Diggs v. Novant Health

NO. COA04–1415

NORTH CAROLINA COURT OF APPEALS

Filed: 2 May 2006

MARY LOUISE DIGGS,
Plaintiff,

v.

NOVANT HEALTH, INC., NOVANT
HEALTH TRIAD REGION, L.L.C.,
FORSYTH MEMORIAL HOSPITAL, INC.,
ALL d/b/a FORSYTH MEDICAL CENTER,
SHEILA CRUMB, JOSEPH MCCONVILLE,
M.D., and PIEDMONT ANESTHESIA &
PAIN CONSULTANTS, P.A.,
Defendants.

Forsyth County
No. 02 CVS 7066

Appeal by plaintiff from order entered 19 April 2004 by Judge

Michael E. Helms in Forsyth County Superior Court. Heard in the

Court of Appeals 22 August 2005.

Kennedy, Kennedy, Kennedy & Kennedy, L.L.P., by Harvey L.
Kennedy, Harold L. Kennedy, III, and Annie Brown Kennedy; and
Law Offices of Willie M. Kennedy, by Willie M. Kennedy, for
plaintiff-appellant.

Bennett & Guthrie, P.L.L.C., by Richard V. Bennett, Roberta B.
King, and Joshua H. Bennett, for defendants-appellees.

Sharpless & Stavola, P.A., by Joseph P. Booth, III, for Joseph
McConville, M.D., Sheila Crumb, and Piedmont Anesthesia & Pain
Consultants, P.A., amicus curiae.

GEER, Judge.

This appeal results from a medical malpractice action arising

out of gall bladder surgery performed on plaintiff Mary Louise

Diggs at the Forsyth Medical Center. Plaintiff’s complaint alleges

that defendants Forsyth Memorial Hospital, Inc., Novant Health,

Inc., and Novant Health Triad Region, L.L.C. (collectively the

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“hospital defendants”) are vicariously liable for the negligence of

(1) the hospital nursing staff and (2) the team assigned to

administer anesthesiology to plaintiff during her gall bladder

surgery. Plaintiff has appealed from the trial court’s order

granting summary judgment in favor of the hospital defendants.

Based upon our review of the record, we hold that plaintiff

has failed to establish a basis for holding Novant Health, Inc.

(“NHI”) or Novant Health Triad Region, L.L.C. (“NHTR”) liable and,

therefore, affirm the entry of summary judgment in favor of those

two defendants. With respect to Forsyth Memorial Hospital, Inc.

(“FMH”), however, we reverse.

In arguing that it is entitled to judgment as to plaintiff’s

claims based on the negligence of the hospital’s nursing staff, FMH

has only challenged the competency of the testimony of plaintiff’s

nursing expert. Since we hold that the testimony was admissible

under N.C.R. Evid. 702 and State v. Tyler, 346 N.C. 187, 204, 485

S.E.2d 599, 608, cert. denied, 522 U.S. 1001, 139 L. Ed. 2d 411,

118 S. Ct. 571 (1997), the trial court erred in granting summary

judgment on plaintiff’s claims based on the negligence of the

nursing staff. With respect to the anesthesiology team, FMH has

argued that it could not be held vicariously liable because the

individuals responsible for the anesthesia were independent

contractors. Although we agree with FMH that plaintiff has failed

to present sufficient evidence of actual agency, the record reveals

that genuine issues of material fact exist regarding the apparent

agency of the anesthesiology team. Accordingly, we hold that the

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trial court also erred in granting summary judgment to FMH as to

the claims based on the negligence of the anesthesiology team.

Factual and Procedural History

In September 1999, plaintiff, who was in her early eighties,

was diagnosed by her gastroenterologist, Dr. Gary Poleynard, with

common duct stones and complications due to gall stone disease.

Dr. Poleynard recommended surgery and referred plaintiff to

defendant Dr. Ismael Goco, a board-certified general surgeon.

After examining plaintiff at his office, Dr. Goco concurred with

Dr. Poleynard’s diagnosis and his recommendation of surgery.

Plaintiff chose to have Dr. Goco perform the gall bladder

surgery. Dr. Goco had hospital privileges at two hospitals in

Winston-Salem: defendant Forsyth Medical Center (“FMC”) and Medical

Park Hospital, Inc. On 12 October 1999, plaintiff was admitted to

FMC. FMC is operated by defendant FMH. NHTR owns FMH and is in

turn owned by NHI.

Plaintiff’s gall bladder surgery required general anesthesia.

Piedmont Anesthesia & Pain Consultants, P.A. (“Piedmont”) had a

contract with FMH that granted Piedmont the exclusive right to

provide anesthesia services at FMC. Piedmont employees Dr. Joseph

McConville and nurse Sheila Crumb were responsible for

administering anesthesia to plaintiff through an induction and

intubation process. Ms. Crumb performed the intubation, which

involved inserting a tube into plaintiff’s trachea, under the

supervision of Dr. McConville. Ms. Crumb made three attempts

before successfully completing the intubation. At some point

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during the attempts, Ms. Crumb perforated plaintiff’s esophagus, a

fact that was not discovered until many hours after the gall

bladder surgery was over. Plaintiff contends that as a result of

that perforation, she has suffered severe and permanent injuries.

On 11 October 2002, plaintiff filed suit against not only the

hospital defendants, but also Ms. Crumb, Dr. McConville, and

Piedmont (collectively “the anesthesiology defendants”). The

complaint alleged that the anesthesiology defendants were

individually liable for their negligence in administering the

anesthesia and that the hospital defendants were vicariously liable

for the anesthesiology defendants’ negligence, as well as the

negligence of the hospital floor nurses who, following plaintiff’s

surgery, failed to immediately notice the perforation.1

On 5 March 2004, plaintiff moved to compel the hospital

defendants to respond to certain interrogatories and requests for

production of documents. On 15 April 2004, the trial court entered

an order allowing this motion in part and denying this motion in

part. Plaintiff has appealed this order to the extent it refused

to order production of certain documents.

On 22 March 2004, the hospital defendants moved for summary

judgment. On 19 April 2004, the trial court granted that motion.

Since plaintiff voluntarily dismissed her claims against the

anesthesiology defendants on 16 April 2004, plaintiff’s appeal of

1On 14 October 2002, plaintiff amended her original complaint
to include Dr. Goco and his practice, Goco Surgical Associates,
P.L.L.C., as additional defendants. Plaintiff later voluntarily
dismissed those claims.

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this summary judgment order is properly before this Court as an

appeal from a final judgment.

Summary Judgment Order

This Court will uphold a trial court’s grant of summary

judgment “if considering the pleadings, depositions, answers to

interrogatories, and admissions on file, together with affidavits,

there is no genuine issue of material fact and a party is entitled

to judgment as a matter of law.” Moore v. Coachmen Indus., Inc.,

129 N.C. App. 389, 393-94, 499 S.E.2d 772, 775 (1998). The moving

parties — in this case, the hospital defendants — bear the initial

burden of showing the lack of any triable issue of fact and the

propriety of summary judgment. Id. at 394, 499 S.E.2d at 775.

Once the moving party has met its initial burden, in order to

survive summary judgment, the nonmoving party — here, plaintiff —

must produce “‘a forecast of evidence demonstrating that the

[nonmoving party] will be able to make out at least a prima facie

case at trial.'” Id. at 394, 499 S.E.2d at 775 (quoting

Collingwood v. Gen. Elec. Real Estate Equities, Inc., 324 N.C. 63,

66, 376 S.E.2d 425, 427 (1989)). On appeal, we view the evidence

in the light most favorable to the nonmoving party and decide

whether summary judgment was appropriate under a de novo standard

of review. Falk Integrated Techs., Inc. v. Stack, 132 N.C. App.

807, 809, 513 S.E.2d 572, 574 (1999).

I.

Plaintiff’s Claims Based on Negligence of the Nursing Staff

Plaintiff contends that the hospital nurses breached their

duty of care by failing to notify plaintiff’s anesthesiologist

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promptly when they observed plaintiff’s troubled breathing and

sharp throat pain following her surgery. According to plaintiff,

had the nurses done so, the perforation of her esophagus would have

been identified earlier and lessened the seriousness of the

injuries resulting from that perforation. In support of this

claim, plaintiff relies upon the expert testimony of a nurse,

Rosalyn Marie Harris-Offutt.

Defendants, however, argue that they are entitled to summary

judgment because (1) Ms. Harris-Offutt was not qualified to testify

as an expert witness under Rule 702(b)(2) of the Rules of

Evidence,2 and (2) Ms. Harris-Offutt, as a nurse, is not qualified

to testify regarding medical causation. In opposing a motion for

summary judgment in a medical malpractice case, a plaintiff must

demonstrate that her expert witness is competent to testify and, in

the absence of such a showing, summary judgment is properly

granted. See Weatherford v. Glassman, 129 N.C. App. 618, 623, 500

S.E.2d 466, 469 (1998) (holding that deposition testimony offered

in opposition to a motion for summary judgment in a medical

malpractice case must reveal that the witness is competent to

testify as to the matters at issue). The question before this

Court is, therefore, whether the record reveals that Ms. Harris-

Offutt is competent to testify.

2Defendants also contended at oral argument that Nurse Harris-
Offutt does not meet the requirements of Rule 702(a). Since,
however, defendants did not make this argument in their appellate
brief, but rather limited their argument and citation of authority
to Rule 702(b)(2), we do not address it.

-7-

A.

Rule 702(b)(2) of the Rules of Evidence

Rule 702(b) provides that medical malpractice experts are not

qualified to testify unless they are licensed health care providers

who meet certain criteria, including the following:

(2) During
immediately
year
the
preceding the date of the occurrence
that is the basis for the action,
the expert witness must have devoted
a
her
or
his
of
majority
professional time to either or both
of the following:

a.

The active clinical practice of
the same health profession in
which the party against whom or
on whose behalf the testimony
is offered, and if that party
is a specialist, the active
clinical practice of the same
specialty
or
a
similar
specialty which includes within
its specialty the performance
of the procedure that is the
subject of the complaint and
have prior experience treating
similar patients . . . .

Defendants contend that Ms. Harris-Offutt is unqualified under Rule

702(b) because she had not been active in the clinical practice of

nursing in the year preceding plaintiff’s injury.

In support of their contention, defendants point to the

deposition testimony of Janet Day Berrier, a representative of

Thomasville Medical Center where Ms. Harris-Offutt was at one time

employed. Ms. Berrier testified that the last date that Ms.

Harris-Offutt worked for Thomasville Medical Center as a certified

registered nurse anesthetist was 31 December 1986. Plaintiff, on

the other hand, filed an affidavit from Ms. Harris-Offutt, stating:

“During the year immediately preceding October 12, 1999, I devoted

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a majority of my professional time to the active clinical practice

of nursing as a registered nurse[.]”

Although defendants point to Ms. Harris-Offutt’s deposition as

showing that she spends her time as a legal consultant rather than

as a nurse, Ms. Harris-Offutt also stated in her deposition that

she spends part of her time in the clinical practice of nursing and

part of her time engaging in legal consulting. Thus, the

deposition offered by defendants does not necessarily contradict

the affidavit offered by plaintiff.

Defendants further argue that Ms. Harris-Offutt’s clinical

work is not relevant since she worked as a registered nurse and not

as a floor nurse. Ms. Harris-Offutt’s affidavit states, however:

There is no specialty in nursing known as
“floor nursing.” Floor nurses in hospitals
are usually registered nurses. Registered
nurses are not limited to the hospital
setting, but work in many different settings
including nursing homes, the private offices
of physicians and the private offices of
registered nurses[.]

Defendants offered no expert testimony to the contrary.

Defendants’ remaining arguments regarding the differences

between Ms. Harris-Offutt’s work experiences and the work

experience of the hospital nursing staff go to the weight, but not

the admissibility, of Ms. Harris-Offutt’s evidence. Howerton v.

Arai Helmet, Ltd., 358 N.C. 440, 461, 597 S.E.2d 674, 688 (2004)

(holding that once an expert has passed Rule 702’s threshold of

admissibility, “lingering questions or controversy concerning the

quality of the expert’s conclusions go to the weight of the

testimony rather than its admissibility”). Thus, for purposes of

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summary judgment, plaintiff has forecast sufficient evidence that

Ms. Harris-Offutt is qualified to testify under Rule 702(b)(2).

B. Nurse Expert’s Testimony Regarding Medical Causation

Plaintiff and defendants also disagree as to whether Ms.

Harris-Offutt is qualified to give an opinion about medical

causation because she is a nurse and not a licensed physician.

Defendants’ position has been rejected by our Supreme Court.

In State v. Tyler, 346 N.C. 187, 204, 485 S.E.2d 599, 608

(emphasis added) (internal citations omitted) (quoting State v.

Mitchell, 283 N.C. 462, 467, 196 S.E.2d 736, 739 (1973)), cert.

denied, 522 U.S. 1001, 139 L. Ed. 2d 411, 118 S. Ct. 571 (1997),

the Supreme Court held:

“The essential question in determining the
admissibility of opinion evidence is whether
the witness, through study or experience, has
acquired such skill that he was better
qualified than the jury to form an opinion on
the subject matter to which his testimony
applies.” The evidence in the present case
clearly indicates that [Nurse] Rosenfeld,
through both study and experience, was better
qualified than the jury to form an opinion on
the cause of Fleetwood’s death and on the
effect of the sedative medication Versed.
Rosenfeld’s position as a nurse was merely a
factor to be considered by the jury in
evaluating the weight and credibility of her
testimony.

See also State v. White, 340 N.C. 264, 294, 457 S.E.2d 841, 858

(“Nurses are qualified to render expert opinions as to the cause of

a physical injury even though they are not licensed to diagnose

illnesses or prescribe treatment, and there is no basis for any

preference of licensed physicians for such medical testimony.”),

cert. denied, 516 U.S. 994, 133 L. Ed. 2d 436, 116 S. Ct. 530

-10-

(1995). These decisions are controlling. Ms. Harris-Offutt’s

testimony as to medical causation cannot be excluded simply because

she is not a physician.

In sum, we hold that plaintiff has made the necessary forecast

that Ms. Harris-Offutt is qualified to render expert testimony

under Rule 702(b)(2) and that prior case law establishes that she

may testify regarding medical causation. Since defendants have

relied upon no other argument to justify summary judgment in

connection with negligence by the hospital staff nurses, we further

hold that the trial court erred in granting summary judgment as to

those claims with respect to FMH, which employed the nurses.

C.

Liability of NHI and NHTR

Defendants NHI and NHTR, however, argue that the trial court

properly dismissed them as defendants because they did not employ

the hospital nursing staff. They submitted evidence that NHI is

“the sole member” of NHTR, while NHTR is “the sole member” of FMH,

which operates FMC. Further, according to defendants’ evidence,

“[n]either [NHTR] nor [NHI] operate the hospital presently known as

Forsyth Medical Center.” Specifically, “all of the employees of

Forsyth Medical Center . . . are employed by Forsyth Memorial

Hospital, Inc.” Plaintiff has presented no contrary evidence.

Instead, plaintiff cites Cahill v. HCA Mgmt. Co., 812 F.2d 170

(4th Cir. 1987), in support of her contention that “[b]oth the

owners and operators of a hospital can be held liable for the

negligence of its employees, servants and agents.” In Cahill, the

district court had entered a directed verdict in favor of a

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hospital management company when the negligent individual was

employed by the hospital and not the management company. The

Fourth Circuit reversed the directed verdict because the plaintiff

presented evidence that the hospital loaned the employee to the

management company and the management company had in fact

supervised and controlled the individual. Id. at 171. Plaintiff

in this case has offered no comparable evidence. Accordingly, the

trial court properly entered summary judgment in favor of NHTR and

NHI with respect to the claims based on the acts of the hospital

nursing staff.

II. Plaintiff’s Claims Based on Negligence of the Anesthesiology
Defendants

Plaintiff has also asserted claims against the hospital

defendants based on the negligence of the anesthesiology

defendants, including Dr. McConville, Ms. Crumb, and Piedmont. The

hospital defendants contend that the trial court properly granted

summary judgment because the anesthesiology defendants were

independent contractors and not employees of the hospital.

Plaintiff, on the other hand, argues that she has offered

sufficient evidence of actual agency, apparent agency, and a non-

delegable duty to warrant denial of the motion for summary

judgment.

A. Liability Based on Actual Agency

As this Court has held, “[u]nder the doctrine of respondeat

superior, a hospital is liable for the negligence of a physician or

surgeon acting as its agent. There will generally be no vicarious

liability on an employer for the negligent acts of an independent

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contractor.” Hylton v. Koontz, 138 N.C. App. 629, 635, 532 S.E.2d

252, 257 (2000) (internal citations omitted), disc. review denied,

353 N.C. 373, 546 S.E.2d 603 (2001). This Court has established

that “[t]he vital test in determining whether an agency

relationship exists is to be found in the fact that the employer

has or has not retained the right of control or superintendence

over the contractor or employee as to details.” Id. at 636, 532

S.E.2d at 257 (internal quotation marks omitted). Specifically,

“‘the principal must have the right to control both the means and

the details of the process by which the agent is to accomplish his

task in order for an agency relationship to exist.'” Wyatt v. Walt

Disney World Co., 151 N.C. App. 158, 166, 565 S.E.2d 705, 710

(2002) (emphasis added) (quoting Williamson v. Petrosakh Joint

Stock Co. of the Closed Type, 952 F. Supp. 495, 498 (S.D. Tex.

1997)). See also Hoffman v. Moore Reg’l Hosp., Inc., 114 N.C. App.

248, 251, 441 S.E.2d 567, 569 (holding that the principal must have

“control and supervision over the details of the [agent’s] work”),

disc. review denied, 336 N.C. 605, 447 S.E.2d 391 (1994).

In arguing that an agency relationship existed, plaintiff

relies exclusively on two contracts entered into between Piedmont

and FMH: the Anesthesia Agreement and the Anesthesia Services

Agreement.3 The Anesthesia Services Agreement specifically

provided, however, that “FMH shall neither have nor exercise any

3The agreements were actually between FMH and Winston-Salem
Anesthesia Associates, P.A. Apparently, the latter entity
subsequently became Piedmont. The parties do not dispute that the
two agreements governed the relationship between FMH and Piedmont
at the time of plaintiff’s surgery.

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control or direction over the methods by which [Piedmont] or any

Physician shall perform it or his work and functions; the sole

interest and responsibility of FMH and the Hospital are to assure

that the services covered by this Agreement shall be performed and

rendered in a competent, efficient and satisfactory manner.”

Further, under the agreements, (1) the physicians associated with

Piedmont are not prohibited from practicing outside of the

Hospital; (2) Piedmont and the hospital bill patients separately

for their respective services; (3) Piedmont is responsible for

meeting its own hiring needs; and (4) Piedmont is responsible for

managing its own scheduling. Our review of the agreements and

depositions in the record does not reveal that the hospital

defendants had any “right to control the manner or method” of the

anesthesiology work performed by Piedmont and its personnel.

Hylton, 138 N.C. App. at 636, 532 S.E.2d at 257 (internal quotation

marks omitted).

The contractual terms relied upon by plaintiff in opposing

summary judgment do not address the actual provision of anesthesia

services to patients. Instead, plaintiff primarily points to FMH’s

right (1) to require that doctors employed by Piedmont become

members of FMH’s Medical-Dental Staff and that they comply with the

rules and regulations governing that Staff, (2) to approve and

credential all Piedmont nurse anesthetists, and (3) to require

Piedmont to remove from FMH’s anesthesia service any physician for

specified grounds. These provisions, however, relate only to a

hospital’s duty to ensure that all medical personnel permitted to

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provide services to FMH patients are qualified to do so. See

Blanton v. Moses H. Cone Mem’l Hosp., Inc., 319 N.C. 372, 376, 354

S.E.2d 455, 458 (1987) (“We hold that a reasonable man of ordinary

prudence in the position of the hospital owes a duty of care to its

patients to ascertain that a doctor is qualified to perform an

operation before granting him the privilege to do so.”). They do

not establish the degree of control necessary for agency.

The remaining provisions cited by plaintiff constitute general

policies detailing how the two businesses — FMH and Piedmont —

would cooperate and coordinate their work. As such, they cannot

support a finding of agency. See Hoffman, 114 N.C. App. at 251,

441 S.E.2d at 569 (holding that “general policy rules . . . are not

indicative of that kind of control and supervision over the details

of a physician’s work that a plaintiff must show in order to prove

that there was an employer-employee relationship”).

We hold that the provisions in the agreements between Piedmont

and FMH are materially indistinguishable from those in Hylton and

Hoffman that this Court held, in the absence of any further

evidence, warranted summary judgment. See Hylton, 138 N.C. App.

at 636-37, 532 S.E.2d at 257-58 (upholding grant of summary

judgment when the anesthesiology agreement provided that the

hospital would have no control over the method and means by which

the anesthesiologists performed their work, the physicians were not

precluded from practicing outside the hospital, the physicians

received no compensation from the hospital, the parties billed the

patient separately, and the hospital did not schedule the

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physicians); Hoffman, 114 N.C. App. at 250-51, 441 S.E.2d at 569

(upholding grant of summary judgment when the physician was a

member of a private group, the physician’s schedule was determined

by the group rather than the hospital, and the patient was billed

for the physician’s services by the group and not the hospital).

Plaintiff has, therefore, failed to present sufficient evidence to

establish a prima facie case of actual agency.

B.

Liability Based on Apparent Agency

It is well-established that even in the absence of an agency

relationship, “‘[w]here a person, by words or conduct, represents

or permits it to be represented that another is his agent, he will

be estopped to deny the agency as against third persons, who have

dealt, on the faith of such representation, with the person so held

out as agent, even if no agency exists in fact.'” Univ. of N.C. v.

Shoemate, 113 N.C. App. 205, 215, 437 S.E.2d 892, 898 (quoting

Barrow v. Barrow, 220 N.C. 70, 72, 16 S.E.2d 460, 461 (1941)),

disc. review denied, 336 N.C. 615, 447 S.E.2d 413 (1994). This

doctrine of apparent agency was first considered by our Supreme

Court as a basis for hospital liability for malpractice in Smith v.

Duke Univ., 219 N.C. 628, 14 S.E.2d 643 (1941), overruled on other

grounds by Rabon v. Rowan Mem’l Hosp., Inc., 269 N.C. 1, 152 S.E.2d

485 (1967).

The Court initially established the principle — addressed

above — that evidence that a physician has privileges at a hospital

is not sufficient, standing alone, to make the physician an agent

of the hospital: “Ordinarily, the hospital undertakes only to

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furnish room, food, facilities for operation, and attendance, and

is not liable for damages resulting from the negligence of a

physician in the absence of evidence of agency, or other facts upon

which the principle of respondeat superior can be applied.” Id.

at 634, 14 S.E.2d at 647. After concluding that the plaintiff had

failed to demonstrate that the doctor — the patient’s treating

physician — was an agent of the hospital, the Supreme Court turned

to the question of apparent agency:

There was no evidence that [the doctor]
in treating [the patient] assumed to act for
Duke University otherwise than in his
individual capacity as a practicing physician,
or that [the doctor] was held out by the
defendant as having been employed by it to
treat pay patients, or that the hospital
undertook to furnish physicians and surgeons
for the treatment of the maladies of patients,
and hence no liability can attach to defendant
on the theory that [the doctor] was acting
within the scope of an apparent authority or
employment.

Id. at 635, 14 S.E.2d at 648 (emphasis added).

Our Supreme Court has since recognized that, in the years

following Smith, the nature of hospitals has substantially changed.

After observing that the Smith assumptions regarding hospitals were

“no longer appropriate in this era,” Harris v. Miller, 335 N.C.

379, 389, 438 S.E.2d 731, 736-37 (1994), the Court explained:

First of all, hospitals are now in the
business of treatment. As stated in Rabon v.
[Rowan Memorial] Hospital:

“The conception that the hospital
does not undertake to treat the
patient, does not undertake to act
through its doctors and nurses, but
undertakes instead simply to procure
them to act upon their own

-17-

responsibility, no longer reflects
the fact. Present day hospitals, as
their manner of operation plainly
demonstrates, do far more than
furnish facilities for treatment.
They regularly employ on a salary
basis a large staff of physicians,
nurses and internes [sic], as well
as
manual
and
administrative
workers, and they charge patients
for medical care and treatment,
collecting for such services, if
necessary,
action.
legal
by
Certainly, the person who avails
himself of ‘hospital facilities’
expects that the hospital will
attempt to cure him, not that its
nurses or other employees will act
on their own responsibility.”

Id., 438 S.E.2d at 737 (quoting Rabon, 269 N.C. at 11, 152 S.E.2d

at 492).

In applying the doctrine of apparent agency, courts throughout

the country have struggled with this change in the nature of

hospitals from institutions providing only facilities to

institutions actually providing medical services, such as emergency

room care or, as in this case, anesthesia. In Sword v. NKC Hosps.,

Inc., 714 N.E.2d 142 (Ind. 1999), the Indiana Supreme Court

conducted a helpful and detailed analysis of the applicability of

apparent agency with respect to a hospital’s liability for

negligence in the provision of services, such as anesthesia, by

independent contractors.

In surveying other jurisdictions, the Indiana Supreme Court

noted that courts have employed apparent agency to hold hospitals

liable for the negligence of independent contractors in both

emergency room and anesthesia contexts. Id. at 150. The court

explained:

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While the language employed by these courts
sometimes varies, generally they have employed
tests which focus primarily on two basic
factors. The first factor focuses on the
hospital’s manifestations and is sometimes
described as an inquiry whether the hospital
acted in a manner which would lead a
reasonable person to conclude that the
individual who was alleged to be negligent was
an employee or agent of the hospital. Courts
considering this factor often ask whether the
hospital held itself out to the public as a
provider of hospital care, for example, by
mounting extensive advertising campaigns. In
this regard, the hospital need not make
express representations to the patient that
the treating physician is an employee of the
hospital; rather a representation also may be
general and implied. The second factor
focuses on the patient’s reliance. It is
sometimes characterized as an inquiry as to
whether the plaintiff acted in reliance upon
the conduct of the hospital or its agent,
consistent with ordinary care and prudence.

Id. at 151 (internal quotation marks and citations omitted). With

respect to the reliance factor, the court pointed out that some

jurisdictions ask whether the plaintiff reasonably believed that

the hospital was providing the pertinent medical care, while other

jurisdictions presume reliance. Id. Over all, the court concluded

that “[c]entral to both of these factors — that is, the hospital’s

manifestations and the patient’s reliance — is the question of

whether the hospital provided notice to the patient that the

treating physician was an independent contractor and not an

employee of the hospital.” Id.

Following its survey of the development of the law in other

jurisdictions, the Indiana Supreme Court adopted the formulation of

-19-

apparent agency set forth in the Restatement (Second) of Torts §

429 (1965). Sword, 714 N.E.2d at 152. That section of the

Restatement provides:

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
by his servants, is subject to liability for
physical harm caused by the negligence of the
contractor in supplying such services, to the
same extent as though the employer were
supplying them himself or by his servants.

Restatement (Second) of Torts § 429. The Indiana Supreme Court

construed § 429 to require that the “trier of fact . . . focus on

the reasonableness of the patient’s belief that the hospital or its

employees were rendering health care.” Sword, 714 N.E.2d at 152.

According to Sword,

This ultimate determination is made by
considering the totality of the circumstances,
including the actions or inactions of the
hospital, as well as any special knowledge the
patient may have about the hospital’s
arrangements with its physicians. We conclude
that a hospital will be deemed to have held
itself out as the provider of care unless it
gives notice to the patient that it is not the
provider of care and that the care is provided
by a physician who is an independent
contractor and not subject to the control and
supervision of the hospital. A hospital
generally will be able to avoid liability by
providing meaningful written notice to the
patient, acknowledged at the time of
admission.

Id. The court noted, however, that written notice might not

suffice if the patient did not have an adequate opportunity to make

an informed choice, such as in the case of a medical emergency.

Id.

-20-

After conducting a similar survey of the development of the

law nationwide, the South Carolina Supreme Court also chose to

adopt the approach set out in the Restatement (Second) of Torts §

429. Simmons v. Tuomey Reg’l Med. Ctr., 341 S.C. 32, 50-51, 533

S.E.2d 312, 322 (2000). The court held:

Under section 429, the plaintiff must
show that (1) the hospital held itself out to
the public by offering to provide services;
(2) the plaintiff looked to the hospital,
rather than the individual physician, for
care; and (3) a person in similar
circumstances reasonably would have believed
that the physician who treated him or her was
a hospital employee. When the plaintiff does
so, the hospital will be held vicariously
liable for any negligent or wrongful acts
committed by the treating physician.

Id. at 51, 533 S.E.2d at 322. The court limited application of

this test “to those situations in which a patient seeks services at

the hospital as an institution, and is treated by a physician who

reasonably appears to be a hospital employee.” Id. at 52, 533

S.E.2d at 323. It stressed that its holding did “not extend to

situations in which the patient is treated in an emergency room by

the patient’s own physician after arranging to meet the physician

there. Nor does our holding encompass situations in which a

patient is admitted to a hospital by a private, independent

physician whose only connection to a particular hospital is that he

or she has staff privileges to admit patients to the hospital.

Such patients could not reasonably believe his or her physician is

a hospital employee.” Id.

Comparable tests have been adopted in numerous other

jurisdictions, particularly with respect to the rendering of

-21-

anesthesia or emergency services. See, e.g., Gilbert v. Sycamore

Mun. Hosp., 156 Ill. 2d 511, 525, 622 N.E.2d 788, 796 (1993)

(concluding (1) that the element of “holding out” is “satisfied if

the hospital holds itself out as a provider of emergency room care

without informing the patient that the care is provided by

independent contractors,” and (2) “[t]he element of justifiable

reliance on the part of the plaintiff is satisfied if the plaintiff

relies upon the hospital to provide complete emergency room care,

rather than upon a specific physician”); Gatlin v. Methodist Med.

Ctr., Inc., 772 So. 2d 1023, 1027 (Miss. 2000) (with respect to a

hospital’s liability for the acts of an independent contractor

anesthesiologist, holding that the controlling “analysis seeks to

determine whether the patient was seeking treatment from the

hospital, without regard for the identity of the particular

physicians working at the hospital, or whether the patient instead

sought the services of a particular physician who merely happened

to be on staff at a particular hospital”); White v. Methodist Hosp.

South, 844 S.W.2d 642, 647-48 (Tenn. Ct. App. 1992) (allowing, with

respect to the provision of anesthesia services, an inference of

reliance when a hospital offers a service and the patient has no

choice as to who will perform that service); Pamperin v. Trinity

Mem’l Hosp., 144 Wis. 2d 188, 210, 423 N.W.2d 848, 857 (1988)

(“[W]e conclude that, if [plaintiff] proves that [the hospital]

held itself out as a provider of emergency room care without

informing [plaintiff] that the care was provided by independent

contractors, [plaintiff] has satisfied the first requirement for

-22-

proving liability under the doctrine of apparent authority. . . .

In determining that a plaintiff acted in reliance upon the conduct

of the hospital or its agent, . . . [c]ourts have uniformly

recognized that, except when the patient enters a hospital

intending to receive care from a specific physician while in the

hospital, it is the reputation of the hospital itself upon which a

patient relies.”).

We believe the analysis of these jurisdictions is persuasive

and consistent with the prior holdings of our appellate courts. In

Smith, our Supreme Court suggested that apparent agency would be

applicable to hold the hospital liable for the acts of an

independent contractor if the hospital held itself out as providing

services and care. 219 N.C. at 635, 14 S.E.2d at 648. In

Shoemate, this Court established that this “holding out” may be

accomplished through either verbal representations or conduct. 113

N.C. App. at 215, 437 S.E.2d at 898.

This Court has also addressed the element of reliance in

circumstances similar to those addressed by the Restatement

(Second) of Torts § 429: when the patient has relied upon a medical

provider to render medical services, but that provider has caused

those services to be provided by an independent contractor. In

Noell v. Kosanin, 119 N.C. App. 191, 196-97, 457 S.E.2d 742, 746

(1995), the plaintiff chose a surgeon to perform her plastic

surgery based on his reputation. That surgeon used a particular

anesthesiologist, who was an independent contractor, to administer

anesthesia to all of his patients requiring general anesthesia.

-23-

Id. at 196, 457 S.E.2d at 746. Consistent with this practice, the

plaintiff received a pamphlet stating that the anesthesiologist

worked jointly with the surgeon. This Court held that “[t]hese

facts are sufficient to create a jury question as to whether

plaintiff reasonably assumed [the surgeon] was in charge of her

entire surgical procedure, including anesthesia care and recovery.”

Id. at 197, 457 S.E.2d at 746. This holding parallels the

principle in the Restatement (Second) of Torts § 429, which asks

whether a patient accepts services from an independent contractor

“in the reasonable belief that the services are being rendered by

the employer or by his servants.”

This Court pursued a similar analysis in Sweatt v. Wong, 145

N.C. App. 33, 549 S.E.2d 222 (2001), in which the plaintiff

engaged a particular surgeon to remove her gallbladder. While the

patient was still in the hospital recovering, that surgeon went on

vacation, leaving the plaintiff in the care of another doctor, who

was an independent contractor. In holding that the trial court had

properly denied a motion for judgment notwithstanding the verdict

because issues of fact existed as to apparent agency, this Court

stressed that the patient was not given a choice as to which

physician would continue her care in the surgeon’s absence, but

rather the surgeon had simply announced that the second doctor had

assisted him in the surgery and would take good care of the

patient. Id. at 42, 549 S.E.2d at 227. This Court held that these

facts were sufficient for a finding that the patient justifiably

relied upon representations of agency. Id. This analysis, like

-24-

that of § 429 and Noell, does not require any showing of a change

of position by the patient, but rather focuses on whether the

patient was relying upon the surgeon to provide services and

reasonably believed that the second doctor was an agent of the

surgeon.

Defendants point to Hoffman as establishing a different test.

As this Court explained in Sweatt, however, “[i]n [Hoffman], the

plaintiff patient sought to recover damages for alleged medical

negligence from a hospital under the theory of respondeat superior

for the negligence of the treating physician who was found to be an

independent contractor.” Id. (emphasis added). Although the

plaintiff in Hoffman, who was admitted to a hospital at the request

of her private physician for a particular procedure, did not choose

the doctor who would perform that procedure, the consent form

specifically listed five possible doctors and the patient was

looking to one of those doctors to provide her care. 114 N.C. App.

at 249-50, 441 S.E.2d at 569. The case fell squarely within the

traditional Smith analysis regarding treating physicians. There

was no indication in the opinion that the hospital was holding

itself out as providing the services involved as opposed to simply

providing facilities for the performance of the procedure by

private practitioners. Under those circumstances, this Court

required evidence “that Mrs. Hoffman would have sought treatment

elsewhere or done anything differently had she known for a fact

that [the doctor] was not an employee of the hospital.” Id. at

252, 441 S.E.2d at 570.

-25-

When, however, a hospital does hold itself out as providing

services, we believe the approach of the Restatement (Second) of

Torts § 429 is consistent with our prior decisions considering

apparent agency. We are also persuaded by the weight of authority

from other jurisdictions. Under this approach, a plaintiff must

prove that (1) the hospital has held itself out as providing

medical services, (2) the plaintiff looked to the hospital rather

than the individual medical provider to perform those services, and

(3) the patient accepted those services in the reasonable belief

that the services were being rendered by the hospital or by its

employees. A hospital may avoid liability by providing meaningful

notice to a patient that care is being provided by an independent

contractor. See, e.g., Cantrell v. Northeast Ga. Med. Ctr., 235

Ga. App. 365, 368, 508 S.E.2d 716, 719-20 (1998) (concluding that

trial court did not err in granting a directed verdict to hospital

when “conspicuous signage was posted and forms signed by the

patient or representative revealed the independent contractor

status of the doctor”), cert. denied, No. 599C0393, 1999 Ga. LEXIS

888 (Ga. Oct. 22, 1999).

Plaintiff has submitted sufficient evidence to meet this test.

The hospital had a Department of Anesthesiology with a Chief of

Anesthesiology and a Medical Director, a fact that a jury could

reasonably find indicated to the public that FMC was providing

anesthesia services to its patients.4 Further, defendants chose to

4Cf. Harris, 335 N.C. at 392, 438 S.E.2d at 738 (“That the
hospital’s anesthesiology department trained its anesthetists
indicates a retention by the hospital of the right to control those

-26-

provide those services by contracting with Piedmont to provide

anesthesia services to the hospital on an exclusive basis.

Piedmont doctors served as the hospital’s Chief of Anesthesiology

and anesthesia Medical Director. As Dr. McConville put it, his

group “provide[d] the anesthesia services for the operating room at

Forsyth and so there is — so our group covers the surgical

caseload.” Plaintiff and other surgical patients had no choice as

to who would provide anesthesia services for their operations.

Plaintiff’s affidavit states that she was unaware that Dr.

McConville and Ms. Crumb were not employees of the hospital. She

explained “I did not select Sheila Crumb nor Dr. Joseph McConville

to provide medical care to me; that in choosing to have my

operation at Forsyth Medical Center, I relied on the fact that

medical care would be provided by employees of Forsyth Medical

Center, excluding my surgeon, Dr. Goco.” She further stated:

“[O]ne of the reasons that I had my operation performed at Forsyth

Medical Center was because it was part of Novant Health, a large

healthcare organization . . . .”

In addition, plaintiff pointed to the form on FMC letterhead

that she signed entitled “Consent to Operation and/or Other

Procedures.” The form specified: “I therefore authorize my

physician, his or her associates or assistants to perform such

surgical procedures as they, in the exercise of their professional

judgment, deem necessary and advisable.” (Emphasis added.) By

anesthetists. Nothing else appearing, it can only be inferred that
the anesthetists remained the servants of the hospital while
performing their surgical duties.”).

-27-

contrast, with respect to anesthesia services, the form stated: “I

authorize the administration of such anesthetics as may be

necessary or advisable by the anesthetist/anesthesiologist

responsible for this service and I request the administration of

such anesthetics.” (Emphasis added.) Finally, the form stated: “I

have had sufficient opportunity to discuss my condition and

treatment with my physician and his or her associates and all of my

questions have been answered to my satisfaction.” (Emphasis

added.)

This consent form stands in contrast to that provided to the

patient in Hoffman. A jury could decide based on this form that

plaintiff was, through this form, requesting anesthesia services

from FMC and that — given the distinction made between plaintiff’s

personal physician and the unnamed anesthesiologist — plaintiff was

accepting those services in the reasonable belief that the services

would be provided by the hospital and its employees. See Jennison

v. Providence St. Vincent Med. Ctr., 174 Or. App. 219, 234, 25 P.3d

358, 367 (2001) (“Nowhere did the consent form indicate that the

radiologists were independent contractors. Thus, it is reasonable

to assume that when a patient in [plaintiff’s] situation signs a

consent form like the one she signed and later has an x-ray taken,

the patient would believe that it would be a hospital employee who

would ultimately interpret that x-ray.”).

Given the current record, we hold that the trial court erred

in granting summary judgment with respect to plaintiff’s claims

based on apparent agency with respect to defendant FMH. With

-28-

respect to defendants NHTR and NHI, plaintiff argues only that

“Novant held itself out to the public as owning and/or operating

Forsyth Medical Center and Plaintiff relied upon this.” Her

affidavit stated “that the hospital held itself out to me and the

public as being part of Novant.” Plaintiff, however, cites no

authority in support of her contention that NHTR and NHI may be

held liable based on apparent agency for the acts of Dr. McConville

and Ms. Crumb. N.C.R. App. P. 28(b)(6) (“Assignments of error . .

. in support of which no reason or argument is stated or authority

cited, will be taken as abandoned.”). The record contains no

evidence that NHTR and NHI, as opposed to the hospital, held

themselves out as providing anesthesia services or that they, as

opposed to the hospital, contracted to supply the services.

Accordingly, the trial court properly granted summary judgment as

to NHTR and NHI.

Plaintiff has also argued (1) that the hospital defendants

owed plaintiff a non-delegable duty and (2) that the hospital

defendants are liable, even apart from agency principles, for the

failure to obtain informed consent from plaintiff regarding

anesthesia services. Plaintiff has cited no authority suggesting

that these theories provide a basis for holding NHI or NHTR liable.

With respect to FMH, because of our resolution of this appeal, we

need not address these alternative arguments.

Discovery of Privileged Documents

On appeal, plaintiff also argues that the trial judge erred in

denying her motion to compel production of (1) certain documents

-29-

contended by defendants to be protected by attorney-client

privilege and the work product doctrine and (2) “[a]ll Statistical

Reports for Forsyth Medical Center for infection control for 1996-

2000.” It is well established, even with respect to claims of work

product and attorney-client privilege, that “orders regarding

discovery matters are within the discretion of the trial court and

will not be upset on appeal absent a showing of abuse of

discretion.” Evans v. United Servs. Auto. Assoc., 142 N.C. App.

18, 27, 541 S.E.2d 782, 788, cert. denied, 353 N.C. 371, 547 S.E.2d

810 (2001).

A.

Attorney-Client Privilege and Work Product

Plaintiff’s document request number 19 sought: “Any documents

not in Plaintiff’s hospital chart at Forsyth Medical Center which

discuss the perforation of Plaintiff’s esophagus and/or any

problems regarding Plaintiff’s intubation during her October 12,

1999 hospitalization.” After contending that the responsive

documents were protected from production by the attorney-client

privilege and the work product doctrine as set forth in Rule

26(b)(3) of the Rules of Civil Procedure, defendants submitted the

documents to the trial judge for in camera review. After reviewing

the documents, the trial court denied plaintiff’s motion to compel

with respect to request number 19.

On appeal, defendants filed with this Court a sealed copy of

the documents reviewed by the trial court and included in their

brief a general description of those documents. The record

indicates that these documents were defendants’ “Risk Management

-30-

file.” We have carefully examined the documents and the

information provided by defendants regarding the nature of those

documents.

Rule 26(b)(3) provides that documents prepared “in

anticipation of litigation” are afforded a qualified immunity from

discovery. The party asserting the work product privilege — in

this case, defendants — bears the burden of showing that the

documents were prepared “in anticipation of litigation.” Evans,

142 N.C. App. at 29, 541 S.E.2d at 789. This Court has explained

that “[t]he phrase ‘in anticipation of litigation’ is an elastic

concept” and “North Carolina’s definition of [the phrase] is unique

in its phraseology.” Cook v. Wake County Hosp. Sys., Inc., 125

N.C. App. 618, 623, 482 S.E.2d 546, 550, disc. review allowed, 346

N.C. 277, 487 S.E.2d 543, appeal withdrawn, 347 N.C. 397, 494

S.E.2d 404 (1997). According to our Supreme Court, documents

prepared “in anticipation of litigation” include “not only

materials prepared after the other party has secured an attorney,

but those prepared under circumstances in which a reasonable person

might anticipate a possibility of litigation.” Willis v. Duke

Power Co., 291 N.C. 19, 35, 229 S.E.2d 191, 201 (1976).

Nevertheless, “[m]aterials prepared in the ordinary course of

business are not protected” under Rule 26(b)(3). Id. This Court,

applying Willis, considered whether an accident report prepared by

a hospital regarding a doctor’s slip and fall constituted work

product. After noting that risk management documents do not

automatically constitute work product, the Court reviewed the

-31-

hospital’s “risk management policy.” Cook, 125 N.C. App. at 624-

25, 482 S.E.2d at 551. That policy set out mandatory reporting

procedures for incidents and accidents as an administrative tool

for identifying areas of risk and reporting occurrences not

consistent with desired safe operation of the hospital or care of

patients. Id. at 625, 482 S.E.2d at 551. The Court pointed out

that the accident reports were not discretionary, but were required

of all employees. Id. Once a report was made, the administration

and Risk Management would make the final decision to report

potential claims of liability. Id. A monthly summary of reports

was prepared for administrative and medical staff review. Id.

Based on these policy provisions, the Court concluded that

“defendant’s accident reporting policy exists to serve a number of

nonlitigation, business purposes” and imposes a “continuing duty on

hospital employees to report any extraordinary occurrences within

the hospital to risk management” regardless whether the hospital

chose to consult its attorney in anticipation of litigation. Id.

The Court concluded:

Here, absent any other salient facts, it
cannot be fairly said that the employee
prepared the accident report because of the
prospect of litigation. In short, the
accident report would have been compiled,
pursuant to the hospital’s policy, regardless
of whether Cook intimated a desire to sue the
hospital or whether litigation was ever
anticipated by the hospital.

. . . We conclude that defendant’s
position is contrary to the discovery rules
established by the Willis and [Simon v. G.D.
Searle & Co., 816 F.2d 397, 401 (8th Cir.),
cert. denied, 484 U.S. 917, 98 L. Ed. 2d 225,
108 S. Ct. 268 (1987)] Courts, and therefore,

-32-

the trial court erred in denying plaintiffs’
motions to compel production of the accident
report.

Id. at 625-26, 482 S.E.2d at 551-52.

In this case, plaintiff has submitted FMH’s policy “for the

reporting of all unexpected events.” This policy appears

materially indistinguishable from that in Cook and, therefore,

under Cook, documents generated pursuant to that policy would not

be entitled to protection under Rule 26(b)(3). We are, however,

unable to determine from the current record whether the documents

at issue were generated pursuant to that policy. While none of the

documents are entitled “Quality Assessment Report,” as specified in

the policy, certain documents appear to correspond to the reports

and summaries required by the hospital’s policy, including

documents numbered 61-68 and 70-81.

We must therefore remand to the trial court for further review

as to these documents. See Willis, 291 N.C. at 36, 229 S.E.2d at

201 (remanding because “[t]he record is insufficient for us to

determine the extent to which” defendant’s claims files “may be

subject to the trial preparation immunity”). On remand, defendants

bear the burden of demonstrating that the specified documents were

not prepared pursuant to the hospital policy or were not otherwise

documents “prepared in the ordinary course of business.” Id. at

35, 229 S.E.2d at 201.

We are similarly unable to determine on this record whether

documents 92-107 and 154 are entitled to protection under the work

product doctrine or the attorney-client privilege. Because the

-33-

record contains no indication who prepared the documents or for

what purpose, we must remand for further review. On remand,

defendants should submit affidavits specifying the author of each

document, the date each document was prepared, the purpose for

which the document was prepared, and the recipients — if any — of

each document.

Document 168 is not addressed by defendants in their brief.

This document is a letter by Dr. McConville apparently to his

insurance agency dated 18 October 1999 relating to plaintiff. We

do not know on what basis defendants contend this document is

protected from disclosure or if the trial judge considered whether

this document was subject to production apart from any risk

management documents otherwise protected. Plaintiff has not had

any opportunity to argue why she is entitled to have this document

produced. Plaintiff may even have already received this document

in other discovery. Without expressing any opinion on the issue,

we leave for consideration on remand whether this document should

be produced.

With respect to the remaining documents, we believe that the

trial court did not abuse its discretion in determining that

documents numbered 84-91, 108-53, 155-60, 164, 169-70, and 179-203

were protected either by the attorney-client privilege or the work

product doctrine. Defendants have represented that copies of

documents 161-63 and 165-67 have already been produced to

plaintiff; these are simply copies attached to documents protected

from disclosure. As to the documents specified in this paragraph,

-34-

we affirm the trial court’s order.

B.

Statistical Reports

Defendant objected to plaintiff’s request for “[a]ll

Statistical Reports for Forsyth Medical Center for infection

control for 1996-2000″ on the grounds of relevance. Defendant

points out that “[t]here is no dispute in this case that the

‘infection’ which the appellant had was an internal one which came

from a leaking esophagus, not from infection of her incision or

other source in the hospital environment.” While plaintiff argues,

without any citation to the record, that the reports deal with all

infections at FMC (and not just infections from external sources)

and that the documents “would be clearly admissible under Rule

404(b) of the North Carolina Rules of Evidence to prove a pattern,

practice, plan and modus operandi,” plaintiff does not explain to

what issue in this case a pattern, practice, plan, or modus

operandi would be relevant. In the absence of such a showing, we

cannot conclude that the trial court’s ruling denying this request

was manifestly unreasonable.

Conclusion

For the foregoing reasons, we reverse the trial court’s grant

of summary judgment in favor of FMH and remand this action for

further proceedings. We affirm the entry of summary judgment as to

NHI and NHTR. We reverse the trial court’s discovery order with

respect to document numbers 61-68, 70-81, 92-107, 154, and 168 and

remand for further review regarding whether they are entitled to

-35-

protection under Rule 26(b)(3) or the attorney-client privilege.

We affirm the remaining portion of the trial court’s discovery

order.

Affirmed in part, reversed in part, and remanded.

Chief Judge MARTIN and Judge BRYANT concur.