G.L. v. Kaiser Foundation Hospitals, Inc.

• Decision Date: 07 June 1988
• Docket Number: SC-S34799
• Citation: 757 P.2d 1347,306 Or. 54
• Parties: , 56 USLW 2725 G.L., Petitioner on review, v. KAISER FOUNDATION HOSPITALS, INC., Respondent on review. CC A8309-05835, CA A40470,
• Court: Oregon Supreme Court

Page 1347

757 P.2d 1347

306 Or. 54, 56 USLW 2725

G.L., Petitioner on review, v. KAISER FOUNDATION HOSPITALS, INC., Respondent on review.

CC A8309-05835, CA A40470, SC-S34799.

Supreme Court of Oregon In Banc.

Argued and Submitted March 2, 1988.

Decided June 7, 1988.

Raymond J. Conboy, of Pozzi, Wilson, Atchison, O'Leary & Conboy, Portland, argued the cause and filed the petition for petitioner on review.

John R. Faust, Jr., of Schwabe, Williamson & Wyatt, Portland, argued the cause for respondent on review and filed a response to the petition.

JONES, Justice.

Plaintiff, admitted to Kaiser Foundation's Sunnyside Hospital for surgery to control duodenal bleeding, was confined after surgery for a time in the intensive care unit, followed by a transfer to the progressive care unit. Finally, on April 29, 1983, plaintiff was transferred to a semi-private room in the hospital, shared by an elderly, partially paralyzed patient.

In the early morning hours of May 1, 1983, plaintiff was sexually assaulted by Terry Daniel, a respiratory therapist employed by defendant. She was unconscious at the time of the assault, possibly as a result of being drugged by Daniel. The other patient in plaintiff's room reported the assault to plaintiff and to hospital personnel. Daniel later pleaded guilty to attempted rape in the second degree.

Plaintiff brought this action against defendant for her injuries, based on several theories of liability. At the direction of the trial court, plaintiff prepared a pretrial order setting forth all her allegations and theories of defendant's liability. The trial court granted defendant's motions for dismissal and summary judgment as to plaintiff's strict liability claims against the hospital and submitted plaintiff's "negligent retention" and negligent supervision claims to a jury, which found in favor of defendant. Plaintiff appealed the dismissal of her allegations of strict liability to the Court of Appeals, which affirmed the decision of the trial court. G.L. v. Kaiser Foundation Hospitals, Inc., 88 Or.App. 528, 746 P.2d 731 (1987). We affirm the decision of the Court of Appeals.

Plaintiff based her allegations of liability beyond negligence on two theories:

"[1. Strict Liability:] Public policy regulates that Defendant hospital be held strictly liable for injuries caused to Plaintiff by the Defendant hospital's employee Terry Earl Daniel."

"[2. Implied Contract: ] By admitting Plaintiff as a patient, Defendant Kaiser Sunnyside Hospital contracted to provide adequate care, safety, treatment, and security for Plaintiff while she was an inpatient. The sexual assault committed by Terry Earl Daniel breached the Defendant's contract with Plaintiff in that Defendant hospital did not provide adequate care, treatment, safety and security for Plaintiff."

Both theories are similar in that they seek to impose liability on the hospital ¹ for the actions of others beyond the control of the hospital, but they differ in that one would base liability on the relationship between the hospital and the perpetrator of the offense, while the other concentrates on the relationship between the hospital and the patient.

Defendant moved to strike these allegations. The circuit court granted the motion. It is this decision by the trial court that is before us. Plaintiff does not appeal from the jury verdict for defendant on the negligence theories.

The question before this court is a matter of first impression in Oregon, if not in the nation. The question is whether a hospital is liable for injuries caused by the criminal assault of an employee on a patient when neither the hospital as a decision-making entity nor any of its employees was negligent and where the attacking employee was acting outside the scope of employment.

1. Plaintiff's Strict Liability Claim.

The idea that an employer must be responsible for certain acts of employees is well established and is not questioned by either party in the present dispute. This case concerns the boundaries of the doctrine of respondeat superior: Under what circumstances will an employer be liable for the intentional torts of the employee? To answer this question we must turn to the rationale upon which the doctrine of respondeat superior rests.

Respondeat superior is a form of strict liability that imposes liability on a defendant without regard for the defendant's fault. This imputation of liability, also referred to as "vicarious liability," is based on long-established policy reasons; i.e., an employer who receives the social and economic benefits of employing others must also be responsible for the acts of employees who are only acting in this fashion because of their employment. Stanfield v. Laccoarce, 284 Or. 651, 655, 588 P.2d 1271 (1978); Gossett v. Simonson, 243 Or. 16, 22, 411 P.2d 277 (1966).

Plaintiff wishes to extend the traditional role of vicarious liability to new limits. In her pretrial order, plaintiff proposed a new public policy rationale for hospital liability. She alleged that "Public Policy regulates that Defendant hospital be held strictly liable for injuries caused to Plaintiff by the Defendant hospital's employee." In her brief before the Court of Appeals, plaintiff elaborated on this argument:

"The issue presented by this appeal is simple. Should the patient or the hospital bear the loss from rape or other criminal conduct committed by a hospital employee whose employment by, and duties about, the hospital facilitate the commission of a crime. Assuming, as generally is the fact, that the criminal is financially irresponsible, is it more reasonable for the hospital who has employed the wrongdoer or the patient who has been victimized by him to shoulder the financial burden of criminal conduct."

In this argument plaintiff is repeating a common theme in the doctrine of respondeat superior. "What has emerged as the modern justification for vicarious liability is a rule of policy, a deliberate allocation of a risk." Keeton, Prosser and Keeton on Torts 500, § 69 (5th ed. 1984).

The particular character of the "policy" argument in this case calls upon us to turn again to the question of this court's analysis of policy arguments. In Donaca v. Curry Co., 303 Or. 30, 36, 734 P.2d 1339 (1987), we stated that this court has not "embraced freewheeling judicial 'policy declarations' in other cases." Such a statement is not a denial of the undeniable fact that the precedential effect of cases decided by an appellate court means that decisions have an effect on policy. Neither is this statement a prohibition on changes in the common law by court decision. See Dahl v. BMW, 304 Or. 558, 567, 748 P.2d 77 (1987). The limitation noted in Donaca represents a limitation on the rationales that this court will consider when it is being asked to make a decision with precedential value. Most specifically, when we refused to limit the potential liability of Curry County in all cases involving the trimming of roadside brush on the "policy" ground that such potential liability would impose additional costs on the scarce resources of the county, this court was continuing to refuse to create potential liability or immunity as a matter of law based on certain types of "policy" arguments. In Donaca and in the cases cited therein this court has refused to change the common law of this state based on arguments concerning the general economic resources of the plaintiff or defendant. We similarly reject plaintiff's invitation to write new policy for hospital liability based on economic grounds in this case.

Plaintiff relies on Hungerford v. Portland Sanitarium, 235 Or. 412, 384 P.2d 1009 (1963). That was an exceptional case in that this court overruled an eight-year-old case which conferred upon charitable enterprises immunity from liability for the torts of their servants. The court recognized the obsolescence of charitable immunity, citing treatises that pre-dated the prior decision, and concluded that expediency no longer justified adherence to a dying doctrine. Id. at 414, 384 P.2d 1009. The court found no reason for adherence to the immunity rule for charities. Id. at 416, 384 P.2d 1009.

Ordinarily this court reconsiders a nonstatutory rule or doctrine upon one of three premises: (1) that an earlier case was inadequately considered or wrong when it was decided, see, e.g., Winn v. Gilroy, 296 Or. 718, 681 P.2d 776 (1984) (reconsidering parental immunity); (2) that surrounding statutory law or regulations have altered some essential legal element assumed in the earlier case, see, e.g., Dahl v. BMW, supra, 304 Or. at 567, 748 P.2d 77 (enactment of comparative fault statutes supports re-examination of prior case holding that failure to wear a safety belt is not a proper defense); Norwest v. Presbyterian Intercommunity Hosp., 293 Or. 543, 562-67, 652 P.2d 318 (1982) (wrongful death law did not alter liability to child if parent survives injury); or (3) that the earlier rule was grounded in and tailored to specific factual conditions, and that some essential factual assumptions of the rule have changed. Without some such premise, the court has no grounds to reverse a well-established rule besides judicial fashion or personal policy preference, which are not sufficient grounds for such a change, see Norwest, 293 Or. at 553, 652 P.2d 318.

In the present case, defendant's liability depends on the application of existing policy underlying respondeat superior to the facts of this case. When the principles of respondeat superior were in their infancy, courts emphasized the idea that the master was liable for the servant's actions because the master exercised control over the servant as a part of the employment relationship. Following these notions, courts "refused to hold [the master] liable for intentional or 'willful' wrongdoing on the part of the servant, on the ground that it could not be implied that such conduct was ever authorized." Keeton, supra at...