California court rules hospital not liable for staff doctor's negligence

Malpractice suit alleges doctor injured patient, caused neurological issue

California court rules hospital not liable for staff doctor's negligence

A hospital may be liable for the negligence of staff physicians under the ostensible agency theory, except if it gave the patient actual notice that they were not hospital employees and if the patient could understand and act on this information, the California Court of Appeal has said.

The case of Franklin v. Santa Barbara Cottage Hospital involved a medical malpractice suit. A patient’s primary care physician checked his complaint about back pain and found a herniated disc. The patient was referred to Dr. John Park, a staff physician of Santa Barbara Cottage Hospital, for further treatment.

Read more: California Supreme Court rules on nurse's lawsuit against hospital

The patient saw Dr. Park twice at his office, which was in a building across the street from the hospital, and agreed to his recommendation for a discectomy. As advised, the patient went to the hospital’s emergency room and signed a consent form authorizing the surgical procedure. A complication during the surgery allegedly led to the patient developing serious neurological problems.

In his malpractice action against Dr. Park, the patient claimed that the physician negligently injured him during the surgery. The parties settled the suit for $1 million. The patient then tried to sue the hospital based on its alleged vicarious liability – under both the actual agency theory and the ostensible agency theory – for Dr. Park’s negligence.

The trial court granted summary judgment in the hospital’s favor. The patient appealed. The California Court of Appeal for the Second District agreed with the trial court’s judgment favoring the hospital.

First, the appellate court rejected the patient’s claim that the hospital was liable under the actual agency theory. The hospital presented a physician recruitment agreement as evidence. The agreement provided that there was no employer-employee relationship between Dr. Park and the hospital, that Dr. Park was an independent contractor, and that the hospital did not exercise control over the way that Dr. Park furnished professional services.

Second, the appellate court disagreed with the patient’s argument that the hospital was liable under the ostensible agency theory. The court noted the following circumstances:

  • Dr. Park was the patient’s personal physician;
  • The patient’s primary physician referred him to Dr. Park, not to the hospital;
  • The patient twice consulted Dr. Park at his office;
  • The patient chose Dr. Park to perform the surgery;
  • Dr. Park personally arranged for the surgery to be performed as an emergency procedure so that the patient’s insurance would cover it;
  • The hospital did not know and did not agree to this arrangement.

According to the appellate court, the patient failed to show that the two essential elements of ostensible agency were present: first, the hospital’s conduct would cause a reasonable person to believe that the physician was the hospital’s agent; and second, the patient relied on that apparent agency relationship.

In relation to the first element of ostensible agency, a reasonable person viewing certain webpages would infer that Dr. Park was an employee of Neurological Surgery of Santa Barbara, Inc., not of the hospital, the appellate court said.

As for the second element, the patient admitted that, before he retained a lawyer, he never thought about the legal relationship between Dr. Park and the hospital. He approached Dr. Park, not the hospital, for surgical services, the appellate court said.

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