Jackson v. Power

• Citation: 743 P.2d 1376
• Decision Date: 16 October 1987
• Docket Number: No. S-1677,S-1677
• Parties: Brett JACKSON and Linda Estrada, Petitioners, v. John POWER, M.D.; Fairbanks Memorial Hospital; Lutheran Hospital and Homes Society of America, Inc.; Emergency Room, Inc.; William H. Montano, M.D.; and George Vrablick, M.D., Respondents.
• Court: Supreme Court of Alaska (US)

Page 1376

743 P.2d 1376

Brett JACKSON and Linda Estrada, Petitioners, v. John POWER, M.D.; Fairbanks Memorial Hospital; Lutheran Hospital and Homes Society of America, Inc. Emergency Room, Inc.; William H Montano, M.D.; and George Vrablick, M.D., Respondents.

No. S-1677.

Supreme Court of Alaska.

Oct. 16, 1987.

Michael Cohn, Dan A. Hensley, L. Ames Luce, Law Offices of L. Ames Luce, Anchorage, for petitioners.

James J. Delaney, Howard A. Lazar, Delaney, Wiles, Hayes, Reitman & Brubaker, Anchorage, for respondents Fairbanks Memorial Hosp. and Lutheran Hosp. & Homes Soc.

Peter J. Maassen, Burr, Pease & Kurtz, Anchorage, for respondents John Power, M.D. and Emergency Room, Inc.

David C. Crosby, Council & Crosby, Juneau, for Health Ass'n of Alaska, amicus curiae.

Before RABINOWITZ, C.J., and BURKE, MATTHEWS and COMPTON, JJ.

OPINION

BURKE, Justice.

This case presents an issue of first impression in this state, concerning health care delivery in hospital emergency rooms. The question that we must resolve is whether a hospital may be held vicariously liable for negligent health care rendered by an emergency room physician who is not an employee of the hospital, but is, instead, an independent contractor. We hold that the hospital in this case had a non-delegable duty to provide non-negligent physician care in its emergency room and, therefore, may be liable.

I

On the evening of May 22, 1981, sixteen year old Brett Jackson was seriously injured when he fell from a cliff. Jackson was airlifted to Fairbanks Memorial Hospital (FMH). Shortly after midnight, he was received in the hospital's emergency room.

Jackson was examined by respondent John Power, M.D., one of two emergency room physicians on duty at the time. Dr. Power's examination revealed multiple lacerations and abrasions of the patient's face and scalp, multiple contusions and lacerations of the lumbar area, several broken vertebrae and gastric distension, suggesting possible internal injuries. Dr. Power ordered several tests, but did not order certain procedures that could have been used to ascertain whether there had been damage to the patient's kidneys. Jackson had, in fact, suffered damage to the renal arteries and veins which supply blood to and remove blood from the kidneys. This damage, undetected for approximately 9 to 10 hours after Jackson's arrival at FMH, ultimately caused Jackson to lose both of his kidneys.

II

Jackson and his mother, Linda Estrada, (hereinafter referred to collectively as Jackson) filed suit. In their complaint they alleged negligence in the diagnosis, care and treatment Jackson received at FMH. Jackson moved for partial summary judgment seeking to hold FMH vicariously liable as a matter of law for the care rendered by Dr. Power. In support of his motion, Jackson advanced three separate theories: (1) enterprise liability; (2) apparent authority; and (3) non-delegable duty.

After briefing and argument, the superior court held, as a matter of law, that FMH could not be held liable under an enterprise liability theory, and that genuine issues of material fact precluded summary judgment on the two remaining theories. ¹ We subsequently granted Jackson's petition for review of the court's ruling.

III

Initially, it is important to clarify the exact issue that we have been asked to resolve. Jackson has conceded, for purposes of this appeal, that Dr. Power was not an employee of FMH, but an independent contractor employed by respondent Emergency Room, Inc. (ERI), and that ERI and FMH are separate legal entities. Traditional rules of respondeat superior are, therefore, inapposite. Jackson also makes no claim that FMH was itself negligent in its selection, retention, or supervision of Dr. Power. Consequently, we have no occasion to consider the doctrine of corporate negligence. ² Jackson asks us to resolve only whether a hospital should be vicariously liable, as a matter of public policy, for the negligence or malpractice ³ of an independent contractor/physician, committed while treating a patient in the hospital's emergency room, under theories of (1) enterprise liability; (2) apparent authority; or (3) non-delegable duty.

IV

As previously noted, this case presents this court with an issue of first impression. ⁴

The generally accepted rule is that, where an employment relationship exists between the physician and the hospital, the hospital will be liable, under the traditional rule of respondeat superior, for any negligence or malpractice which results in injury to a hospital patient. E.g., Bing v. Thunig, 2 N.Y.2d 656, 163 N.Y.S.2d 3, 11, 143 N.E.2d 3, 9 (N.Y.1957); Weldon v. Seminole Municipal Hospital, 709 P.2d 1058, 1059 (Okla.1985). Conversely, no liability attaches to the hospital when the physician is an independent contractor. E.g. Greene v. Rogers, 147 Ill.App.3d 1009, 101 Ill.Dec. 543, 547, 498 N.E.2d 867, 871 (1986); Hill v. St. Clare's Hosp., 67 N.Y.2d 72, 499 N.Y.S.2d 904, 908, 490 N.E.2d 823, 827 (1986). See generally Comment, The Hospital-Physician Relationship: Hospital Responsibility for Malpractice of Physicians 50 Wash.L.Rev. 385 (1975) (hereinafter "Comment, Hospital Responsibility ").

Jackson concedes that Dr. Power was an independent contractor; however, he asserts that Alaska's law of respondeat superior mandates a result different than that which would be reached under the general rule. ⁵ Jackson argues that our decision in Fruit v. Schreiner, 502 P.2d 133 (Alaska 1972), establishes that the law of "vicarious legal responsibility" in Alaska is "enterprise liability." Thus, he contends, if the enterprise impacts society and the negligent act occurred during an activity performed for the benefit or in the interest of the enterprise, the enterprise is liable.

Jackson's argument proves unpersuasive. First, Jackson's interpretation of Fruit is flawed. A close reading of that case shows that we did not view "enterprise liability" as a separate theory of liability or a distinct cause of action. Rather, enterprise liability was seen as one of two widely accepted theories used by courts to justify imposition of vicarious liability in an established employer/employee context. Id. at 138-39. As was noted in Fruit:

[T]he "enterprise" theory ... finds liability whenever the enterprise of the employer would have benefited by the context of the act of the employee but for the unfortunate injury.

....

The rule of respondeat superior however, ... is limited to requiring an enterprise to bear the loss incurred as a result of the employee's negligence. The acts of the employee need be so connected to his employment as to justify requiring that the employer bear that loss.

Id. at 140-41 (emphasis added) (footnotes omitted). See generally Morris, Enterprise Liability and the Actuarial Process--the Insignificance of Foresight, 70 Yale L.J. 554 (1961).

Additionally, our decisions since Fruit show that we have applied the theory of respondeat superior only in an employer/employee context, unless one of the well established exceptions to that rule exists. See, Parker Drilling v. O'Neill, 674 P.2d 770, 775 (Alaska 1983); Williams v. Alyeska Pipeline Service Co., 650 P.2d 343, 349 (Alaska 1982); Hammond v. Bechtel Inc., 606 P.2d 1269, 1273 (Alaska 1980); Barton v. Lund, 563 P.2d 875, 876 (Alaska 1977); Luth v. Rogers & Babler Construction, 507 P.2d 761, 763-64 (Alaska 1973). Jackson's theory presents no such exception.

Finally, the cases from other jurisdictions cited by Jackson provide little support for his theory; those cases deal only with theories of apparent agency or corporate negligence. Moreover, although at least two courts appear to have implicitly indicated a willingness to recognize a theory of enterprise liability, see Alden v. Providence Hospital, 382 F.2d 163, 166 (D.C.Cir.1967); Adamski v. Tacoma General Hospital, 20 Wash.App. 98, 579 P.2d 970, 977 & n. 5 (1978), to date, no court has explicitly embraced that concept. ⁶

In short, Jackson's theory of enterprise liability is not yet the law in Alaska.

V

Jackson next argues that the trial court erred in holding that genuine issues of material fact prevented it from granting summary judgment on his theory of apparent authority.

Although we have recognized the doctrine of apparent authority in other contexts, see City of Delta Junction v. Mack Trucks, 670 P.2d 1128, 1129-30 (Alaska 1983) (national distributor and local franchise); Perkins v. Willacy, 431 P.2d 141, 142 (Alaska 1967) (husband and wife), this is the first time we have been asked to apply this doctrine to a hospital-independent contractor/physician relationship.

Cases from other jurisdictions show a strong trend toward liability against hospitals that permit or encourage patients to believe that independent contractor/physicians are, in fact, authorized agents of the hospitals. ⁷ These courts have held hospitals vicariously liable under a doctrine labeled either "ostensible" or "apparent" agency or "agency by estoppel." See Porubiansky v. Emory University, 156 Ga.App. 602, 275 S.E.2d 163, 168 (1981); Paintsville Hospital v. Rose, 683 S.W.2d 255, 257 (Ky.1985); Mehlman v. Powell, 378 A.2d 1121 (Md.1977); Grewe v. Mt. Clemens General Hospital, 404 Mich. 240, 273 N.W.2d 429, 432-33 (1978); Arthur v. St. Peters Hospital, 169 N.J.Super. 575, 405 A.2d 443 (1979); Hannola v. City of Lakewood, 68 Ohio App.2d 61, 426 N.E.2d 1187, 1192 (1980); Weldon, 709 P.2d at 1060; Themins v. Emanuel Lutheran Charity Bd., 54 Or.App. 901, 637 P.2d 155, 158-59 (1982); Adamski v. Tacoma General Hospital, 20 Wash.App. 98, 579 P.2d 970, 977 (1978); see generally Janulis & Hornstein, supra at 696-702. Although courts and commentators often use these terms interchangeably, they are not theoretically identical.

The "ostensible" or "apparent" agency theory is based on Section 429 of the Restatement (Second) of Torts (1965), which provides:

One who employs an independent contractor to perform services for another...