The opinion
[This opinion has been published in Ohio Official Reports at 68 Ohio St.3d 435.]
CLARK, ADMR., APPELLANT v. SOUTHVIEW HOSPITAL AND FAMILY HEALTH
CENTER, APPELLEE.
[Cite as Clark v. Southview Hosp. & Family Health Ctr., 1994-Ohio-519.]
Hospitals—Physicians and surgeons—Malpractice—Hospital may be held liable
under the doctrine of agency by estoppel for the negligence of independent
medical practitioners operating in the hosptial, when.
A hospital may be held liable under the doctrine of agency by estoppel for the
negligence of independent medical practitioners practicing in the hospital
when: (1) it holds itself out to the public as a provider of medical services;
and (2) in the absence of notice or knowledge to the contrary, the patient
looks to the hospital, as opposed to the individual practitioner, to provide
competent medical care. (Albain v. Flower Hosp. [1990], 50 Ohio St. 3d
251, 553 N.E.2d 1038, paragraph four of the syllabus, overruled.)
(No. 92-2194—Submitted October 20, 1993—Decided March 16, 1994.)
APPEAL from the Court of Appeals for Montgomery County, Nos. 12845 and
13060.
__________________
{¶ 1} At approximately 6:00 a.m. on the morning of August 25, 1986,
twenty-six-year-old Kimberly Sierra arrived at the emergency room at appellee
Southview Hospital and Family Health Center ("Southview") suffering from an
asthma attack. She drove to the hospital with her eighteen-month-old daughter
from her house in West Carrollton. The most direct route from Kimberly's house
to Southview would have taken her directly past Sycamore Hospital. Kimberly was
pronounced dead at 11:16 a.m. that morning at Southview, allegedly as a proximate
result of negligent medical care provided by Dr. Thomas Mucci, D.O., the
emergency-room physician on duty at Southview.
SUPREME COURT OF OHIO
{¶ 2} At that time, Dr. Mucci was president and sole shareholder of TMES,
Inc. ("TMES"). Pursuant to an agreement in effect on August 25, 1986 between
TMES and Dayton Osteopathic Hospital, d.b.a. Southview, TMES was obligated
to provide qualified physicians to staff the emergency department at Southview
twenty-four hours per day. The agreement provided that "[t]he relationship
between [Southview and TMES] shall be that of independent contractor."
{¶ 3} On August 21, 1987, Kimberly's mother, appellant Edna K. Clark,
administrator of Kimberly's estate, filed a complaint, later amended, in the
Montgomery County Court of Common Pleas, which alleged, in part, the wrongful
death of Kimberly as a result of medical negligence on the part of Southview
through its agents and/or employees, Dr. Mucci and TMES. It is undisputed that
prior to trial, appellant settled her claims against Dr. Mucci and TMES, and
dismissed these defendants from the case.
{¶ 4} On April 16, 1991, the case proceeded to trial by jury against
Southview. During her case-in-chief, appellant testified that on the morning of
August 25, 1986, while vacationing in South Carolina, she received a telephone call
from her aunt who told her that Kimberly was in the hospital and in critical
condition. Although her aunt did not know what hospital Kimberly was in,
appellant immediately telephoned the emergency room at Southview because she
knew that Kimberly would go there if she had any control of herself at the time.
Appellant had told her daughter that if she ever encountered any problems,
appellant wanted her to go to Southview because it had doctors on duty there
twenty-four hours a day. Prior to August 25, 1986, appellant had been told by the
administrative department at Southview that "the hospital had doctors there twenty-
fours hours a day in their emergency room and [that] they were fully equipped."
As a result of this statement, and having read various promotional and marketing
materials concerning the services that were available at Southview, appellant
believed that the emergency-room physicians at Southview "worked for the hospital
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[and] were hospital doctors." She told Kimberly "the same thing that I believed
[about the physicians] from the first time I was ever in the emergency room at
Southview." At no time was appellant informed to the contrary.
{¶ 5} The promotional and marketing materials of Southview which were
admitted into evidence consisted of various pamphlets, brochures and an
"Emergency Handbook & Physician Directory." Also admitted into evidence were
various newspaper advertisements and the contents of radio and television
advertisements. As relevant here, the promotional literature contains statements
such as: "We welcome the opportunity to serve our community in this way, to
supplement our full range of inpatient and outpatient medical care"; "You'll find
facts about the hospitals' emergency departments"; "Southview ***feature[s]
attractive new emergency department[] with the latest technology and equipment
[which] can handle all major medical emergencies"; "At***Southview's emergency
department[], we treat whole people, not just diseases and traumatic injuries"; "Get
more information about our emergency facilities"; "Paramedics call the emergency
department from the scene, and by the time the patient is stabilized and brought to
the hospital, the surgical team is ready"; "Southview Hospital[] provide[s] the full
range of patient care"; and "Our business is your good health, not just the cure of
ill health." The promotional literature does not reveal the existence of TMES or
the fact that the emergency department at Southview is staffed by independent
physicians under a contract.
{¶ 6} At the conclusion of appellant's evidence, and again at the close of all
the evidence, Southview moved for a directed verdict on the issue of agency by
estoppel, which motion the trial court denied.
{¶ 7} At the conclusion of the trial, the jury returned a general verdict in
favor of appellant in the amount of $1,004,603.94. In its answers to interrogatories,
the jury found that Southview had made representations, both directly and
indirectly, leading Kimberly to believe that Dr. Mucci was an agent or employee of
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Southview, and that Kimberly had thereby been induced to rely upon that
relationship to seek emergency services at Southview on August 25, 1986.
Judgment was entered on the verdict in the amount of $729,603.94, reflecting a
setoff of the $275,000 received by appellant in her settlement with Dr. Mucci and
TMES.
{¶ 8} The court of appeals reversed the judgment of the trial court, finding
that a directed verdict should have been granted in Southview's favor, and entered
judgment for Southview. The court found in part that reasonable minds could not
conclude from the evidence that Dr. Mucci or TMES was an apparent agent of
Southview.
{¶ 9} The cause is now before this court pursuant to the allowance of a
motion to certify the record.
__________________
Stocklin & Simpson Co., L.P.A., Valerie Stocklin and Jay M. Simpson, for
appellant.
Freund, Freeze & Arnold, Neil F. Freund and Mary E. Lentz, for appellee.
Bricker & Eckler, James J. Hughes, Jr., and Catherine M. Ballard, urging
affirmance for amicus curiae, Ohio Hospital Association.
Wolske & Blue and Michael S. Miller, urging reversal for amicus curiae,
Ohio Academy of Trial Lawyers.
__________________
ALICE ROBIE RESNICK, J.
{¶ 10} We must determine whether the trial court should have directed a
verdict in favor of Southview on the issue of agency by estoppel.
{¶ 11} Civ. R. 50(A)(4) provides that:
"When a motion for a directed verdict has been properly made, the trial
court, after construing the evidence most strongly in favor of the party against
whom the motion is directed, finds that upon any determinative issue reasonable
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minds could come to but one conclusion upon the evidence submitted and that
conclusion is adverse to such party, the court shall sustain the motion and direct a
verdict for the moving party as to that issue."
"By the same token, if there is substantial competent evidence to support
the party against whom the motion is made, upon which evidence reasonable minds
might reach different conclusions, the motion must be denied." Hawkins v. Ivy
(1977), 50 Ohio St.2d 114, 115, 4 O.O. 3d 243, 244, 363 N.E.2d 367, 368.
{¶ 12} Generally, an employer or principal is vicariously liable for the torts
of its employees or agents under the doctrine of respondeat superior, but not for
the negligence of an independent contractor over whom it retained no right to
control the mode and manner of doing the contracted-for work. Councell v.
Douglas (1955), 163 Ohio St. 292, 295-296, 56 O.O. 262, 263-264, 126 N.E.2d
597, 599-600.
{¶ 13} This issue was addressed in Albain v. Flower Hosp. (1990), 50 Ohio
St. 3d 251, 553 N.E.2d 1038. At paragraph four of the syllabus in Albain, this court
recognized and adopted the following exception to hospital nonliability for the
negligence of independent contractors:
"A hospital may, in narrowly defined situations, under the doctrine of
agency by estoppel, be held liable for the negligent acts of a physician to whom it
has granted staff privileges. In order to establish such liability, a plaintiff must
show that: (1) the hospital made representations leading the plaintiff to believe that
the negligent physician was operating as an agent under the hospital's authority, and
(2) the plaintiff was thereby induced to rely upon the ostensible agency
relationship."
{¶ 14} In attempting to apply Albain to the facts of this case, we find
ourselves questioning the very basis of the holding in paragraph four of the
syllabus. Concomitantly, we are not unmindful of the doctrine of stare decisis
which dictates adherence to judicial decisions. Stare decisis, however, was not
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intended "to effect a 'petrifying rigidity,' but to assure the justice that flows from
certainty and stability. If, instead, adherence to precedent offers not justice but
unfairness, not certainty but doubt and confusion, it loses its right to survive, and
no principle constrains us to follow it." Bing v. Thunig (1957), 2 N.Y. 2d 656, 667,
163 N.Y.S. 2d 3, 11, 143 N.E.2d 3, 9.
{¶ 15} With the foregoing in mind, we now proceed to reconsider the
holding in Albain as it is applicable to the instant case. In adopting an agency-by-
estoppel exception, we noted in Albain that the majority of jurisdictions which have
recognized this type of hospital vicarious liability has done so based on either
Section 267 of the Restatement of the Law 2d, Agency (1958) 578, or Section 429
of the Restatement of the Law 2d, Torts (1965) 421. In adopting Section 267, we
stated that "Section 267 poses a stricter standard, and requires actual reliance***."
Id. at 262, 553 N.E.2d at 1048-1049.
{¶ 16} We then proceeded to narrowly define the situations to which the
doctrine could apply, without any discussion or analysis of how the multitude of
cases from other jurisdictions has applied Sections 267 or 429 to vicarious hospital
liability. Rather, based on a law review, Comment, Hospital Liability for Physician
Malpractice: The Impact of Hannola v. City of Lakewood (1986), 47 Ohio St. L.J.
1077, and a severely criticized dissenting opinion in Pamperin v. Trinity Mem.
Hosp. (1988), 144 Wis.2d 188, 423 N.W.2d 848, we limited the doctrine in a way
that simultaneously abrogated the very exception we claimed to create.
{¶ 17} We began our analysis in Albain with the statement that the doctrine
of agency by estoppel was first applied to hospitals in Grewe v. Mt. Clemens Gen.
Hosp. (1978), 404 Mich. 240, 250-251, 273 N.W.2d 429, 433, as follows:
"'[I]f the individual looked to the hospital to provide him with medical
treatment and there has been a representation by the hospital that medical treatment
would be afforded by the physicians working therein, an agency by estoppel can be
found.'" Albain, 50 Ohio St.3d at 262, 553 N.E.2d at 1048.
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{¶ 18} We then used this language to form the basis of what we set forth as
the first element required under paragraph four of our syllabus, viz., that the plaintiff
must show that the hospital made representations leading her to believe that the
negligent physician was operating as an agent under the hospital's authority. Id. at
263, 553 N.E.2d at 1049.
{¶ 19} A close reading of the Grewe opinion, however, reveals that the
above passage was not meant to summarize what we articulated as the first prong
of agency by estoppel. Rather, it was advanced as the total set of requirements
imposed upon a plaintiff relying on the doctrine to establish liability of the hospital.
In the very next paragraph, the court in Grewe explained that:
"[T]he critical question is whether the plaintiff, at the time of his admission
to the hospital, was looking to the hospital for treatment of his physical ailments or
merely viewed the hospital as the situs where his physician would treat him for his
problems. A relevant factor in this determination involves resolution of the
question of whether the hospital provided the plaintiff with [the treating physician]
or whether the plaintiff and [the treating physician] had a patient-physician
relationship independent of the hospital setting." Id., 404 Mich. at 251, 273 N.W.2d
at 433.
{¶ 20} In applying this test, Grewe recognized that it is not the
patient/plaintiff's duty to inquire as to the employment relationship between the
hospital and the physician it provides. Rather, it is the hospital's duty "'to put
[plaintiff] on notice that the [treatment was not rendered as] an integral part of [the
hospital], and it cannot be seriously contended that [plaintiff], when he was being
carried from room to room suffering excruciating pain, should have inquired
whether the individual doctors who examined him are
employees***or***independent contractors.'" Id. at 253, 273 N.W.2d at 434,
quoting Stanhope v. Los Angeles College of Chiropractic (1942), 54 Cal. App.2d
141, 146, 128 P.2d 705, 708.
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{¶ 21} Yet, in direct contrast to the very case we relied upon in adopting
paragraph four of our syllabus in Albain, we proceeded to reject plaintiff's averment
in Albain that upon her arrival at the hospital she believed "that [the hospital] would
provide me with a physician." We found that plaintiff "did not believe that a
physician who was an employee of the hospital would be provided her" because the
treating physician "never discussed her employment status with [plaintiff] in any
manner." (Emphasis sic.) Id. at 264, 553 N.E.2d at 1050.
{¶ 22} We also added a second element--that the plaintiff must show that
she was induced to rely upon the apparent-agency relationship. In fact we applied
this element in a way that is contrary to the holding of cases in all other jurisdictions
that we have found which adopted and applied the doctrine in actions against
hospitals. See discussion infra.
{¶ 23} We stressed that "[a]s to this second element *** the question is ***
not whether the plaintiff relied on the reputation of the hospital." (Emphasis sic.)
Id. at 263, 553 N.E.2d at 1049-1050. Rather, the plaintiff must demonstrate that
she "would have refused *** care if she had known [that the treating physician]
was not an employee of the hospital." Id. at 264, 553 N.E.2d at 1050.
{¶ 24} By requiring the patient/plaintiff in Albain to demonstrate that she
would have refused care had she known of the independent status of the treating
physician, we have created an exception that is so illusory that it forces the
emergency patient to demonstrate that she would have chosen to risk further
complications or death rather than be treated by a physician of whose independence
she had been unaware. In addition, Albain imposed the burden that the patient
ascertain and understand the contractual arrangement between the hospital and
treating physician, while simultaneously holding that her belief upon arrival that
the hospital would provide her with a physician is insufficient. Thus it is virtually
impossible for the plaintiff, especially in a wrongful-death case, to establish
reliance as required in Albain.
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{¶ 25} It is no wonder that among the many cases from other jurisdictions
dealing with this issue, we were unable to find a single case in support of such a
narrow interpretation of agency by estoppel in a hospital setting. In fact, Albain is
so much an aberration that its requirements, proposed elsewhere, have been called
"astonishing," "absurd," "unfair," criticized for creating a "false dichotomy"
between reliance on the apparent agency relationship and the hospital's reputation,
and scoffed at for focusing on notice that comes "too little, too late." Paintsville
Hosp. Co. v. Rose (Ky. 1985), 683 S.W.2d 255, 258; Capan v. Divine Providence
Hosp. (1980), 287 Pa. Super. 364, 369, 430 A.2d 647, 649; Note, Pamperin v.
Trinity Mem. Hosp. and the Evolution of Hospital Liability: Wisconsin Adopts
Apparent Agency (1990), Wis. L.Rev. 1129, 1147, 1148.
{¶ 26} Appellant, in conciliatory fashion, proposes that in the event that we
choose not to reexamine Albain, we can find evidence of reliance in the fact that
Kimberly drove directly by Sycamore Hospital in order to be treated at Southview.
If we were to do as appellant suggests, then the outcome would be different had she
suffered the asthma attack at a place geographically closer to Southview than to
Sycamore Hospital. It is disconcerting at best that the fortuity of geographic
proximity should determine the outcome under a doctrine so deeply rooted in public
policy.
{¶ 27} Because of the history surrounding the growth of hospital liability
and strong public policy arguments, we choose to revisit paragraph four of the
syllabus of Albain. At common law, hospitals enjoyed immunity from liability
even for the negligent acts of their employees. The concept is said to have
originated in mid-Nineteenth Century England and was based on the theory that
charitable funds could not be diverted from the use intended by their donors.
American courts imported the "trust fund" theory and added others to justify the
exemption of hospitals from tort liability, even long after the theory was discarded
in England. The other theories included implied waiver, public policy and the idea
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that respondeat superior is not appropriate because the hospital derived no benefit
from the physician's services. See, generally, Note, Independent Duty of a Hospital
to Prevent Physicians' Malpractice (1973), 15 Ariz. L.Rev. 953, 954-956. As one
court has stated:
"[S]ince [a hospital] ministers to those who cannot pay as well as those who
can, thus acting as a good Samaritan, justice and sound public policy alike dictate
that it should be exempt from the liability attaching to masters whose only aim is
to engage in enterprises of profit or of self-interest***." Morrison v. Henke (1917),
165 Wis. 166, 170-171, 160 N.W. 173, 175 (overruled by Kojis v. Doctors Hosp.
[1961], 12 Wis.2d 367, 107 N.W.2d 131).
{¶ 28} This court first applied the doctrine of charitable immunity to
hospitals in Taylor v. Protestant Hosp. Assn. (1911), 85 Ohio St. 90, 96 N.E. 1089,
relying on each of the aforementioned justifications. In summary, we made the
following predictive observation:
"Experience has shown that the ends of justice are best secured by holding
the master responsible for injuries caused by the wrongful acts of his servant done
in the prosecution of his private ends and for his benefit.
"Doubtless the rule will be extended to meet the requirements of manifold
new conditions brought about by growth and advance. Courts are constantly
confronted with the necessity of extending established principles to new conditions.
But in this case it is sought to extend the rule to masters different from others and
who do not come within its reason, and to hold a public charity involving no private
profit responsible for the negligence of servants employed solely for a public use
and a public benefit. We think such extension is not justified. Public policy should
and does encourage enterprises with the aims and purposes of defendant and
requires that they should be exempted from the operation of the rule" Id. at 103,
96 N.E. at 1092.
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{¶ 29} Indeed, our reasoning was painfully reflective of the realities of the
time:
"The hospital of the early mid-nineteenth century would not be recognizable
as such to a modern observer. 'Respectable' people who fell sick or who were
injured were treated by their doctors at home; only the lowest classes of society
sought help in the 'hospital,' which was most often a separate wing on the
almshouse. As late as 1873, there were only 178 hospitals in the United States,
with a total of 50,000 beds. These hospitals were private charities, and their trustees
were usually unable to raise sufficient funding to provide a pleasant stay. The
hospital of the time was dirty, crowded and full of contagious disease. The 'nurses'
were usually former patients. Doctors, who were not paid, tended the ill for a few
hours per week out of a sense of charity mixed with the knowledge that they could
'practice' their cures on the poor and charge young medical students for instruction
in the healing arts. These young 'house doctors' also worked without pay, practicing
cures on the ill." Note, supra, 1990 Wis. L.Rev. at 1131.
{¶ 30} As the role of the hospital in society changed, the justifications
underlying charitable immunity eroded. At first, courts drew a distinction between
medical and administrative acts of employees, imposing liability on the hospital for
the latter but not the former. See Schloendorff v. Soc. of New York Hosp. (1914),
211 N.Y. 125, 105 N.E.92. This distinction represented a judicial policy of
compromise between the doctrines of respondeat superior and charitable
immunity. See Bing v. Thunig, supra, at 662, 163 N.Y.S.2d at 7, 143 N.E.2d at 6.
In Bing, however, it was observed that liability based on respondeat superior is the
rule and immunity the exception. Id. at 666, 163 N.Y.S. 2d at 10, 143 N.E.2d at 8.
In abolishing immunity, that court made the following observation:
"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 responsibility, no longer reflects the
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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 interns, as well as administrative and
manual workers, and they charge patients for medical care and treatment, collecting
for such services, if necessary, by legal action. 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. at 666,
163 N.Y.S.2d at 11, 143 N.E.2d at 8.
{¶ 31} This court reached the same conclusion as did Bing when, in
Avellone v. St. John's Hosp. (1956), 165 Ohio St. 467, 60 O.O. 121, 135 N.E.2d
410, we abolished the doctrine of charitable immunity for hospitals (later in
Albritton v. Neighborhood Centers Assn. [1984], 12 Ohio St. 3d 210, 12 OBR 295,
466 N.E. 2d 867, the doctrine of charitable immunity would be abolished altogether
in Ohio). We observed that "the average nonprofit hospital of today is a large well
run corporation, and, in many instances, the hospital is so 'businesslike' in its
monetary requirements for entrance and in its collections of accounts that a shadow
is thrown upon the word, 'charity,' and the base of payment mentioned above is
broadened still more." Id. at 474, 50 O.O. at 125, 135 N.E.2d at 415. Again in
predictive fashion, we left open the question as to a hospital's liability for the
negligent acts of independent medical practitioners working in the hospital. Id. at
477-478, 60 O.O. at 126-127, 135 N.E.2d at 417.
{¶ 32} With the demise of charitable immunity, the issue pushed to the
forefront was whether and under what circumstances a hospital could be held liable
for the negligence of those independent physicians.
{¶ 33} In Cooper v. Sisters of Charity of Cincinnati, Inc. (1971), 27 Ohio
St. 2d 242, 254, 56 O.O. 2d 146, 152, 272 N.E.2d 97, 104, we declined to apply the
doctrine of agency by estoppel to a hospital unless "'induced reliance' [is] shown
*** as required by Johnson v. Wagner Provision Co. (1943), 141 Ohio St. 584 [26
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O.O. 161, 49 N.E.2d 925]." Johnson indeed requires "reliance upon an ostensible
agency." Id. at paragraph four of the syllabus. Johnson, however, approved and
followed Rubbo v. Hughes Provision Co. (1941), 138 Ohio St. 178, 20 O.O. 233,
34 N.E.2d 202. Id. at 590, 26 O.O. at 164, 49 N.E.2d at 928. In Rubbo, we found
the element of reliance to take on a different character where a plaintiff responds to
a business advertisement. We held the doctrine of agency by estoppel applicable
"[w]here the proprietor of a provision market advertises an article for sale in his
market and a purchaser, in reliance that he was buying from such proprietor and
without knowledge to the contrary, buys such advertised article at a counter in the
market which the proprietor had leased to another***." (Emphasis added.) Id. at
paragraph one of the syllabus.
{¶ 34} Rubbo imposed no requirement that the plaintiff show induced
reliance upon the employment relationship between the proprietor and the lessee.
Rather, the focus shifted to reliance upon the relationship between the proprietor's
advertisement and the article purchased. In fact, we agreed with the court of appeals
in that case that "'prospective purchasers going to the company's place of business
had a right to assume that the company was selling [the advertised article] in the
absence of knowledge to the contrary.'" (Emphasis added.) Id. at 181, 20 O.O. at
234, 34 N.E.2d at 204.
{¶ 35} Nor does Rubbo require proof that representations were made
directly to the plaintiff in order for the doctrine to apply. "'[R]epresentations need
not be made to the plaintiff directly***[;] "[i]t is sufficient if the representation is
made to a third person to be communicated to the plaintiff, or to*** a class of
persons of whom the plaintiff is one, or even if it is made to the public generally
with a view to its being acted on, and the plaintiff as one of the public acts on it
***."'" (Emphasis sic.) Id. at 182, 20 O.O at 235, 34 N.E.2d at 205, quoting from
Globe Indemn. Co. v. Wassman (1929), 120 Ohio St. 72, 85, 165 N.E. 579, 583,
which was quoting from Swift v. Winterbotham (1872-1873), 8 L.R., Q.B. 244.
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{¶ 36} Courts in other jurisdictions that have addressed the issue of a
hospital's liability for the negligence of those with whom it contracts, but over
whom the hospital retains no right of control, have adopted the approach of Grewe
and Rubbo with virtual unanimity. Without exception, and irrespective of whether
Section 267 of the Restatement of Agency 2d or Section 429 of the Restatement of
Torts 2d is utilized, the cases applying this kind of liability do not require an express
representation to the patient that the treating physician is an employee of the
hospital or direct testimony as to reliance. Rather, the element of representation is
satisified when the hospital holds itself out to the public as a provider of medical
services, and the element of reliance is satisfied if the patient looks to the hospital,
rather than a specific physician, to provide her with medical care. In applying the
traditional elements in this way, those courts invariably recognize the status of the
modern-day hospital and its role in contemporary society. Not only is the hospital
of today a large, well-run business, as we noted in Avellone when we abolished
charitable immunity for hospitals, but advances in medical technology have
inevitably spawned increased specialization and industrialization. Hospitals are the
only place where the best equipment and facilities and a full array of medical
services are available at any time without an appointment. With hospitals now
being complex full-service institutions, the emergency room has become the
community medical center, serving as the portal of entry to the myriad of services
available at the hospital. As an industry, hospitals spend enormous amounts of
money advertising in an effort to compete with each other for the health care dollar,
thereby inducing the public to rely on them in their time of medical need. The
public, in looking to the hospital to provide such care, is unaware of and
unconcerned with the technical complexities and nuances surrounding the
contractual and employment arrangements between the hospital and the various
medical personnel operating therein. Indeed, often the very nature of a medical
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emergency precludes choice. Public policy dictates that the public has every right
to assume and expect that the hospital is the medical provider it purports to be.
{¶ 37} A hospital may be held liable under the doctrine of agency by
estoppel for the negligence of independent medical practitioners practicing in the
hospital if it holds itself out to the public as a provider of medical services and in
the absence of notice or knowledge to the contrary, the patient looks to the hospital,
as opposed to the individual practitioner, to provide competent medical care.
(Albain v. Flower Hosp., supra, paragraph four of the syllabus, overruled.) Unless
the patient merely viewed the hospital as the situs where her physician would treat
her, she had a right to assume and expect that the treatment was being rendered
through hospital employees and that any negligence associated therewith would
render the hospital liable. Gilbert v. Sycamore Mun. Hosp. (1993), WL 421663
(Ill.); Kashishian v. Port (1992), 167 Wis.2d 24, 481 N.W.2d 277; Torrence v.
Kusminsky (1991), 185 W.Va. 734, 408 S.E.2d 684; Sharsmith v. Hill (Wyo. 1988),
764 P.2d 667, 671-672; Pamperin v. Trinity Mem. Hosp., supra; Richmond Cty.
Hosp. Auth. v. Brown (1987), 257 Ga. 507, 361 S.E.2d 164; Hill v. St. Clare's Hosp.
(1986), 67 N.Y.2d 72, 499 N.Y.S. 2d 904, 490 N.E.2d 823; Brownsville Med. Ctr.
v. Garcia (Tex. App. 1985), 704 S.W.2d 68; Hardy v. Brantley (Miss. 1985), 471
So.2d 358; Paintville Hosp. Co. v. Rose (Ky. 1985), 683 S.W.2d 255; Williams v.
St. Claire Med. Ctr. (Ky. App. 1983), 657 S.W.2d 590, 595-596; Smith v. St.
Francis Hosp., Inc. (Okla. App. 1983), 676 P.2d 279; Irving v. Doctors Hosp. of
Lake Worth, Inc. (Fla. App. 1982), 415 So. 2d 55; Themins v. Emanuel Lutheran
Charity Bd. (1981), 54 Ore. App. 901, 637 P.2d 155; Capan v. Divine Providence
Hosp., supra; Arthur v. St. Peters Hosp. (1979), 169 N.J. Super 575, 405 A.2d 443;
Adamski v. Tacoma Gen. Hosp. (1978), 20 Wash. App. 98, 579 P.2d 970; Mehlman
v. Powell (1977), 281 Md. 269, 378 A.2d 1121; Mduba v. Benedictine Hosp. (1976),
52 A.D. 2d 450, 384 NYS 2d 527; Schagrin v. Wilmington Med. Ctr., Inc. (Del.
Super. 1973), 304 A.2d 61; Vanaman v. Milord Mem. Hosp., Inc. (Del. Super.
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1970), 272 A. 2d 718; Quintal v. Laurel Grove Hosp. (1964), 62 Cal. 2d 154, 166-
168, 41 Cal. Rptr. 577, 584-586, 397 P.2d 161, 168-170; Seneris v. Haas (1955),
45 Cal. 2d 811, 291 P.2d 915; Stanhope v. Los Angeles College of Chiropractic
(1942), 54 Cal. App. 2d 141, 128 P.2d 705. See, also, Annotation, Liability of
Hospital or Sanitarium for Negligence of Physician or Surgeon (1987), 51 A.L.R.
4th 235, 271-276, Section 7; Comment, Medical Malpractice by Emergency
Physicians and Potential Hospital Liability (1986-1987), 75 Ky. L.J. 633;
Southwick, Hospital Liability: Two Theories Have Been Merged (1983), 4 J. Legal
Med. 1; Levin, Hospital's Liability for Independent Emergency Room Service
(1982), 22 Santa Clara L. Rev. 791; Note, Judicial Recognition of Hospital
Independent Duty of Care to Patients: Hannola v. Lakewood (1981), 30 Cleve. St.
L.Rev. 711; Note, Independent Duty of a Hospital to Prevent Physicians'
Malpractice (1973), 15 Ariz. L. Rev. 953.
{¶ 38} As to notice to the plaintiff that care is being provided by
independent medical practitioners, we stress that such notice, to be effective, must
come at a meaningful time.1
{¶ 39} A review of the record in this case reveals substantial competent
evidence upon which reasonable minds could conclude, as the jury did, that
1. It has been suggested, particularly by the dissent in Pamperin v. Trinity Mem. Hosp., supra, 144
Wis. 2d at 217-218, 222, 423 N.W.2d at 860, 861, that hospitals could escape liability for the
negligence of their independent contractors by posting signs in their emergency rooms regarding
the legal relationship of persons rendering medical assistance. The dissent, however, misconstrues
the concept of notice. Such "notice" will rarely provide the patient with the ability to choose at a
meaningful time:
"The plaintiff, who by definition is injured and under stress, is relying upon the hospital to
provide the services that the hospital has held out that it can provide. The plaintiff's reliance upon
the hospital's competence has been demonstrated by her walking (or being wheeled) into the
emergency room. Simply informing her that some doctors and staff have a different technical
relationship with the hospital than the one she expected does not lessen the reasonableness of her
reliance upon the hospital. Even if the patient understood the difference between an employee and
an independent-contractor relationship, informing her of the nature of the relationship after she
arrives is too late. The purpose of any notice requirement is to impart knowledge sufficient to enable
the plaintiff to exercise an informed choice. The signs suggested by the dissent are too little, too
late." Note supra, 1990 Wis. L. Rev. at 1147.
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January Term, 1994
Southview is estopped from denying that Dr. Mucci was its employee on August
25, 1986. By its representation to Kimberly's mother and its promotional campaign,
Southview held itself out as a provider of a full range of medical services, including
emergency care. There is nothing in the record to indicate that Kimberly was
informed or knew that the emergency care she received was being rendered by an
independent contractor merely using the hospital as a situs to provide such care.
Rather, appellant's testimony indicates that Kimberly was looking to Southview to
provide such care.
{¶ 40} For all the foregoing reasons, the judgment of the court of appeals is
reversed, and the judgment of the trial court entered upon the verdict is reinstated.
Judgment reversed.
DOUGLAS, F.E. SWEENEY, and PFEIFER, JJ., concur.
MOYER, C.J., A.W. SWEENEY and WRIGHT, JJ., dissent.
__________________
MOYER, C.J., dissenting.
{¶ 41} I respectfully dissent. In its attempt to mitigate the perceived
harshness of Albain v. Flower Hosp. (1990), 50 Ohio St.3d 251, 553 N.E.2d 1038,
the majority swings the pendulum so far to the other side as to make a hospital the
virtual insurer of its independent physicians.
{¶ 42} In Albain, this court held that a hospital may be found liable for the
acts of its staff physicians under the doctrine of agency by estoppel. Id. at paragraph
four of the syllabus. To establish such liability, Albain required the plaintiff to
prove that "(1) the hospital made representations leading the plaintiff to believe that
the negligent physician was operating as an agent under the hospital's authority, and
(2) the plaintiff was thereby induced to rely upon the ostensible agency
relationship." In my view, the instant case presents a set of facts that could be found
to satisfy the Albain test for agency by estoppel and demonstrates that there is no
need to overrule paragraph four of the Albain syllabus.
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{¶ 43} As the majority points out, the evidence in this case established that
Southview Hospital, through its advertising materials, held itself out as a hospital
with an emergency room that possessed "the latest technology and equipment" and
that could "handle all major medical emergencies." Prior to her medical
emergency, plaintiff had made a specific decision to go to the Southview Hospital
emergency room if she were to have a medical crisis. She apparently passed
directly by a closer hospital on her way to Southview. As I read Albain, a
reasonable trier of fact could have, based on this and other evidence at trial, found
Southview liable through agency by estoppel.
{¶ 44} Instead, the majority overrules paragraph four of the Albain syllabus
and substitutes a new test for agency by estoppel. Thus, a majority of the court
persists in its eagerness to overrule recent and well-reasoned precedent. The court
justifies its departure from the doctrine of stare decisis in this case by implying that
the standards enunciated in Albain will lead to "unfairness, *** doubt and
confusion."
{¶ 45} At a time when the rising cost of medical care surpasses most other
issues on national agendas, a majority of this court has acted to substantially
increase the acts of doctors for which hospitals will be required to provide
insurance. The test the majority has established will unfortunately increase the cost
of providing medical services and create more unfairness, doubt and confusion than
it resolves. Numerous questions arise when one tries to analyze and predict the
consequences of the newly announced standard. For example, what does it mean
for a hospital to "hold itself out" to the public as a provider of medical services?
Does not every medical hospital do so when it erects a sign saying "hospital" on its
premises? The majority cites approvingly to Rubbo v. Hughes Provision Co.
(1941), 138 Ohio St. 178, 20 O.O. 233, 34 N.E.2d 202, for the proposition that the
hospital need only make a representation to "a class of persons of whom the plaintiff
is one." Does this require that the plaintiff even be aware of the representation?
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January Term, 1994
Does the "holding out" of the hospital require any specific representations about
the emergency room?
{¶ 46} As to the second prong of the newly announced test, what constitutes
"notice or knowledge to the contrary?" The majority has indicated that a sign in
the emergency room is not sufficient. Will disclaimers in the hospital's brochures
and advertisements be sufficient? Will a hospital be able to insulate itself by
promoting, for instance, "the excellent care provided by its independent staff
physicians?"
{¶ 47} In addition, the final element of the majority's new test, which
requires that the plaintiff look to the hospital as opposed to the individual physician
to provide competent care, is entirely subjective. Once a plaintiff testifies that he
or she "looked to the hospital" as opposed to the individual practitioner, a hospital
defendant will have almost no effective means to disprove the plaintiff's subjective
state of mind. The majority criticizes Albain for requiring the plaintiff to prove
reliance in a wrongful death case, stating that it would be "virtually impossible."
The newly announced test, however, which depends exclusively on the decedent's
state of mind at the time he or she received medical care, presents the very same
problem of proof. Finally, to what extent must the plaintiff's "looking to the
hospital" be a direct result of the hospital's representations as opposed to the
plaintiff's ambient information—or disinformation—about how hospitals are
structured and operate in general?
{¶ 48} More doubt and confusion will arise when the majority's holding is
applied in other factual settings. For example, some large department stores rent
space in their stores to purveyors of individual lines of products, such as cosmetics.
In doing so, does a department store hold itself out to the public as a "provider" of
cosmetics, subjecting it to liability for the negligent acts of the independent
contractors on its premises?
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{¶ 49} The majority asserts, and I agree, that stare decisis should not prevail
when precedent leads to injustice and unfairness. I also agree that the role of
hospitals in society has changed dramatically over time. Nevertheless, I do not
agree that merely because hospitals have come more to resemble businesses than
charitable institutions, this court should dramatically weaken their ability to limit
contractually their liability for their independent agents. This court should not force
hospitals to be excess insurers of their staff physicians. Nor has plaintiff shown
that, in the great majority of malpractice cases, the physician's insurance will be
inadequate to cover the full amount of damages.
{¶ 50} Estoppel is an equitable doctrine that, according to Black's Law
Dictionary (6 Ed.1990) 551, mandates that "[a] party is prevented by his own acts
from claiming a right to detriment of other party who was entitled to rely on such
conduct and has acted accordingly." (Citing Graham v. Asbury [1975], 112 Ariz.
184, 185-186, 540 P.2d 656, 657-658.) It is a doctrine rooted in considerations of
fairness that prevents a party from benefiting from a representation, and later
denying it. By requiring reliance, the Albain test properly embodied this concept.
By eliminating the need for a nexus between the representation and a specific act
by the plaintiff in reliance thereon, the new standard loses sight of the basis for
applying estoppel in the first place. The new standard penalizes a hospital where it
has reaped no benefit from its own actions.
{¶ 51} The essence of the problem in these cases is the tension between
making hospitals liable in all instances and making them liable in none. The
majority criticizes Albain because it "abrogated the very exception [it] claimed to
create." The fact that the instant case may be decided favorably to the plaintiff
under Albain, however, demonstrates otherwise. Moreover, I believe that the
majority has committed the same fault to the opposite extreme: it has created a rule
that swallows the exception.
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January Term, 1994
{¶ 52} If the Albain standard unduly limits the class of potential plaintiffs,
the more jurisprudentially sound approach would be to modify, interpret or soften
the holding of that case instead of conducting the radical surgery performed by the
majority opinion. For example, this court could choose not to follow the dicta in
Albain that the plaintiff prove that he or she would have refused treatment had he
or she known of the agency relationship. 50 Ohio St.3d at 264, 553 N.E.2d at 1050.
This is the difference between the incremental development of the common law
and judicial legislation. In a time of ever-increasing medical costs and potentially
drastic changes to our health care system, this court would do well to take caution
in its radical redistribution of liabilities for acts of medical malpractice.
A.W. SWEENEY and WRIGHT, JJ., concur in the foregoing dissenting
opinion.
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WRIGHT, J., dissenting.
{¶ 53} My former colleague, Justice Ralph Locher, certainly said it right.
The battle cry in this era of burgeoning litigation is "sue, sue, sue!"2 "Deep pocket"
suits are upon us but for little purpose.
{¶ 54} The majority's pejorative description of stare decisis as "'"petrifying
rigidity,"'" in this particular context defies comment. I say this because the
precedent overturned today merely states that if a hospital employs an intern,
resident or any other medical practitioner, it must answer in damages for their
actions on the job. Conversely, if a doctor is working as an independent contractor
within a hospital and the medical facility does not hold itself out as that doctor's
employer, the hospital should not be joined in an action for malpractice against the
doctor. Today, the majority rejects this precedent.
{¶ 55} From this day on no malpractice action evolving out of an incident
within a hospital will be brought without joining the medical facility as a co-
defendant and this will include the costs of defense attendant thereto.
{¶ 56} In this period of burgeoning costs to the medical consumer the
majority has surely taken a step backwards.
{¶ 57} I concur in the Chief Justice's commentary and vigorously dissent.
__________________
2. See Justice Locher's dissent in Nottingdale Homeowners' Assn., Inc. v. Darby (1987), 33 Ohio
St.3d 32, 37, 514 N.E.2d 702, 707.
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