Within Hospital Walls: Vicarious Liability in Medical Malpractice
By Jacqueline Korn
It has become increasingly challenging for hospitals to escape liability for acts of professional negligence occurring within their walls. Traditionally, hospitals were held liable under the doctrine of respondeat superior for the negligent acts of their employees or agents. Today, there are two forms of vicarious liability. First, a hospital may breach the standard of care and be liable for the actions of its actual employees under the theory of actual agency. Second, a hospital may breach the standard of care and be liable for the actions of implied agents, who are not employees of the hospital, but instead independent contractors, under the theory of apparent agency.
In claims of vicarious liability against a hospital, a plaintiff must prove that the employee or agent was either the hospital’s actual agent or apparent agent.1 While the existence of an agency relationship is generally a question of fact, a court may decide the issue as a matter of law if only one conclusion may be drawn from the undisputed facts.2 The principal consideration for determining whether an agency relationship exists is whether the agent retains the right to control the manner of doing his or her work.
Illinois courts have repeatedly held that absent an employer-employee relationship, a hospital is not liable for the acts of an individual who provides medical care as an independent agent beyond the control of the hospital.4 In fact, “the relationship between a hospital and the members of its staff who are not regular employees of the hospital has traditionally been an independent relationship even though both parties must cooperate for the purposes of the hospitalization to succeed.”5 Accordingly, when the evidence clearly establishes that the treating physician was not employed by the hospital and no employer-employee or principal-agent relationship exists, the hospital is not vicariously liable for the treating physician’s medical care as an actual agent.6
The Illinois Appellate Court, First District’s decision in Magnini v. Centegra Health System makes it abundantly clear whether a plaintiff can argue actual agency.7 In Magnini, Centegra Health System sought summary judgment on actual agency stating that the physicians were independent contractors, not agents, since Centegra did not control the manner in which they rendered care to patients.8 The first district upheld the circuit court’s ruling granting summary judgment and denied the appeal.9
The circuit court and the appellate court relied on case law holding that in order to find agency or “the hallmark of agency” is the principal’s right to control the manner in which the agent performs the work.10 The court explained that, by definition, the principal does not supervise the details of the independent contractor’s work and, therefore, is not in a good position to prevent negligent performance. For this reason a hospital is generally not liable for the actions of one who provides medical care as an independent agent outside the hospital’s control.11 The court continued its evaluation by examining the bylaws and policies and procedures in place at Centegra. The court concluded that while the bylaws required the physicians to be in places at certain times and apply for privileges, the bylaws and policies left the practitioner to exercise independent medical judgment.12
The Magnini court put further distance between the lines of cases granting summary judgment on actual agency in a hospital setting.13 Magnini stands for the proposition that medical staff bylaws and holding a position within the hospital are insufficient to establish actual agency without specific evidence the hospital controls medical decision making.
Another recent decision is instructive on actual agency. In Hammer v. Barth, the trial court found no implied agency existed because Dr. Barth retained the right to control her work and to guide the treatment and care of her patients, regardless of the procedures and bylaws applicable to the medical staff.14 The Appellate Court discussed in depth actual agency;
if the principal retains sufficient control over the independent contractor’s work, his independent status is negated and the principal is vicariously liable for the contractor’s tortious conduct. This type of authority, termed implied authority, is actual authority proved by circumstantial evidence. The primary consideration in determining the existence of implied authority is not the intent of the parties, or whether the physician is an employee or independent contractor, but rather the degree of control the principal retains over performance of the contractor’s work. In a hospital-physician relationship, the key issue is whether the hospital has the right to control the physician’s exercise of medical judgment in delivering medical care to patients.15
If a plaintiff argues the service agreement and bylaws allow a hospital to control the physician’s work sufficient to establish a principal-agent relationship, the court’s response further dismisses such arguments;
As the trial court noted, Advocate’s recertification and reappointment process for staff privileges does not indicate sufficient control over Dr. Barth’s medical judgment in the treatment of her patients to negate her independent status, and at most shows only control over the conduct and activities of its medical staff. Furthermore, its procedures and regulations required of medical staff are mostly administrative. Compliance with such review and regulation procedures in itself does not indicate control by Advocate over its physicians.16
The analysis by the appellate court in Hammer shows the trial court gave weight to issues argued by the plaintiff that should not have been given weight and ignored the most important fact: actual control of the care given to a patient.
In short, a hospital may breach the standard of care and be liable for the actions of its actual employees under the theory of actual agency.
A hospital may also breach the standard of care and be liable for the actions of implied agents, who are not employees of the hospital, but instead independent contractors, under the theory of apparent agency. In Illinois, the burden of proof for establishing the elements of an apparent agency claim remain on the Plaintiff.17 Liability will attach to the hospital if the treating physician is the apparent agent of the hospital.18 The Illinois Supreme Court provided the following elements that the plaintiff must prove to recover under the apparent agency doctrine:
For a hospital to be liable under the doctrine of apparent agency, 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.19
Failure to establish any one of these elements will support summary judgment in favor of the hospital.20
The Illinois Supreme Court made it clear in Gilbert that a hospital will not be liable for the negligent acts of its independent contractor physicians if the patient “knows or should have known, that the physician is an independent contractor.”21 The first district held in Wallace that to defeat a medical malpractice apparent agency claim, “all that was required was some evidence to show that the plaintiff knew or should have known of the physician’s independent contractor status.”22 The court reasoned that if the “plaintiff was placed on notice of the independent contractor status of these doctors, ‘it would be unreasonable’ for her to assume that they were employed by defendant and, thus, she could not sustain an apparent agency claim against defendant.”23
Even if, however, the court does not take note of a plaintiff’s inability to meet the threshold requirement to consider the elements of an apparent agency claim, the plaintiff must still establish some evidence that would satisfy his burden of proof on the “holding out” and “reliance” elements of an apparent agency claim.
The first two elements of the Gilbert test establish the first factor required for an apparent agency relationship, which is commonly referred to as the “holding out” factor.24 A plaintiff satisfies this factor by demonstrating that the hospital did not inform the plaintiff that the medical personnel providing care and treatment at the hospital were independent contractors.25 This element requires a plaintiff to come forward with evidence that a hospital “[held] itself out as a provider of care ... without informing the patient that the care is provided by independent contractors.”26 Although not dispositive of the “holding out” factor, whether a patient signs a hospital consent to treatment form that contains clear and unambiguous independent contractor disclaimer language is an important factor to consider because it is unlikely that a patient who signs such a form can reasonably believe that his treating physician is an employee or agent of a hospital when the form contains specific language to the contrary.27 Where the language of a hospital consent form is clear and unequivocal and there is no evidence that the hospital held out the physician as its agent or employee, the hospital is entitled to summary judgment on plaintiff’s apparent agency claim as a matter of law.28 Recently, the first district held in Frezados, that a consent form which informed the patient that he would receive a separate bill for services was even more dispositive that the hospital was not “holding out” as contemplated in Gilbert.29
Notably, courts have evaluated the specific language and clarity of a hospital consent form in determining whether the “holding out” factor is satisfied. In Wallace, the first district found that the hospital consent form clearly indicated that the defendant contracted with independent physicians to provide services to patients.30 The court specifically noted that the term “independent contractors” was used in the consent form when referring to consulting physicians.31 Further, the consent form noted that as the signatory, the plaintiff read the form and had an opportunity to ask questions.32
Recently, the first district revisited this issue in Lamb-Rosenfeldt. There, the court noted factors that support the clarity of a disclosure statement, including the use of key phrases like “independent contractor” or “independent physician” and unequivocal language advising the signor that the physicians attending him at the hospital are not agents or employees of the hospital.33 Illinois law on this question is long-standing and consistent. The Supreme Court held in Black v. Wabash that a competent adult is charged with knowledge of and assent to a document the adult signs and that ignorance of its contents does not avoid its effect.34 This principle has been consistently reiterated by the Supreme Court and by the appellate court.35
It is evident that the concerns hospitals face in relation to liability for acts of professional negligence occurring within its walls are increasingly challenging. Although there is some apprehension surrounding the challenges hospitals face based on professional negligence, there are also solutions beyond hospital walls.
1. Wallace v. Alexian Brothers Medical Center, 389 Ill. App. 3d 1081, 1085-86 (1st Dist. 2009).
Jacqueline Korn is an associate with Heyl, Royster, Voelker & Allen in Peoria, Illinois. She concentrates her practice in medical malpractice defense, the representation of insurance carriers in liability coverage disputes, governmental law and business and commercial litigation. Ms. Korn is a graduate of NIU College of Law and received her undergraduate degree from the University of Missouri-Columbia.