Phelps v. Physicians Ins. Co.

Decision Date10 July 2009
Docket NumberNo. 2006AP2599.,2006AP2599.
Citation768 N.W.2d 615,2009 WI 74
PartiesGregory PHELPS, Marlene L. Phelps, Estate of Adam Phelps, Deceased, by his Special Administrator, Gregory G. Phelps, Caroline Phelps and Kyle Phelps, minors, by their Guardian ad Litem, William M. Cannon, Plaintiffs-Respondents-Cross-Appellants, v. PHYSICIANS INSURANCE CO. OF WISCONSIN, INC., a Wisconsin insurance corporation and Matthew Lindemann, M.D., Defendants-Appellants-Cross-Respondents-Petitioners.
CourtWisconsin Supreme Court

For the defendants-appellants-cross-respondents-petitioners there were briefs by Michael B. Van Sicklen, Katherine C. Smith, and Foley & Lardner LLP, Madison, and oral argument by Michael B. Van Sicklen.

For the plaintiffs-respondents-cross-appellants there were briefs by William M. Cannon, Sarah F. Kaas, Edward E. Robinson, and Cannon & Dunphy, S.C., Brookfield, and oral argument by William M. Cannon.

An amicus curiae brief was filed by Martha H. Heidt and Bye, Goff, Rhode & Skow, Ltd., River Falls, on behalf of the Wisconsin Association for Justice.

An amicus curiae brief was filed by Timothy J. Muldowney, Robert J. Dreps, Jennifer L. Peterson, and Godfrey & Kahn SC, Madison; Ruth Heitz and Wisconsin Medical Society, Madison; and Leonard Nelson and AMA Litigation Center, Chicago, on behalf of the Wisconsin Medical Society and the American Medical Association.


We review a published decision of the court of appeals,1 which reversed in part and affirmed in part a decision of the circuit court.2 There are two questions presented for our review: (1) whether Dr. Matthew Lindemann (Lindemann) was a borrowed employee of St. Joseph's Hospital of Milwaukee (St. Joseph's), and was therefore an employee of a health care provider subject to Wis. Stat. ch. 655 and Wis. Stat. § 893.55(4) (1997-98);3 and (2) whether Gregory Phelps (Gregory) can recover damages caused by Lindemann's negligence on a theory of the negligent infliction of emotional distress to a bystander. We conclude that Lindemann was a borrowed employee of St. Joseph's, and was therefore an employee of a health care provider under ch. 655. As a result, ch. 655 governs Gregory's claim. We further conclude that ch. 655 does not permit claims arising from medical negligence other than those listed in Wis. Stat. §§ 655.005(1) and 655.007, and the negligent infliction of emotional distress to a bystander is not one of those claims. Therefore, Gregory's claim is not actionable under Wisconsin law. Accordingly, we reverse the decision of the court of appeals, and remand the cause to the circuit court to issue an order dismissing Gregory's claim.

A. Factual Summary

¶ 2 This is a long, drawn-out litigation that has been wandering through the Wisconsin court system for more than eight years. The underlying facts have been the source of three separate published appellate opinions. See Phelps v. Physicians Ins. Co. of Wis., Inc., 2004 WI App 91, ¶ 1, 273 Wis.2d 667, 681 N.W.2d 571 (Phelps I); Phelps v. Physicians Ins. Co. of Wis., Inc., 2005 WI 85, ¶¶ 5-13, 282 Wis.2d 69, 698 N.W.2d 643 (Phelps II); Phelps v. Physicians Ins. Co. of Wis., Inc., 2008 WI App 6, ¶¶ 2-11, 307 Wis.2d 184, 744 N.W.2d 880 (Phelps III). Our summary of the relevant facts here largely restates the factual summaries in those prior decisions.

¶ 3 Marlene Phelps (Marlene) discovered that she was pregnant with twins in June 1998. Due to medical complications, she was placed on strict home bed rest. Marlene's pregnancy then progressed without incident until October 18, 1998, when another medical complication occurred. She was admitted to St. Joseph's and continued her program of bed rest in the hospital. Two days later, an ultrasound revealed that one of the twins was in a breech presentation. As a result, Marlene was deemed a high-risk patient who likely would require a caesarean section for delivery of the twins.

¶ 4 In the early morning of November 24, 1998, Marlene was awakened by constant suprapubic pain. The on-call resident, Lindemann, was contacted. Lindemann was an unlicensed first-year resident and an employee of the Medical College of Wisconsin Affiliated Hospitals, Inc. (Affiliated Hospitals entity). His primary duty at this time was to assess and report findings and differential diagnoses on St. Joseph's patients to a senior resident or to the attending obstetrician.

¶ 5 Lindemann ordered lactated Ringer's solution to be administered to Marlene at 2:40 a.m., for suspected contractions. It did not alleviate Marlene's pain. At 3:00 a.m., Lindemann made a differential diagnosis of her pain that included bladder infection, labor and placental abruption. He ordered a urinalysis in regard to a potential bladder infection. The results of that test were negative.

¶ 6 At 4:15 a.m., Marlene requested that the attending nurse call Lindemann again due to continued pain. Fetal heart monitoring showed that the twins' heart rates were within normal ranges. Lindemann informed Marlene that he would take an ultrasound so he could consult a senior resident about her condition.

¶ 7 After the ultrasound, potent narcotics were administered to Marlene at 4:50 a.m. and 5:20 a.m., on Lindemann's orders, but he was neither seen nor heard from between 4:15 a.m. and 6:00 a.m. He never satisfactorily explained his whereabouts during this time. There is no evidence that he ever contacted a senior resident to discuss the ultrasound and Marlene's case.

¶ 8 Marlene was still in pain when Lindemann examined her again at 6:00 a.m. At 6:45 a.m., Marlene's husband, Gregory, arrived at the hospital. Marlene informed Gregory that she needed to defecate and asked for assistance to get to the commode. At 7:00 a.m., while sitting on the commode, she reached down and felt toes extending from her.

¶ 9 Gregory rushed to the nurses' desk where he found another doctor, who delivered Adam Phelps at 7:20 a.m. Adam was immediately rushed to the neonatal intensive care unit where hospital staff attempted to resuscitate him. The efforts were unsuccessful, and he was pronounced dead at 7:36 a.m. Adam's death was caused by asphyxia due to umbilical cord entrapment and placental abruption, which impaired his oxygen supply.

¶ 10 While hospital staff were attempting to resuscitate Adam, Marlene was taken to the operating room. The second twin, Kyle, was delivered at 7:43 a.m. Afterward, the treating physicians questioned Lindemann about his decisions, his whereabouts and his diagnosis.

B. Procedural History
1. Prior appeal

¶ 11 Gregory and Marlene, along with their two surviving children, Kyle and Caroline (collectively, the Phelpses), sued Lindemann and his insurer, Physician's Insurance Company of Wisconsin (Physicians), St. Joseph's, St. Joseph's insurer, and the Affiliated Hospitals entity, in Milwaukee County Circuit Court, alleging negligence, loss of society and companionship, wrongful death and negligent infliction of emotional distress.

¶ 12 The Honorable Michael P. Sullivan presided over the initial trial proceedings. Prior to trial, Judge Sullivan dismissed the Affiliated Hospitals entity from the case, concluding that even though Lindemann was an employee of the Affiliated Hospitals entity, he was not the Affiliated Hospitals entity's "servant" because the Affiliated Hospitals entity did not control or supervise his medical decisions performed at St. Joseph's. Therefore, the Affiliated Hospitals entity could not be held liable on a theory of respondeat superior. This decision was not appealed. The Phelpses then moved for a declaratory ruling that St. Joseph's was Lindemann's employer. Before Judge Sullivan could rule, however, the Phelpses and St. Joseph's settled, and St. Joseph's was dismissed from the litigation.

¶ 13 The day before trial, Judge Sullivan struck Lindemann's jury demand because Lindemann's lawyer had been late in paying the jury fee. A bench trial was then held. Judge Sullivan found Lindemann 80% causally negligent and St. Joseph's 20% causally negligent. Judge Sullivan awarded the Phelpses $990,000, to be distributed as follows: (1) $500,000 total to Gregory and Marlene for the wrongful death of Adam; (2) $200,000 each to Gregory and Marlene for emotional distress; and (3) $45,000 each to Kyle and Caroline for the loss of society and companionship of their mother, Marlene.

¶ 14 Lindemann and Physicians appealed. The court of appeals held that Judge Sullivan had erred when he struck Lindemann's jury demand, and remanded for a new trial. Phelps I, 273 Wis.2d 667, ¶ 18, 681 N.W.2d 571. The court also concluded that the circuit court had applied an incorrect standard of care in concluding that Lindemann was liable. Id., ¶¶ 23-25. Furthermore, the court held that Lindemann was not a statutory health care provider, and that the noneconomic damages caps set forth in Wis. Stat. § 893.55(4) did not apply. Id., ¶¶ 41-47. The court of appeals also directed the circuit court to make factual findings on remand to determine whether some evidence should have been excluded under the statutory peer review privilege. Id., ¶ 40.

¶ 15 Lindemann and Physicians had argued to the circuit court and the court of appeals that Wis. Stat. ch. 655 barred the Phelpses' claims for negligent infliction of emotional distress to a bystander. Id., ¶ 48. Because the court of appeals concluded that Lindemann was not a health care provider under ch. 655, it did not address this argument. Id. However, the court of appeals did remand the case to the circuit court to make findings of fact regarding whether Lindemann was St. Joseph's borrowed employee, which would have rendered him an employee of a health care provider, thereby bringing the Phelpses' claims under ch. 655 and the noneconomic damages caps set forth in Wis. Stat. § 893.55(4). Id., ¶ 46 n. 10.

¶ 16 We granted the parties' cross-petitions for review. Phelps II, 282 Wis.2d 69, ¶¶ 2-3, 698 N.W.2d 643....

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