By Damian D. Capozzola, Esq., and Jamie Terrence, RN
News
The California Court of Appeal for the Fifth District affirmed a trial court’s decision granting summary judgment in favor of a hospital in a medical malpractice case. The appellate court ruled that the hospital could not be held liable under the ostensible agency theory for the alleged negligence of a physician who performed surgery at its facility. The court determined that the plaintiff, who experienced complications following the procedure, should have known that her treating physician was not an agent or employee of the hospital.
The plaintiff’s lawsuit arose after a hysterectomy performed by her chosen physician resulted in significant complications, including a rectal injury that required emergency surgery and ongoing medical interventions. She argued that the hospital was vicariously liable for the physician’s alleged negligence on the basis that the physician was the hospital’s agent.
Both the trial court and appellate court rejected this argument. They highlighted the plaintiff’s preexisting relationship with the physician and her failure to demonstrate reliance on the hospital when selecting her care provider. This decision underscores the challenges plaintiffs face when attempting to hold hospitals liable for independent contractor physicians and reinforces the importance of clear documentation in limiting hospital liability.
Background
The case arose from a total vaginal hysterectomy and bilateral salpingo-oophorectomy performed in June 2016 by a physician employed by a health center. The plaintiff had been the physician’s patient since 2015, and had previously sought treatment for gynecological issues, including chronic pelvic pain, abnormal bleeding, and other related symptoms. By May 2016, after worsening symptoms, the plaintiff proceeded with surgery to address these issues. The surgery was scheduled to take place at the defendant hospital by the plaintiff’s physician, with whom she had a preexisting relationship.
Prior to the procedure, the plaintiff signed the hospital’s conditions of service form, which stated that physicians practicing at the hospital were independent contractors, not hospital employees or agents. The plaintiff initialed this section but later claimed she did not understand its content because the form was written in English, while her primary language is Spanish. She claimed that no Spanish interpreter or translation was provided to explain the document’s terms. Despite these claims, the courts noted that the plaintiff had a longstanding relationship with her physician and relied on the physician’s guidance, rather than the plaintiff seeking care from the hospital itself.
The surgery resulted in complications. Shortly after being discharged, the plaintiff was readmitted to the hospital’s emergency department, where a rectal injury was diagnosed. Emergency surgery revealed that the plaintiff’s rectum had been sutured to the vaginal cuff during the original procedure. The plaintiff required additional intervention, including a colostomy, which resulted in significant ongoing medical and personal challenges for her.
The plaintiff filed a medical negligence lawsuit against the physician, the health center, and the hospital. The claims against the hospital relied solely on the theory of ostensible agency, on the basis that the physician was acting as the hospital’s agent during the procedure. The hospital moved for summary judgment, arguing that it could not be held liable under this theory because the plaintiff had selected the physician as her personal care provider, not as someone supplied or endorsed by the hospital.
On appeal, the plaintiff argued that, even if the physician was an independent contractor with the hospital, the hospital should have, but failed to, provide adequate notice of that. She argued that she was unable to comprehend the conditions of service form and claimed that she reasonably believed the physician was an agent of the hospital. The plaintiff also argued that the hospital should be held accountable because it permitted the physician to use its facilities, which she alleged created the impression of an agency relationship between the physician and hospital.
The appellate court ultimately affirmed the trial court’s decision to grant summary judgment in favor of the hospital. The appellate court highlighted several key points in its analysis. First, it found that the plaintiff’s long-term physician-patient relationship suggested that she sought treatment based on her trust in the physician, not on any representations made by the hospital. Second, the court determined that the plaintiff’s lack of understanding of the conditions of service form did not negate the fact that she looked to her physician for care rather than relying on the hospital to assign a provider.
Finally, the court emphasized that ostensible agency in medical malpractice cases requires both a reasonable belief that the physician was an agent of the hospital and reliance on this belief in seeking treatment. The court found no evidence that the plaintiff relied on an apparent agency relationship when choosing to undergo the procedure.
What This Means for You
This case highlights key principles of agency law and its application in medical malpractice claims. For a plaintiff, the theory of agency offers a pathway to hold a hospital, often perceived as a “deep pocket” defendant, liable for the negligence of physicians practicing at its facility.
However, the plaintiff must meet the legal standard to successfully argue that the physician was acting as the hospital’s agent, whether explicitly or through the doctrine of ostensible agency.
Agency is a legal relationship in which one party (the agent) acts on behalf of another (the principal), with the principal retaining some level of control over the agent’s actions. In the context of medical malpractice, agency theory often is invoked by plaintiffs trying to establish that a hospital should be held liable for the acts or omissions of a physician, its agent. The rationale for vicarious liability in such cases is that the hospital, as the principal, exerts control over the agent-physician and, therefore, has responsibility for the physician’s negligence.
To establish agency, a plaintiff typically needs to prove that the principal’s conduct led a reasonable person to believe an agency relationship existed and that the plaintiff relied on this apparent relationship when seeking care. In situations where a hospital directly employs a physician, the agency relationship is clear. However, many physicians work as independent contractors, which complicated efforts to hold hospitals liable for the physician’s actions.
In cases where the physician is not a hospital employee, a plaintiff may still argue that the hospital is vicariously liable under the theory of ostensible or apparent agency. Ostensible agency arises when the hospital’s conduct, such as advertising or operational practices, would cause a reasonable patient to believe that the physician was acting on behalf of the hospital. Additionally, the plaintiff must show that they relied on this perceived agency relationship in selecting the hospital for care. This doctrine is particularly relevant in cases involving emergency room care or when a patient does not have a preexisting relationship with a physician. In such scenarios, the patient often relies on the hospital to provide competent care and may reasonably assume that the physicians working within the hospital are its agents.
Hospitals may defend against ostensible agency claims by arguing that the physician is an independent contractor, not an employee or agent of the hospital. In this case, the hospital successfully showed that the plaintiff sought treatment from her long-term personal physician and not from the hospital itself. The plaintiff’s choice to undergo surgery at the hospital was driven by her reliance on her physician’s expertise, not any representation made by the hospital.
Hospitals must provide information about the status of the physicians treating patients in that facility. Signage needs to be posted in multiple areas where patients enter, sign admission paperwork, dine, or wait for treatment or emergency care. The statement that physicians are not employees of the hospital should be stated in layman’s terms. Along with that notice should be the contact information for the regulatory agency that physicians are accountable to.
In most cases, physician practice is monitored by the state’s medical board. That agency’s phone number should be clearly visible. Complications arise when the issue involves physicians, such as hospitalists, that are considered hospital employees. It is the responsibility of hospital personnel to inform admitted patients that their care may be provided by a physician who is employed by that hospital. In this case, because the patient was treated previously by this physician and sought care from him regardless of where he chose to practice, the hospital would have no liability unless the physician’s practice was known by the hospital to be questionable and took no action to protect patients. Note also that this particular issue can vary widely by state, so consult local counsel.
A key element in the hospital’s defense was the plaintiff’s preexisting relationship with her physician, which the court found to be dispositive in defeating the ostensible agency theory. Under the relevant law, such a relationship is sufficient to negate any reasonable belief that the physician was acting as the hospital’s agent. This longstanding relationship with her physician, rather than reliance on the hospital for treatment, precluded any claim of ostensible agency.
Another element in the hospital’s defense was the conditions of service form signed by the plaintiff before the procedure. This form stated that physicians practicing at the hospital were independent contractors and not hospital employees or agents. Although the plaintiff argued she did not understand the form because of language barriers, the appellate court did not credit this testimony.
For plaintiffs, this case illustrates the challenges of pursuing an ostensible agency claim. A mere assumption that a physician is affiliated with a hospital is insufficient to establish liability. Plaintiffs must demonstrate both a reasonable belief in the agency relationship and reliance on that belief when seeking care. These elements can be difficult to prove when the plaintiff has a longstanding personal relationship with the physician and selects the hospital based on the physician’s recommendation.
For hospitals, the ruling highlights that hospitals that allow independent contractors to provide services on their premises should adopt robust practices to minimize the risk of liability. This includes ensuring that admission forms, consent documents, and other patient-facing materials expressly clarify the employment status of physicians. Additionally, providing these documents in multiple languages or offering translation services can help address potential arguments related to language barriers or misunderstandings. Hospitals also should be mindful of how their branding, advertising, and operations may create the appearance of an agency relationship with independent contractor physicians.
Reference
- Decided on June 24, 2022, in the Court of Appeal, Fifth District, California, Case No. F082099.
Damian D. Capozzola, Esq., The Law Offices of Damian D. Capozzola, Los Angeles Jamie Terrence, RN, President and Founder, Healthcare Risk Services, Former Director of Risk Management Services (2004-2013), California Hospital Medical Center, Los Angeles
The California Court of Appeal for the Fifth District affirmed a trial court’s decision granting summary judgment in favor of a hospital in a medical malpractice case.
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