Why this Case is Important
In California, under a rule premised on the theory of ostensible agency, a hospital may be liable for the negligence of physicians on the staff, even when such physicians are in fact independent contractors, unless the hospital has clearly notified the patient that the treating physicians are not hospital employees and there is no reason to believe the patient was unable to understand or act on the information. The required elements of ostensible agency are: "(1) conduct by the hospital that would cause a reasonable person to believe that there was an agency relationship and (2) reliance on that apparent agency relationship by the plaintiff." (Mejia v. Community Hospital of San Bernardino (2002) 99 Cal.App.4th 1448, 1457.)
On June 1, 2020, the California Court of Appeal, Second Appellate District, decided the case of Wicks, et al. v. Antelope Valley Healthcare District. The court held, among other holdings, that the evidence established in the case conclusively established that the emergency room physicians were not the ostensible agents of the hospital as a matter of law.
This case is crucially important in the context of hospital liability for the negligence of emergency room physicians as ostensible agents because it allows hospitals to negate an ostensible or apparent agency with the physicians by making a showing that the plaintiff received actual notice that the treating physicians were not agents of the hospital, and that plaintiff was in a position to reasonably comprehend or understand such notice.
Plaintiffs were the spouse and daughter of the decedent, Mr. Wicks, and sued two emergency room physicians, Antelope Valley Emergency Medicine Associates, Inc.; and Antelope Valley Healthcare District, doing business as Antelope Valley Hospital (the Hospital), for medical negligence in connection with Mr. Wicks’s death on October 26, 2016.
The complaint alleged that the Hospital selected and assigned physicians to care for and treat Mr. Wicks, and those individuals were the ostensible agents of the hospital. The complaint also alleged that the hospital was negligent in the “selection, training, retention, supervision and hiring” of the two ER doctors, and its nursing personnel were negligent in the care and treatment of the decedent.
As relevant to the issue of ostensible agency, the Hospital presented evidence to the trial court that the decedent had signed and initialed an admission form a little over an hour of being in the Hospital emergency room which clearly stated that all physicians were not employees, representatives or agents of the Hospital, and explained the relationship between the Hospital and the physicians. The Hospital also submitted evidence in the form of the decedent's medical records, which showed that the decedent was "alert, oriented, cooperative and able to describe his symptoms" approximately nine minutes before he signed the form. Additionally, the records indicated that the decedent had previously signed and initialed two identical hospital admission forms the prior year.
The trial court granted the Hospital's motion for summary judgment on all issues. Of note here is that the trial court concluded as a matter of law that Mr. Wicks received “actual notice that the emergency department physicians were independent contractors,” and “no reasonable jury could find that Mr. Wicks did not understand the information provided.”1
The appellate court affirmed the trial court's judgment in full. The court held that a hospital may be liable for the negligence of physicians on an ostensible agency theory, unless (1) the hospital gave the patient actual notice that the treating physicians are not hospital employees, and (2) there is no reason to believe the patient was unable to understand or act on the information, or (3) the patient was treated by his or her personal physician and knew or should have known the true relationship between the hospital and physician.
The Wicks decision is guided by three opinions in California regarding hospital liability for ostensible agency: Mejia v. Community Hospital of San Bernardino (2002) 99 Cal.App.4th 1448 (Mejia), Whitlow v. Rideout Memorial Hospital (2015) 237 Cal.App.4th 631 (Whitlow), and Markow v. Rosner (2016) 3 Cal.App.5th 1027. The Mejia court noted that California law has “inferred ostensible agency from the mere fact that the plaintiff sought treatment at the hospital without being informed that the doctors were independent contractors[,]” and that "unless the patient had some reason to know of the true relationship between the hospital and the physician—i.e., because the hospital gave the patient actual notice or because the patient was treated by his or her personal physician—ostensible agency is readily inferred.” (99 Cal.App.4th 1448, 1454-1455 and 1457.)
The Wicks court distinguished the facts and circumstances presented in the case from those presented in the Mejia and Whitlow decisions. In Mejia, the patient was never given any notice that the hospital's staff physicians were independent contractors, and had no reason to know that they were not agents of the hospital, thereby presenting the classic emergency room situation where ostensible agency can be inferred.
In Whitlow, the patient signed an admission form which included a provision advising that all physicians were independent contractors, however, the court found that the patient was in no condition to understand the admission form due to evidence presented that she was "crying in horrible pain[,]" nauseous and unable to read it. Further, the processor did not explain to the patient the contents of the form or read it to her. This case presented a situation in which the surrounding circumstances and the patient's condition negated any actual notice to the patient, due to the patient being in no condition to understand the notice.
The Wicks court distinguished from these two cases by pointing to the fact that the patient signed a straightforward notice, with no obtuse legalese, telling him the staff physicians were independent contractors and not employees or agents. Further, the court held that there was nothing in the record to suggest that the patient was incapable of understanding the admission form as he was not in dire distress or excruciating pain, but rather the patient was alert, oriented, cooperative and able to describe his symptoms mere minutes before he signed the form.
The court also borrowed from the Markow decision, where the court found no basis to hold a hospital liable for the negligence of a staff physician, as the physician had been the patient’s chosen personal doctor for four and a half years, and the patient had signed 25 conditions of admission forms and other consent forms giving him notice that his physician was an independent contractor. The Markow decision provides an alternative avenue to negate ostensible agency by making a showing that a patient had sufficient prior interactions with his or her physician to reasonably be on notice that the physician is not an agent of the hospital.
The Wicks court used all three decisions to guide its rationale in holding that the decedent patient received actual meaningful notice at the time of admission when he was alert, oriented and cooperative, that the staff physicians were not employees or agents of the Hospital. The court fashioned the rule that that "although a hospital may not control, direct or supervise physicians on its staff, a hospital may be liable for their negligence on an ostensible agency theory, unless (1) the hospital gave the patient actual notice that the treating physicians are not hospital employees, and (2) there is no reason to believe the patient was unable to understand or act on the information, or (3) the patient was treated by his or her personal physician and knew or should have known the true relationship between the hospital and physician."
The Wicks decision reveals steps that can be undertaken by a hospital to potentially shield itself from liability for the negligence of staff physicians premised upon a theory of ostensible agency.
First and foremost, a hospital should always include a clear and unambiguous notice in any admission forms that physicians are independent contractors, and not agents of the hospitals. While most, if not all, hospitals already employ such a notice, changes in font and typeface (such as bold and all-caps) may assist in drawing a patient's attention to the notice. Further, requiring the patient to initial and sign said notice, acknowledging their understanding of the notice and relationship between the hospital and physician is crucial.
If for any reason a patient cannot read or sign the admission forms and the notice, a hospital should provide a staff member to clearly explain the details of the relationship between the physicians and the hospital, and ensure to document in the patient's records that they have received said notice.
Second, this decision makes a patient's state or condition around the time of signing or receiving notice highly relevant to determine whether a patient was able to understand or act on the information. A patient's medical records noting the condition of a patient to be alert, oriented and cooperative around the time of receiving the notice would prove to be key in establishing actual notice.
In sum, the Wicks decision is an acknowledgement by the court that hospitals providing emergency care to members of the public who do not have an appointment or any relationship with the staff physicians have little to no practical means to give such notice before a patient is admitted. This decision provides the opportunity for hospitals to make a showing as a matter of law of actual notice to defeat liability for the negligence of staff physicians under an ostensible agency theory.
1 The trial court also found that plaintiffs have not cogently disputed the Hospital's showing that it exercised reasonable care in retaining the emergency department physicians as independent contractors.