Quilico v. Kaplan

• Decision Date: 07 August 1984
• Docket Number: No. 83-2013,83-2013
• Citation: 749 F.2d 480
• Parties: Charles QUILICO, Plaintiff-Appellant, v. Sidney J. KAPLAN and Samuel Solomon, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 480

749 F.2d 480

Charles QUILICO, Plaintiff-Appellant, v. Sidney J. KAPLAN and Samuel Solomon, Defendants-Appellees.

No. 83-2013.

United States Court of Appeals Seventh Circuit.

Submitted Aug. 7, 1984. ^*

Decided Dec. 6, 1984.

As Amended Dec. 14, 1984.

Joseph Moscov, Waukegan, Ill., for plaintiff-appellant.

Dan K. Webb, U.S. Atty., Chicago, Ill., for defendants-appellees.

Before ESCHBACH, POSNER and COFFEY, Circuit Judges.

COFFEY, Circuit Judge.

The issue raised in this appeal is whether physicians and surgeons appointed to the Veterans Administration Department of Medicine and Surgery on a temporary basis under the authority of 38 U.S.C. Sec. 4114 are exempt from personal liability under 38 U.S.C. Sec. 4116 for malpractice arising from the performance of their services for the Veterans Administration ("VA"). The district court held that the defendant physicians and surgeons, appointed to the Department of Medicine and Surgery of the Veterans Administration pursuant to section 4114, are exempt from personal liability under section 4116. We affirm.

The defendants, Drs. Kaplan and Solomon, are physicians and surgeons appointed to the VA Department of Medicine and Surgery under the provisions of 38 U.S.C. Sec. 4114. Physicians and surgeons receiving appointments pursuant to section 4114 are assigned to the Department of Medicine and Surgery for a fixed period of time and are not considered permanent employees. The defendant physicians, as consulting physicians for the VA, treated the plaintiff from August 1979 to August 1981 at a local VA hospital and at Dr. Solomon's office on three occasions. The treatment given to Quilico during the office visits was part of his overall treatment program originally commenced at the VA hospital. In November of 1982, the plaintiff brought an action against the defendants in the Circuit Court of Lake County, Illinois alleging that the defendants were negligent in providing medical care in failing to remedy or substantially control the plaintiff's dermatitis.

Three months after the defendants were served in the state action, the United States Attorney for the Northern District of Illinois filed a petition for removal of the action to the district court. The removal petition was filed in accordance with 38 U.S.C. Sec. 4116 which directs the Attorney General to defend, as a suit brought under the Federal Torts Claims Act ("FTCA"), any suit against physicians, surgeons, and other medical personnel ¹ for malpractice liability in furnishing care or treatment "while in the exercise of such persons duties in or for the Department of Medicine and Surgery" of the VA. 38 U.S.C. Sec. 4116(a), (b), (c). In the petition for removal, the United States Attorney certified that at the time of the alleged negligence the defendant physicians were acting within the scope of their duties as employees of the United States. In affidavits submitted in support of the removal petition, both doctors alleged that they had treated Quilico as part of their duties as consulting physicians with the VA hospital in North Chicago, Illinois. They further asserted that they were "controlled by Veterans Administration regulations and procedures" while practicing at the VA hospital. Dr. Solomon further stated in his affidavit that the Quilico treatment procedures at his office were nothing more than a continuation of the program of treatment commenced at the VA hospital. The plaintiff, Quilico, filed a motion in opposition requesting remand of the cause to the state court, claiming that the defendants were not employees of the United States but rather were independent contractors; thus, section 4116 and the FTCA were inapplicable as they only apply to employees of the United States government. The plaintiff also contended in his motion in opposition to the remand that "the allegations as to the quality of medical care afforded plaintiff in the instant case concern the services provided by the defendants primarily in their private office rather than facilities of the United States Veterans Agency [sic], and plaintiff provided compensation to the defendants for the complained of medical services at their private office." ²

At a hearing on the motion to remand, the district court found that unquestionably the two physicians were acting within the scope of their duties as employees of the VA Department of Medicine and Surgery. The district court noted that the office consultations, following the original diagnosis and treatment at the VA hospital, were an integral part of the treatment program and were performed as part of the defendant physicians' employment by the VA in spite of the fact that the plaintiff was obligated to pay for two of the three office visits. ³ The district court concluded that the defendant physicians were immune from liability under section 4116 because the alleged malpractice occurred during the course of their employment with the VA. Accordingly, the district court denied the plaintiff's motion to remand to the state court and, at the same time, granted the defendants' motion to dismiss for failure to exhaust administrative remedies, a prerequisite for suits brought under the FTCA. ⁴ Quilico appeals from the dismissal of the action solely on the basis that the FTCA is inapplicable to these defendants because the defendants are merely independent contractors as contrasted with employees of the federal government. We note that Quilico does not contend in his pleadings or his argument that he has met the FTCA exhaustion requirement by filing an administrative claim with the VA.

I. INDEPENDENT CONTRACTOR

The plaintiff argues that to determine whether or not section 4114 physicians are immunized from liability under section 4116 we must apply the strict control test. Under this test, before the defendants may be considered government employees, it must be demonstrated that the government is authorized to direct or control the detailed performance of the defendants' work. See United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976); Logue v. United States, 412 U.S. 521, 93 S.Ct. 2215, 37 L.Ed.2d 121 (1973). (In these cases the Court developed the strict control test to determine whether a person is an employee or an independent contractor under the Federal Torts Claims Act.) We, however, disagree that the strict control test is the proper method to determine whether physicians rendering service to the VA are to be considered employees for purposes of section 4116 immunity since such a test, because of the nature of a physicians' work, would severely curtail the immunity privilege for both temporary and permanent employee/physicians.

Title 38 U.S.C. Sec. 4116(a) provides that:

"The remedy against the United States provided by sections 1346(b) and 2672 of title 28 ... for damages for personal injury, including death, allegedly arising from malpractice or negligence of a physician ... in furnishing medical care or treatment while in the exercise of such person's duties in or for the Department of Medicine and Surgery [of the Veterans Administration] shall hereafter be exclusive of any other civil action or proceeding by reason of the same subject matter against such physician ... whose act or omission gave rise to such claim."

Section 1346(b) of Title 28 grants exclusive jurisdiction to the district courts in civil actions or claims against the United States for injuries "caused by the negligent or wrongful act or omission of any employee of the government while acting within the scope of his office or employment...." ⁵ Section 1346(b) incorporates the section of the FTCA defining government employees as including officers and employees of "any federal agency" but excluding "any contractor with the United States." 28 U.S.C. Sec. 2671. ⁶ Thus, we must analyze the cases interpreting the independent contractor exception to the FTCA to determine whether non-career physicians appointed to the VA Department of Medicine and Surgery under section 4114, on a temporary basis for a fixed period of time, as contrasted with physicians and surgeons appointed to the Department of Medicine and Surgery as full-time employees on a permanent basis, are immune from liability under section 4116.

In developing the strict control test for the independent contractor exception to the FTCA, the Supreme Court noted that the FTCA provides for, "a limited waiver of sovereign immunity, making the Federal Government liable to the same extent as a private party for certain torts of federal employees acting within the scope of their employment." Orleans, 425 U.S. at 813, 96 S.Ct. at 1975. As a waiver of sovereign immunity, the FTCA must be strictly interpreted and applied when granting relief. United States v. Sherwood, 312 U.S. 584, 590, 61 S.Ct. 767, 771, 85 L.Ed. 1058 (1941). Whether the defendant is a government employee or an independent contractor under the FTCA is a question of federal law. Logue, 412 U.S. at 528, 93 S.Ct. at 2219. In Logue, the Supreme Court, in effect adopting the reasoning of the Restatement (Second) of Agency Sec. 2 (1958), ⁷ held that when the relationship between the government and a person is fixed by contract, the distinction between an employee and an independent contractor turns "on the absence of authority in the principal to control the physical conduct of the [alleged employee] in [the] performance of the contract." Logue, 412 U.S. at 527, 93 S.Ct. at 2219. See also Orleans, 425 U.S. at 814, 96 S.Ct. at 1976. ⁸

The ability of the VA Department of Medicine and Surgery to supervise and control temporary or permanent physicians and surgeons in the Department, however, is limited by the physician's ethical obligation to have "free and complete exercise of [their] medical judgment and skill...." ⁹ Principles of Medical Ethics Sec. 6, reprinted in Opinions and Reports of the American Medical Association Judicial Council, 5 (1977). See also Lurch v. United...