The Journal of The DuPage County Bar Association

Back Issues > Vol. 19 (2006-07)

Apparent Agency in the Medical Malpractice Context After York v. Rush-Presbyterian-St. Luke’s Medical Center
By Ryan A. Biller

There was a time when hospitals were virtually immune from suit. That time has long since passed. Now, hospitals are being sued under various theories of direct and vicarious liability. The good news for plaintiffs (and bad news for defendants), is that the Illinois Supreme Court has made it easier for plaintiffs to prevail in a vicarious liability claim under the theory of apparent agency.

As a result of the Illinois Supreme Court’s decision in York v. Rush-Presbyterian-St. Luke’s Medical Center,1 it now appears that once a plaintiff has established that the hospital held itself out as a provider of quality medical care, the plaintiff will prevail on his/her vicarious liability claim. The reliance element has virtually been eliminated. This note will follow Dr. York’s apparent agency claim against Rush as it made its way all the way up to and through the Illinois Supreme Court.

Apparent Agency in Illinois Before York

Prior to 1993, the Illinois appellate court held in some decisions that a hospital may be vicariously liable for the negligence of a physician under the theory of apparent agency.2 In other decisions, the Illinois appellate court held a hospital may be vicariously liable for the negligence of a physician only when an actual agency relationship was established.3

In 1993, the Illinois Supreme Court in Gilbert v. Sycamore Municipal Hospital4 recognized that "the realities of modern hospital care raise a serious question regarding the responsibility of a hospital when a physician who is an independent contractor renders negligent health care."5 As a result, it recognized that a hospital may be vicariously liable for the negligence of a treating physician under the doctrine of apparent authority and set forth the elements for this cause of action.6

"‘For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show that: (1) the hospital, or its agent, acted in a manner that would lead a reasonable person to conclude that the individual who was alleged to be negligent was an employee or agent of the hospital; (2) where the acts of the agent create the appearance of authority, the plaintiff must also prove that the hospital had knowledge of and acquiesced in them; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent with ordinary care and prudence.’"7 Vicarious liability will not attach where a patient knows, or should have known, that the physician was an independent contractor.8

In 1995, the Civil Justice Reform Amendments of 1995 became effective.9 This Act added a code section that set forth pleading requirements for claims based upon apparent or ostensible agency.10 These pleading requirements were stricter than those established in Gilbert.11 The Act which added this code section, however, was declared unconstitutional in its entirety by the Illinois Supreme Court in Best v. Taylor Machine Works.12 As a result, the Gilbert decision remains the primary authority in Illinois regarding apparent agency in the medical malpractice context.

While the Gilbert decision answered the question regarding whether hospitals may be liable under the doctrine of apparent authority, it did not adequately elaborate on the requirements necessary to determine liability.13 Confusion then arose over the reliance requirement, and subsequent court decisions adopted different reliance approaches.14 "Some post-Gilbert courts endorse[d] a detrimental reliance requirement, while others promote[d] an assumed reliance requirement."15 The reliance element forms the basis for Rush’s appeals in the following proceedings.

York v. El-Ganzouri

On February 9, 1998, Dr. James York underwent a cemented total knee arthroplasty in his left knee.16 Dr. Abdel Raouf El-Ganzouri and Dr. Miller, an anesthesiology resident at Rush Presbyterian-St. Luke’s Medical Center, performed the combined spinal epidural prior to the surgery.17 A combined spinal epidural is an anesthesia procedure during which the anesthesiologist inserts needles in the patient’s back through the lumbar area of the spine and below the spinal cord.18 This insertion point is used to avoid contact with the spinal cord, but some risk of contacting a bundle of nerves which hangs at the end of the spinal cord still exists.19

Spinal anesthesia is then injected and an epidural catheter is also placed through the same insertion point.20 The catheter allows for the ongoing administration of anesthesia as needed.21

During Dr. York’s combined spinal epidural, he experienced significant pain as Dr. El-Ganzouri inserted the needles into his back.22 During one of the insertions, Dr. York’s right thigh cramped and his right calf swelled.23 Dr. York eventually went numb as the anesthetic took effect, and the knee surgery was performed.24 After the surgery, Dr. York could not feel or move his right leg, he lost bladder and bowel control, and he experienced sexual dysfunction.25 Rehabilitation was only partially successful.26

Dr. York filed a complaint against Dr. El-Ganzouri and University An-esthesiologists, Dr. El-Ganzouri’s an-esthesiology practice group, and later amended the complaint to include Rush under the theory that Dr. El-Ganzouri was Rush’s apparent agent.27

Dr. York alleged that Dr. El-Ganzouri negligently performed the combined spinal epidural by injecting the anesthesia directly into Dr. York’s spinal cord thereby killing nerves and causing Dr. York’s injuries.28 Dr. York further alleged that Rush was accountable for Dr. El-Ganzouri’s negligence because Dr. York was not informed that Dr. El-Ganzouri was an independent contractor, because Dr. El-Ganzouri appeared to be a hospital employee based on the language in the consent form Dr. York signed and by his wearing scrubs with Rush’s name and insignia on them, and because Dr. York relied on the hospital to provide the anesthesiologist for the procedure.29 The trial court, pursuant to a jury verdict, found for the plaintiff and entered judgment against Dr. El-Ganzouri, University Anesthesiologists, and Rush.30 The defendants appealed.31

Rush, on appeal, contended that the manifest weight of the evidence showed that Dr. York could not have believed that Dr. El-Ganzouri was a Rush employee, and any reliance on Dr. York’s part was not of the kind required for vicarious liability to attach.32 The appellate court, after reviewing the decisions in Gilbert, McCorry v. Evangelical Hospitals Corp.,33 and Kashishian v. Port,34 determined that "the law of Illinois is that when a patient relies on a hospital for the provision of support services, even when a physician specifically selected for the performance of a procedure directs the patient to the particular hospital, there may be sufficient reliance for liability to attach to the hospital should the supporting physician commit malpractice."35 The appellate court then found the evidence sufficient to sustain the trial court’s verdict.36

Dr. York testified that he did not know that Rush anesthesiologists were independent contractors, that he was unaware of the employment status of anesthesiologists he has worked with in the past, and that since his wife handled the bills, he, by implication, had never seen prior bills from University Anesthesiologists from his other surgery at Rush.37 There was no indication on Dr. York’s consent form that that his physicians would be independent contractors.38 Further, all physicians working at Rush wore lab coats and/or scrubs with Rush’s name and logo on them.39 This evidence along with other, albeit conflicting, evidence led the appellate court to believe that a jury could reasonably conclude that Dr. El-Ganzouri was Rush’s agent.40

While making this determination, the appellate court noted that the imposition of vicarious liability in this context would not result in injustice because hospitals "advertise themselves as centers for complete medical care, and profit when competent service is provided by independent contractors in their facilities."41 The court also stated that the imposition of vicarious liability will "encourage hospitals to provide better supervision and quality control over the independent physicians working in their facilities."42

York v. Rush-Presbyterian-St.Luke’s Medical Center

After the appellate court affirmed the trial court verdict against all of the defendants, the defendants filed petitions for leave to appeal with the Illinois Supreme Court.43 Only Rush’s petition was granted, and the appeal solely addressed the apparent agency claim against Rush.44

In its apparent agency analysis, the Illinois Supreme Court reiterated the Gilbert elements.45 The court stated that "with respect to the first element of an apparent agency claim against a hospital . . . in order to find ‘holding out’ on the part of the hospital, it is not necessary that there be an express representation by the hospital that the person alleged to be negligent is an employee."46 In its appeal to the Illinois Supreme Court, Rush did not challenge the sufficiency of the evidence with respect to this element.47 Rush did, however, challenge the sufficiency of the evidence with respect to the reliance element.48

Rush argued that a plaintiff must establish detrimental reliance to prevail on a vicarious liability claim under the doctrine of apparent agency.49 In this context, detrimental reliance would require a plaintiff "asserting apparent agency must show that he or she relied on the ‘holding out’ of the hospital or agent to his or her detriment in accepting treatment."50

Rush pointed out that there is a split in the Illinois appellate court, and it argued the decisions which required a "but for" causal connection between the holding out and the injury correctly analyzed the reliance element in the medical malpractice context.51

Dr. York’s position was that "relevant inquiry with respect to the reliance element is not whether the plaintiff reported to the hospital at the direction of another person but, rather, whether the plaintiff looked to the hospital to furnish all that is essential for treatment, including medical support personnel."52 The Illinois Trial Lawyers Association, in its amicus brief in support of the plaintiff, argued that since hospitals market themselves based on the quality of their medical staffs, a plaintiff should be able to establish that supporting doctors were apparent agents of the hospital, even when the plaintiff initially entered the hospital only because of a chosen physician.53

The Illinois Supreme Court rejected Rush’s position and accepted Dr. York’s position.54 According to the court, "the reliance element of a plaintiff’s apparent agency claim is satisfied if the patient reasonably relies on the hospital to provide medical care, rather than upon a specific physician."55 Where a plaintiff selects some of his physicians, he may still reasonably rely on the hospital to perform the necessary support services.56 The Illinois Supreme Court held that Dr. York presented sufficient evidence to support his vicarious liability claim, and it affirmed the judgment of the appellate court.

Justice Garman, in her dissent, stated that the majority’s opinion dilutes the "reliance" element of apparent authority claims in the medical malpractice context.57

"In effect, as long as the plaintiff can satisfy the ‘holding out’ element of his apparent authority claim, he may recover from the hospital."58 According to Justice Garman, the two primary questions posed by Rush were ignored by the majority.59

The first question is whether a patient may "recover based on the doctrine of apparent authority at all where he chooses a hospital for treatment because he handpicked a particular physician to perform the treatment, and the physician practices only at that hospital."60 The majority implicitly answered this in the affirmative.61 The second question is whether the satisfaction of "the ‘reliance’ element of an apparent authority claim . . . [requires] a patient who schedules a procedure with a particular physician, and who is injured by another physician providing a support service, . . . to prove that his belief regarding the employment status of the physician who committed malpractice actually mattered in his decision to proceed with treatment."62 The majority implicitly answered this in the negative.63

Justice Garman believes that the majority’s position tends to create tension with the underlying rationale of Gilbert.64 According to Gilbert, hospitals market themselves as quality health care providers to persuade the public to utilize their services.65

If a patient, however, winds up at a particular hospital because he/she sought care from a particular physician, and would have utilized that physician regardless of the hospital the physician practiced at, it does not necessarily follow that the patient relied on that hospital’s reputation in deciding whether to seek treatment there.66 As a result, Justice Garman believes that "in cases where a patient chooses to undergo a procedure at a given hospital for the sole purpose of receiving treatment from a particular physician, and the patient is injured by the malpractice of another physician providing support service, . . . [it] would be reasonable to require the patient to prove that his belief regarding the employment status of the physician who committed malpractice actually mattered in his decision to proceed with his treatment."67 This requirement is more like the detrimental reliance requirement position asserted by Rush.68

Practical Impact

The decision in this case underscores the importance of clarity in consent forms utilized by hospitals. If hospitals have not done so already, they should redraft any consent forms involving independent contractors and ensure that the form clearly states that the patient will be working with an independent contractor. Inserted language regarding independent contractor status should be in boldface type. Another measure that hospitals should take, as cumbersome as it may be, would involve making the independent contractors working at the hospital wear scrubs and/or lab coats that do not have the hospital’s name and logo on them. Realistically, hospitals cannot expect perfect compliance with a policy regarding what scrubs doctors and support personnel should wear, but such a policy would aid in hospitals’ recoveries against negligent independent contractors.

It is now easier for plaintiffs in Illinois to prevail in vicarious liability claims against hospitals under the theory of apparent agency. It is, to an extent, disappointing that Illinois chose this case to make the burden easier on plaintiffs especially when other, potentially more appropriate theories of liability exist and may have been utilized. The lighter reliance standard used by the majority in York has fortunately been limited to the medical malpractice context. Hopefully it does not represent a step by Illinois down a slippery slope towards a place where this standard is the rule rather than the exception. Only time will tell.

1 222 Ill.2d 147 (2006).

2 Gilbert v. Sycamore Municipal Hospital, 156 Ill.2d 511 (1993).

3 Id.

4 Id.

5 Id. at 522.

6 Id. at 524-25.

7 Gilbert, 156 Ill.2d at 525 (quoting Pamperin v. Trinity Memorial Hospital, 423 N.W.2d 848, 855-56 (Wis. 1988)).

8 Id. at 524.

9 Civil Justice Reform Amendments of 1995, 1995 Ill. Laws 89-7, invalidated by Best v. Taylor Mach. Works, 179 Ill.2d 367 (1997).

10 735 Ill. Comp. Stat. 5/2-624 (1995).

11 See id.

12 Best v. Taylor Mach. Works, 179 Ill.2d 367 (1997).

13 Howard Levin, Note, Hospital Vicarious Liability for Negligence by Independent Contractor Physicians: A New Rule for New Times, 2005 U. Ill. L. Rev. 1291, 1293.

14 Id.

15 Id.

16 York v. El-Ganzouri, 353 Ill. App. 3d 1, 4 (1st Dist. 2004).

17 Id.

18 Id.

19 Id. at 4-5.

20 Id. at 5.

21 El-Ganzouri, 353 Ill. App. 3d at 5.

22 Id.

23 Id.

24 Id.

25 Id.

26 El-Ganzouri, 353 Ill. App. 3d at 5.

27 Id.

28 Id.

29 Id.

30 Id. at 3.

31 El-Ganzouri, 353 Ill. App. 3d at 3.

32 Id. at 23.

33 331 Ill. App. 3d 668, 771 (1st Dist. 2002).

34 481 N.W.2d 277 (1992).

35 El-Ganzouri, 353 Ill. App. 3d at 29.

36 Id. at 30.

37 Id.

38 Id.

39 Id. at 31.

40 See El-Ganzouri, 353 Ill. App. 3d at 30-32.

41 Id. at 30.

42 Id.

43 York v. Rush-Presbyterian-St. Luke’s Medical Center, 222 Ill.2d 147, 152 (2006).

44 Id.

45 Id. at 184-85.

46 Id. at 185.

47 Id. at 188.

48 Rush, 222 Ill.2d at 188.

49 Id. at 189.

50 Id.

51 Id.

52 Id. at 191.

53 Rush, 222 Ill.2d at 192.

54 Id.

55 Id. at 194.

56 Id.

57 Id. at 204 (Garman, J., dissenting).

58 Rush, 222 Ill.2d at 204-05 (Garman, J., dissenting).

59 Id. at 212. (Garman, J., dissenting).

60 Id. (Garman, J., dissenting).

61 Id. (Garman, J., dissenting).

62 Id. (Garman, J., dissenting).

63 Rush, 222 Ill.2d at 212 (Garman, J., dissenting).

64 Id. at 213 (Garman, J., dissenting).

65 Id. at 214 (Garman, J., dissenting).

66 Id. (Garman, J., dissenting).

67 Id. (Garman, J., dissenting).

68 See Rush, 222 Ill.2d at 215 (Garman, J., dissenting).

DCBA Brief