Yarbrough v. Northwestern Memorial Hospital , 104 N.E.3d 445 ( 2017 )

2017 IL 121367
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
(Docket No. 121367)
CHRISTINA YARBROUGH et al., Appellees, v. NORTHWESTERN MEMORIAL
HOSPITAL et al. (Northwestern Memorial Hospital, Appellant).
Opinion filed December 29, 2017.
JUSTICE THEIS delivered the judgment of the court, with opinion.
Chief Justice Karmeier and Justices Thomas and Garman concurred in the
judgment and opinion.
Justice Burke dissented, with opinion, joined by Justices Freeman and Kilbride.
OPINION
¶1 The circuit court of Cook County certified the following question pursuant to
Illinois Supreme Court Rule 308 (eff. Feb. 26, 2010): “Can a hospital be held
vicariously liable under the doctrine of apparent agency set forth in Gilbert v.
Sycamore [Municipal Hospital], 156 Ill. 2d 511 ([1993]), and its progeny for the
acts of the employees of an unrelated, independent clinic that is not a party to the
present litigation?” The appellate court answered this question in the affirmative.
2016 IL App (1st) 141585, ¶ 46. For the reasons that follow, we find that the
appellate court answered the question incorrectly. Accordingly, we reverse the
judgment of the appellate court and remand this cause to the circuit court for further
proceedings consistent with this opinion.
¶2 BACKGROUND
¶3 On November 15, 2005, plaintiff Christina Yarbrough went to the Erie Family
Health Center (Erie) located at 1701 West Superior Avenue in Chicago after
searching online for a clinic that would administer a pregnancy test without
requiring her to have insurance coverage.
¶4 Erie does not require medical insurance. Erie is a “Federally Qualified Health
Center” (FQHC) that comprises several clinics in the Chicago area. 1 FQHCs are
“community-based and patient-directed organizations that serve populations with
limited access to health care. These include low income populations, the uninsured,
those with limited English proficiency, *** individuals and families experiencing
homelessness, and those living in public housing.” (Internal quotation marks
omitted.) Lyndsay Gunkel, Federally Qualified Health Centers: The Next Step in
Cost-Effective Health Care, 20 Annals Health L. Advance Directive 31, 33 (2010);
see also 42 U.S.C. § 254b (2012). FQHCs rely heavily on federal grants and
Medicaid cost-based reimbursement to operate and provide the communities that
they serve with primary and preventative care regardless of a patient’s ability to
pay. Gunkel, supra, at 32-33; see also 42 U.S.C. § 254b (2012).
¶5 Erie was originally founded as a project between Northwestern Memorial
Hospital (NMH) and “Erie Neighborhood House” in 1957. NMH provides
financial support, technological assistance, and strategic support. A representative
1
Employees of Erie are deemed federal employees. Arteaga v. United States, 711 F.3d 828, 830
(7th Cir. 2013) (citing 42 U.S.C. § 233(g)(1)(A), (g)(4) (2006)). Consequently, a tort suit against
Erie or its employees can be maintained only under the Federal Tort Claims Act. Id. at 830-31
(citing 42 U.S.C. § 233(a), (g)(1)(A) (2006)).
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of NMH may serve on Erie’s board if requested by Erie’s board chairperson.
Erie-employed physicians seeking privileges to practice at NMH are required to
apply for them, as would any physician.
¶6 At the time Yarbrough went to Erie in November 2005, she did not have a
relationship with an obstetrician-gynecologist (OB-GYN) or a family physician.
After receiving a positive pregnancy result during her initial visit, Yarbrough spoke
with a staff member at Erie. She asked the unnamed staff person where she would
deliver her baby. Yarbrough was informed that she would have her ultrasounds
done at Northwestern Medicine Prentice Women’s Hospital and would most likely
deliver her baby at NMH. During this same visit, Yarbrough received informational
materials regarding tours of NMH’s birthing/delivery area, having the installation
of an infant car seat inspected at NMH, and attending birthing classes at NMH.
Based upon this information, Yarbrough believed that Erie and NMH were one and
the same entity, particularly because she was told that she would give birth at
NMH.
¶7 On November 30, 2005, Yarbrough began to experience vaginal bleeding and
went to the emergency room at Advocate Illinois Masonic Medical Center
(Advocate). She obtained an abdominal ultrasound there and was allegedly advised
by a physician at Advocate that she had a bicornuate uterus.
¶8 On December 2, 2005, Yarbrough met at Erie with Betsy McKelvey, a certified
nurse midwife, and Dr. Raymond Suarez, an OB-GYN. Both McKelvey and Dr.
Suarez were employees of Erie. She underwent another abdominal ultrasound that
day. Yarbrough was purportedly told that she did not have a bicornuate uterus but
instead was diagnosed with a shortened cervix.
¶9 On February 21, 2006, Erie referred Yarbrough to NMH for a 20-week
ultrasound. This second ultrasound was interpreted by Dr. William Grobman, who
is employed by Northwestern Medical Faculty Foundation (NMFF).
¶ 10 On April 8, 2006, Yarbrough delivered her daughter, Hayley Joe Goodpaster,
prematurely by emergency caesarean section at NMH. Dr. Suarez purportedly told
Yarbrough that she did, in fact, have a bicornuate uterus and an “incompetent
cervix.”
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¶ 11 On December 28, 2009, Yarbrough and David Goodpaster, on behalf of their
daughter Hayley, filed a two-count complaint against NMH and NMFF. Count I of
the complaint alleged medical negligence by Dr. Grobman, as an actual or apparent
agent of NMFF, in relation to his interpretation of the ultrasound on February 21,
2006. 2 In count II, as subsequently amended on August 22, 2013, plaintiffs alleged
that Erie’s employees were the actual or apparent agents of NMH.
¶ 12 They alleged that the medical staff who treated Yarbrough at Erie had
negligently failed to identify and address issues surrounding her shortened cervix
and bicornuate uterus, causing her to deliver her daughter prematurely at 26 weeks’
gestation. Plaintiffs further alleged that Yarbrough was never told that the
healthcare workers at Erie were not employees of NMH. Plaintiffs alleged that
based on Yarbrough’s knowledge of NMH’s reputation and the information
provided to her by Erie, she believed that if she received prenatal care from Erie,
she would be receiving treatment from NMH health care workers.
¶ 13 NMH moved for partial summary judgment on the amended complaint as to all
agency claims arising out of treatment that Yarbrough received by Erie employees.
NMH asserted that it did not hold Erie out as its agent. Similarly, Erie and its
employees did not hold themselves out as agents of NMH. NMH maintained that
Erie was an independent, federally funded community health center and that the
staff at Erie who treated Yarbrough on-site at Erie were working strictly within the
scope of their employment with Erie.
¶ 14 The trial court denied NMH’s motion for partial summary judgment. After
NMH orally moved to certify a question under Rule 308, the trial court ordered the
parties to draft a proposed certified question, which they subsequently filed,
respectively, with the court. Thereafter, the trial court entered an order certifying
the above-quoted question, which the court drafted.
¶ 15 The appellate court initially denied NMH’s application for leave to appeal. We
denied NMH’s petition for leave to appeal but entered a supervisory order directing
the appellate court to vacate its order and to consider the question certified by the
2
Count I is not at issue in this appeal.
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circuit court. Yarbrough v. Northwestern Memorial Hospital, No. 118149 (Ill. Nov.
26, 2014) (supervisory order).
¶ 16 The appellate court in its subsequent opinion answered the certified question in
the affirmative. 2016 IL App (1st) 141585, ¶ 46. The appellate court rejected
NMH’s argument that Gilbert is inapplicable in this case because the alleged
negligent conduct did not occur at the hospital. Id. ¶¶ 36, 46. The appellate court
held that nothing in Gilbert limits a plaintiff from recovering against a hospital
“ ‘merely because the negligent conduct of the physician did not occur in the
emergency room or some other area within the four walls of the hospital.’ ” Id. ¶ 40
(quoting Malanowski v. Jabamoni, 293 Ill. App. 3d 720, 727 (1997)). The appellate
court also held that a plaintiff is not required to name the individual physician or his
or her employer as a defendant in order to hold the hospital vicariously liable as the
principal. Id. ¶¶ 43-44, 46.
¶ 17 This court allowed NMH’s petition for leave to appeal. Ill. S. Ct. R. 315 (eff.
Mar. 15, 2016). In addition, we allowed the Illinois Association of Defense Trial
Counsel to file an amicus curiae brief in support of NMH. We also allowed the
University of Chicago Medical Center, Rush University Medical Center, Advocate
Health Care, Northshore University Health System, Presence Health and Trinity
Health to file a joint amicus curiae brief in support of NMH. We further allowed
the Illinois Trial Lawyers Association to file an amicus curiae brief in support of
plaintiffs. Ill. S. Ct. R. 345 (eff. Sept. 20, 2010).
¶ 18 ANALYSIS
¶ 19 The certified question asks:
“Can a hospital be held vicariously liable under the doctrine of apparent
agency set forth in Gilbert v. Sycamore [Municipal Hospital], 156 Ill. 2d 511
([1993]), and its progeny for the acts of the employees of an unrelated,
independent clinic that is not a party to the present litigation?”
¶ 20 NMH asserts that the appellate court erred in answering this question in the
affirmative. NMH contends that the doctrine of apparent authority, as set forth in
Gilbert and subsequent cases, is inapplicable, as a matter of law, because the
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treatment at issue occurred at Erie and not at a hospital or hospital facility owned by
NMH.
¶ 21 Rule 308(a) provides for interlocutory appeals of nonfinal orders that present “a
question of law as to which there is substantial ground for difference of opinion.”
Ill. S. Ct. R. 308(a) (eff. Feb. 26, 2010). When the trial court finds that an answer to
that question “may materially advance the ultimate termination of the litigation,”
the court must identify the question in writing, and the appellate court may allow an
appeal. Id. “Because an interlocutory appeal under Rule 308 necessarily involves a
question of law, our review of the appellate court’s decision in such an appeal is
de novo.” In re Marriage of Mathis, 2012 IL 113496, ¶ 19.
¶ 22 This court first applied the apparent authority doctrine in a medical malpractice
context in Gilbert. There, we addressed whether a hospital may be held vicariously
liable for the negligence of a physician who is not an employee of the hospital but,
rather, an independent contractor. Gilbert, 156 Ill. 2d at 514. The physician who
treated the plaintiff’s decedent in the hospital’s emergency room was a staff
physician practicing through an independent professional association. Id. at
515-16. The hospital did not advise emergency room patients that the physicians
were independent contractors and not hospital employees. Id. at 516. The hospital
argued that it could not be held vicariously liable for a physician’s negligence
where the physician was neither an employee nor agent of the hospital. Id. at 517.
The appellate court agreed. Id.
¶ 23 In rejecting appellate court decisions that had refused to impose vicarious
liability upon a hospital based upon an agency relationship unless the physician
was an actual agent of the hospital, we held those decisions overlooked two
realities of modern hospital care. Id. at 519-20. First, those appellate court
decisions overlooked the “business of a modern hospital.” Id. at 520. We
recognized:
“ ‘[H]ospitals increasingly hold themselves out to the public in expensive
advertising campaigns as offering and rendering quality health services. One
need only pick up a daily newspaper to see full and half page advertisements
extolling the medical virtues of an individual hospital and the quality health
care that the hospital is prepared to deliver in any number of medical areas.
Modern hospitals have spent billions of dollars marketing themselves,
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nurturing the image with the consuming public that they are full-care modern
health facilities. All of these expenditures have but one purpose: to persuade
those in need of medical services to obtain those services at a specific hospital.
In essence, hospitals have become big business, competing with each other for
health care dollars.’ ” Id. (quoting Kashishian v. Port, 481 N.W.2d 277, 282
(Wis. 1992)).
¶ 24 The second reality of modern hospital care discussed by this court in Gilbert
involved the “reasonable expectations of the public.” Id. at 521. We stated:
“ ‘[G]enerally people who seek medical help through the emergency room
facilities of modern-day hospitals are unaware of the status of the various
professionals working there. Absent a situation where the patient is directed by
his own physician or where the patient makes an independent selection as to
which physicians he will use while there, it is the reputation of the hospital itself
upon which he would rely. Also, unless the patient is in some manner put on
notice of the independent status of the professionals with whom [he] might be
expected to come into contact, it would be natural for him to assume that these
people are employees of the hospital.’ ” Id. (quoting Arthur v. St. Peters
Hospital, 405 A.2d 443, 447 (N.J. Super. Ct. Law Div. 1979)).
¶ 25 This court also emphasized that “ ‘[s]uch appearances speak much louder than
the words of whatever private contractual arrangements the physicians and the
hospital may have entered into, unbeknownst to the public, in an attempt to insulate
the hospital from liability for the negligence, if any, of the physicians.’ ” Id.
(quoting Brown v. Coastal Emergency Services, Inc., 354 S.E.2d 632, 637 (Ga. Ct.
App. 1987)).
¶ 26 After considering these realities of modern hospital care, we held that a patient
who is unaware that the person providing treatment is not the employee or agent of
the hospital has the right to look to the hospital in seeking compensation for any
negligence in providing emergency room care. Id. at 522. We stressed that liability
attaches to the hospital in such cases only where the treating physician is the
apparent or ostensible agent of the hospital. If a patient knows or should have
known that the treating physician is an independent contractor, then the hospital
will not be liable. Id.
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¶ 27 This court held that in order to find a hospital vicariously liable for the
negligence of independent-contractor physicians, a plaintiff must plead and prove
apparent authority, which provides that a principal will be bound not only by
authority the principal actually gives to another but also by the authority that the
principal appears to give to another. Id. at 523. We explained that apparent
authority “is the authority which a reasonably prudent person, exercising diligence
and discretion, in view of the principal’s conduct, would naturally suppose the
agent to possess.” Id. We also found that “[w]here the principal creates the
appearance of authority, the principal ‘will not be heard to deny the agency to the
prejudice of an innocent party, who has been led to rely upon the appearance of
authority in the agent.’ ” Id. at 524 (quoting Union Stock Yard & Transit Co. v.
Mallory, Son & Zimmerman Co., 157 Ill. 554, 565 (1895)).
¶ 28 This court in Gilbert concluded that a hospital may be found vicariously liable
under the doctrine of apparent authority for the negligent acts of a physician
providing care at a hospital, regardless of whether the physician is an independent
contractor, unless the patient knows or should have known that the physician is an
independent contractor. Id.
¶ 29 We set forth the following three elements for a hospital to be liable under the
doctrine of apparent authority:
“ ‘[A] plaintiff must show that: (1) the hospital, or its agent, acted in a manner
that would lead a reasonable person to conclude that the individual who was
alleged to be negligent was an employee or agent of the hospital; (2) where the
acts of the agent create the appearance of authority, the plaintiff must also prove
that the hospital had knowledge of and acquiesced in them; and (3) the plaintiff
acted in reliance upon the conduct of the hospital or its agent, consistent with
ordinary care and prudence.’ ” Id. at 524-25 (quoting Pamperin v. Trinity
Memorial Hospital, 423 N.W.2d 848, 855-56 (Wis. 1988)).
¶ 30 With respect to the first two elements, we explained that in order to find
“holding out” on the part of the hospital, it is not necessary that there be an express
representation by the hospital that the person alleged to be negligent is an
employee. Id. at 525. Rather, the element is satisfied if the hospital holds itself out
as a provider of care without informing the patient that the care is provided by
independent contractors. Id.
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¶ 31 Concerning the third element, “justifiable reliance,” this court explained that a
plaintiff’s reliance is satisfied if the plaintiff relies upon the hospital to provide
medical care, rather than upon a specific physician. Id. A “critical distinction” is
whether the plaintiff is seeking care from the hospital itself or whether the plaintiff
is looking to the hospital merely as a place for his or her personal physician to
provide medical care. Id. We stated:
“ ‘Except for one who seeks care from a specific physician, if a person
voluntarily enters a hospital without objecting to his or her admission to the
hospital, then that person is seeking care from the hospital itself. An individual
who seeks care from a hospital itself, as opposed to care from his or her
personal physician, accepts care from the hospital in reliance upon the fact that
complete emergency room care—from blood testing to radiological readings to
the endless medical support services—will be provided by the hospital through
its staff.’ ” Id. at 525-26 (quoting Pamperin, 423 N.W.2d at 857).
¶ 32 This court ultimately held in Gilbert that the trial court improperly granted
summary judgment to the defendant hospital, as a genuine issue of material fact
existed with respect to whether the physician who treated the plaintiff was an
apparent agent of the hospital. Id. at 526.
¶ 33 We revisited the issue of apparent authority in the medical malpractice context
in Petrovich v. Share Health Plan of Illinois, Inc., 188 Ill. 2d 17 (1999). There, the
plaintiff brought a medical malpractice action against a physician and others for
their alleged negligence in failing to diagnose her cancer in a timely manner. Id. at
22. The plaintiff was a member of a health maintenance organization (HMO) and
also named the HMO as a defendant, alleging that the HMO was vicariously liable
for the conduct of the participating physicians who treated her. Id. at 25. The trial
court granted summary judgment to the HMO, holding that it could not be held
vicariously liable for the negligence of its physicians who are independent
contractors. Id. at 22. In rejecting this holding, we explained that the apparent
authority doctrine “functions like an estoppel” and “[w]here the principal creates
the appearance of authority, a court will not hear the principal’s denials of agency
to the prejudice of an innocent third party, who has been led to reasonably rely upon
the agency and is harmed as a result.” Id. at 31.
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¶ 34 Following our rationale in Gilbert, we held that to establish apparent authority
against an HMO for physician malpractice, the patient must prove (1) that the
HMO held itself out as the provider of health care, without informing the patient
that the care is given by independent contractors, and (2) that the patient justifiably
relied upon the conduct of the HMO by looking to the HMO to provide health care
services rather than looking to a specific physician. Id. at 33-34. We ultimately
concluded that an HMO may be held vicariously liable for the negligence of its
independent-contractor physicians under both the doctrines of apparent authority
and implied authority and that the plaintiff was entitled to a trial on both doctrines.
Id. at 52.
¶ 35 Our most recent statements on apparent authority in the area of medical
malpractice come in York v. Rush-Presbyterian-St. Luke’s Medical Center, 222 Ill.
2d 147 (2006). In York, the plaintiffs filed a medical malpractice action against the
attending anesthesiologist who was employed by University Anesthesiologists,
S.C., and added Rush as a defendant on the theory that the anesthesiologist was
Rush’s apparent agent. Id. at 151-52. We found that the plaintiff presented
sufficient evidence of apparent authority to support the jury’s verdict, finding Rush
vicariously liable for the malpractice of the anesthesiologist. Id. at 195.
¶ 36 Although Rush disputed the sufficiency of the evidence to support the
justifiable reliance element, we found the following: (1) there was evidence that the
plaintiff had only sought treatment from Rush after he heard that the hospital had
good doctors, (2) the anesthesiologist wore either scrubs covered with the Rush
logo or a lab coat that displayed the Rush emblem, (3) nothing in the treatment
consent form drafted by Rush and signed by the plaintiff alerted him that the
anesthesiologist was an independent contractor, and (4) the evidence presented at
trial revealed that Rush failed to place the plaintiff on notice that the
anesthesiologist was an independent contractor and not an employee of Rush. Id. at
196-97.
¶ 37 In affirming the trial court’s denial of Rush’s motion for judgment
notwithstanding the verdict, we reaffirmed our holding in Gilbert and stated:
“In Gilbert, this court recognized that the relationship between a patient and
health-care providers, both physicians and hospitals, presents a matrix of
unique interactions that finds no ready parallel to other relationships. To
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underscore this point, we set forth in great detail what we termed the ‘realities
of modern hospital care’ and concluded that the fervent competition between
hospitals to attract patients, combined with the reasonable expectations of the
public that the care providers they encounter in a hospital are also hospital
employees, raised serious public policy issues with respect to a hospital’s
liability for the negligent actions of an independent-contractor physician. It is
against this specific factual backdrop that we extended the doctrine of apparent
agency to instances wherein a plaintiff seeks to hold a hospital vicariously
liable for the malpractice of an independent contractor physician.” Id. at 192.
¶ 38 Turning to the question before us, as acknowledged by NMH during oral
argument, prior to Gilbert, hospitals could solicit patients, advertise themselves as
full-service facilities, and offer all necessary services to patients, yet they could
also potentially avoid liability by working through independent contractors.
Gilbert, as NMH concedes, sought to address this inequity by setting forth the
elements necessary to prove apparent authority against a hospital under such
circumstances. The elements are a “ ‘holding out’ ” by the hospital and
“ ‘justifiable reliance’ ” by the plaintiff. Petrovich, 188 Ill. 2d at 33 (quoting
Gilbert, 156 Ill. 2d at 525).
¶ 39 Our decision in Gilbert, as we later recognized in Petrovich, was grounded in
“two realities of modern hospital care.” First, this court recognized that hospitals, in
essence, have become big business. Hospitals increasingly hold themselves out to
the public as the providers of health care, particularly in their marketing. Hospitals
also benefit financially from the health care delivered in their emergency rooms.
Second, the reasonable expectations of the public have changed. Patients have
come to rely on the reputation of the hospital in seeking out emergency care. These
patients would naturally assume that the physicians attending the emergency room
are employees of the hospital, unless put on notice otherwise. Consequently, we
held that, unless the patient knows or should have known that the physician
providing treatment is an independent contractor, vicarious liability can attach to a
hospital for the medical malpractice of its physicians under the apparent authority
doctrine. Id. at 32 (citing Gilbert, 156 Ill. 2d at 524).
¶ 40 Our health care system has continued to evolve in the years since we decided
Gilbert. The realities of modern hospital care that informed our decision then are
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even more true today. Hospitals across the country have consolidated to improve
their finances in the health care industry and to attract more patients. E.g., Lisa
Schencker, Loyola Medicine to Acquire MacNeal; Tenet Seeks to Sell 3 Other
Chicago-Area Hospitals, Chi. Trib. (Oct. 11, 2017), http://www.chicago
tribune.com/business/ct-biz-loyola-acquires-berwyn-101217-story.html. Others
have entered into “rebranding initiatives,” which have allowed more than one
organization to use similar logos while continuing to retain their individual names.
E.g., Mike Nolan, Rebranding to Bring Modified Name to Ingalls Hospital, Chi.
Trib. (Sept. 14, 2017), http://www.chicagotribune.com/suburbs/daily-southtown/
news/ct-sta-ingalls-facilities-st-0915-20170914-story.html.
¶ 41 NMH acknowledges these significant changes in the health care industry and
represents that “[l]ike many hospital networks, NMH (now Northwestern
Medicine) owns or operates many facilities *** outside of the main hospital
campus, including six hospitals and multiple small immediate care clinics in
various neighborhood locations.” NMH concedes that “depending on the
circumstances of the case, a plaintiff could argue apparent agency against NMH
arising out of the treatment at one of those facilities.”
¶ 42 NMH urges us, however, to hold that Gilbert may only be applied to treatment
at a hospital or a facility that is owned by the hospital. In Petrovich, as we discussed
above, we held that the Gilbert factors may also be used to impose vicarious
liability on HMOs. Consequently, this court has already applied the rationale of
Gilbert outside of treatment received at a hospital or a facility owned by a hospital.
¶ 43 That said, we find the question before us does not implicate the policy
considerations that informed our decision in Gilbert and our later holdings in
Petrovich and York. Those cases sought to protect a patient who is unaware that the
individual providing him or her medical treatment is not an employee or agent of
the hospital or HMO from whom treatment is sought. Under such circumstances,
we found a patient should have the right to look to the hospital or HMO in seeking
compensation for any negligent care.
¶ 44 The circumstances in this case are in marked contrast to the factual backdrop
that led us to extend the doctrine of apparent authority in Gilbert and the cases
thereafter. Here, Yarbrough sought treatment at Erie but looks to impose liability
on NMH. Erie is neither owned nor operated by NMH. While Erie receives some
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charitable financial and technical assistance from NMH, Erie is an FQHC that
relies heavily on federal grants and Medicaid reimbursement to provide
underserved communities with primary and preventative care regardless of an
individual’s ability to pay. Erie’s employees are considered federal employees, and
suits against Erie or its employees can only be maintained under the Federal Torts
Claim Act. Erie does not utilize the Northwestern name. There is no
Northwestern-related branding or the use of Northwestern’s trademark purple color
by Erie.
¶ 45 Plaintiffs rely upon Malanowski, which we find inapposite. In Malanowski, the
plaintiff’s decedent treated annually with an independent contractor physician at
the Loyola University Mulcahy Outpatient Center. Malanowski, 293 Ill. App. 3d at
722. Loyola University of Chicago (Loyola) owned and operated the outpatient
center. Id. at 726. The appellate court, relying upon Gilbert, held that if, as the
plaintiff maintained, the conduct of Loyola led the decedent to rely upon “Loyola”
for medical treatment, rather than any particular physician, then the plaintiff should
be allowed to recover from Loyola for any negligent care the decedent received
from the physician. Id. at 727. In significant contrast to this case, the complaint in
Malanowski alleged the outpatient center bore the “Loyola” name, the outpatient
center held itself out as a direct provider of health care services, the outpatient
center introduced the decedent to her physician, and the payment for services
provided by the physician was made directly to the outpatient center. Id. at 728.
¶ 46 We recognize that physicians employed by Erie routinely have privileges to
practice at NMH. They must apply for such privileges as would any doctor. Gilbert
was informed by our concern with the reasonable expectations of the public that the
care providers that they encounter in a hospital are also hospital employees. Gilbert
does not suggest that merely granting a physician employed by another entity
hospital staff privileges alone could create an apparent agency relationship.
¶ 47 We refuse to read Gilbert and its progeny so broadly as to impose vicarious
liability under the doctrine of apparent authority on a hospital for the care given by
employees of an unrelated, independently owned and operated clinic like Erie.
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¶ 48 CONCLUSION
¶ 49 For the foregoing reasons, we answer the certified question in the negative.
Accordingly, we reverse the judgment of the appellate court. We remand this case
to the circuit court for further proceedings consistent with this opinion.
¶ 50 Appellate court judgment reversed.
¶ 51 Cause remanded.
¶ 52 JUSTICE BURKE, dissenting:
¶ 53 This Rule 308 appeal raises two questions, one legal and one factual. The legal
question is whether a medical malpractice plaintiff is automatically barred from
asserting the existence of an apparent agency between a health care worker and a
defendant hospital when the plaintiff was treated by the health care worker outside
the hospital or hospital-owned facility. The factual question is whether, assuming
there is no such per se bar, there was an apparent agency under the facts of this
case. The majority improperly conflates these two issues and, in doing so, grants
unwarranted relief to the defendant. Accordingly, I respectfully dissent.
¶ 54 Background
¶ 55 The plaintiffs, Cristina 3 Yarbrough and David Goodpaster, filed a medical
malpractice complaint on behalf of their minor child, Hayley, against the
defendant, Northwestern Memorial Hospital (NMH). In their complaint, plaintiffs
alleged that, during the course of her pregnancy with Hayley, Cristina received
negligent medical treatment from health care workers at the Erie Family Health
Center (Erie), a community health center located in Chicago. According to
plaintiffs, this negligent treatment caused Hayley to suffer a premature birth and
severe neurological injuries.
3
In her discovery deposition, Cristina states that her name is spelled without an “h.”
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¶ 56 Erie is not owned by NMH, and the employees at Erie are not paid by NMH.
Plaintiffs maintained, however, that the actions of NMH were such that a
reasonable person would have concluded the health care workers at Erie were the
agents of NMH and, further, that Cristina relied on this fact in seeking treatment at
Erie. Plaintiffs therefore alleged that, pursuant to Gilbert v. Sycamore Municipal
Hospital, 156 Ill. 2d 511 (1993), the health care workers at Erie were the apparent
agents of NMH and NMH was vicariously liable for their negligent conduct.
¶ 57 NMH moved for partial summary judgment with respect to all claims arising
out of the care Cristina received at Erie. NMH asserted that, given the facts of
record, no reasonable juror could find that the health care workers at Erie were the
apparent agents of NMH. The circuit court denied NMH’s motion. The court
concluded there were genuine issues of material fact regarding the relationship
between NMH and the workers at Erie and, therefore, the question of whether there
was an apparent agency was a matter to be resolved by the jury.
¶ 58 NMH thereafter moved for the circuit court to certify that its order denying
partial summary judgment merited discretionary appeal under Illinois Supreme
Court Rule 308 (eff. Feb. 26, 2010). The circuit court granted that request and, as
required under the rule, identified the pertinent question of law underlying its order
as follows:
“Can a hospital be held vicariously liable under the doctrine of apparent
agency set forth in Gilbert v. Sycamore Mun. Hosp., 156 Ill. 2d 511 (Ill. 1993),
and its progeny for the acts of the employees of an unrelated, independent clinic
that is not a party to the present litigation?”
¶ 59 The appellate court denied NMH’s request for appeal of the circuit court’s
order. NMH then appealed to this court. We denied NMH’s petition for leave to
appeal but entered a supervisory order directing the appellate court to consider the
interlocutory appeal.
¶ 60 In its opinion, the appellate court answered the legal question “yes.” 2016 IL
App (1st) 141585, ¶¶ 36-46. The appellate court held that, so long as a plaintiff can
satisfy the elements for a claim based on apparent agency as set forth in Gilbert,
there is no automatic bar to recovery simply because the negligent conduct of the
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health care worker did not occur within the four walls of the hospital or
hospital-owned facility. Id.
¶ 61 The appellate court then addressed NMH’s alternative argument that it was
entitled to summary judgment on the question of whether an apparent agency
existed on the facts of this case. The appellate court rejected this contention. The
court stated:
“plaintiffs do not seek to hold NMH liable merely because, as NMH contends,
the Erie physicians have privileges at the hospital. Rather, the issue of whether
NMH and/or Erie held themselves out as having such close ties such that a
reasonable person would conclude that an agency relationship existed, and
whether [Cristina] relied upon NMH or Erie, raises material questions of fact
for a jury to resolve. Under the unique facts of this case and in light of the
evidence presented thus far, plaintiffs have, at a minimum, raised a question of
fact regarding the holding out and reliance elements under Gilbert and their
apparent authority claim contains issues of fact subject to a jury’s
determination.” Id. ¶ 51.
¶ 62 This appeal followed.
¶ 63 Analysis
¶ 64 This appeal is brought pursuant to Illinois Supreme Court Rule 308 (eff. Feb.
26, 2010). That rule provides, in relevant part:
“(a) Requests. When the trial court, in making an interlocutory order not
otherwise appealable, finds that the order involves a question of law as to which
there is substantial ground for difference of opinion and that an immediate
appeal from the order may materially advance the ultimate termination of the
litigation, the court shall so state in writing, identifying the question of law
involved. Such a statement may be made at the time of the entry of the order or
thereafter on the court’s own motion or on motion of any party. The Appellate
Court may thereupon in its discretion allow an appeal from the order.” Ill. S. Ct.
R. 308(a) (eff. Feb. 26, 2010).
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¶ 65 Rule 308 requires the circuit court to identify, in writing, a legal question that
justifies allowing an appeal from an otherwise unappealable, interlocutory order.
The rule does not specify what type of legal issues meet this standard. However,
because Rule 308 requires the identification of a “question of law,” this court has
held that the circuit court may not certify for review an order that involves only a
disagreement over the application of a rule of law to the case at hand. As this court
has recently observed, “[b]y definition, certified questions are questions of law
***. [Citation.] Certified questions must not seek an application of the law to the
facts of a specific case.” Rozsavolgyi v. City of Aurora, 2017 IL 121048, ¶ 21.
¶ 66 In this case, the circuit court concluded that its order denying NMH partial
summary judgment involved a question of law regarding the scope of the apparent
agency doctrine as set forth in Gilbert. In Gilbert, the plaintiff filed a medical
malpractice and wrongful death action against the defendant hospital for treatment
given by a physician within the hospital emergency room. The physician was not
employed by the hospital but by a medical association, a separate corporate entity.
Plaintiff maintained, however, that the physician was the apparent agent of the
hospital and, therefore, the hospital was vicariously liable for the physician’s
conduct. The circuit court granted the hospital summary judgment, and the
appellate court affirmed. This court reversed.
¶ 67 This court noted that “Illinois has long recognized the doctrine of apparent
authority, which refers to a type of agency relationship.” Gilbert, 156 Ill. 2d at 523.
Under this doctrine, “[a] principal will be bound by not only that authority which he
actually gives to another, but also by the authority which he appears to give.” Id.
The apparent agency is created by the actions of the principal, not the agent.
“Apparent authority in an agent is the authority which the principal knowingly
permits the agent to assume, or the authority which the principal holds the agent out
as possessing. It is the authority which a reasonably prudent person, exercising
diligence and discretion, in view of the principal’s conduct, would naturally
suppose the agent to possess.” Id.
¶ 68 The defendant hospital in Gilbert asserted that, as a matter of law, all hospitals
should be excepted from the doctrine of apparent agency and, therefore, the
plaintiff should not be able to pursue a claim against it. The court rejected that
argument. Pointing to the reality of how modern hospitals are marketed as large,
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full-service businesses and the reasonable expectations of the public that flow from
that reality, this court held that, under the doctrine of apparent agency, a hospital
“can be held vicariously liable for the negligent acts of a physician providing care
at the hospital, regardless of whether the physician is an independent contractor,
unless the patient knows, or should have known, that the physician is an
independent contractor.” Id. at 524.
¶ 69 The court set forth the elements of the doctrine as follows:
“For a hospital to be liable under the doctrine of apparent authority, a plaintiff
must show that: (1) the hospital, or its agent, acted in a manner that would lead
a reasonable person to conclude that the individual who was alleged to be
negligent was an employee or agent of the hospital; (2) where the acts of the
agent create the appearance of authority, the plaintiff must also prove that the
hospital had knowledge of and acquiesced in them; and (3) the plaintiff acted in
reliance upon the conduct of the hospital or its agent, consistent with ordinary
care and prudence.” (Internal quotation marks omitted.) Id. at 525.
¶ 70 This court then reversed the circuit court’s grant of summary judgment to the
defendant hospital, holding that there was a genuine issue of material fact as to
whether the treating physician was an apparent agent of the hospital. Id. at 526.
¶ 71 In this case, NMH notes that, underlying the circuit court’s denial of its motion
for partial summary judgment is the assumption that the doctrine of apparent
agency can be asserted against a defendant hospital when the plaintiff receives
treatment outside the hospital or hospital-owned facility. According to NMH, this
assumption, which forms the basis for the certified question, is wrong. NMH
maintains that, under Gilbert, the doctrine of apparent agency can exist only when
the contested treatment occurs within the hospital or hospital-owned facility.
¶ 72 The majority rejects this contention. Pointing to Petrovich v. Share Health Plan
of Illinois, Inc., 188 Ill. 2d 17 (1999), the majority notes that “this court has already
applied the rationale of Gilbert outside of treatment received at a hospital or a
facility owned by a hospital.” Supra ¶ 42. Accordingly, there is no per se bar to
pursuing a claim based on apparent agency for treatment received outside the
hospital or hospital-owned facility. I agree with this conclusion.
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¶ 73 In Gilbert, the court adopted a legal test to be applied to determine whether
there is an apparent agency between a health care worker and a defendant hospital.
The court then applied the test to the facts before it, which happened to involve a
hospital emergency room. That the doctrine of apparent agency was applied in
Gilbert to treatment that took place within the hospital does not mean that the
doctrine itself is limited only to that setting. As our appellate court has noted, there
is “nothing in the Gilbert opinion that would bar a plaintiff, who could otherwise
satisfy the elements for a claim based on apparent agency, from recovering against
a hospital merely because the negligent conduct of the physician did not occur in
the emergency room or some other area within the four walls of the hospital.”
Malanowski v. Jabamoni, 293 Ill. App. 3d 720, 727 (1997).
¶ 74 In short, the legal rule adopted by the majority in this case is that hospitals are
liable for medical negligence committed by unrelated, independent agents when the
elements of the doctrine of apparent agency, as set forth in Gilbert, are satisfied.
There is no automatic or per se bar to apparent agency for treatment that takes place
outside the hospital or hospital-owned facility. Notably, this is the same conclusion
reached by the appellate court. Supra ¶ 16 (“The appellate court rejected NMH’s
argument that Gilbert is inapplicable in this case because the alleged negligent
conduct did not occur at the hospital.”).
¶ 75 Answering the legal question in this way does not conclude this appeal.
Although plaintiffs do not face a per se bar in asserting that the health care workers
at Erie were the apparent agents of NMH, they still must establish the elements of
the doctrine as set forth in Gilbert in order to prevail. NMH contends they cannot
do this and, further, that no reasonable juror could conclude, based on the facts of
record, that there was an apparent agency. Accordingly, NMH maintains it is
entitled to summary judgment on the application of the apparent agency doctrine to
the facts of this case.
¶ 76 The appellate court rejected this alternate argument but expressed some
hesitation in reaching it, noting that appeals brought under Rule 308 are typically
limited to reviewing the legal question identified by the circuit court. 2016 IL App
(1st) 141585, ¶ 50. Other appellate court decisions have gone further, holding that
under Rule 308, the reviewing court has no jurisdiction to go beyond the legal
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question and address the propriety of the circuit court’s order. See, e.g., Combs v.
Schmidt, 2015 IL App (2d) 131053, ¶ 6. This is incorrect.
¶ 77 Rule 308 explicitly states that the appeal is taken “from the order” of the circuit
court, not the “question of law involved” in that order. Ill. S. Ct. R. 308(a) (eff. Feb.
26, 2010). The legal question identified by the circuit court explains why the order
merits interlocutory review, but ultimately, it is the propriety of the circuit court’s
order that is before the reviewing court, not simply the question. Thus, a reviewing
court always retains the discretion to consider the application of the legal rule
addressed in the certified question to the circuit court’s order. Indeed, this court has
long recognized that we may consider whether a circuit court has erred in denying a
defendant’s motion for summary judgment after resolving the legal question or
questions raised in a Rule 308 appeal. Heidelberger v. Jewel Cos., 57 Ill. 2d 87, 92
(1974) (“this appeal was allowed as an interlocutory appeal under our Rule 308,
which would normally result in a remand for further proceedings in the trial court.
However, our resolution of the questions presented in this appeal requires
consideration of the further question whether the trial court erred in not granting
summary judgment for defendant.”); De Bouse v. Bayer AG, 235 Ill. 2d 544, 558
(2009).
¶ 78 Here, the parties agree that, given the state of the record, there is no barrier to
this court deciding whether defendant is entitled to summary judgment on the
existence of an apparent agency. However, answering this question requires us to
apply the appropriate legal standards.
¶ 79 Summary judgment is appropriate when the pleadings, depositions, and
admissions on file, together with any affidavits, show that there is no genuine issue
of material fact and that the moving party is entitled to judgment as a matter of law.
735 ILCS 5/2-1005 (West 2000). When determining whether a genuine issue of
material fact exists, a court must construe the pleadings, depositions, admissions,
and affidavits strictly against the moving party and liberally in favor of the
nonmoving party. Gilbert, 156 Ill. 2d at 518. A triable issue exists when the
material facts are disputed or, when the material facts are not in dispute, reasonable
persons might draw different inferences from the undisputed facts. Id. Because
summary judgment is a drastic means of disposing of litigation, courts should grant
summary judgment only when the moving party’s right is clear and free from
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doubt. Id. Generally, the question of whether an agency relationship exists is a
question of fact. Id. at 524. However, “if only one conclusion may be drawn from
the undisputed facts, then a question of law is presented which may be
appropriately dispensed with by summary judgment.” Reynolds v. Decatur
Memorial Hospital, 277 Ill. App. 3d 80, 84 (1996); Churkey v. Rustia, 329 Ill. App.
3d 239, 243 (2002); James v. Ingalls Memorial Hospital, 299 Ill. App. 3d 627, 632
(1998).
¶ 80 The majority does not apply these standards. Instead, after resolving the legal
issue presented in this appeal and concluding there is no per se bar to asserting the
doctrine of apparent authority outside a hospital or hospital-owned facility, the
majority states the following:
“The circumstances in this case are in marked contrast to the factual
backdrop that led us to extend the doctrine of apparent authority in Gilbert and
the cases thereafter. Here, Yarbrough sought treatment at Erie but looks to
impose liability on NMH. Erie is neither owned nor operated by NMH. While
Erie receives some charitable financial and technical assistance from NMH,
Erie is a FQHC that relies heavily on federal grants and Medicaid
reimbursement to provide underserved communities with primary and
preventative care regardless of an individual’s ability to pay. Erie’s employees
are considered federal employees, and suits against Erie or its employees can
only be maintained under the Federal Torts Claim Act. Erie does not utilize the
Northwestern name. There is no Northwestern-related branding or the use of
Northwestern’s trademark purple color by Erie.” Supra ¶ 44.
¶ 81 Continuing its emphasis on the factual circumstances of this case, the majority
then distinguishes the facts of the present case with those of another appellate
decision addressing apparent agency. Supra ¶ 45 (discussing Malanowski, 293 Ill.
App. 3d 720). From this, the majority then reaches the illogical conclusion that the
answer to the certified question of law in this case is “no.”
¶ 82 The majority has conflated the legal issue raised in the certified question with
the application of the apparent agency doctrine to the facts of this case. In other
words, the majority has concluded that the application of the legal rule is part of
answering the certified question. But our case law on this point is unequivocal.
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“Certified questions must not seek an application of the law to the facts of a specific
case.” Rozsavolgyi, 2017 IL 121048, ¶ 21. The majority has committed clear error.
¶ 83 There is good reason to keep a clear distinction between resolving the legal
issue identified in the certified question and applying any resulting legal rule to the
circuit court’s order: the failure to do so confuses the applicable legal standards and
leads to inequitable results. In this case for example, for NMH to prevail on its
motion for summary judgment, it must show that plaintiffs can never establish the
holding out or reliance elements of apparent agency set forth in Gilbert. But instead
of focusing on these elements, the majority emphasizes that Erie “relies heavily on
federal grants” and that “Erie employees are considered federal employees”—facts
that have nothing whatsoever to do with NMH’s actions or whether plaintiffs can
establish an apparent agency. Further, the majority makes no mention of the burden
NMH faces under summary judgment. Indeed, by expressly resting its decision on
an analysis of the specific facts of this case but then calling that analysis the answer
to the certified question, the majority has effectively awarded NMH summary
judgment on a question of fact without ever requiring NMH to meet the summary
judgment standard. This is both confusing and unfair to plaintiffs.
¶ 84 The appellate court did a thorough analysis of the Gilbert elements and
explained why there remain questions of fact sufficient to preclude the entry of
summary judgment. I find this analysis persuasive and would adopt it herein.
¶ 85 Summarizing, like the appellate court, this court unanimously agrees that there
is no per se bar to asserting the doctrine of apparent agency for treatment received
outside a hospital or hospital-owned facility. Nevertheless, having resolved this
legal issue, the majority answers the certified legal question in this case “no.” This
result is untenable. The majority effectively awards NMH summary judgment on
the existence of an apparent agency without ever conducting a summary judgment
analysis or finding that the summary judgment standard has been met. I disagree
with this result and therefore respectfully dissent.
¶ 86 JUSTICES FREEMAN and KILBRIDE join in this dissent.
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