Osborne v. Adams

• Citation: 346 S.C. 4,550 S.E.2d 319
• Decision Date: 23 July 2001
• Docket Number: No. 25320.,25320.
• Court: United States State Supreme Court of South Carolina
• Parties: Marianne OSBORNE, individually, and as Guardian ad Litem for Matthew Connor Osborne, a minor, Petitioner, v. R. Stephen ADAMS, M.D., B. Edward O'Dell, M.D., Adams, O'Dell, Davidson and Lusk, OB/GYN, P.C., Evelyn H. Melnick, M.D., J.E. Harlan, Jr., M.D., Pee Dee Neonatal Associates, P.A., and McLeod Regional Medical Center, Defendants, of which, McLeod Regional Medical Center is, Respondent.

346 S.C. 4

550 S.E.2d 319

Marianne OSBORNE, individually, and as Guardian ad Litem for Matthew Connor Osborne, a minor, Petitioner, v. R. Stephen ADAMS, M.D., B. Edward O'Dell, M.D., Adams, O'Dell, Davidson and Lusk, OB/GYN, P.C., Evelyn H. Melnick, M.D., J.E. Harlan, Jr., M.D., Pee Dee Neonatal Associates, P.A., and McLeod Regional Medical Center, Defendants, of which, McLeod Regional Medical Center is, Respondent.

No. 25320.

Supreme Court of South Carolina.

Heard May 9, 2001.

Decided July 23, 2001.

Rehearing Denied August 22, 2001.

Edward L. Graham, of Zeigler and Graham, of Florence, for petitioner.

John S. Wilkerson, III, of Turner, Padget, Graham & Laney, P.A., of Florence, for respondent McLeod Regional Medical Center.

PLEICONES, Justice.

Marianne Osborne's ("Osborne") son, Connor, was born prematurely and received care at McLeod Regional Medical Center ("McLeod") in its neonatal care unit. After Connor developed serious physical and mental ailments, Osborne brought suit alleging negligence on the part of the abovecaptioned defendants. The trial court granted McLeod's motion for summary judgment. The Court of Appeals, relying in large part on its decision in Simmons v. Tuomey Regional Medical Center, 330 S.C. 115, 498 S.E.2d 408 (Ct.App.1998) (hereinafter, "Simmons I"), affirmed. Osborne v. Adams, 338 S.C. 82, 525 S.E.2d 268 (Ct.App.1999). We granted certiorari to review the Court of Appeals' decision, in light of our modification of Simmons I. See Simmons v. Tuomey Regional Medical Center, 341 S.C. 32, 533 S.E.2d 312 (2000)

("Simmons II"). We reverse.

ISSUE I

Did the trial court err in granting McLeod's motion for summary judgment?

ANALYSIS

In reviewing the grant of a summary judgment motion, this Court applies the same standard which governs the trial court under Rule 56(c), SCRCP: summary judgment is proper when "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Baughman v. American Tel. & Tel. Co., 306 S.C. 101, 410 S.E.2d 537 (1991).

In determining whether any triable issues of fact exist, the evidence and all reasonable inferences therefrom must be viewed in the light most favorable to the non-moving party. Summer v. Carpenter, 328 S.C. 36, 492 S.E.2d 55 (1997). On appeal from an order granting summary judgment, the appellate court will review all ambiguities, conclusions, and inferences arising in and from the evidence in a light most favorable to the non-moving party below. Williams v. Chesterfield Lumber Co., 267 S.C. 607, 230 S.E.2d 447 (1976).

Based on its holding in Simmons I that a hospital's nondelegable duties are confined to emergency room care, the Court of Appeals affirmed the trial court's grant of summary judgment in favor of McLeod. The Court of Appeals expressed its opinion that Section 429 of the Restatement (Second) of Torts was not an accurate reflection of the law of this State, and therefore, Osborne could not rely on that section in maintaining a cause of action against McLeod.

However, in Simmons II, this Court adopted section 429,¹ and held that a hospital owes a common law nondelegable duty to render competent service to its emergency room patients such that it may not avoid liability for the negligent acts of emergency room physicians hired as independent contractors under a contract between the hospital and a separate corporation.

Although Simmons II involved emergency room physicians, we did not limit our decision to such physicians. The decision was limited, however, "to those situations in which a patient seeks services at the hospital as an institution, and is treated by a physician who reasonably appears to be a hospital employee." Id. at 52, 533 S.E.2d at 323. The holding did not "encompass situations in which a patient is admitted to a hospital by a private, independent physician whose only connection to a particular hospital is that he or she has staff privileges to admit patients to the hospital." Id.

In order to establish liability under section 429, a plaintiff must show that

(1) the hospital held itself out to the public by offering to provide services; (2) the plaintiff looked to the hospital, rather than the individual physician, for care; and (3) a person in similar circumstances reasonably would have believed that the physician who treated him or her was a hospital employee. When the plaintiff does so, the hospital will be held vicariously liable for any negligent or wrongful acts committed by the treating physician. The hospital may attempt to avoid liability for the physician's acts by demonstrating the plaintiff failed to prove these factors.

Id. at 51, 533 S.E.2d at 322.

We review each of these elements below.

Element 1: Holding out

In her complaint, Osborne² alleged that McLeod "holds itself out to the public as having specialized facilities, equipment and staff for the provision of high quality obstetrical care." In an affidavit submitted in opposition to McLeod's summary judgment motion, Osborne stated that "[t]hrough McLeod's marketing efforts the representation was made to me that McLeod had first rate physical facilities, staff, equipment and supplies for its birthing center, including a Level 3 Neonatal Intensive Care Unit (hereinafter, "NICU"); that Dr. J.E. Harlan, Jr., was director of McLeod's NICU; and that the neonatologists were an integral part of McLeod's NICU team."

Further, Osborne submitted a three-part article appearing in McLeod Magazine³ extolling McLeod's facilities and referring to "McLeod neonatologists." The article depicts Dr. Harlan standing in front of what appears to be medical equipment with his arm outstretched, and refers to Harlan as McLeod's Neonatal Intensive Care Unit Director. The article lauds the excellent facilities and care available to newborns and expectant mothers at McLeod.

Element 2: Plaintiff looked to hospital, rather than individual physician

In her affidavit, Osborne stated: "I selected McLeod as the hospital where I planned to have my delivery, and obtain any incidental medical services related to my pregnancy, labor, delivery and newborn care." She continued: "[a]t no time did I select these neonatologists to care for my baby. Rather, I selected McLeod as the hospital to provide any and all healthcare needs which might arise incident to my labor and delivery and the newborn care for my son.... I had no knowledge that these neonatologists were employed by their own professional association, as opposed to being employed directly by McLeod. To my knowledge they were the only neonatologists working at McLeod.... I thought all of my son's health care [sic] services at the McLeod NICU were being provided by McLeod, and did not realize the neonatologists were independently employed."

Element 3: Reasonable belief that service is being provided by hospital

In addition to the McLeod Magazine article mentioned in the discussion of Element 1, above, Osborne stated in her affidavit that "I had been exposed to [the McLeod Magazine] articles early in my pregnancy, and they reinforced my belief that the neonatologists were not separately employed, but were an integral part of McLeod's professional NICU team. I do not recall any marketing materials about McLeod's NICU making a distinction between the nurses/technicians being hospital employees and the neonatologists being independently employed."

Viewing this evidence in the light most favorable to Osborne, she has made a prima facie showing of the elements required in Simmons II. The McLeod Magazine article is evidence that McLeod held itself out as providing top-notch neonatal services; Osborne avers in her affidavit that she believed the neonatologists were McLeod employees; and, in light of the magazine article, and the other evidence adduced, a finder of fact could infer that her belief was reasonable.

We are not convinced by McLeod's argument that this case is distinguishable from Simmons II due to the fact that all hospitals are required to have emergency rooms while they are not mandated to have NICUs. The rule announced in Simmons II contains no requirement that the service be mandated by law before a plaintiff can recover based on section 429. We decline to add such a requirement.⁴ We note that although McLeod was not mandated by law to maintain a NICU, the hospital sought and acquired a Level III designation from the South Carolina Department of Health and Environmental Control. In order to achieve this designation, McLeod was required to have the services of a neonatologist available. See 24A S.C.Code Ann. Regs. 61-16 § 608.3 (1992).

ISSUE II

Should the holding in Simmons II apply prospectively only?

ANALYSIS

Osborne's recovery against McLeod might yet be foreclosed if we decide, as McLeod urges, that the holding in Simmons II should apply prospectively only. "[T]he general rule regarding retroactive application of judicial decisions is that decisions creating new substantive rights have prospective effect only, whereas decisions creating new remedies to vindicate existing rights are applied retrospectively .... Prospective application is required when liability is created where formerly none existed." Toth v. Square D Co., 298 S.C. 6, 8, 377 S.E.2d 584, 585 (1989) (internal citations omitted). "Other cases which have held prospective application to be appropriate include those in which immunities have been dissolved." Id. at 9, 377 S.E.2d at 586.

In Toth, the Court had to determine whether its earlier holding in Small v. Springs Industries, Inc., 292 S.C. 481, 357 S.E.2d 452 (1987), should apply prospectively only. In Small, the Court held that employee handbooks were admissible as evidence of a contract of employment. The Toth defendants, employers being sued by former employees for breach of contract, argued that Small created new contractual obligations, and therefore, should apply prospectively only. The Court declined to so limit Small. It reasoned...