Shofner v. Baptist Health care Affiliates, Inc.
RENDERED:
August 29, 2003; 2:00 p.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2002-CA-001637-MR
SHAWN SHOFNER and STEPHANIE SHOFNER,
Individually, and as the Administratrix
of the ESTATE OF JOEL SHOFNER
APPELLANTS
v.
APPEAL FROM OLDHAM CIRCUIT COURT
HONORABLE PAUL W. ROSENBLUM, JUDGE
ACTION NO. 96-CI-00044
BAPTIST HEALTHCARE AFFILIATES, INC.
d/b/a/ TRI-COUNTY BAPTIST HOSPITAL
APPELLEE
OPINION
AFFIRMING IN PART, VACATING IN PART AND REMANDING
BEFORE: BARBER, COMBS, and KNOPF, Judges.
** ** ** ** **
COMBS, JUDGE. Shawn Shofner and his wife, Stephanie Shofner (in
her individual capacity and as the administratrix of the estate
of Joel Shofner), appeal from the summary judgment of the Oldham
Circuit Court dismissing their negligence claim against the
appellee, Baptist Healthcare Affiliates, d/b/a Tri-County
Baptist Hospital (the hospital).
The Shofners alleged that an
emergency room doctor at the hospital, Dr. Richard Lawrence, was
negligent in diagnosing their son ’s condition and that the
negligence resulted in his death.
In granting summary judgment,
the circuit court concluded as a matter of law that the doctor
was an independent contractor and that, therefore, the hospital
could not be liable under the doctrine of respondeat superior.
After reviewing the record in a light most favorable to the
Shofners as we must, we conclude that the trial court erred with
respect to Dr. Lawrence’s employment relationship with the
hospital.
We vacate and remand accordingly.
The litigation preceding this appeal consisted of a
trial, a directed verdict, a previous appeal, a remand, and an
entry of summary judgment. The facts involved a tragedy.
On
February 11, 1995, the Shofners took their six-week-old son,
Joel, to the hospital. A nurse contacted Joel’s primary care
physician, Dr. Plavakeerthi Kemparajurs, and advised him that
the child was crying continuously and was experiencing
stiffening and rigidity. Dr. Kemparajurs, who had seen the
child in his office the day before, refused to authorize payment
of insurance for treatment of Joel by emergency room personnel.
Nevertheless, Dr. Lawrence, who was on duty in the emergency
room, examined Joel and diagnosed the child’s problem as colic.
Joel was not admitted to the hospital and was sent home.
He
died two days later from a seizure disorder.
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The Shofners filed a wrongful death action against the
hospital and Dr. Kemparajurs.
Their claim against the hospital
was predicated on the alleged negligence of both Dr. Lawrence
and the triage nurse, Lavon Martin.
Neither Ms. Martin nor Dr.
Lawrence was named as a defendant in the lawsuit.
Prior to
trial, the hospital moved for partial summary judgment and
argued that it was not vicariously liable for any alleged
negligence of Dr. Lawrence.
In support of its motion, it
submitted a copy of its contract with Oldham Emergency Group,
P.S.C., of which Dr. Lawrence was a member.
The contract
designated the group’s doctors as independent contractors.
However, the trial court found that the record did not contain
sufficient evidence with respect to the doctor’s relationship to
the hospital to entitle the hospital to summary judgment at this
juncture.
The matter was tried before a jury in September 1999.
At the conclusion of the plaintiffs’ case, the defendants moved
for a directed verdict. The hospital’s motion was based, in
part, on its renewed assertion that Dr. Lawrence was not its
agent. The Oldham Circuit Court directed a verdict for both the
hospital and Dr. Kamparajurs, concluding that there was
insufficient evidence of causation to submit the case to the
jury but not addressing the issue of the doctor’s status with
respect to the principal/agency issue.
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The Shofners appealed the dismissal of their
complaint. On May 11, 2001, this Court affirmed the directed
verdict in favor of Dr. Kemparajurs.
It also affirmed the
verdict in favor of the hospital on the issue of its liability
for the actions of Ms. Martin.1
However, this Court concluded
that a jury question as to causation was presented because of
Dr. Lawrence’s failure either to conduct a thorough neurological
evaluation of Joel or to address the cause of the child ’s
seizure disorder. Thus, this Court reversed the judgment that
had dismissed the Shofners’ complaint against the hospital and
remanded the case to the Oldham Circuit Court for a new trial.
Because the trial court had not addressed the agency issue, this
Court observed as follows:
We express no opinion as to whether
Baptist Hospital may be held liable in the
event that a jury should find that Dr.
Lawrence was negligent and that his
negligence caused Joel’s death.
The issue
of whether Dr. Lawrence was an independent
contractor must first be addressed at the
circuit court level on remand.
After this stage in the appellate process was
completed, the hospital again moved for summary judgment,
arguing as it had earlier that Dr. Lawrence was an independent
contractor. Additionally, the hospital concluded that it could
1 See, Shofner v. Kemparajurs, No. 1999-CA-002531-MR.
Discretionary Review was denied by the Kentucky Supreme Court on
February 13, 2002, No. 2001-SC-631-D and 2001-SC-642-D.
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not be liable under a theory of apparent or ostensible agency
because Stephanie Shofner had signed a form containing the
following disclaimer:
II.
INDEPENDENT STATUS OF PHYSICIANS:
The medical treatment rendered to the
patient during his hospitalization will
be provided by independent
practitioners. They are not employees
or agents of the Hospital.
These
independent practitioners may include,
but are not limited to:
anesthesiologist(s), cardiologist(s),
pathologist(s), neurologist(s),
emergency room physician(s) and other
professionals. You will be billed
separately for the services of these
physicians or the bill you receive will
include separate charges for their
services. These charges are
established by the physician.
In response, the Shofners contended that the
contract’s designation of the physician as an independent
contractor was not dispositive. They cited several provisions
in the contract giving the hospital control over Dr. Lawrence
and asked the lower court to consider the totality and reality
of the circumstances surrounding the relationship — not merely
the contractual recitals of the independent contractor status of
the doctor. They also contended that the form required to be
signed by Stephanie in order to obtain treatment for Joel should
not bar them from relying on principles of apparent agency in
seeking to hold the hospital liable for his death.
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In the judgment from which the Shofners have appealed,
the trial court relied on several provisions of the contract in
concluding as a matter of law that Dr. Lawrence was acting as an
independent contractor when he treated Joel.
It specifically
cited ¶7.1, which states the parties’ intent that the members of
the Oldham Emergency Group have independent contractor status.
The court also cited several other provisions of the contract
supporting the hospital’s position:
Under the Agreement, Tri-County was not
authorized to control the medical judgment
of the physicians.
See Emergency Services
Agreement, ¶7.3.
The Oldham Emergency Group
was responsible for patient billing and
collections.
See Emergency Services
Agreement, ¶ 6.1. The Oldham Emergency
Group was responsible for setting its fees
for professional services provided by the
physicians. See Emergency Services
Agreements, ¶ 6.2. Under the Agreement, the
Oldham Emergency Group was obligated to
provide its own professional liability
insurance.
See ¶3.1. The Agreement
terminated after one year.
See Emergency
Services Agreement, ¶6.2. The Agreement
defined terms for early termination by the
parties. See ¶¶ 5.2, 5.3, 5.4.
The terms of the Agreement did not give
Tri-County the right to control Dr.
Lawrence. Any control over Dr. Lawrence was
retained by the Oldham Emergency Group.
It
is clear from the terms of the Emergency
Services Agreement between the Oldham
Emergency Group and Tri-County that Dr.
Lawrence, as well as any other physician
provided by the Oldham Emergency Group was
an independent contractor, not an agent of
the hospital.
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With respect to the Shofners’ claim of apparent
agency, the trial court concluded as follows:
Under Kentucky law the fact that a
patient reads and signs an admission form
containing an Independent Contractor clause
regarding medical personnel is determinative
on the issue of ostensible agency. Floyd v.
Humana of Virginia, Inc., Ky.App., 787
S.W.2d 267, 270 (1989).
Even if a patient
is unconscious at the time of admission, if
the hospital has taken action to notify the
public about the status of physicians, an
apparent or ostensible agency is not
created. Roberts v. Galen of Virginia,
Inc., 111 F.3d 405, 413 (6th Cir. 1997)
(reversed on other grounds by Roberts v.
Galen of Virginia, Inc., 525 U.S.249 (1000).
The test is not whether the patient read and
signed the form containing the disclaimer,
the test is whether the hospital took steps
to notify the public about the status of the
physicians.
On July 10, 2002, the trial court entered its final order
dismissing the Shofners’ complaint.
This appeal followed.
In reviewing a summary judgment, our function is to
determine whether the trial court was correct in ruling that
there was no genuine issue of material fact and that the moving
party was entitled to summary judgment as a matter of law.
CR2
56.03; Scifries v. Kraft, Ky.App., 916 S.W.2d 799 (1996).
Because the issue is one of law, we may not defer to the
decision of the trial court.
Goldsmith v. Allied Building
Components, Ky., 833 S.W.2d 378, 381 (1992).
2 Kentucky Rules of Civil Procedure.
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The sole issue in this appeal concerns the agency
issue: (1) whether the trial court correctly concluded that
there was no genuine issue of material fact with respect to Dr.
Lawrence’s relationship to the hospital and (2) whether the
hospital established his relationship as an independent
contractor “with such clarity that there is no room left for
controversy.”
Steelvest, Inc. v. Scansteel Service Center,
Inc., Ky., 807 S.W.2d 476, 482 (1991).
The Kentucky Supreme Court recently re-stated the many
factors (indeed, matters of fact) to be considered in
determining whether an individual is an employee or an
independent contractor. Kentucky Unemployment Insurance
Commission
v. Landmark Community Newspapers of Kentucky, Inc.,
Ky., 91 S.W.3d 575 (2002).
In determining whether one acting for
another is a servant or an independent
contractor, the following matters of fact,
among other, are considered:
(a) the extent of control which, by the
agreement, the master may exercise over
the details of the work;
(b) whether or not the one employed is
engaged in a distinct occupation or
business;
(c) the kind of occupation, with reference
to whether, in the locality, the work
is usually done under the direction of
the employer or by a specialist without
supervision;
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(d) the skill required in the particular
occupation;
(e) whether the employer or the workman
supplies the instrumentalities, tools,
and the place of work for the person
doing the work;
(f) the length of time for which the person
is employed;
(g) the method of payment, whether by the
time or by the job;
(h) whether or not the work is a part of
the regular business of the employer;
(i) whether or not the parties believe they
are creating the relation of master and
servant; and
(j) whether the principal is or is not in
business.
(Emphasis added.)
Id. at 579.
In applying these factors, the Court emphasized
that no single factor is determinative and that every case
“needs to be resolved on its own facts.”
Id.
at 580.
The trial court’s opinion recounts evidence relevant
to several of the factors in the employee versus independent
contractor debate. However, the record also contains other
evidence that supports the Shofners’ argument that the hospital
retained enough control over Dr. Lawrence to raise a question of
fact as to his possible status as an agent or servant.
Although
the trial court believed that the agreement did not give the
hospital any control over Dr. Lawrence, a close examination of
the agreement reveals the contrary: that in fact the hospital
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exerted significant control over Dr. Lawrence.
Examples include
a lengthy list:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
the PSC was required to obtain the
hospital’s written approval before
assigning Dr. Lawrence to work in the
emergency department in the first
instance (¶1.2);
the hospital determined the number of
hours Dr. Lawrence might work in any
given day (¶1.2);
the hospital provided all the
supplies, equipment, and technical and
other non-professional assistance to
the doctor (¶4.1);
the hospital had final approval over
the amount of fees charged by Dr.
Lawrence (¶6.2);
the hospital maintained control over
all medical records generated by Dr.
Lawrence (¶10.1);
the hospital had the ultimate
authority to terminate Dr. Lawrence’s
relationship with the hospital (¶1.3);
the hospital had the right to demand
Dr. Lawrence’s participation in non-
patient care events designed “to
promote community education, support
or involvement” (¶1.4).
While the trial court correctly determined that some
of the terms of the agreement revealed an intent to create a
independent contractor relationship between the parties, the
factors upon which it relied were not dispositive under
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Landmark, at 581. In addition to the provisions of the
agreement cited by the court, others underscored by the
appellants indicate an attempt by the hospital to circumvent the
doctrine of respondeat superior while actually enjoying the
benefits of an employer/employee relationship.
Particularly
significant is the fact that the hospital — not the Oldham
Emergency Group — had the ultimate control over Dr. Lawrence’s
ability to practice medicine at the hospital.
A careful review of the evidence reveals facts that
could arguably support an ambivalent finding that Dr. Lawrence
could have been acting either as an independent contractor or as
a servant of the hospital when he treated Joel.
We conclude
that the hospital exerted sufficient control over the methods
and materials used by the doctor to raise a question about his
status. Therefore, the court erred in entering a summary
judgment in favor of the hospital on this disputed issue of an
agency or employment relationship.
The Shofners also contest the court ’s ruling that they
were barred as a matter of law from asserting a claim based on
the apparent agency as announced in Paintsville Hospital Company
v. Rose, Ky., 683 S.w.2d 255 (1985).
We disagree and conclude
that the trial court properly resolved the issue.
Kentucky law
consistently holds that an attempt by a hospital to disclaim an
agency relationship and to notify the public (by means of the
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very kind of form signed by Stephanie Shofner) suffices to
defeat apparent or ostensible agency.
This Court summarized the
current state of the law on this point in Floyd v. Humana of
Virginia, Inc., Ky.App., 787 S.W.2d 267, 270 (1989):
[W]e find the testimony of the appellant
admitting that she had read and signed each
of the admission forms to Humana of Virginia
Hospital, Inc. d/b/a Humana Hospital
University, which indicates her knowledge
that the doctors were independent
contractors and not agents of the hospital,
to be determinative in this case.
(Emphasis
added).
Next, the Shofners argue that the hospital has a non-
delegable duty to provide emergency care at its facility — one
that may not be satisfied by hiring independent contractors.
The hospital correctly argues that this issue was not raised in
the trial court. As it has not been properly preserved for our
review, we may not address it.
Regional Jail Authority v.
Tackett, Ky., 770 S.W.2d 255 (1989).
Finally, the appellants contend that the hospital
waived the right to assert the status of Dr. Lawrence as a
defense to its negligence claims.
They note that the hospital
did not file a protective cross-appeal from the earlier judgment
in which a directed verdict had been entered it its favor.
Appellants contend that the law-of-the-case doctrine barred
relitigating the agency issue on remand. We disagree. The law
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of this case is contained in this Court ’s previous opinion,
which directed the trial court to address this very agency issue
on remand.
In summary, we hold that there is a question of fact
as to whether Dr. Lawrence was acting as the actual agent of the
hospital with respect to the Shofners’ claims of medical
negligence. The judgment is vacated on this issue alone and is
remanded for further proceedings consistent with this opinion.
BARBER, JUDGE, CONCURS.
KNOPF, JUDGE, DISSENTS.
KNOPF, JUDGE, DISSENTING OPINION:
Respectfully, I
dissent.
I agree with the trial court that Shofner has failed
to establish a genuine issue of fact as to whether Dr. Lawrence
was an employee of the hospital as opposed to an independent
contractor. Summary judgment for the hospital was therefore
proper. The contract between the hospital and Oldham Emergency
Group, P.S.C. leaves no doubt that the parties’ intended to
create an independent-contractor relationship.
In my judgment,
furthermore, the mere fact that under the contract the hospital
retains administrative control of its emergency room does not
permit a finding that, contrary to the parties’ intentions and
contrary to the general independence of physicians, the hospital
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exerted an employer’s control over Dr. Lawrence’s practice of
medicine.
Whether a hospital should be deemed vicariously liable
for negligent emergency-room services regardless of its
employment relationship with the negligent doctor is an
interesting question.3
But, as the majority notes, that question
is not presently before us.
Our inability to reach that
question, however, does not justify a departure from well
established principles of agency law.
Because I believe the
majority’s result to be such a departure, I must respectfully
dissent.
BRIEF FOR APPELLANTS:
BRIEF FOR APPELLEE:
T. Wesley Faulkner
Kevin C. Burke
John Harralson, III
Louisville, Kentucky
ORAL ARGUMENT FOR APPELLANTS:
Kevin C. Burke
Louisville, Kentucky
Susan D. Phillips
William P. Swain
Louisville, Kentucky
ORAL ARGUMENT FOR APPELLEE:
Susan D. Phillips
Louisville, Kentucky
3 Schiavone v. Victory Memorial Hospital, 738 N.Y.S.2d 87 (2002);
Simmons v. Tuomey Regional Medical Center, 341 S.C. 32, 533 S.E.2d 312
(2000).
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