7761755960_ef24f59a6e_zCan a hospital be held vicariously liable under the doctrine of apparent agency set forth in Gilbert v. Sycamore Municipal Hospital and its progeny for the acts of the employees of an unrelated, independent clinic that is not a party to the present litigation? The Illinois Supreme Court agreed to decide that issue in the closing days of the November term, allowing a petition for leave to appeal in a certified question appeal from Division Five of the First District, Yarbrough v. Northwestern Memorial Hospital.

Yarbrough began in 2005 when the plaintiff appeared at a federally funded, not-for-profit clinic seeking pregnancy testing. After receiving a positive pregnancy test, the plaintiff was allegedly told that if she received prenatal care at the clinic, she would deliver and receive additional testing and care at the defendant hospital, including ultrasounds. She later received an ultrasound at the clinic and one at the plaintiff hospital, but in neither case was she advised of a malformation which made her pregnancy high risk. As a result, she ultimately delivered at 26 weeks, and the baby suffered numerous medical complications.

The plaintiff filed a two count complaint, alleging malpractice against the defendant hospital in connection with the ultrasound, as well as vicarious liability for malpractice at the clinic based on actual or apparent agency. The trial court granted the hospital’s motion for summary judgment on the vicarious liability claims, but the plaintiff then filed an amended complaint, restating her claims relating to the treatment at the clinic based on allegations of apparent authority.

In support of their theory, the plaintiffs alleged that the hospital held out the clinic as its agent in published materials, including annual and community service reports, as well as on its website, which listed the clinic as one of “our health partners.” The clinic’s website stated that all clinic doctors had faculty status at the defendant hospital’s school of medicine.

The defendant hospital moved for summary judgment on all apparent authority claims, arguing that the clinic was an independent, federally funded community health center, it had not been named as a defendant, and that all its employees were working onsite within the scope of their employment with the clinic. The defendant argued that the plaintiff had never been told that the defendant and the clinic were the same entity, and the mere fact that she was informed that she would likely deliver at the defendant hospital was insufficient to establish apparent agency. After hearing argument on the motion for summary judgment, the trial court certified the question above under Supreme Court Rule 308.

The parties in Yarbrough agreed that a hospital may be vicariously liable for the acts of a independent contractor physician under the doctrine of apparent authority pursuant to Gilbert. Gilbert required plaintiffs to show three factors: (1) the hospital or its agent acted in a way which would lead a reasonable person to conclude that the negligent individual was an employee or agent of the hospital; (2) the hospital had knowledge of and acquiesced in any acts of its agent which created the appearance of authority; and (3) the plaintiff acted in reliance upon the conduct of the hospital or its agent.

On appeal, the defendant in Yarbrough argued that Gilbert was limited to the four walls of the hospital itself – nothing in the decision suggested it could extend to a physically separate clinic. The Appellate Court disagreed, holding that the important factor was not the geographic location of the challenged events, but rather whether the hospital had somehow caused the plaintiff to rely on the hospital for treatment rather than the individual physician. The defendant also argued that the hospital could not be sued as principal when the alleged agent – the clinic – had not been sued, but the Court concluded that Gilbert contained no such requirement.

The Appellate Court held that the plaintiff had produced sufficient evidence to raise a genuine dispute of fact for the jury on whether a reasonable person would believe that an agency relationship existed. The Court pointed to the defendant hospital’s holding itself out as a community-oriented “full service hospital,” and noted the entities’ affiliation agreement, which provided that the hospital would be the primary site for acute and specialized hospital care for the clinic’s patients. It made no difference whether or not the plaintiff had actually seen the written materials or website of the defendant hospital; the standard for “holding out” was objective. Accordingly, the Appellate Court answered the certified question with which we began this post in the affirmative.

We expect Yarbrough to be decided in the fall of 2017.

Image courtesy of Flickr by Metro Centric (no changes).