Hospital Contracting with Companies to Provide Doctors Did Not Enter Joint Venture; Hospital Not Vicariously Liable for Hospitalist and Surgeon Acts

A man was admitted to a hospital where he was treated by a hospitalist. While the hospitalist was on vacation, his substitute hospitalist referred the man to a surgeon. The surgeon performed exploratory surgery. Following the surgery the man developed a serious infection that apparently resulted from the surgery. The man suffered permanent injury as a result of the infection.


The hospitalists were both employed by a company that contracted with the hospital. They both treated patients exclusively at the hospital. The surgeon provided surgical services at the hospital in accordance with a contract he executed with another company.


The man and his wife sued the hospital, the two hospitalists, the surgeon, and the two companies for medical malpractice. The plaintiffs proceeded under a theory that that hospital was vicariously liable for the alleged negligence of the three doctors because they were employees or actual agents of the hospital or the doctors and the two companies were engaged in a joint venture with the hospital.


The hospital filed a motion for summary judgment arguing that that the three doctors were not employees of, actual agents of, or in joint ventures with the hospital. The trial court granted the motion for summary judgment reasoning that the doctors were not employees or actual agents of the hospital and that there was no joint venture. The plaintiffs appealed.


The Supreme Court of West Virginia affirmed the district court’s grant of summary judgment finding that the doctors were not employees or actual agents of the hospital and that there was no joint venture. The court held that to determine whether a master-servant relationship exists for purposes of the doctrine of respondeat superior the court considers four factors: (1) selection and engagement of the servant; (2) payment of compensation; (3) power of dismissal; and (4) power of control, with particular attention to the last element.


First, with regard to the selection and engagement of the servant the court noted that the doctors were not hired by the hospital. The two hospitalists were selected and engaged by one company, not the hospital. The surgeon was selected by the second corporate defendant and presented to the hospital for approval in accordance with the contract between the corporation and the hospital. The surgeon was recruited and hired by the corporation, therefore, it was the corporation, not the hospital, responsible for the surgeon’s selection and engagement.


Second, with regard to the payment of compensation the court noted that the doctors were not paid by the hospital. Rather, the hospital paid the two companies and the two companies paid the three doctors. The hospital did not bill patients for the services the three doctors provided. The hospital did not pay for the three doctors’ medical malpractice insurance.


Third, with regard to the power of dismissal the court noted that the hospital could not terminate the three doctors’ employment. Rather, the hospital could notify the company that the doctor had not met particular requirements as outlined in the contract between the hospital and the company. Then the company would remove the doctor from the schedule of doctors providing services at the hospital. Nothing in the agreements between the hospital and the corporations gave the hospital authority to terminate the doctors’ contract with their respective corporation. Instead, the contracts between the doctors and the corporations expressly stated the conditions for termination.


Fourth, with regard to the power of control the court found that the hospital exercised broad general powers of supervision and control as to the results of the work to insure satisfactory performance of the contract without changing the relationship from that of owner and independent contractor, or changing the duties arising from that relationship.


The court found that there was no joint venture among the three doctors, two companies, and one hospital. The court held that the control required for imputing negligence under a joint enterprise theory is not actual physical control, but the legal right to control the conduct of the other with respect to the prosecution of the common purpose. The plaintiffs failed to prove that the hospital exercised the right to control the doctors' practice of medicine or that the other defendants had the right to control the hospital's practices with respect to its business.


See: Cunningham v. Herbert J. Thomas Memorial Hosp. Ass'n, 2012 WL 5935610 (W.Va., November 20, 2012) (not designated for publication).