Hyde v. Univ. of Wash. Med. Ctr., 70830–9–I.

• Decision Date: 13 April 2015
• Docket Number: No. 70830–9–I.,70830–9–I.
• Court: Washington Court of Appeals
• Parties: Steven W. HYDE and Sandra D. Brooke, husband and wife, Respondents, v. UNIVERSITY OF WASHINGTON MEDICAL CENTER, State of Washington, and The Association of University Physicians, d/b/a UW Physicians, Petitioners.

186 Wash.App. 926

347 P.3d 918

Steven W. HYDE and Sandra D. Brooke, husband and wife, Respondents

v.UNIVERSITY OF WASHINGTON MEDICAL CENTER, State of Washington, and The Association of University Physicians, d/b/a UW Physicians, Petitioners.

No. 70830–9–I.

Court of Appeals of Washington, Division 1.

April 13, 2015.

Michael F. Madden, Bennett Bigelow & Leedom PS, Carol Lee Moody, Fain Anderson VanDerhoef, Seattle, WA, for Petitioners.

Carl A. Taylor Lopez, Lopez & Fantel, Seattle, WA, for Respondents.

Opinion

VERELLEN, A.C.J.

¶ 1 A nonprofit corporation that is functionally an arm of the state is subject to the tort claim filing requirements of RCW 4.92.100 and .110. The Association of University Physicians, d/b/a UW Physicians (UWP), a nonprofit corporation, provides physician services by University of Washington (UW) medical school faculty at hospitals operated by the university. UWP was created to serve the purposes of, and is controlled by, the UW School of Medicine, a state agency. Because UWP functions as an arm of the state and exposes state funds to liability, it constitutes a state entity for purposes of tort claim notice requirements. Accordingly, we reverse the trial court's denial of summary judgment.

FACTS

¶ 2 On August 27, 2012, Steven Hyde and his wife Sandra Brooke brought a medical malpractice suit alleging that Dr. Virany Hillard was negligent in providing medical care to Hyde at the UW Medical Center in August 2009. Dr. Hillard, a neurosurgeon, was a member of UWP and was on the UW School of Medicine faculty at the time. UWP provides physician services at the UW Medical Center. All its members are physicians who are faculty members at the UW School of Medicine with no independent private practice. The complaint did not name Dr. Hillard as a defendant, but named the State of Washington, the UW Medical Center, and UWP.

¶ 3 The defendants moved for summary judgment based on Hyde's failure to submit a notice of tort claim before commencing the action as required by RCW 4.92.100 and .110 for tort claims against a state entity. The trial court granted the motion as to the State of Washington and the UW Medical Center, but denied it as to UWP. The court concluded that UWP is not a municipal corporation, but is a nonprofit corporation dealing with the public at large and therefore, RCW 4.92.110 does not apply. This court granted UWP's motion for discretionary review.

DISCUSSION

¶ 4 UWP contends that it is a state entity subject to the tort claim filing requirements of RCW 4.92.100 and .110. We agree.

¶ 5 When reviewing an appeal from summary judgment, we engage in the same inquiry as the trial court to determine whether there is a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law.¹ Here, the issue is solely whether, as a matter of law, UWP constitutes a state entity subject to the tort claim filing requirements. We hold that it does.

¶ 6 By enacting chapter 4.92 RCW, the legislature abrogated state sovereign immunity and established procedures for suing the state. Among these are the filing requirements provided in RCW 4.92.100 and .110, which preclude tort claims against the state unless the plaintiff first files a tort claim with the state's risk management office at least 60 days before commencing the action:

All claims against the state, or against the state's officers, employees, or volunteers, acting in such capacity, for damages arising out of tortious conduct, must be presented to the office of risk management.^{[ 2 ]}

No action subject to the claim filing requirements of RCW 4.92.100 shall be commenced against the state, or against any officer, employee, or volunteer, acting in such capacity, for damages arising out of tortious conduct until sixty calendar days have elapsed after the claim is presented to the office of risk management.^{[ 3 ]}

Dismissal is the proper remedy for failure to comply with these tort claim filing requirements.⁴

¶ 7 As both parties acknowledge, our courts have not addressed the precise question of whether an entity such as UWP, which provides physician services in hospitals owned and operated by the university and whose members are UW faculty members, constitutes a state entity for purposes of triggering the tort claim filing requirements of RCW 4.92.100 and .110. But there is case law consistent with recognizing UWP as a functional arm of the state.

¶ 8 Generally, an entity operated and managed by a state agency for a state purpose is considered an arm of the state. For example, in Hontz v. State, the court recognized that, for purposes of immunity from 42 U.S.C. § 1983 civil rights lawsuits, Harborview hospital “is an arm of the State” because it is operated and managed by UW, a state agency.⁵ The court concluded, “It is clear that, in the context of this case, a § 1983 suit against Harborview is in legal effect a suit against the State and cannot, therefore, be maintained.”⁶

¶ 9 Specifically, tort claim notice requirements for state entities extend to those who function on behalf of the state, especially if that activity exposes state funds to liability. In Hardesty v. Stenchever, this court addressed the applicability of the tort claim filing statutes to a doctor employed by the UW Medical Center.⁷ There, a patient brought a medical negligence claim against the state, UW Medical Center, and a doctor employed by the UW Medical Center. The trial court dismissed the claims against the state and the UW Medical Center because the plaintiff failed to comply with the tort claim filing requirements. But the trial court allowed the claim to go forward against the doctor, finding that he was acting in his individual capacity when he made decisions about the patient's medical care.⁸ This court reversed, concluding that the doctor's actions were performed within the scope of his official duties at UW.⁹ As the court explained:

As a physician at the UW, treating patients is his “official” duty. He has no others. Under RCW 4.92, the attorney general is required to defend him and satisfy any judgment against him. The suit, therefore, exposes state funds to liability, making this precisely the type of case to which RCW 4.92 applies.^{[ 10 ]}

¶ 10 The character and function of UWP are evidenced by its articles of incorporation, bylaws, and operating agreement with the university. UWP is a nonprofit corporation created under chapter 24.03 RCW “for the benefit of the University of Washington School of Medicine exclusively for charitable, educational and scientific purposes, and to aid in performing certain functions of and to carry out certain purposes of the University of Washington School of Medicine.”¹¹ Its principal and income are devoted exclusively to these purposes. UWP is managed and directed by a board of trustees, which includes the chairs of each department of the UW medical school, plus 12 at—large trustees who are voting members of UWP elected by their colleagues and three community members who are appointed by the dean of the medical school. Upon dissolution, UWP's remaining assets will transfer to the university.

¶ 11 UWP provides physician services only at hospitals owned or managed by UW and other practice sites approved by the medical school dean. The physicians who provide these services must be faculty members of the UW School of Medicine, have no independent private medical practice, and, unless otherwise approved by the medical school dean, must be licensed to practice medicine in Washington. All records of care provided by UWP members at UW facilities are the property of UW.

¶ 12 UWP is responsible for billing for the services rendered by its members and retains payments received as its property. Members are compensated by UWP in addition to their salary as UW faculty employees.¹² Member compensation agreements with UWP are subject to the dean's approval. UWP retains all funds in excess of the annual operating expenses “for the benefit of the School of Medicine, as an Academic Support Fund to be used through the University by the School of Medicine for the educational, research and other institutional needs of the School of Medicine.”¹³

¶ 13 As provided in the operating agreement, UWP members are deemed agents of UW for professional liability purposes:

Members of the University's faculty, house staff and students involved in providing health care in University facilities shall be deemed employees and agents of the University for professional liability coverage purposes and self-insurance purposes by the University when providing care to patients in facilities owned or managed by or affiliated with the University as a part of an approved University research or other health care program.^{[ 14 ]}

¶ 14 UWP contends that, as with Harborview, which is only managed and operated by UW, UWP is also “an arm of the state.” UWP's analogy to Harborview is persuasive.¹⁵

¶ 15 While Hontz was in the context of state immunity from 42 U.S.C. § 1983 claims, the question there was whether the suit against Harborview was “in legal effect a suit against the State,” the same issue presented here.¹⁶ The court concluded that it was a suit against the state because Harborview was operated and managed by UW, a state agency.¹⁷ The court also noted that Harborview's employees are state employees and that claims against UW's operation at Harborview are paid from a fund held by the state treasurer.¹⁸

¶ 16 Similarly, UWP is operated and managed by UW. The operating agreement recites that UWP “has been organized for the purposes of assisting the University School of Medicine in carrying out its charitable, educational, and scientific purposes.”¹⁹ Its bylaws recognize UWP is ultimately accountable to the UW School of Medicine: “The functioning of this Association is subject to the policies of the School of Medicine with respect to the practice of medicine in connection with the faculty duties of the members.”²⁰ The board of trustees that manages and oversees UWP...