Protecting Apparent Agency: Why Hospitals Are Liable for the Negligence of Their Medical Staff

by Alinor C. Sterling

Is a hospital responsible for the negligent acts of its nonemployee emergency room physicians, radiologists, and anesthesiologists? Or are these physicians independent contractors, such that the hospital in which they work is not legally responsible for any malpractice they commit? Does it matter that the hospital has marketed itself as providing quality care through these same physicians? These questions implicate the doctrine of apparent agency, a theory of vicarious liability which holds the hospital responsible for the negligence of independent contractor physicians when it has created the appearance that those physicians work for it. Hospitals now argue as a matter of course that apparent agency is dead in Connecticut. The injured plaintiff’s sole remedy lies in an action against the individual physician, they claim, even if the hospital led the plaintiff to believe the physician worked for the hospital. This article explains the attack on apparent agency, and the three reasons why it is wrong.

Apparent Agency

“The doctrine of apparent [agency] basically holds that one who employs an independent contractor to perform services for another which are accepted in the reasonable belief that the services are being rendered by the employer or its servants is subject to liability for physical harm caused by the negligence of the independent contractor in supplying the services to the same extent as though the employer were supplying them itself or by its servants[.]” Francisco v. Hartford Gynecological Center, Inc., 1994 Conn. Super. LEXIS 521, at *6 (Conn. Super. Mar. 1, 1994) (Corradino, J.). The doctrine recognizes the fundamental fairness in binding a principal who benefits because of a third party’s belief – which the principal has fostered – that the third party is dealing with an agent of the principal. See Cohen v. Holloways, 158 Conn. 395, 407 (1969). Apparent agency is widely accepted across the country and is described in both the Restatement (Second) of Torts and the several Restatements of Agency. See, e.g. Restatement (Second) of Torts § 429 (2000); Restatement (Second) of Agency § 267 (1994).

In line with the national trend, our Superior Courts repeatedly have applied apparent agency to hold hospitals responsible for the negligence of doctors who appear to work for them. See Wellons v. Bristol Hospital, 2012 Conn. Super. LEXIS 1226 (Conn. Super. May 10, 2012) (Sheridan, J.); Center v. Kost, 2011 Conn. Super. LEXIS 2005 (Conn. Super. Aug. 4, 2011) (Wilson, J.); Corey v. Eastern Connecticut Health Network, Inc., 2011 Conn. Super. LEXIS 1918 (Conn. Super. Jul. 22, 2011) (Sheldon, J.); Custer v. Kurowski, 1999 Conn. Super. LEXIS 228 (Conn. Super. Jan. 29, 1999) (Hurley, J.); Pierzga v. Charlotte Hungerford Hosp., 2010 Conn. Super. LEXIS 2519 (Conn. Super. Oct. 6, 2010) (Roche, J); Spaulding v. Rovner, 2009 Conn. Super. LEXIS 942 (Conn. Super. Apr. 3, 2009) (Jennings, J.); Grasser v. Midstate Medical Center, 2009 Conn. Super. LEXIS 53 (Conn. Super. Jan. 12, 2009) (Scholl, J.); Aube v. Middlesex Hosp., 2008 Conn. Super. LEXIS 2548 (Conn. Super. Oct. 3, 2008) (Scholl, J.); Wiggins v. St. Vincent’s Medical Center, 2006 Conn. Super. LEXIS 898 (Conn. Super. Mar. 20, 2006) (Radcliffe, J.).[1]

1941: Connecticut Supreme Court Applies Apparent Agency in Tort.

Apparent agency, which is also sometimes called apparent authority or ostensible agency, began as a contract doctrine. In the last fifty to seventy years, however, its application in negligence cases became widely accepted. Thus in 1941, the Connecticut Supreme Court applied the doctrine in a tort case: Fireman's Fund Indemnity Co. v. Longshore Beach & Country Club, Inc., 127 Conn. 493 (1941).

In Fireman's Fund, a club member asked a watchman at the Longshore Beach & Country Club to get his car. The watchman damaged the car (and died in the process). The club member’s insurer brought an action against the club, asserting that the club was liable for the negligence of the watchman which caused damage to the car. The Supreme Court recited the law of apparent authority and held,

Applying these tests to the facts found, it is apparent that [the watchman] was not acting at the time even in the apparent or ostensible scope of his authority. The plaintiff failed to establish that the defendants held [the watchman] out to the members as possessing sufficient authority to embrace the particular act in question, or knowingly permitted him to act as having such authority; or that [the club member] acting in good faith had reason to believe and did believe that [the watchman] possessed the necessary authority. The defendants' liability is determined by what authority [the club member], exercising reasonable care and prudence, was justified in believing that the defendants had by their acts under the circumstances conferred upon [the watchman].

127 Conn. at 497-98 (emphasis supplied). Fireman’s Fund was then unfortunately forgotten for a time.

Fireman’s Fund is Overlooked by the Appellate Court.

Coming forward in time to 2013, more and more hospital defendants argue that Connecticut does not apply the doctrine of apparent agency in tort cases at all. They typically rely on a trio of decisions by the Connecticut Appellate Court: Mullen v. Horten, 46 Conn. App. 759 (1997); Davies v. General Tours, Inc., 63 Conn. App. 17, cert. granted, 256 Conn. 926 (2001), appeal withdrawn (Oct. 18, 2001); and L & V Contractors, LLC v. Heritage Warranty Ins. Risk Retention Group, Inc., 136 Conn. App. 662 (2012). Mullen erroneously determined that no Connecticut high court decision had ever applied apparent agency in the tort context. Mullen, 46 Conn. App. at 772. This determination was wrong because Fireman’s Fund did apply apparent agency in tort. Mullen’s error in overlooking Fireman’s Fund is significant because the Mullen court’s sole basis for declining to apply apparent agency in the tort case before it was the perceived lack of Connecticut precedent.

The Supreme Court had no opportunity to review Mullen directly, as no petition for certification was filed. Just a year after Mullen, however, the Supreme Court observed in Hanson v. General Transportation, Inc., 245 Conn. 613, 618 n.5 (1998), that apparent authority had been applied in a tort case, citing Fireman’s Fund. Hanson v. General Transportation, Inc., 245 Conn. 613, 618 n.5 (1998). While not referring to Mullen by name, it seems reasonable to infer from the timing of this statement that the Supreme Court was responding to Mullen. Recall that in Mullen the appellate panel had determined that Connecticut would not apply apparent agency in tort because it never had in the past. Eleven months later in Hanson, the Supreme Court effectively said: “Yes, we did -- Fireman’s Fund 1941 -- we applied apparent agency in a tort case”.

Unfortunately for plaintiffs, this message went unheeded. Again overlooking Fireman’s Fund (and now Hanson as well), in 2001 the Davies court followed Mullen.[2] The recent decision of L & V Contractors (2013) relies on Mullen and Davies and therefore repeats their error of ignoring Fireman’s Fund and Hanson.[3]

The Three Reasons Why the Attack on Apparent Agency is Wrong.

Hospitals’ attack on apparent agency fails for three reasons. First, Mullen, Davies, and L&V Contractors must be read and applied narrowly, because they overlook Fireman’s Fund and Hanson. The Appellate Court does not have the authority to overrule Supreme Court decisions. Mazzuca v. Sullivan, 94 Conn. App. 97, 102, cert. denied, 178 Conn. 905 (2006); see also D’Arcy v. Shugrue, 5 Conn. App. 12, 29 (1985) (“In our short appellate life we have consistently taken the position that it is not within our function as an intermediate appellate court to overrule Supreme Court authority.”); Somohano v. Somohano, 29 Conn. App. 392 (1992) (same).

Second, none of the three appellate decisions addresses hospital liability for physician negligence. Mullen involves the vicarious liability of a religious order for the sexual exploitation of a church member by one of its priests. Davies deals with the “tenuous relationship between a tour operator and an independent contractor that it contracted with to provide services to tourists around the world.” Davies, 63 Conn. App. at 33. L & V Contractors concerns a transmission company’s liability for misrepresentations and theft by an employee of one of its distributors. Indeed, the Davies court strongly suggests that the analysis is different in the hospital-doctor context. See Davies, 63 Conn. App. at 32-33 & n.8. What hospitals are advocating is an extension of the rulings in these cases, a dubious argument given Fireman’s Fund and Hanson.

Third, a growing number of Superior Courts have rejected the hospitals’ position, reasoning that the application of apparent agency in hospital cases has been widely accepted; that Mullen, Davies, and now L&V Contractors overlook Fireman’s Fund; and that Davies suggests medical negligence cases would require a separate analysis. These decisions include: Pierzga v. Danbury Hospital, 2010 Conn. Super. LEXIS 2519 (Conn. Super. Oct. 6, 2010) (Roche, J.) (declining to follow Mullen or Davies and instead agreeing with other trial courts that recognize the doctrine of apparent authority in medical malpractice cases); Center v. Kost, 2011 Conn. Super.LEXIS 2005, at *24 (Conn. Super. Aug. 4, 2011) (Wilson, J.) (declining to follow Mullen or Davies as they did not involve a hospital being sued for vicarious liability under a theory of apparent agency, and relying instead on the “substantial weight of Superior Court authority” recognizing apparent agency as “an appropriate theory for plaintiffs to allege vicarious liability of hospitals for the acts of independent contractors”); Bordonaro v. Anesthesia Assocs. of Torrington, 2012 Conn. Super. LEXIS 2647 (Conn. Super. Oct. 23, 2012 ) (Danaher, J.) (declining to follow L&V Contractors for all three reasons listed above); Sheehy v. Griffin Hosp., CV 12 6011638 (J.D. Milford/Ansonia at Derby, Sept. 30, 2103) (Brazzel-Massaro, J.) (same); Cadavid v. Ranginwala, 2013 Conn. Super. LEXIS 1409 (Conn. Super. Jun. 24, 2013) (Tobin, J.) (same); see also Kafri v. Greenwich Hosp. Ass'n, 2000 U.S. Dist. LEXIS 22657, at *7-14 (D. Conn. Feb. 24, 2000) (Nevas, J.) (declining to apply Mullen to limit viability of apparent agency doctrine against hospital).

Connecticut Patients Need the Doctrine of Apparent Agency.

Apparent agency is about fairness. It is unfair for a hospital to market itself by impressing the public with the quality of its care, but then later disavow its caregivers as independent contractors. How is the public to know which doctors are hospital employees and which are “independent contractors”? It is, after all, the hospital that knows and the hospital that chooses how to represent itself.[4]

With these principles in mind, the modern trend across the country imposes liability on hospitals for the negligent acts of their apparent agent physicians.. The Illinois Supreme Court, refining the apparent agency test as it applies to hospitals, wrote:

[T]he relationship between a patient and health-care providers, both physicians and hospitals, presents a matrix of unique interactions that finds no ready parallel to other relationships. . . . [T]he fervent competition between hospitals to attract patients, combined with the reasonable expectations of the public that the care providers they encounter in a hospital are also hospital employees, raise[s] serious public policy issues with respect to a hospital's liability for the negligent actions of an independent-contractor physician. It is against this specific factual backdrop that we extended the doctrine of apparent agency to instances wherein a plaintiff seeks to hold a hospital vicariously liable for the malpractice of an independent contractor physician.

York v. Rush-Presbyterian-St. Luke's Medical Center, 854 N.E.2d 635, 660-61 (Ill. 2006).

The Wisconsin Supreme Court reached the same conclusion:

We agree with the many courts and commentators who have set forth the numerous reasons why applying the doctrine of apparent authority to hold hospitals liable under apparent authority is sound public policy. ... [H]olding a hospital liable for a physician's negligent acts provides a stronger incentive to the hospital to monitor and control physicians. This will result in higher quality medical care since the hospital is in the best position to enforce strict adherence to policies regarding patient safety, whether it be by rules, regulations, or other means. Second, ... [holding the hospital liable] places the burden of liability on a financially dependable defendant so that an injured patient may receive adequate compensation.

Since modern hospitals are run like businesses, it is reasonable to require them to insure against malpractice by all their personnel, including doctors. Payment of insurance premiums by hospitals can be negotiated along with other terms of employment and can be absorbed as a cost of doing business. If hospitals become more directly involved in malpractice liability, they will undoubtedly develop a greater interest in monitoring the quality of care being provided.

Kashishian v. Port, 481 N.W.2d 277, 285-86 (Wis. 1992).

These decisions recognize the importance of the rights and the policy considerations put in issue by the doctrine of apparent agency: they are hugely important. Apparent agency is a doctrine worth fighting for.

Alinor Sterling is an attorney at Koskoff, Koskoff & Bieder. She works on complex cases, both in the trial court and on appeal.

 


[1] See also Franklin v. Murray, 2004 Conn. Super. LEXIS 685 (Conn. Super. Mar. 12, 2004) (Sheedy, J.); Loughery v. Commissioner of Corrections, 2002 Conn. Super. LEXIS 2333 (Conn. Super. Jul. 9, 2002) (Hennessey, J.); Piteau v. Horanieh, 2002 Conn. Super. LEXIS 1291 (Conn. Super. Apr. 11, 2002) (Wagner, J.); McClelland v. Danbury Hospital, 2001 Conn. Super. LEXIS 366 (Conn. Super. Feb. 2, 2001) (Bishop, J.); Wilverding v. Ostrowitz, 2000 Conn. Super. LEXIS 607 (Conn. Super. Feb. 28, 2000) (Skolnick, J.); Francisco v. Hartford Gynecological Center, Inc., 1994 Conn. Super. LEXIS 521 (Conn. Super. Mar. 1, 1994) (Corradino, J.); Koniak v. Sawhney, 1994 Conn. Super. LEXIS 95 (Conn. Super. Jan. 13, 1994) (Rush, J.); LeConche v. Elligers, 1991 Conn. Super. LEXIS 1693 (Conn. Super. Jul. 16, 1991) (Stengel, J.); Kafri v. Greenwich Hospital Ass’n, 2000 U.S. Dist. LEXIS 22657 (D. Conn. Feb. 24, 2000) (Nevas, J.).

[2] Courts sometimes confuse whether apparent agency and apparent authority are the same thing. According to Davies, they are. The plaintiff in Davies, citing Section 429 of the Restatement (Second) of Torts, relied on the doctrine of “apparent agency”. The Davies court re-characterized her claim as one based on apparent authority and then said explicitly that apparent agency “is generally discussed in the context of apparent authority”. Davies, 63 Conn. App. at 33.

[3] In the Appellate Court’s defense, the apparent agency issues were only lightly briefed in Mullen and L&V Contractors, and Fireman’s Fund apparently was not cited by any party in any of the briefing.

[4] Taking discovery on these issues is fairly simply done --one of the best techniques is the deposition of the hospital’s corporate designee on these topics – and an important part of preparing the apparent agency claim.