EMAIL TO A FRIEND COMMENT

 

Hospital Vicariously Liable if Ostensible Agency Shown


A pregnant woman was referred to a prenatal care clinic operated by a hospital. The clinic was staffed by nurses and physicians who volunteered their time, including the obstetrician who would later deliver the woman’s child.

 

Every time the woman went to the clinic, the woman signed a document titled Conditions of Admissions (COA). The COA was a two-page document listing twelve conditions. The sixth condition stated:

 

All physicians and surgeons furnishing healthcare services to me/the patient, including the radiologist, pathologist, anesthesiologist, emergency room physicians, hospitalists etc., are independent contractors and are NOT employees or agents of the hospital. I am advised that I will receive separate bills for these services. _________ (Initial)

 

This was the only condition on the COA that required the patient’s initials. The woman initialed in the indicated space and signed with full name at the end of each form. The woman claimed that the woman had no recollection of reading or signing these forms on five separate occasions. The woman alleged that the forms were handed to the woman without explanation.

 

The woman preregistered for childbirth at the hospital. It was standard practice for expecting mothers at the clinic to preregister with the hospital within three months of the expected delivery date. When the woman preregistered, the woman signed and initialed a COA identical to the five COAs the woman had previously signed at the clinic.

 

The woman went into labor. When the woman arrived at the hospital to deliver, an obstetrician the woman had never met was on call. Although the obstetrician volunteered at the clinic, there was no indication that the woman selected the obstetrician to deliver the child. The woman did not sign a COA at that time.

 

The delivery did not go as planned. It resulted in the woman’s child suffering permanent, debilitating injuries.

 

The woman filed a medical malpractice suit against the obstetrician and hospital. The complaint alleged that the obstetrician and hospital provided negligent care which proximately caused the child’s injuries. Specifically, the complaint alleged that the hospital was directly negligent in its treatment and vicariously liable for the obstetrician’s alleged negligence. The woman conceded that the obstetrician was an independent contractor rather than an employee of the hospital. The obstetrician was paid by a practice group to provide on-call obstetrical service at the hospital. The woman argued that a reasonable patient in the woman’s position would have understood the obstetrician to be a hospital employee, making the obstetrician an ostensible agent of the hospital and exposing the hospital to vicarious liability for the obstetrician’s conduct.

 

Prior to trial, the woman settled with the obstetrician. In the settlement, the woman and obstetrician signed a release which explicitly reserved “[a]ll rights against the hospital predicated upon the actions or omissions of [the obstetrician].”

 

The hospital moved for partial summary judgment on the issue of vicarious liability. The First Judicial District Court, Carson City, granted that motion. The trial court found that NRS 41A.045 abrogated vicarious liability for providers of health care. NRS 41A.045(1) provided:

 

In an action for injury or death against a provider of health care based upon professional negligence, each defendant is liable to the plaintiff . . . severally only, and not jointly, for that portion of the judgment which represents the percentage of negligence attributable to the defendant.

 

Additionally, the trial court found that the woman’s settlement with the obstetrician precluded additional recovery from the hospital for the obstetrician’s conduct. Finally, the trial court found the obstetrician was not an ostensible agent of the hospital as a matter of law. The court reasoned that the COA that the woman signed established as a matter of law that the obstetrician was an independent contractor

 

The issue of whether the hospital was directly negligent in its treatment proceeded to a jury trial.

 

The hospital moved in limine to introduce evidence that the woman received collateral payments from Medicaid. Over the woman’s objection, the trial court allowed the hospital to introduce this evidence of collateral payments made on behalf of the woman.

 

After an eleven-day trial, the jury rejected the claim that the hospital was directly negligent in its treatment.

 

The Supreme Court of Nevada reversed and remanded for a jury to determine whether an ostensible agency relationship existed between the hospital and the obstetrician. The court held that a hospital can be vicariously liable for the alleged negligence of a doctor who worked at the hospital as an independent contractor where (1) the doctor independently settled with the plaintiff and (2) the plaintiff signed forms stating that all doctors at the hospital were independent contractors, so long as an ostensible agency relationship existed between the hospital and the doctor. The court also held that the trial court erred in allowing the hospital to introduce evidence of collateral payments made on behalf of the woman.

 

A hospital can be vicariously liable for the alleged negligence of a doctor who worked at the hospital as an independent contractor where (1) the doctor independently settled with the plaintiff and (2) the plaintiff signed forms stating that all doctors at the hospital were independent contractors, so long as an ostensible agency relationship existed between the hospital and the doctor. The court concluded this for three reasons. First, NRS 41A.045 did not abrogate vicarious liability for providers of health care. Second, the woman’s settlement with the obstetrician did not preclude additional recovery from the hospital for the obstetrician’s conduct. Third, the trial court erred in finding the obstetrician was not an ostensible agent of the hospital as a matter of law.

 

First, the Nevada statute did not abrogate vicarious liability for providers of health care. Instead, it substituted a joint and several liability scheme, wherein each defendant is liable for all of the damages that joint defendants caused, for a several liability scheme, wherein a plaintiff can recover only the defendant’s share of the injured plaintiff’s damages. Vicarious liability survived in the several liability scheme created by NRS 41A.045.

 

Second, the woman’s settlement with the obstetrician did not preclude additional recovery from the hospital for the obstetrician’s conduct. The woman’s settlement with the obstetrician expressly reserved all claims against the hospital. The court concluded that, under NRS 17.245, the woman’s settlement did not extinguish the hospital’s vicarious liability. The court explained that if the woman recovered damages from the hospital on a vicarious liability theory, those damages would be reduced by the amount the woman already received from the obstetrician.

 

Third, the trial court erred in finding the obstetrician was not an ostensible agent of the hospital as a matter of law. An issue of fact existed as to whether the obstetrician was an ostensible agent of the hospital. The court found that it was debatable whether a typical patient would understand section 6 of the COA to mean that the hospital was not liable for a physician’s negligence. On the one hand, the COA drew attention to section 6 because it was the only condition that required a patient’s initials alongside it and it was the only section that contained boldfaced text. On the other hand, section 6 said nothing about liability. It required patients to infer that the hospital was not liable for the negligence of independent contractors. A reasonable patient may have interpreted section 6 to inform the patient only that the patient would receive separate bills from the doctor and hospital. The woman might have failed to read or understand the preceding language regarding doctors’ status as independent contractors. Additionally, the most recent occasion on which the woman signed a COA was 22 days before the woman met the obstetrician on the night the woman delivered. The language of the COAs was not so sufficiently clear as to dispel the appearance of agency as a matter of law. Because material issues of fact existed as to whether ostensible agency existed, the trial court erred in granting summary judgment on this issue.

 

Fourth, the trial court erred in allowing the hospital to introduce evidence of collateral payments made on behalf of the woman. Nevada adopted a per se rule barring the admission of a collateral source of payment for an injury into evidence for any purpose. NRS 42.021(1) created an exception to that rule in the medical malpractice context, allowing defendants to introduce evidence of collateral payments that the plaintiff received from third parties. The purpose of this law was to prevent “double-dipping”—that is, the practice of plaintiffs receiving payments from both health care providers and collateral sources for the same damages. To protect plaintiffs from having awards overly diminished, the second half of the enacted statute—NRS 42.021(2)—prohibited collateral sources from also recovering directly from plaintiffs. Under federal law, 42 U.S.C. § 2651(a) allowed the United States to recover from a plaintiff who prevailed in a medical malpractice suit the Medicaid payments the plaintiff received—exactly what NRS 42.021(2) prohibited. The court concluded that 42 U.S.C. § 2651(a) preempted NRS 42.021(2) from preventing recovery of federal collateral source payments, such as Medicaid payments. Because of this preemption, and because severing NRS 42.021(2) from the statute would result in the unintended consequence of doubly reducing plaintiffs’ recoveries, the court struck the statute in its entirety as applied to federal collateral source payments. Absent application of NRS 42.021 to federal collateral source payments, the court reverted to the per se rule in Nevada that collateral source payments may not be admitted into evidence. Thus, on remand, the trial court should not allow the hospital to introduce evidence of Medicaid payments made on behalf of the woman.

 

The Supreme Court of Nevada reversed the trial court’s grant of partial summary judgment to the hospital and remanded for a jury to determine whether an ostensible agency relationship existed between the hospital and the doctor.

 

See: McCrosky v. Carson Tahoe Regional Medical Ctr., 2017 WL 6629160 (Nev., December 28, 2017) (not designated for publication).

 

See also Medical Law Perspectives Report: Mothers, Infants, and Obstetrical Injuries: Labor and Delivery Liability Risks

 

See the Medical Law Perspectives Blog: Is Stillbirth Medical Malpractice Success Directly Proportional to Weeks of Pregnancy?

 

 

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