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You’re ordinarily not liable for the misdeeds of others, right? Sure, you can be vicariously liable for certain conduct of employees and agents, but not others you may associate with, such as independent contractors. Except sometimes. And now, if you’re a hospital that allows independent contractor physicians to treat patients at your facility, “sometimes” is presumptively “all the time.” That is the rule laid down in the recent decision in Mejia v. Community Hospital of San Bernardino , (2002) 99 Cal.App.4th 1448. Mejia has taken a sharp right turn off the path of hospital liability jurisprudence over the past century. In fact, a treatise last year discussing hospitals’ direct liability for acts of independent, non-salaried doctors reported, “So far there is no recorded case in California where such liability has been imposed because of the acts of a medical doctor.” (1 MacDonald, Cal. Medical Malpractice: Law and Practice (2001 supp.) Ostensible Agency, � 4.20.) Mejia blazes a new trail in this area by imposing such liability under the doctrine of “ostensible agency,” a legal fiction that has been created to impose vicarious liability for injuries caused by someone who is not a “real” agent of the defendant, but is nonetheless treated as the defendant’s agent for public policy reasons. Whether other appellate courts follow Mejia down this road remains to be seen. Hospital administrators obviously hope not, out of concern that the Mejia rule will threaten their continued ability to offer medical services by dramatically increasing potential liability and legal costs. The Doctrine of Ostensible Agency As the court of appeal in Mejia acknowledged, “[f]or the last century, courts throughout the country have struggled with the issue of whether hospitals are liable for the negligence of physicians.” ( Mejia, supra , at p. 1451.) That is because doctors generally are not employees of the hospital. “A physician is not an agent of a hospital merely because he or she is on the medical staff of the hospital.” ( Mayers v. Litow , (1957) 154 Cal.App.2d 413.) Thus, in California, hospital liability for injuries caused by a physician’s negligence has usually depended on proof that the negligence of a hospital employee (such as a nurse) contributed to a patient’s injury (see, e.g., Lisa M. v. Henry Mayo Newhall Memorial Hospital ,(1995) 12 Cal.4th 291, 296-299), or proof that the hospital itself was directly negligent, usually in improperly reviewing the qualifications of a doctor before granting or renewing privileges to practice at the hospital (see Elam v. College Park Hospital , (1982) 132 Cal.App.3d 332, 346). Vicarious liability based solely on the doctor’s negligence, however, has not been a major consideration for hospitals. Not, that is, until the court in Mejia created a presumption that all doctors are “ostensible agents” of the hospitals in which they practice. Civil Code � 2300 states the requirements for ostensible agency in California: Vicarious liability will be imposed on a principal who “intentionally, or by want of ordinary care, causes a third person to believe another to be his agent. . . .” (See also Civil Code � 2317 ["Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess"]; Civil Code � 2334 ["A principal is bound by the acts of his agent, under a merely ostensible authority, to those persons only who have in good faith, and without want of ordinary care, incurred a liability or parted with value, upon the faith thereof"].) Thus, by statute, a plaintiff may not recover for the negligent acts of a defendant’s ostensible agent without proving three elements: 1. intentional or negligent misleading statements or conduct by the principal amounting to representations that the third party is his agent, 2. actual and justifiable reliance by the plaintiff upon the principal’s representations, without any negligence on the part of the plaintiff, and 3. harm to the plaintiff as a result of such reliance. ( Hartong v. Partake, Inc., (1968) 266 Cal.App.2d 942, 960). “The decided cases leave no question but [t]hat ostensible agency is essentially a subspecies of estoppel. . . . The ostensible principal, by its conduct or negligent behavior, must do something to mislead the individual, who afterwards relies detrimentally on the representation of agency.” (1 MacDonald, California Medical Malpractice: Law and Practice, supra , � 4.20.) The Mejia case In Mejia , a patient sought to use the ostensible agency doctrine to impose liability on the hospital where the plaintiff had been treated, despite the lack of evidence that any hospital employee had been negligent. The plaintiff sought treatment for a neck injury at the hospital’s emergency room. The emergency room physician ordered X-rays, which he sent to the on-call radiologist for evaluation. The radiologist’s report identified only a congenital fusion. Based on this report, the emergency room physician treated plaintiff for a twisted neck and discharged her. The next morning, Mejia was paralyzed. She was taken to another hospital where it was determined that her neck was actually broken. Mejia sued the hospital, the emergency room physician, the medical group that ran the emergency room and employed the emergency room physician, the radiologist and the medical group that ran the radiology department and employed the radiologist. The defendant physicians were not hospital employees and there was no evidence that the hospital had been negligent, either in the plaintiff’s treatment or in allowing the defendant physicians to practice at the hospital. The trial court thus excused the hospital from the case at the close of plaintiff’s presentation of evidence at trial. The trial continued against the doctors and their respective groups, and the jury found the radiologist and radiology group were negligent. Having obtained a judgment against those defendants, Mejia nonetheless appealed, contesting the order granting non-suit in favor of the hospital. The Fourth District Court of Appeal reversed, holding that, even though the hospital was not itself negligent and even though the radiologist was not actually the agent of the hospital, the hospital could be vicariously liable for the radiologist’s negligence under an ostensible agency theory. Justice Art McKinster’s opinion acknowledged that ostensible agency requires proof that 1. the hospital engaged in conduct that would cause a reasonable person to believe that the physician was an agent of the hospital, and 2. the plaintiff relied on that apparent agency to his or her detriment. But it held that these elements are generally satisfied whenever a patient seeks care at a hospital : “[B]ecause it is commonly believed that hospitals are the actual providers of care, ostensible agency can be readily inferred whenever someone seeks treatment at a hospital.” ( Mejia, supra,99 Cal.App.4th at p. 1456 ) The Mejia court concluded that the first ostensible agent element “is satisfied when the hospital ‘holds itself out’ to the public as a provider of care.” Thus, to prove the first element, “it is not necessary to show an express representation by the hospital.” ( Id.at pp. 1453-1454.) “Instead, a hospital is generally deemed to have held itself out as the provider of care, unless it gave the patient contrary notice.” ( Ibid .) Moreover, the court even suggested that “prior notice may not be sufficient to avoid liability in an emergency context, where an injured patient in need of immediate medial care cannot be expected to understand or act upon that information.” ( Ibid .) In effect, this ruling by the court amounts to “judicial notice” that virtually all patients believe the doctors treating them at a hospital are hospital employees. The Mejia court further held that “[t]he second element, reliance, is established when the plaintiff ‘looks to’ the hospital for services, rather than to an individual physician.” ( Id.,at p. 1454.) “Effectively, all a patient needs to show is that he or she sought treatment at the hospital. . . .” ( Id . at p. 1458.) Once this is shown, “courts presume reliance, absent evidence that the plaintiff knew or should have known the physician was not an agent of the hospital.” ( Id . at p. 1454.) The hospital pointed to plaintiff’s admissions that 1. she “never even knew about the radiologist’s involvement in her case,” and therefore could not have understood the hospital to have held the radiologist out as its agent; 2. the radiology group, not the hospital, selected and controlled the radiologist, and 3. “plaintiff went to [the] hospital because it was the closest [to her], not because [of its] reputation.” ( Id.at pp. 1458-1459.) The court of appeal found none of these facts to be relevant. ( Id.at p. 1458.) Focusing exclusively on the presumed “appearance” of agency ( id.at p. 1459), the court acknowledged, “it appears difficult, if not impossible, for a hospital to ever obtain a non-suit based on the lack of ostensible agency” ( id . at p. 1458), and added that “merely by claiming that she sought treatment at [a] hospital,” a plaintiff will present sufficient evidence to allow her claim to reach a jury, “absent evidence that plaintiff should have known that the [treating physician] was not an agent of [the] hospital” ( id.at p. 1460). Why the i Mejia</<b i opinion is troubling Contrary to the Mejia court’s analysis, patients don’t generally choose an emergency room in reliance on any belief about the doctors’ employment or agency relationship with the hospital. They may choose the hospital based on terms of their insurance plan or the hospital’s geographic location. But no one can seriously suggest that, if a patient were confronted with a neon sign in the hospital waiting room declaring the doctors to be independent contractors whose conduct is not attributable to the hospital, the patients would turn around and look elsewhere to find a hospital with employee doctors. In other words, patients who consent to be treated by a doctor do not generally rely on “appearances,” one way or another, when consenting to being treated by a doctor at the hospital. Rather, they presumably rely on the doctor to provide competent diagnosis and treatment, while they rely on the hospital to provide proper facilities and related nursing and staffing care. The rationale underlying the “ostensible agency” fiction for imposing vicarious liability is therefore absent in this context. It is, of course, conceivable that a patient could present evidence that a doctor’s services were chosen based on a belief that the doctor had an employment or agency relationship with the hospital. (See Jacoves v. United Merchandising Corp ., (1992) 9 Cal.App.4th 88, 104 [triable issue of fact created concerning ostensible agency where defendant doctor was designated by hospital as the director of its adolescent psychiatric unit, obtained releases for him on its admission forms, and evidence gave rise to an inference that the plaintiffs "admitt[ed their son] to the Hospital at least in part [based] on [the doctor's] position with the hospital”].) But the Mejia opinion creates a presumption of ostensible agency without requiring any such evidence, and instead shifts the burden to the defendant to prove the plaintiff had actual notice (such as through information on an admission form, or because of a prior relationship with the doctor) demonstrating the doctor was not an agent of the hospital. To the extent Mejia departs from the analysis in Jacoves (which the Mejia opinion did not cite, much less distinguish), and other cases requiring the patient to present affirmative evidence on the elements of ostensible agency, trial courts may decline to follow Mejia.( Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455-456.) If followed by other courts, however, the Mejia court’s expanded ostensible agency theory is tantamount to creating strict liability for hospitals for most physician negligence occurring on hospital premises. This increase in potential liability and litigation costs comes at a particularly bad time. Soaring medical malpractice costs have already forced the closure of obstetric wards, the temporary closure of rural clinics and reduced trauma services at more than 1,300 health care institutions across the country this past summer. (Treaster, Rise in Insurance Forces Hospitals to Shutter Wards , N.Y. Times (Aug. 25, 2002).) The rule of almost-automatic ostensible agency liability endorsed by the court of appeal here will only exacerbate these costs, and threaten to further reduce the availability of services. Weighed against these problems is the dubious advantage of authorizing suit against hospitals (with their “deep pockets”) in actions that otherwise would proceed only against the doctor (with the doctor’s liability insurer in the background). On balance, neither patients nor healthcare providers seem to come out as winners under Mejia . Mary-Christine Sungaila and Lisa Perrochet are partners at Horvitz& Levy in Encino, where they practice appellate law.

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