In another defining decision regarding ostensible agency, the Court of Appeal in De Valle v. Doctors Med. Ctr. of Modesto, No. F082099 (Cal. Ct. App. Jul. 6, 2022) found in favor of a defendant hospital. Based upon this recent decision, a patient’s claim for injuries against a hospital based upon ostensible agency for negligent surgery performed by an independent contractor will fail when it is demonstrated that the patient had a pre-existing relationship with the physician, that such physician scheduled the surgery and selected the hospital where the surgery would be performed, and that the patient should have reasonably known that the hospital was simply the venue for the surgery.

Factual Background

Elisa Magallanes de Valle (Magallanes) was a patient of Rebecca Brock, M.D. whose office was located at Golden Valley Health Center (GVHC). Dr. Brock was an employee of GVHC. Magallanes had specifically selected Dr. Brock as her physician. In May 2016, Magallanes presented to Dr. Brock with complaints of abnormal bleeding and cramping. She was diagnosed with an enlarged uterus and anemia. As her symptoms began to rapidly worsen, she agreed to undergo surgery to be performed by Dr. Brock. Dr. Brock scheduled a total vaginal hysterectomy with bilateral salpingo-oophorectomy to be performed on June 27, 2016, at Doctors Medical Center of Modesto (DMC). Dr. Brock was not an employee of DMC.

On June 27, 2016, Magallanes initialed and signed DMC’s Conditions of Service form. The form at paragraph 4, expressly stated: “Physicians are not employees or agents of the hospital”. Magallanes initialed paragraph 4 and also certified that she had read and understood the terms of the document. Magallanes later argued that the form was written in English, while Spanish was her first and primary language.

Dr. Brock performed the surgery at DMC on June 27, 2016. On June 29, 2016, Magallanes was discharged from DMC by Dr. Brock. Subsequently, on the same day, Magallanes sought emergency medical treatment and presented to the Emergency Department of DMC. She underwent exploratory surgery and was found to have significant injuries to her rectum, requiring further surgery including a colostomy.

On September 27, 2017, Magallanes brought suit against Dr. Brock, GVHC, and DMC sounding in medical negligence. The Complaint alleged that, "each defendant was the agent, servant and/or employee of each of the remaining defendants."

DMC filed a Motion for Summary Judgment, addressing the issue of ostensible agency and asserting as an undisputed fact, that Dr. Brock was not an employee of DMC. Magallanes argued in her opposing papers that there was no evidence that she received “actual” notice that Dr. Bock was not an employee of DMC. In Reply, DMC argued that Dr. Bock was Magallanes’ personal physician for the scheduled non-emergency surgery and Magallanes could not rely upon an apparent or ostensible agency since she had presented to the hospital solely due to her relationship with her physician which was independent of the hospital.

The Decision

The Court of Appeal affirmed the trial court’s grant of the summary judgment in favor of DMC. In its analysis, the Court of Appeal primarily adopted the arguments set forth by DMC. The key factors in its decision largely stemmed from the fact that Magallanes had a pre-existing relationship with her physician, Dr. Bock. Magallanes selected Dr. Bock as the physician to perform the recommended surgery. Dr. Bock scheduled the surgery to be performed at DMC, a licensed hospital setting. The only reason Magallanes presented to the hospital on the day of the alleged incident, was at the direction of Dr. Bock and specifically for the performance of surgery. Hence, the Court of Appeal held that the trial court was correct in finding that it was "indisputable” that Magallanes knew or should have known that Dr. Bock was not employed by DMC. It should be noted that the Court of Appeal rejected Magallanes argument as to her inability to understand the hospital admissions form, given that the evidence revealed she had previously signed numerous similar forms written in English.

Impact Of This Decision

In medical malpractice cases, hospitals are commonly subjected to a cause of action based upon a physician’s alleged negligence under a theory of ostensible agency. There is no question that an employee of a hospital will be regarded as an ostensible agent of the hospital. But more often than not, physicians are not employees of hospitals. Hence, variations of agency theories have been leveled against hospitals over the years. As differing fact patterns have been subject to law and motion challenges, we have seen new and different variations of the law governing these agency theories.

In the instant case, the Court of Appeal’s decision will impact those causes of action for ostensible agency brought against hospitals, in similar settings of non-emergent surgeries that are scheduled by a patient’s treating physician at acute care hospitals solely as a venue for the surgical procedure. A similar defense can be made when defending outpatient surgery centers in this setting.

In defending this cause of action brought against a hospital or surgery center, it will be essential to obtain evidence supporting the following: 1. That Plaintiff selected his or her physician and developed a physician-patient relationship. 2. That Plaintiff’s physician scheduled the medical procedures to be performed. 3. That Plaintiff’s physician selected the venue where he or she would be performing the surgery. 4. That Plaintiff’s only purpose for presenting to the hospital or surgery center on the day of surgery was at his or her physician’s request. 5. That Plaintiff understood that the hospital or surgery center was simply the venue for the surgery.

Of course, it is also helpful to demonstrate that Plaintiff was given actual notice that the surgical facility did not employ the Plaintiff’s physician, which may be effectuated by way of the Conditions of Admission form, hospital signage, or verbal representation by the hospital or physician followed by chart documentation, among other methods. Ensuring that written notice of independent contractor status of physicians is provided in the patient’s native tongue or at least properly translated, is obviously recommended. Nevertheless, the Court of Appeal’s decision in this case rests primarily on implied notice based upon reasonable inference.

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