Baptist Memorial Hosp. System v. Sampson

• Decision Date: 03 July 1998
• Docket Number: No. 97-0268,97-0268
• Citation: 41 Tex. Sup. Ct. J. 833,969 S.W.2d 945
• Parties: 41 Tex. Sup. Ct. J. 833 BAPTIST MEMORIAL HOSPITAL SYSTEM, Petitioner, v. Rhea SAMPSON, Respondent.
• Court: Texas Supreme Court

Page 945

969 S.W.2d 945

41 Tex. Sup. Ct. J. 833

BAPTIST MEMORIAL HOSPITAL SYSTEM, Petitioner, v. Rhea SAMPSON, Respondent.

No. 97-0268.

Supreme Court of Texas.

Argued Dec. 2, 1997.

Decided May 21, 1998.

Rehearing Overruled July 3, 1998.

Ruth G. Malinas, George F. Evans, Jr., San Antonio, for Petitioner.

Oliver S. Heard, Jr., Luis R. Vera, Jr., Clifton F. Douglass, III, Karl E. Hays, San Antonio, for Respondent.

PHILLIPS, Chief Justice, delivered the opinion of the Court.

In this case, we decide whether the plaintiff raised a genuine issue of material fact that defendant Hospital was vicariously liable under the theory of ostensible agency for an emergency room physician's negligence. We granted Baptist Memorial Hospital System's application for writ of error to resolve a conflict in the holdings of our courts of appeals regarding the elements required to establish liability against a hospital for the acts of an independent contractor emergency room physician. We hold that the plaintiff has not met her burden to raise a fact issue on each element of this theory. Accordingly, we reverse the judgment of the court of appeals, 940 S.W.2d 128, and render judgment that the plaintiff take nothing.

I

On March 23, 1990, Rhea Sampson was bitten on the arm by an unidentified creature that was later identified as a brown recluse spider. By that evening, her arm was swollen and painful, and a friend took her to the Southeast Baptist Hospital emergency room. Dr. Susan Howle, an emergency room physician, examined Sampson, diagnosed an allergic reaction, administered Benadryl and a shot of painkiller, prescribed medication for pain and swelling, and sent her home. Her condition grew worse, and she returned to the Hospital's emergency room by ambulance a little over a day later. This time Dr. Mark Zakula, another emergency room physician, treated her. He administered additional pain medication and released her with instructions to continue the treatment Dr. Howle prescribed. About fourteen hours later, with her condition rapidly deteriorating, Sampson went to another hospital and was admitted to the intensive care ward in septic shock. There, her bite was diagnosed as that of a brown recluse spider, and the proper treatment was administered to save her life. Sampson allegedly continues to have recurrent pain and sensitivity where she was bitten, respiratory difficulties, and extensive scarring.

Sampson sued Drs. Howle and Zakula for medical malpractice. She also sued Baptist Memorial Hospital System ("BMHS"), of which Southeast Baptist Hospital is a member, for negligence in failing to properly diagnose and treat her, failing to properly instruct medical personnel in the diagnosis and treatment of brown recluse spider bites, failing to maintain policies regarding review of diagnoses, and in credentialing Dr. Zakula. Sampson also alleged that the Hospital was vicariously liable for Dr. Zakula's alleged negligence under an ostensible agency theory. Sampson nonsuited Dr. Howle early in the discovery process. The trial court granted BMHS summary judgment on Sampson's claims of vicarious liability and negligent treatment. The trial court severed those claims from her negligent credentialing claim against BMHS and her malpractice claim against Dr. Zakula. ¹ Sampson appealed only on the vicarious liability theory.

Both parties agree that BMHS established as a matter of law that Dr. Zakula was not its agent or employee. Thus the burden shifted to Sampson to raise a fact issue on each element of her ostensible agency theory, which Texas courts have held to be in the nature of an affirmative defense. See Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex.1984); Smith v. Baptist Mem'l Hosp. Sys., 720 S.W.2d 618, 622 (Tex.App.--San Antonio 1986, writ ref'd n.r.e.), disapproved on other grounds by St. Luke's Episcopal Hosp. v. Agbor, 952 S.W.2d 503, 509 n. 1 (Tex.1997). Sampson contended that she raised a material fact issue on whether Dr. Zakula was BMHS's ostensible agent. The court of appeals, with one justice dissenting, agreed and reversed the summary judgment. 940 S.W.2d 128. In our review, we must first determine the proper elements of ostensible agency, then decide whether Sampson raised a genuine issue of material fact on each of these elements.

II

Under the doctrine of respondeat superior, an employer is vicariously liable for the negligence of an agent or employee acting within the scope of his or her agency or employment, although the principal or employer has not personally committed a wrong. See DeWitt v. Harris County, 904 S.W.2d 650, 654 (Tex.1995); RESTATEMENT (SECOND) OF AGENCY § 219 (1958). The most frequently proffered justification for imposing such liability is that the principal or employer has the right to control the means and methods of the agent or employee's work. See Newspapers, Inc. v. Love, 380 S.W.2d 582, 585-86 (Tex.1964); RESTATEMENT (SECOND) OF AGENCY § 220, cmt. d. Because an independent contractor has sole control over the means and methods of the work to be accomplished, however, the individual or entity that hires the independent contractor is generally not vicariously liable for the tort or negligence of that person. See Enserch Corp. v. Parker, 794 S.W.2d 2, 6 (Tex.1990); Redinger v. Living, Inc., 689 S.W.2d 415, 418 (Tex.1985). Nevertheless, an individual or entity may act in a manner that makes it liable for the conduct of one who is not its agent at all or who, although an agent, has acted outside the scope of his or her authority. Liability may be imposed in this manner under the doctrine of ostensible agency in circumstances when the principal's conduct should equitably prevent it from denying the existence of an agency. ² See, e.g., Marble Falls Hous. Auth. v. McKinley, 474 S.W.2d 292, 294 (Tex.Civ.App.--Austin 1971, writ ref'd n.r.e.). Ostensible agency in Texas is based on the notion of estoppel, that is, a representation by the principal causing justifiable reliance and resulting harm. See Ames v. Great S. Bank, 672 S.W.2d 447, 450 (Tex.1984); RESTATEMENT (SECOND) OF AGENCY § 267; KEETON ET AL., PROSSER AND KEETON ON THE LAW OF TORTS § 105, at 733-34 (5 th ed.1984).

Texas courts have applied these basic agency concepts to many kinds of principals, including hospitals. See Sparger v. Worley Hosp., Inc., 547 S.W.2d 582, 585 (Tex.1977) (explaining that "[h]ospitals are subject to the principles of agency law which apply to others"). A hospital is ordinarily not liable for the negligence of a physician who is an independent contractor. See, e.g., Berel v. HCA Health Servs., 881 S.W.2d 21, 23 (Tex.App.--Houston [1 st Dist.] 1994, writ denied); Jeffcoat v. Phillips, 534 S.W.2d 168, 172 (Tex.Civ.App.--Houston [14 th Dist.] 1976, writ ref'd n.r.e.). On the other hand, a hospital may be vicariously liable for the medical malpractice of independent contractor physicians when plaintiffs can establish the elements of ostensible agency. See, e.g., Lopez v. Central Plains Reg'l Hosp., 859 S.W.2d 600, 605 (Tex.App.--Amarillo 1993, no writ), disapproved on other grounds by Agbor, 952 S.W.2d at 509 n. 1; Nicholson v. Mem'l Hosp. Sys., 722 S.W.2d 746, 750 (Tex.App.--Houston [14 th Dist.] 1986, writ ref'd n.r.e.).

III

In this case, the court of appeals held that two distinct theories of vicarious liability with different elements are available in Texas to impose liability on a hospital for emergency room physician negligence: agency by estoppel (referred to in this opinion as ostensible agency), based on the Restatement (Second) of Agency section 267, and apparent agency, based on the Restatement (Second) of Torts section 429. See 940 S.W.2d at 131. Under section 267, the party asserting ostensible agency must demonstrate that (1) the principal, by its conduct, (2) caused him or her to reasonably believe that the putative agent was an employee or agent of the principal, and (3) that he or she justifiably relied on the appearance of agency. RESTATEMENT (SECOND) OF AGENCY § 267 (1958). Although neither party mentioned section 429 in the trial court or in their briefs to the court of appeals, the court of appeals then proceeded to adopt section 429 and hold that under that section, plaintiff had only to raise a fact issue on two elements: (1) the patient looked to the hospital, rather than the individual physician, for treatment; and (2) the hospital held out the physician as its employee. See 940 S.W.2d at 132. Holding that the plaintiff had established a genuine issue of material fact on each element of this latter affirmative defense, the court reversed and remanded to the trial court for trial on the merits. The court of appeals further suggested that a hospital could do nothing to avoid holding out a physician in its emergency room as its employee because notification to prospective patients in any form would be ineffectual:

[W]e take an additional step in our analysis to consider whether notice provided in consent forms and posted in emergency rooms can ever be sufficient to negate a hospital's "holding out"....

....

... Because we do not believe hospitals should be allowed to avoid such responsibility, we encourage the full leap--imposing a nondelegable duty on hospitals for the negligence of emergency room physicians.

940 S.W.2d at 135-136. Thus, the court of appeals would create a nondelegable duty on a hospital solely because it opens its doors for business.

We first reject the court of appeals' conclusion that there are two methods, one "more difficult to prove" than the other, to establish the liability of a hospital for the malpractice of an emergency room physician. 940 S.W.2d at 132. Our courts have uniformly required proof of all three elements of section 267 to invoke the fiction that one should be responsible for the acts of another who is not in fact an agent acting within his or her scope of authority. As we have explained:

Apparent authority in Texas is based on estoppel....