McDonald v. Hampton Training School for Nurses

• Citation: 486 S.E.2d 299,254 Va. 79
• Decision Date: 06 June 1997
• Docket Number: No. 961831,961831
• Court: Virginia Supreme Court
• Parties: James J. McDONALD v. HAMPTON TRAINING SCHOOL FOR NURSES, d/b/a Sentara Hampton General Hospital Record

Page 299

486 S.E.2d 299

254 Va. 79

James J. McDONALD v. HAMPTON TRAINING SCHOOL FOR NURSES, d/b/a Sentara Hampton General Hospital

Record No. 961831.

Supreme Court of Virginia.

June 6, 1997.

Thomas B. Shuttleworth (Shuttleworth, Ruloff & Giordano, on brief), Virginia Beach, for appellant.

R. Barrow Blackwell (Ann Mayhew Golski; Kaufman & Canoles, on brief), Norfolk, for appellee.

Present: CARRICO, C.J., COMPTON, STEPHENSON, LACY, HASSELL and KOONTZ, JJ., and WHITING, Senior Justice.

LACY, Justice.

In this appeal in a medical malpractice case, we consider whether the trial court properly held that, because a physician exercised independent medical judgment in performing his duties, he was an independent contractor as a matter of law.

The plaintiff, James J. McDonald, sued Hampton Training School for Nurses, d/b/a Sentara Hampton General Hospital (the Hospital) alleging that Richard F. Clark, M.D., a pathologist at the Hospital, negligently interpreted McDonald's pathology specimens and failed to timely diagnose cancer. McDonald did not allege any independent acts of negligence by the Hospital, but asserted the Hospital was liable solely through the doctrine of respondeat superior. The trial court entered an order granting the Hospital's motion to strike McDonald's evidence and dismissing the case finding that, as a matter of law, Clark was an independent contractor rather than an employee of the Hospital. Because we conclude that the evidence presented a jury question on the issue of Clark's employment status, we will reverse the judgment of the trial court and remand the case.

The doctrine of respondeat superior imposes liability on an employer for the negligent acts of its employees. If, however, the negligent acts were performed by an independent contractor rather than an employee, no master-servant relationship exists between the contractor and employer, and the employer is not liable for the negligent acts. Norfolk and Western Ry. Co. v. Johnson, 207 Va. 980, 983, 154 S.E.2d 134, 137 (1967). The factors which are to be considered when determining whether an individual is an employee or an independent contractor are well established: (1) selection and engagement; (2) payment of compensation; (3) power of dismissal; and (4) power to control the work of the individual. The fourth factor, the power to control, is determinative. Hadeed v. Medic-24, Ltd., 237 Va. 277, 288, 377 S.E.2d 589, 594-95 (1989). This factor refers to control over the means and method of performing the work. Baker v. Nussman & Cox, 152 Va. 293, 304, 147 S.E. 246, 249 (1929). It is immaterial whether the employer exercises this control; the test is whether the employer has the power to exercise such control. Smith v. Grenadier, 203 Va. 740, 746, 127 S.E.2d 107, 111-12 (1962).

The trial court's determination in this case turned upon the Hospital's lack of control over Dr. Clark's exercise of his professional judgment in carrying out his duties as a pathologist at the Hospital. ¹ The trial court found that there was "nothing contractually or factually" to suggest that the Hospital controlled the way that Dr. Clark performed his duties but that he used "his independent professional judgment, based on his education and his training and his experience to do that." Thus, the trial court held, as a matter of law, that Clark was an independent contractor, not an employee, of the Hospital.

The Hospital asserts that the trial court was correct in relying on the Hospital's inability to control Dr. Clark's exercise of his professional judgment as conclusive in the determination of his independent contractor status. We do not agree. The proposition adopted by the trial court and argued by the Hospital here may have been a correct statement of the law at one time; however, it is inconsistent with current case law in this jurisdiction and with the methods of operation currently utilized by health care providers.

As early as 1920, this Court held in Virginia Iron, Coal & Coke Co. v. Odle's Administrator, 128 Va. 280, 105 S.E. 107 (1920), that, although a mining company could be liable for the malpractice of a physician employed by it based on the company's agreement to furnish medical services to the employee, this liability could not be based upon the doctrine of respondeat superior. There could be no master-servant relationship between the company and the physician, the Court explained, because the doctor was employed "to render professional services requiring special education and training, and involving the exercise of skill and judgment, which could not, in the nature of things, be controlled by the will and direction of the company.... The position of the doctor was rather that of an independent contractor." Id. at 288-89, 105 S.E. at 109. This was the prevailing rationale throughout the country at that time. See, e.g., Schloendorff v. Society of New York Hospital, 211 N.Y. 125, 105 N.E. 92 (1914); Runyan v. Goodrum, 147 Ark. 481, 228 S.W. 397 (1921); Joel D. Cunningham, The Hospital-Physician Relationship: Hospital Responsibility for Malpractice of Physicians, 50 Wash. L.Rev. 385, 388-90 (1975).

Weston's Administratrix v. Hospital of St. Vincent of Paul, 131 Va. 587, 107 S.E. 785 (1921), decided a year after Virginia Iron reconfirmed that view in Virginia. In that case, a patient sought to impose liability on a charitable hospital based on the negligence of a nurse in its employ. Justice Burks, writing for the Court, stated that hospitals were not liable for the negligence of nurses and physicians because there can be no master-servant relationship between a hospital and a physician or nurse. 107 S.E. at 787. ²

A physician's status as an independent contractor rather than an employee of a hospital was again reiterated, albeit in dicta, in Stuart Circle Hospital Corp. v. Curry, 173 Va. 136, 3 S.E.2d 153 (1939). There, a hospital was held liable to a patient for the negligent acts of an intern and a nurse based on an implied contract between the hospital and the patient to provide medical services. In the course of its opinion, the Court recited that it was "conceded" that a physician is an independent contractor and "alone is responsible for the exercise of professional skill and judgment, subject to no control by the hospital in the execution thereof." Id. at 149, 3 S.E.2d at 158.

The proposition that a physician is an independent contractor solely because the nature of his profession prevents his employer from acquiring the requisite ability to control his medical activities has not been explicitly overruled in Virginia by case or statute. Subsequent cases, however, have reached directly contrary results.

In Ritholz v. Commonwealth, 184 Va. 339, 35 S.E.2d 210 (1945), the Commonwealth sought a declaratory judgment and injunction against Ritholz and others claiming that they were practicing optometry without a license based on the doctrine of respondeat superior. ³ Ritholz operated stores in which licensed physicians examined each customer's eyes, wrote a prescription for eyeglasses, and collected a $2 fee. The prescription was given to an employee in the store to be filled. Ritholz claimed that his business was the filling of prescriptions by producing the prescribed eyeglasses. He argued that the physicians in his stores were independent contractors because he neither exercised, nor attempted to exercise, any supervision or control over the means and method used by these physicians in eye examinations. Id. at 355-57, 35 S.E.2d at 219. The Court held that the physicians were employees, not independent contractors, referring specifically to the decisions of other jurisdictions holding that physicians in identical circumstances were employees "notwithstanding the fact that the defendants actually exercise no control over 'the mode, manner or result of the examination of the eyes of the customer and the doctor is left free to exercise his own will (and) judgment and to use his own professional skill and methods in making such examination.' " Id. at 358-59, 35 S.E.2d at 219 (citations omitted).

Forty years later, this Court held that the Virginia Beach S.P.C.A. was engaged in the illegal practice of veterinary medicine because it operated a full-service veterinary clinic through the services of its licensed veterinarian. Virginia Beach S.P.C.A., Inc. v. South Hampton Roads Veterinary Ass'n, 229 Va. 349, 353, 329 S.E.2d 10, 12 (1985). The veterinarian was an employee, not an independent contractor, the Court concluded, because the employment contract showed that the S.P.C.A. retained substantial control over the doctor's performance. ⁴ Id. Finally, in Hadeed v. Medic-24, Ltd., a case involving the negligent acts of several physicians, we concluded that the issue whether the doctors were independent contractors or employees was a matter for the jury to determine. 237 Va. at 288, 377 S.E.2d at 595.

Clearly, these cases have undermined the applicability of the principle set out in Virginia Iron, Weston's Administratrix, and Stuart Circle. ⁵ This jurisprudential evolution is consistent with changes adopted in other jurisdictions. See, e.g., Beeck v. Tucson General Hosp., 18 Ariz.App. 165, 500 P.2d 1153 (1972); Medi-Stat, Inc. v. Kusturin, 303 Ark. 45, 792 S.W.2d 869 (1990); Rice v. California Lutheran Hosp., 27 Cal.2d 296, 163 P.2d 860 (1945); Moeller v. Hauser, 237 Minn. 368, 54 N.W.2d 639 (1952); Bing v. Thunig, 2 N.Y.2d 656, 163 N.Y.S.2d 3, 143 N.E.2d 3 (1957); John D. Hodson, Annotation, Liability of Hospital or Sanitarium for Negligence of Physician or Surgeon, 51 A.L.R.4th 235, 281-85 § 9[c] (1987). ⁶

The federal courts also recognize that the exercise of professional judgment in providing medical treatment alone cannot be determinative of the employment relationship between a physician and an employer for purposes of the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680 (1994 & Supp.1997). Some circuits have...