Wood v. United States, Civ. A. No. 77-0338-R.
| Decision Date | 11 July 1980 |
| Docket Number | Civ. A. No. 77-0338-R. |
| Citation | 494 F. Supp. 792 |
| Parties | Caster WOOD v. UNITED STATES of America. |
| Court | U.S. District Court — Eastern District of Virginia |
Alan W. Clarke, Lively, Va., James A. Eichner, Boyd F. Collier, Richmond, Va., for plaintiff.
Elliott Norman, Asst. U. S. Atty., Richmond, Va., for defendant.
In an order entered in this case on 8 March 1978, the Court noted that:
the United States denies that the public health physician, Dr. Beatley, who treated the plaintiff in this case, was its agent for purposes of treating the plaintiff. The United States takes no position as to whether or not Dr. Beatley was negligent in such treatment. If it be shown by appropriate proof that Dr. Beatley was negligent, then the United States will defend this action only on the ground that he was not their agent for purposes of such medical treatment of plaintiff. The determination of whether or not the treating physician was the agent of the United States will be bifurcated from the trial. . . .
A schedule for the submission to the Court of stipulations and briefs on the agency issue was established by order of 15 October 1979, as modified by the orders of 6 November 1979 and 29 April 1980; that schedule is now complete and the issue of the defendant United States's agency is ripe for determination. By order of 21 December 1979 the plaintiff's action was dismissed without prejudice as to Standard Products Company, Inc. and Dr. Beatley.
Section 2674 of Title 28 of the United States Code establishes that:
The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances . . ..
Section 1346 of Title 28 of the United States Code provides that:
The district courts . . . shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages . . . for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the government while acting within the scope of his office of employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.
Section 2671 of Title 28 of the United States Code defines "employee of the government" to include:
officers or employees of any federal agency, member of the military or naval forces of the United States, and persons acting on behalf of a federal agency in an official capacity, temporarily or permanently in the service of the United States, whether with or without compensation.
28 U.S.C. § 2671. Also defined by this section are "federal agency" and "acting within the scope of his office or employment":
As used in this chapter 28 U.S.C. §§ 2671 et seq. and sections 1346(b) and 2401(b) of this title 28 U.S.C. §§ 1346(b) and 2401(b) the term `Federal agency' includes the executive departments, the military departments, independent establishments of the United States, and corporations primarily acting as instrumentalities or agencies of the United States but does not include any contractor with the United States.
In this case plaintiff asserts that Dr. Beatley was an employee of the U.S. Public Health Service under the Department of Health, Education, and Welfare, and that Dr. Beatley was acting on behalf of that federal agency in his official capacity at the time of the events forming the basis of plaintiff's claims. Defendant United States contends that Dr. Beatley was an employee of the Reedville Medical Clinic, Inc., an independent contractor with the United States, and thus that Dr. Beatley was not an employee or agent of the United States so as to require the United States to respond to damages under the Federal Tort Claims Act.
The parties have entered into extensive stipulations which the Court accepts as established facts for the purpose of this case. A summary of the relevant stipulations outlines the basic facts of this case.
The plaintiff, Caster Wood, was a fisherman employed by the Standard Products Company aboard its menhaden fishing vessel Frances. While the plaintiff was assigned to the Frances, a fishbone became stuck in his left third finger. On 15 September 1976, after obtaining execution of the proper Public Health forms by the captain of the Frances, plaintiff's immediate supervisor, plaintiff was treated for the infected finger by Dr. Robert E. Beatley of Reedville, Virginia. Plaintiff was subsequently treated by Dr. Beatley at Dr. Beatley's office on four or five more occasions. On or about 25 September plaintiff was referred by Dr. Beatley to Dr. Robert Crouch and was hospitalized by Dr. Crouch at St. Luke's Hospital near Richmond, Virginia. At the hospital it was determined that in addition to the infection plaintiff had diabetes mellitus. Plaintiff's infected finger was amputated by a physician at St. Luke's Hospital and two days later a midforearm amputation was performed because of the continued spread of the infection. Plaintiff was discharged from St. Luke's Hospital in mid-October 1976. Thereafter plaintiff returned to St. Luke's Hospital where he was fitted with a prosthesis for his amputated left arm.
At the time of plaintiff's injury, consultation, and treatment he was a fisherman eligible for medical care provided by the U.S. Public Health Service (hereinafter referred to as PHS) to seamen beneficiaries. In order to be eligible for PHS treatment, a beneficiary must present a properly executed Master's Certificate of Service, Form PHS-125, or other appropriate evidence that he has been employed on a registered, licensed vessel of the United States. The plaintiff presented such Master's Certificate of Service to Dr. Beatley at the time of his first treatment by Dr. Beatley on 15 September 1976. The plaintiff had initially obtained the certificate form from Dr. Beatley who had received it from the PHS hospital in Norfolk, Virginia.
At the time of the operative facts of the case at bar, Dr. Beatley was the sole physician employee of the Reedville Medical Clinic, Inc., a closely-held corporation of which Dr. Beatley and his wife were the sole shareholders and directors. The Reedville Medical Clinic, Inc. (hereinafter RMC), at this time was under contract on a "fee-for-services" basis to the PHS to serve as a PHS "contract physician" rendering specified services to PHS beneficiaries on an "as needed" basis. During the relevant period the RMC derived approximately 20 percent of its gross income from the treatment of PHS beneficiaries. Compensation from the PHS for medical treatment of PHS beneficiaries was not made directly to Dr. Beatley, rather such reimbursement was paid directly to the corporation, RMC.
The responsibilities of the PHS "contract physician" are set forth generally in 42 C.F.R. §§ 31, 32, and more specifically in the Contract Physician's Guide, a manual prepared by the PHS and incorporated in the contract between the PHS and the designated physician by the provisions of the contract for medical services. The terms of the contract between the RMC and PHS and the provisions of §§ 31 and 32 of Title 42 of the Code of Federal Regulations and the Contract Physician's Guide will be examined in greater detail infra.
The PHS does not directly restrict a designated physician's treatment of private patients. The only restriction which the PHS actually places upon the designated physician's treatment of PHS beneficiaries is to require that the beneficiaries meet the relevant PHS eligibility requirements. The compensation received for treatment of PHS beneficiaries is determined according to a fee schedule submitted to the PHS by the designated physician. The fee schedule submitted by Dr. Beatley for PHS charges is the same fee schedule used by him for the treatment of private patients with the exception of charges made for office visits. Dr. Beatley does not have special PHS hours; PHS beneficiaries may seek and receive treatment by him during normal business hours or at other hours in the case of an emergency. The PHS does not control the day-to-day professional medical decisions of Dr. Beatley's practice.
Before delving further into the nature of Dr. Beatley's relationship with PHS, it is advisable that the legal effect of the interposition of RMC, Reedville Medical Clinic, Inc., be more closely examined.
That the instant PHS contract was technically between the PHS and the RMC, a closely-held professional corporation, does not distort the status of Dr. Beatley as the PHS "designated physician" in his treatment of PHS beneficiaries at the RMC. At the time of the events pertinent to this case, Dr. Beatley was the sole physician employed by the RMC; on the face of Contract No. HSA XXX-XX-XXX, the contract purportedly entered into between the RMC and the PHS, Dr. Beatley executed the contract as the "contractor," and certified as to the "contractor's qualifications" by attaching a copy of his own curriculum vitae outlining his own professional qualifications. Further, the PHS considered Dr. Beatley and not the RMC to be the "contract physician"; Appendix at Ch. A-I(a) to the Contract Physician's Guide lists Dr. Beatley as the "contract physician" for Reedville, Virginia, as of 13 April 1977. The Court must conclude that Dr. Beatley was the "designated physician" recognized by the PHS as the person through whom the PHS would perform professional services for appropriate PHS beneficiaries. RMC, not being a physician, could be neither a contract nor a designated physician.
As an additional preliminary matter, the Court considers the use of the terms "contract physician" and "designated physician" worthy of consideration. The Code of Federal Regulations defines "designated physician" as "a physician holding...
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