Wayne Cnty. Hosp. v. Jakobson (Summary)

OSTENSIBLE AGENCY AND INDEMNIFICATION

Wayne Cnty. Hosp. v. Jakobson, Civil No. 09-44-GFVT (E.D. Ky. May 3, 2013)

The United States District Court for the Eastern District of Kentucky granted in part and denied in part a number of motions filed by a hospital.  The hospital brought suit against a physician for payment of damages paid to a patient.  The patient came to the radiology department for a mammogram, which was read as “normal/negative” by the physician, although a small mass was detected.  The next year, the mass had increased and the same physician determined that the mass was “abnormal,” leading to the diagnosis that the patient had Stage 1 cancer.  At trial, it was determined that the physician was negligent and that he was an ostensible agent of the hospital.  The hospital paid over $1 million in damages and sought indemnity from the physician.

The district court affirmed the ruling on vicarious liability for the physician’s negligence because there was no clear indication to the patient that the physician was not a hospital employee. It was reasonable for her to bring suit against both the hospital and the physician and for the trial court to hold that the physician was an ostensible agent of the hospital.

Even though the physician was an ostensible agent, the district court held that the negligence on the part of the hospital was passive, making an indemnity claim appropriate. The court stated that the negligence upon which the case was based were the mammogram readings by the physician, making him the actively negligent party. The district court rejected as irrelevant the physician’s argument that advertising or profiting from his services amounted to negligent misrepresentation. The court stated that the liability of the physician needed to be determined by a jury; if a jury found him negligent, the hospital would be entitled to indemnity.

The district court also granted the hospital’s motion to exclude one of the physician’s experts. The court stated that nothing in the expert’s report or testimony would be relevant in helping the jury understand the evidence. The expert’s report argued that an ostensible agency relationship existed between the parties and that the passive negligence of the hospital made it reasonable for the hospital to bear some of the burden of damages.  Since both of these issues were already decided by the court, the expert’s report and testimony were no longer necessary.