of summary judgment in favor of NKC Hospitals, Inc., Alliant Health System, Inc., d/b/a Norton’s Children Hospital (hereinafter “Norton Hospital”), a Kentucky hospital.
ISSUE
We consolidate and restate the dispositive issues raised on appeal as:
1. Whether a hospital may be held liable for the negligent acts of an independent contractor.
2. Whether the trial court erred in determining that the Swords failed to demonstrate that their injuries resulted from the actions of an anesthesiologist.
FACTS
The facts taken in a light most favorable to the non-movants are as follows. The Swords selected Norton Hospital in Louisville, Kentucky as the medical facility in which Diana would deliver their first child. During labor, Diana received an epidural anesthetic which was administered by Dr. Luna, an anesthesiologist at Norton Hospital. Dr. Luna first attempted to insert a catheter into Diana’s upper spinal cord near her neck, but was unsuccessful. Dr. Luna then administered the anesthetic by inserting the catheter into Diana’s spine in her lower back.
Soon after delivering her healthy baby, Diana began experiencing headaches, sensitivity to light and loud noises, and numbness in her back.
DISCUSSION
In summary judgment proceedings, the party moving for summary judgment
Further, the party moving for summary judgment must designate to the trial court all parts of the matters included in the record on which it relies for the motion. The opposing party likewise must designate to the trial court “each material issue of fact which that party asserts precludes entry of summary judgment and the evidence relevant thereto.” Ind.Trial Rule 56(C). Any doubt as to the existence of a factual issue should be resolved against the moving party, construing all properly asserted facts and reasonable inferences in favor of the non-movant. Cowe v. Forum Group, Inc. (1991), Ind.,
The Swords seek to hold Norton Hospital hable for the negligence of Dr. Luna, an anesthesiologist who practices medicine at Norton Hospital. The parties do not dispute that Dr. Luna was not an employee of Norton Hospital, and practiced medicine at Norton Hospital as an independent contractor. The trial court granted Norton Hospital’s motion for summary judgment based upon Indiana law that hospitals may not be held liable for the negligence of independent contractor doctors. See Iterman v. Baker (1938),
Apparent Agency
The Swords argue that Norton Hospital should be held liable for the negligence of Dr. Luna, despite the fact that Dr. Luna is an independent contractor, under the doctrine of apparent agency. Many courts have recognized such liability based upon either or both of two theories arising under the specter of apparent agency, in some eases confusing the two and misapplying the analysis. See D. Janulis & A. Hornstein, Damned If You Do, Damned If You Don’t: Hospitals’ Liability for Physicians’ Malpractice, 64 Neb.L.Rev. 689, 696-702 (1985). The first theory is commonly referred to as ostensible agency, and is based upon Restatement (Second) of Torts, § 429, which states:
One who employs an independent contractor to perform services for another which are accepted in the reasonable belief that the services are being rendered by the employer or by his servants, is subject to liability for physical harm caused by the negligence of the contractor in supplying such services, to the same extent as though the employer were supplying them himself or by his servants.
The second theory is'commonly referred to as agency by estoppel, and is predicated on Restatement (Second) of Agency, § 267:
One who represents that another is a servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.
The Swords invite us to adopt either of these Restatement provisions and find that Norton Hospital may be held liable for Dr. Luna’s alleged negligence. While we decline to adopt either of the Restatement provisions at this time, we find that the Swords may state a claim against Norton Hospital under existing Indiana law.
Indiana recognizes the doctrine of apparent agency and follows the rule that a principal may be held liable by a third party
Like an actual agency relationship, an apparent agency is also initiated by a manifestation of the principal. However, the required manifestation is one made by the principal to a third party who in turn is instilled with a reasonable belief that another individual is an agent of the principal.... The essential element being there must be some form of communication, direct or indirect, by the principal, which instills a reasonable belief in the mind of the third party.
Hope Lutheran Church v. Chellew (1984), Ind.App.,
Where one represents to another that a designated person is his servant or agent, and induces the person to whom such representations are made to confide therein, and he acts upon the behef that such relationship does in fact exist, an action may be maintained for the servant’s neghgence, although the relationship of master and servant did not exist.
Growcock v. Hall (1882),
Indiana hospitals’ insulation against liability for the neghgence of independent contractor doctors may be traced to our Supreme Court’s decision in Iterman,
The right to practice medicine and surgery under a hcense by the state is a personal privilege. It cannot be delegated, and a corporation, or other unlicensed person, may not engage in the practice of medicine by employing one who is licensed to do the things which constitute practicing the profession. ... There are cases holding that a corporation is estopped from denying that a physician is its agent, and that it is liable for the physician’s neghgence, where the corporation has contracted to diagnose or treat diseases.
An estoppel can only arise where the party claiming it has acted to his injury without full knowledge of the facts and without an equal opportunity to know the facts. It cannot arise out of a lack of knowledge of the law, since all have an equal opportunity to know the law, and are presumed to know it. The complaint charges that the corporation contracted to diagnose and treat plaintiffs ailments; that it was negligent in performing the contract. The defense is that the corporation made no such contract because it had no power to make it. An estoppel would deny the corporation the right to assert illegality.... There can be no estoppel on such a basis. Since the corporation could not legally practice medicine, the appellee was bound to know that whoever treated him was not acting for the corporation.
However, cases and statutory changes subsequent to Herman have opened Indiana hospitals to potential liability for the negligence of physicians practicing within hospitals’s facilities, and have eroded the foundation for insulating hospitals from such liability. We now find that there is no reason under law or policy for shielding hospitals from liability for the negligence of their agents, and instead find several reasons justifying such liability.
As noted in Herman, other jurisdictions have found that hospitals may be held liable for the negligence of independent contractor doctors in certain situations, and the rationale behind doing so is not a new idea. See, e.g., Houghland v. Grant (1995), App.,
This is not without parallel in Indiana. In Sloan v. Metro. Health Council (1987), Ind.App.,
Under the nature of health care services today, it is entirely possible for a reasonable, prudent person to conclude from representations made by hospitals that the doctors and health care professionals that service patients within the hospitals’s facilities are agents or servants of the hospitals. As the Supreme Court of Wisconsin recently noted in Kashishian v. Port (1992),
[Hjospitals increasingly hold themselves out to the public in expensive advertising campaigns as offering and rendering quality health services. One need only pick up a daily newspaper to see full and half page advertisements extolling the medical virtues of an individual hospital and the quality health care that the hospital is prepared to deliver in any number of medical areas. Modern hospitals have spent billions of dollars marketing themselves, nurturing*15 the image with the consuming public that they are full-care modern health facilities. All of these expenditures have but one purpose: to persuade those in need of medical services to obtain those services at a specific hospital. In essence, hospitals have become big business, competing with each other for health care dollars.
Id.
We therefore find that hospitals may be held liable for the negligence of their apparent agents, notwithstanding the fact that the agents are independent contractors. For a hospital to be held liable for the negligence of a health care professional under the doctrine of apparent agency, a plaintiff must show that the hospital acted or communicated directly or indirectly to a patient in such a manner that would lead a reasonable person to conclude that the health care professional who was alleged to be negligent was an employee or agent of the hospital, and that the plaintiff justifiably acted in reliance upon the conduct of the hospital, consistent with ordinary care and prudence.
In support of their claim, the Swords point to evidence demonstrating various representations Norton Hospital made concerning its expertise in caring for expectant mothers. Like many hospitals, Norton Hospital aggressively marketed its services to the public. Norton Hospital stated in brochures that its Women’s Pavilion is “the most technically sophisticated birthplace in the region.” R. 228. And particular to this case, Norton Hospital advertised that it offers:
[Ijnstant access to the specialized equipment and facilities, as well as to physician specialists in every area of pediatric medicine and surgery. Every maternity patient has a private room and the full availability of a special anesthesiology team, experienced and dedicated exclusively to OB patients.
R. 228 (emphasis added). Norton Hospital made similar claims in other advertisements as well. See R. 229, 230. And, one brochure stated that:
The Women’s Pavilion medical staff includes the only physicians in the region who specialize exclusively in obstetrical an*16 esthesiology. They are immediately available within the unit 24 hours a day and are experts in administering continuous epidural anesthesia.
R. 232 (emphasis added). The Swords cite these advertisements and claim that they justifiably relied upon Norton Hospital’s representations concerning its staff of expert obstetrical anesthesiologists, and in particular its representations that its obstetrical anesthesiology “team” members were experts in administering epidurals — the exact procedure which allegedly caused Diana’s injury. Further, the Swords argue that a reasonable person would conclude from the representations made by Norton Hospital that the anesthesiologists Norton Hospital provides to patients are its agents.
Whether the representations made by Norton Hospital concerning its obstetrical anesthesiology team would lead a reasonable person to conclude that Dr. Luna was an agent of Norton Hospital, and whether the Swords exercised ordinary care and prudence and justifiably relied upon the representations of Norton Hospital, are genuine issues of material fact to be resolved by a jury after considering all of the circumstances in evidence.
Absent a situation where the patient is directed by his own physician or where the patient makes an independent selection as to which physicians he will use while there, it is the reputation of the hospital itself upon which he would rely. Also, unless the patient is in some manner put on notice of the independent status of the professionals with whom it might be expected to come into contact, it would be natural for him to assume that these people are employees of the hospital_ “Such appearances speak much louder than the words of whatever private contractual arrangements the physicians and the hospital may have entered into, unbeknownst to the public, in an attempt to insulate the hospital from liability for the negligence, if any, of the physicians.”
Gilbert v. Sycamore Mun. Hosp. (1993),
Causation
The Swords also challenge the trial court’s finding that the affidavits they submitted in response to Norton Hospital’s motion for summary judgment failed to establish that a genuine issue of material fact exists as to whether Dr. Luna’s alleged negligence caused their injuries.
Norton Hospital argues on appeal, as it did in its motion for summary judgment, that the Swords failed to adduce any expert evidence stating that Dr. Luna’s negligence caused the injuries Diana allegedly sustained. In support of this, Norton Hospital points to Diana Sword’s deposition in which she stated that none of the doctors that examined her attributed her symptoms to the epidural she received while at Norton Hospital.
The Swords responded to Norton Hospital’s motion for summary judgment with the affidavits of Dr. Davidson and Dr. Milan. Doctor Davidson’s affidavit states that, in his opinion, Dr. Luna’s care fell below the standard of care required by physicians administering an epidural. R. 98. Doctor Milan’s affidavit states that “Plaintiffs symptoms of low back pain and headaches are consistent with the loss of spinal fluid which accompanied the insertion of the epidural in the cervical region of the Plaintiffs back.” R. 100. Norton Hospital argues that the doctors’s affidavit testimony do not establish that Dr. Luna’s alleged negligence caused Diana’s injuries, only that her injuries are consistent with a loss of spinal fluid. Norton Hospital concludes that the Swords have failed to demonstrate that a genuine issue of material fact exists, and that it therefore is entitled to judgment as a matter of law. We disagree.
While the doctors’ affidavits do not expressly state that Dr. Luna’s negligence caused Diana’s injuries, from the testimony
REVERSED.
Notes
. The dissent posits that "a party cannot be deemed an agent and an independent contractor in the same breath.” At 17. However, as we noted in Burkett v. Crulo Trucking Co. (1976),
Employees, servants, and independent contractors, as well as other categories of persons, may, in the proper circumstances, be described as agents. Professor Seavey classifies all agents as either servants or non-servants and designates the latter as a type of independent contractor. W. Seavey, Handbook on the Law of Agency § 6 (1964). While "employee” and "servant” may have variant connotations, modem case law tends to treat the words as virtually synonymous in agency applications. Although [the plaintiff] seems to view "agent” and "independent contractor" as mutually exclusive descriptions, they are not. An independent contractor may well be an agent. An example is the attorney representing a client.
(Emphasis added).
. The Restatement (Second) of Torts, § 429 does not require that a third party act in reliance upon the representations of the principal in order to establish liability. And, while the Restatement (Second) of Agency, § 267 does include reliance as an element of liability, Illustration 3 to that Restatement section indicates that reliance is not essential to the cause of action. That illustration is as follows:
L, a department store, contracts with T, as an independent contractor to give medical attention to patrons of the store, T appearing as an employee of D. D is liable for negligent medical care rendered by T.
Many jurisdictions have found that under either Restatement provision a patient may hold a hospital liable without a showing that the patient relied upon representations made by the hospital, often in cases alleging negligence on the part of emergency room physicians. See e.g., Orlando Reg. Med. Center, Inc. v. Chmielewski (1990), Fla.App.,
As noted supra, we have declined to adopt either Restatement provision and instead have applied existing Indiana law on the doctrine of apparent agency. As espoused by our Supreme Court in Growcock, it is a necessary requirement that a third party "act[] upon the belief that [the agency] relationship does in fact exist...."
Dissenting Opinion
dissenting.
I dissent. The majority concludes “hospitals may be held liable for- the negligence of their apparent agents, notwithstanding the fact that the agents are independent contractors.” Op. at 15. I cannot agree because the law in this state is clear, unequivocal, and of long duration that absent certain exceptions not relevant here, an employer may not be held liable for the negligent acts of his independent contractor employees. Daugherty v. Fuller Engineering Serv. Corp.,
There is no dispute that the negligence of an agent may be imputed to the principal. See e.g., Green v. Perry,
In this jurisdiction the rule that a hospital is not liable for the negligent act of its physicians and surgeons was first announced in Iterman v. Baker,
It is now clear that a hospital may be held liable for the acts of a physician performing services on the hospital’s premises. However, as we recently reaffirmed in Weaver v. Robinson,
. Also, Iterman has been cited for the proposition that a hospital is generally not liable for the medical negligence of doctors on its staff because doctors are considered independent contractors as a matter of law. See Yaney by Yaney v. McCray Memorial Hosp., Ind.App.,
