Agency Authority and Hospital Physicians

Agency Authority and Hospital Physicians

      In a decision rendered last November, the court considered and applied the law of apparent agency with respect to certain hospital-based physicians. Where the plaintiff sought to hold the physicians liable on certain alleged malpractice, those claims were dismissed on the basis of the statute of limitations. Efforts to hold the hospital liable on the basis of vicarious liability were rejected because the plaintiff had been advised that the physicians are independent contractors, and there is no vicarious liability from the actions of independent contractors. Sneed v. University of Louisville Hospital, No. 2017-CA-001069-MR, 2018 WL 6603806 (Ky App. Dec. 14, 2018).

      Sneed, the plaintiff, delivered a baby on August 2, 2013. There was a complication in the delivery, for which an apparently significantly flawed repair effort was undertaken. She returned to the hospital several times, and ultimately required reconstructive surgery. On August 1, 2014, she filed a lawsuit alleging malpractice, but did not name as defendants either of the physicians who actually were involved in the delivery and the initial flawed repair efforts. Those physicians were added as defendants some 50 days after the filing of the complaint. The physicians moved to dismiss on the basis that the suit was not brought within the one-year statute of limitations.  The trial court granted that dismissal, that determination was affirmed by the Court of Appeals. In turn, the hospital sought to dismiss the complaint on two bases. Initially, the plaintiff did not have an expert witness to the effect that the hospital violated its standard of care. In addition, the hospital sought dismissal on the grounds that it could not be vicariously liable for the actions of the independent contractor physicians.

       With respect to the statue limitations, the plaintiff alleged that she returned several times to the University of Louisville Hospital for treatment consequent to the initial errors made on August 2, and on that basis the statute of limitations should be tolled. The Court of Appeals rejected that assertion, writing that:

[W]e agree with those jurisdictions that have concluded that the continuing course of treatment doctrine only tolls the statute of limitations until the treatment by the physician who committed the negligent act ceases and the doctor-patient relationship ends.

       Returning to the question of agency, the plaintiff asserted that the physicians were each ostensible agents of the hospital. After reviewing the rules of ostensible (apparent) agents, the Court of Appeals went on to note that the position of an apparent agent may be negated by contrary disclosure. In this instance, in March 2013, some five months before the birth that gave rise to this complaint, the plaintiff had entered the hospital and received a document reciting that the physicians are not employees and that the hospital is not responsible for their actions. In response to the argument that she should not be bound by that disclosure because she did not sign that form, it was held that no signature was required. Rather, in reliance upon Simmerman v. Fort Hartford Coal Co., 221 S.W.2d 442, 447 (Ky. 1949):

It is the rule of this state that a party who can read and has an opportunity to read the contract which he signs must stand by the words of the contract unless he is misled as to the nature of the writing which he signs or which his signature is obtained by fraud.

       Ultimately:

In this case, the Hospital took affirmative action to put patients and the public on notice that an agency relationship did not exist between the Hospital and its physicians. Like the admissions forms described in the above-cited cases, the form herein clearly expressed that physicians were independent contractors and not employed by the Hospital. Nor was there any representation or action otherwise to induce [the plaintiff] to believe that the physicians were employees or agents of the Hospital. Accordingly, there can be no valid argument that the ostensible agency doctrine would make the hospital liable for the actions of Dr. Franklin or Dr. Alan. Therefore, summary judgment in favor of the hospital was proper. 2018 WL 6603806, *6 (citation omitted).