Arthur v. St. Peters Hospital

• Decision Date: 30 July 1979
• Citation: 405 A.2d 443,169 N.J.Super. 575
• Parties: Keith L. ARTHUR, Plaintiff, v. ST. PETERS HOSPITAL, Lorin Press, M. D., Alan Hirshman, M. D., Jane Doe, MaryRoe, etc., Unknown Physicians, Radiologists, Registered Nurses, LicensedPractical Nurses, and Nurses Aides, Jointly, Severally and in the Alternative,Defendants.
• Court: New Jersey Superior Court

Page 575

169 N.J.Super. 575

405 A.2d 443

Keith L. ARTHUR, Plaintiff, v. ST. PETERS HOSPITAL, Lorin Press, M. D., Alan Hirshman, M D., Jane Doe, MaryRoe, etc., Unknown Physicians Radiologists, Registered Nurses, LicensedPractical Nurses and Nurses Aides, Jointly, Severally and in the Alternative,Defendants.

Superior Court of New Jersey, Law Division.

July 30, 1979.

Gerard C. Gross, Atlantic City, for plaintiff.

Joel A. Greenberg, Atlantic City, for defendants (Horn, Kaplan, Goldberg & Gorny, Atlantic City, attorneys).

GIBSON, J. S. C.

This is a medical malpractice case in which the defendant hospital has moved for summary judgment. Essentially, the hospital argues that whatever negligence existed was that of the physicians involved and since they were independent contractors, it is entitled to a dismissal as a matter of law. Plaintiff asserts that the doctors' contractual status is still a factual question and that, in any event, the hospital held the doctors out as its employees and it would therefore be responsible under the doctrine of apparent authority. ¹

The material facts are not in dispute and may be summarized as follows: Following an injury to his left wrist on February 6, 1976, plaintiff sought treatment at the emergency room of St. Peters Hospital in New Brunswick. After being examined he was sent to the radiology department where his wrist was x-rayed. At that point he was advised that no fractures existed and was released. As a result of continuing pain and swelling over a period of months, however, plaintiff sought the services of another physician, whereupon it was discovered that he had sustained a fracture of the navicular bone. This suit ensued. Submitted with this motion is an affidavit by a representative of the hospital stating that the physicians involved were independent contractors. In support of that conclusion it is noted that no deductions for withholding or Social Security taxes were made from the payment they received. Although no responsive affidavit was submitted, copies of the reports from the emergency room and the radiology department were supplied along with a copy of the hospital bill. All contain the logo of the hospital and there is no indication which would identify the physicians as being part of any independent group, as the hospital had claimed.

Contrary to the position taken by the hospital, it is clear that while the absence of deductions may have some probative value on the issue of whether an employer-employee status existed, "neither the making nor the failure to make such deductions is dispositive of an issue of this type." Dee v. Excel Wood Products Co., 86 N.J.Super. 453, 457, 207 A.2d 203, 205 (App.Div.1965). In determining employment status in New Jersey, it is the "degree of control" which is critical. When applying that test several factors may be considered, including the type of occupation, the skill required, the method of payment, who supplies the tools, etc. Miklos v. Liberty Coach Co., 48 N.J.Super. 591, 602, 138 A.2d 762 (App.Div.1958); see also, Pelliccioni v. Schuyler Packing Co., 140 N.J.Super. 190, 199, 356 A.2d 4 (App.Div.1976); Dee v. Excel Wood Products Co., Inc., supra, and Restatement, Agency, § 220 (1933). Although it may be that the movant can develop proofs sufficient to favorably resolve this question, it nevertheless becomes moot for purposes of this opinion in view of the determination being made here on the issue of apparent authority. ²

By invoking the doctrine of apparent authority plaintiff suggests that regardless of the employment status of the physicians, the hospital should nevertheless be held responsible for their conduct, having held them out to the public as their employees. Although this concept is well recognized within the law of agency, research reveals no New Jersey cases where it has been applied to establish liability upon hospitals for the negligence of its independent physicians. Normally, a principal is responsible for the actions of an agent who is acting within the scope of his authority. Wright v. Globe Porcelain Co., 72 N.J.Super. 414, 418, 179 A.2d 11 (App.Div.1962). However, where one engages the services of an independent contractor, that person is generally not liable for the latter's negligent acts. Majestic Realty Associates, Inc. v. Toti Contracting Co., 30 N.J. 425, 430, 153 A.2d 321 (1959); Donch v. Delta Inspection Services, Inc., 165 N.J.Super. 567, 570, 398 A.2d 925 (Law Div.1979). ³ The general rule of immunizing persons from vicarious liability for the negligent acts of independent contractors has been applied equally to hospitals. Judge Greenberg outlined this principle in Corleto v. Shore Memorial Hospital, 138 N.J.Super. 302, 350 A.2d 534 (Law Div.1975):

Liability of a private hospital for the negligent acts of the members of its professional staff must be predicated on the doctrine of Respondeat superior. Accordingly, a private hospital is not responsible for any default on the part of a physician or surgeon who practices his profession as an independent agent, and, where a patient employs a physician or surgeon not in the employ of the hospital, the hospital is not liable for his negligence. (at 306, 350 A.2d at 536; 41 C.J.S. Hospitals, § 8 at 346).

Contrary to the defendant hospital's suggestion, however, Corleto cannot be read as having resolved the question now being considered. The issue raised there dealt with the liability of a hospital where it could be shown that it was negligent in failing to supervise and/or remove an incompetent doctor. The court never considered the doctrine of apparent authority, nor did it have to.

Since it has been assumed for purposes of this argument that the physicians here were independent contractors, the general rules outlined above make it clear that the hospital would normally not be responsible for their wrongdoing. How, then, does the doctrine of apparent authority affect that conclusion, if at all? Apparent authority, or what is sometimes referred to as the "holding out" theory, has its origins as part of the law of agency. It imposes liability, not as the result of the reality of a contractual relationship but rather because of the actions of a principal or an employer in somehow misleading the public into believing that the relationship or the authority exists. The concept is essentially one of estoppel and has been explained in this manner:

* * * (T)he principal is bound by the acts of his agent with the apparent authority which he knowingly permits the agent to assume, or which he holds the agent out to the public as possessing. The question in every case * * * is whether the principal has by his voluntary act placed the agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such agent has authority to perform the particular act in question; * * *. (Hudson &C., Loan Assn., Inc. v. Horowytz, 116 N.J.L. 605, 608, 186 A. 437, 438 (Sup.Ct.1936))

Generally, the doctrine presupposes the existence of a principal-agent relationship, Ibid, and of course, when dealing with an independent contractor, no such relationship exists. However, this relationship is not necessary to the application of the doctrine. Nor is the concept confined to the field of contracts. Hill v. Newman, 126 N.J.Super. 557, 316 A.2d 8 (App.Div.1973), certif. den. 64 N.J. 508, 317 A.2d 720 (1974). In Hill the vendor of certain furniture was held liable for the negligent acts of an independent contractor which it had sent to the buyer's home to make repairs. Plaintiff, who was injured as a result of that negligence, was not aware of the repairman's independent contractor status. The court found that the evidence supported the view that the seller had held out the repairman as its own employee. In so ruling the court quoted with approval § 429 of the Restatement, Torts 2d (1964):

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. (at 562, 316 A.2d at 11).

Given the holding in Hill and despite the general rule dealing with independent contractors, there does not appear to be any rational basis for excluding the concept of apparent authority from the field of hospital liability. In those cases...