Mary Johnson v. LeBonheur Children's Medical Center ( 2001 )

IN THE SUPREME COURT OF TENNESSEE
AT JACKSON
November 14, 2001 Session
MARY JOHNSON, ET AL. v. LeBONHEUR CHILDREN’S MEDICAL
CENTER, ET AL.
Appeal by Permission from the Court of Appeals
Circuit Court for Shelby County
Nos. 66041-9 and 74022-9 Robert L. Childers, Judge
No. W1999-01719-SC-R11-CV - Filed May 3, 2002
We granted appeal to determine whether the vicarious liability of a private hospital may be based
upon the acts or omissions of a state-employed physician resident. We hold that a private hospital
may be vicariously liable under the doctrine of respondeat superior based solely upon the acts of a
state-employed physician resident when the resident is acting as an agent of the hospital. The
judgment of the Court of Appeals is affirmed, and the case is remanded to the trial court for
proceedings consistent with this opinion.
Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals Affirmed;
Case Remanded to Trial Court
JANICE M. HOLDER , J., delivered the opinion of the court, in which FRANK F. DROWOTA , III, C.J.,
and E. RILEY ANDERSON, ADOLPHO A. BIRCH, JR. and WILLIAM M. BARKER , JJ, joined.
Parke S. Morris, Robertson Morrow Leatherman, and Thomas R. Prewitt, Jr., Memphis, Tennessee,
for the appellant, LeBonheur Children’s Medical Center.
Randall Loftin Kinnard, Nashville, Tennessee, and Steven Rand Walker, Memphis, Tennessee, for
the appellee, Mary Johnson.
Buckner Wellford and John H. Dotson, Memphis, Tennessee, for the amicus curiae, UT Medical
Group, Inc.
Catherine S. Mizell, Knoxville, Tennessee, and Rebecca P. Tuttle, Memphis, Tennessee, for the
amicus curiae, University of Tennessee.
OPINION
BACKGROUND / PROCEDURAL HISTORY
Amman Johnson underwent surgery at LeBonheur Children’s Medical Center (LeBonheur)
on November 4, 1991, to repair a heart condition. During the surgery, Amman sustained permanent
neurological damage resulting from cardiac arrest. Mary Johnson, Amman’s mother, filed suit
against LeBonheur and other health care providers involved in the surgery seeking damages for the
injuries sustained by Amman.
The complaint alleges, inter alia, that Dr. Michael Citak and Dr. Michael Martindale were
acting as the agents and servants of LeBonheur during Amman’s surgery and that LeBonheur is
vicariously liable under the doctrine of respondeat superior for their negligence. Dr. Citak and Dr.
Martindale were physician residents in the University of Tennessee (UT) training program. They
were compensated by UT and thus were state employees pursuant to Tenn. Code Ann.
§ 8-42-101(3). While in the UT training program, both resident physicians worked on rotation at
LeBonheur.1 During their rotation, they were required to follow LeBonheur’s protocols, rules, and
regulations in providing treatment or services, or otherwise in attending patients of LeBonheur.
Amman Johnson was one of the LeBonheur patients for whom the resident physicians provided
services. Dr. Citak assisted in performing Amman’s surgery, and Dr. Martindale assisted in
providing the anesthesia care during the surgery.
LeBonheur filed a motion for partial summary judgment. LeBonheur asserted that it could
not be held vicariously liable based solely upon the actions of Dr. Citak and Dr. Martindale because
the physician residents were immune from liability as state employees under Tenn. Code Ann.
§ 9-8-307. On December 8, 1998, the trial court entered an order overruling the motion. LeBonheur
was granted permission to seek an interlocutory appeal pursuant to Tenn. R. App. P. Rule 9. The
Court of Appeals affirmed the trial court’s overruling of the partial summary judgment motion. We
granted appeal.
I. Standard of Review
Summary judgment is appropriate when "there is no genuine issue as to any material fact and
. . . the moving party is entitled to a judgment as a matter of law." Tenn. R. Civ. P. 56.04. A ruling
on a motion for summary judgment involves only questions of law and not disputed issues of fact.
Owner-Operator Indep. Drivers Ass'n v. Concord EFS, Inc., 59 S.W.3d 63 (Tenn. 2001).
Accordingly, our review of a denial of summary judgment is de novo with no presumption of
correctness as to the trial court’s findings. Webber v. State Farm Mut. Auto. Ins. Co., 49 S.W.3d
265, 269 (Tenn. 2001). The evidence must be viewed “in the light most favorable to the nonmoving
party,” and all reasonable inferences must be drawn in the nonmoving party’s favor. Staples v. CBL
& Assocs., Inc., 15 S.W.3d 83, 89 (Tenn. 2000).
1
LeBo nheur a nd UT entered in to a written affiliation ag reemen t on Janu ary 22, 1 975.
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ANALYSIS
II. Tennessee Code Annotated § 9-8-307
To determine whether LeBonheur may be held vicariously liable under the doctrine of
respondeat superior for the actions of physician residents employed by the State, we begin with an
examination of the relevant portions of Tenn. Code Ann. § 9-8-307 (1998). The statute provides in
pertinent part:
(a)(1) The commission or each commissioner sitting individually has
exclusive jurisdiction to determine all monetary claims against the
state based on the acts or omissions of “state employees,” as defined
in § 8-42-101(3), falling within one (1) or more of the following
categories:
* * *
(D) Legal or medical malpractice by a state employee;
provided, that the state employee has a
professional/client relationship with the claimant;
* * *
(b) Claims against the state filed pursuant to subsection (a) shall
operate as a waiver of any cause of action, based on the same act or
omission, which the claimant has against any state officer or
employee. The waiver is void if the commission determines that the
act or omission was not within the scope of the officer’s or
employee’s office or employment.
* * *
(h) State officers and employees are absolutely immune from liability
for acts or omissions within the scope of the officer’s or employee’s
office or employment, except for willful, malicious, or criminal acts
or omissions or for acts or omissions done for personal gain. For
purposes of this chapter, “state officer” or “employee” has the
meaning set forth in 8-42-101(3).
Tenn. Code Ann. § 9-8-307 (1998) (emphasis added).
When construing statutes, we are required to ascertain and effectuate the legislative intent
and purpose of the statutes. State v. Walls, 62 S.W.3d 119 (Tenn. 2001). We should “assume that
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the legislature used each word in the statute purposely and that the use of [each] word[] conveyed
some intent.” State v. Levandowski, 955 S.W.2d 603, 604 (Tenn. 1997). Applying these principles,
we hold that the legislative purpose and intent of Tenn. Code Ann. § 9-8-307 is to protect state
employees from individual liability for acts or omissions that occur in the scope of their
employment.
Section 9-8-307 of the Tennessee Code Annotated vests the Tennessee Claims Commission
with exclusive jurisdiction for medical malpractice claims against the State of Tennessee based upon
the actions of physician residents employed by the State. The filing of a claim against the State in
the Claims Commission waives any cause of action against such a physician resident based on the
same act or omission occurring within the scope of employment. Tenn. Code Ann. § 9-8-307(b)
(1998). The statute further provides that state employees are absolutely immune from liability unless
their acts or omissions are willful, malicious, criminal, or done for personal gain. Tenn. Code Ann.
§ 9-8-307(h) (1998). Nothing in the statute, however, immunizes a private hospital from liability
for the acts or omissions of physician residents employed by the State who are also acting as agents
or servants of the private hospital. Section 9-8-307 of the Tennessee Code Annotated therefore
provides LeBonheur no protection against the imposition of vicarious liability based upon the acts
or omissions of Dr. Citak and/or Dr. Martindale if the residents are found to have been the agents
of the hospital.
III. Traditional Agency Principles
We must now determine whether LeBonheur may be held vicariously liable under traditional
agency principles for the acts of state-employed physician residents who are “immune” from
individual liability. We begin with a review of relevant agency principles.
The creation of an agency relationship does not require a contract, an explicit agreement, or
an understanding between the parties. White v. Revco Disc. Drug Ctrs., Inc., 33 S.W.3d 713, 724
(Tenn. 2000). The existence of an agency relationship, however, “is a question of fact under the
circumstances of the particular case,” id. (quoting McCay v. Mitchell, 62 Tenn. App. 424, 463
S.W.2d 710, 715 (1970)), and is determined by examination of agreements among the parties or of
the parties’ actions. Id. The principal’s right to control the acts of the agent is a relevant factor when
determining the existence of an agency relationship. Id. The amount of actual control exercised by
the principal over the agent also may be determinative of whether an agency relationship exists.
McDonald v. Dunn Const. Co., 182 Tenn. 213, 220, 185 S.W.2d 517 (1945).
When an agency relationship exists, the principal may be bound by the acts of the agent
performed on the principal’s behalf and within the actual or apparent scope of the agency. White,
33 S.W.3d at 724. In Tennessee, the doctrine of respondeat superior permits the master/principal
to be held liable for the negligent actions of his servant/agent. Smith v. Henson, 214 Tenn. 541, 551,
381 S.W.2d 892, 897 (1964). To hold the master/principal vicariously liable, “it is enough that the
servant or agent was acting in the business of his superior.” White, 33 S.W.3d at 725 (quoting
Kinnard v. Rock City Const. Co., 39 Tenn. App. 547, 551, 286 S.W.2d 352, 354 (1955)).
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Moreover, an agent may serve two masters simultaneously when the objectives of the dual
masters are not contrary. Id. “A person may be the servant of two masters, not joint employers, at
one time as to one act, if the service does not involve abandonment of the service to the other.” Id.
(quoting Restatement (Second) of Agency, § 226 cmt. b.). Two parties “may agree to employ a
servant together or to share the services of a servant. If there is one agreement with both of [the
parties], the actor is the servant of both [when] the servant is subject to joint control.” Restatement
of the Law, Second, Agency, § 226. Thus, a person serving two masters may subject both to liability
for the same act “if the act is within the scope of employment for both.” White, 33 S.W.3d at 725
(quoting Restatement (Second) of Agency, § 226 cmt. a.). We hold, therefore, that a physician
resident may be the agent of both the State and a private hospital. Whether an agency relationship
exists is determined by the trier of fact. See Harris v. St. Mary's Med. Ctr., Inc., 726 S.W.2d 902,
906 (Tenn. 1987).
LeBonheur argues that if physician residents may also be agents of a private hospital, then
the absolute immunity granted physician residents would be removed, contrary to legislative intent.
LeBonheur contends that the immunity provided by statute to resident physicians could not apply
to residents who have dual masters. LeBonheur’s argument incorrectly presumes that an agent can
act for only one master at a time. When a state-employed physician resident performs a rotation at
a private hospital, the same acts or omissions may be within the resident’s scope of employment with
the State and within the resident’s scope of employment with the private hospital. Permitting a
finding of dual masters, therefore, does not serve to abolish the absolute immunity granted to a state-
employed physician resident pursuant to section 9-8-307(h).
LeBonheur also asserts that a principal/master may not be held vicariously liable under the
doctrine of respondeat superior based solely upon the acts of an agent who is immune from liability.
In support of this proposition, LeBonheur cites numerous cases. Our analysis of Tennessee case law,
however, reveals that this proposition is not without limitation.
Loveman Co. v. Bayless, 128 Tenn. 307, 160 S.W. 841 (Tenn. 1913), represents the first
category of cases addressing this issue. In Loveman Co., the employer’s liability was predicated
solely upon the doctrine of respondeat superior. 128 Tenn. 307, 311, 160 S.W. 841 (Tenn. 1913).
The jury rendered a verdict against the employer but in favor of the employees. Id. The Court held
that when an action is filed against an employer based solely upon the tortious actions of its
employee under the doctrine of respondeat superior, a verdict in favor of the employee entitles the
employer to a discharge from liability. 128 Tenn. 307, 312, 160 S.W. 841, 842 (Tenn. 1913). The
Court reasoned that it is contradictory to find the master liable when the servant by whose act the
injury occurred is exonerated on the same evidence. Loveman Co., 128 Tenn. 307, 315, 160 S.W.
841, 843 (Tenn. 1913).
Subsequently, the Court, in Raines v. Mercer, addressed the issue of whether a father could
be held liable to his son’s wife under the doctrine of respondeat superior for his son’s negligent
conduct. 165 Tenn. 415, 55 S.W.2d 263 (1932). The plaintiff, the wife of the defendant’s son, filed
suit against the defendant for his son’s negligent operation of the defendant’s vehicle. Raines, 165
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Tenn. 415, 417, 55 S.W.2d 263 (1932). The negligent incident occurred before the marriage of the
plaintiff and the defendant’s son. Id. The Raines Court held that the rule of marital unity2
extinguished the plaintiff’s right of action against her husband. 165 Tenn. 415, 419, 55 S.W.2d 263,
264 (1932). The Court reasoned that since the plaintiff could not maintain a direct action against her
husband, she “could not avoid the forbidden frontal attack by an encircling movement against [the
principal, her husband’s father] . . . .” Raines, 165 Tenn. 415, 420, 55 S.W.2d 263, 264 (1932); See
also Graham v. Miller, 182 Tenn. 434, 187 S.W.2d 622 (1945) (holding that the general rule
prohibiting a child from suing his parent prevents the imposition of liability to the parent’s employer
under the doctrine of respondeat superior); Ownby v. Kleyhammer, 194 Tenn. 109; 250 S.W.2d 37(1952); Smith v. Henson, 214 Tenn. 541, 381 S.W.2d 892 (1964). Thus, by extinguishing the right
of action against the son, the marital unity rule precluded an action against the father.
In Stewart v. Craig, 208 Tenn. 212, 344 S.W.2d 761 (1961), this Court established a third
category of cases that prohibited a party from maintaining an action against the principal for
vicarious liability under the doctrine of respondeat superior based solely upon the acts of an agent.
In Stewart, the plaintiffs were injured in an automobile accident in which the driver was an employee
of the defendant. 208 Tenn. 212, 213, 344 S.W.2d 761 (1961). The plaintiffs executed a covenant
not to sue the employee/driver but then filed suit against the employer based on the doctrine of
respondeat superior. Stewart, 208 Tenn. 212, 214, 344 S.W.2d 761, 762 (1961). The Stewart Court
held that the covenant not to sue prohibited a suit for negligence against the employer based solely
on vicarious liability. 208 Tenn. 212, 216, 344 S.W.2d 761, 763 (1961); See also Craven v. Lawson,
534 S.W.2d 653 (Tenn. 1976).
These cases indicate that a principal may not be held vicariously liable under the doctrine of
respondeat superior based upon the acts of its agent in three instances: (1) when the agent has been
exonerated by an adjudication of non-liability, (2) when the right of action against the agent is
extinguished by operation of law, or (3) when the injured party extinguishes the agent’s liability by
conferring an affirmative, substantive right upon the agent that precludes assessment of liability
against the agent. See Rankhorn v. Sealtest Foods, 63 Tenn. App. 714, 721, 479 S.W.2d 649, 652
(1971).
The first and third categories above clearly do not apply to the facts of this case. The
resident physicians in this case have not been exonerated by an adjudication of non-liability; and Ms.
Johnson has not taken any affirmative action to prevent an assessment of liability against the
residents. The second category similarly provides no basis for LeBonheur’s assertion that the
resident physicians’ personal immunity should insulate LeBonheur from vicarious liability. The
marital unity rule extinguished a spouse’s right of action that was based upon the other spouse’s
tortious conduct. The statute conferring immunity upon the residents, however, does not extinguish
a claimant’s right of action. Section 9-8-307(h) of the Tennessee Code Annotated simply immunizes
2
Marital unity, a rule that declared husband and wife to be one person, extinguished antenuptial actions for tort
between husban d and w ife. Raines, 165 Tenn. 415, 420, 55 S.W.2d 263, 264. Davis v. D avis, 657 S.W.2d 753 (Tenn.
1983), expressly abolished interspousal tort immunity.
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physician residents from individual monetary liability. The residents’ conduct remains available as
a basis for the imposition of liability in the Claims Commission against the State. Thus, Ms.
Johnson’s right of action against the residents survives. Fault may be assessed for the residents’
tortious conduct, but the State has assumed responsibility for the damages assessed as a result of that
fault. Accordingly, we hold that a physician resident’s personal immunity does not prohibit
LeBonheur from being held vicariously liable under the doctrine of respondeat superior based upon
the actions of a physician resident.
LeBonheur further maintains that it may not be held vicariously liable for the actions of the
resident physicians because to do so would violate common law indemnity principles. Courts in
Tennessee have long recognized that a principal is entitled to seek indemnification against a
negligent agent. See Continental Ins. Co. v. City of Knoxville, 488 S.W.2d 50 (Tenn. 1972); Cohen
v. Noel, 56 S.W.2d 744 (Tenn. 1933); Walker v. Walker, 52 Tenn. 425 (1871). LeBonheur asserts,
however, that it would be barred from seeking indemnification against the residents. The residents
are provided absolute immunity from individual liability. See Tenn. Code Ann. § 9-8-307(h).
Moreover, the State has not consented to suit for indemnity claims based upon the actions of its
employees. See Northland Ins. Co. v. State of Tennessee, 33 S.W.3d 727 (Tenn. 2000) (holding that
“a waiver of sovereign immunity must be clear and unmistakable”). We decline, however, to hold
that the unavailability of an action for indemnity precludes the imposition of vicarious liability
against a private hospital for the negligence of physician residents who are found to be agents of the
hospital. Section 9-8-307(h) of the Tennessee Code Annotated eliminates the common law right to
indemnification by providing absolute immunity to resident physicians who are working within the
scope of their employment. It is within the prerogative of the legislature, therefore, to either modify
this individual immunity or to waive the State’s sovereign immunity to permit private, dual masters
of state employees to seek indemnification against the State in the Claims Commission.
Finally, LeBonheur argues that our holding in Carroll v. Whitney, 29 S.W.3d 14 (Tenn.
2000), requires that LeBonheur receive the same immunity that the residents receive. In Carroll, we
held that fault could be apportioned to a nonparty, notwithstanding that the nonparty was immune
from suit. Id. at 15. This Court reasoned that if a nonparty may not be apportioned fault, then the
doctrine of joint and several liability would be revived. Id. at 22. The Court determined, therefore,
that fairness to the parties required linking liability with fault. Id. at 21. The decision in Carroll,
however, in no way eliminated the doctrine of respondeat superior under which a principal may be
liable solely for the tortious acts of his agent. Eliminating vicarious liability for private hospitals
that utilize state-employed residents would encourage private hospitals to shift the risk of liability
to the State simply because the residents are employed by the State. As we stated in White v. Revco
Disc. Drug Ctrs., Inc., 33 S.W.3d 713, 722 (Tenn. 2000), the allocation of risk is
placed on the employer because, having engaged in an enterprise,
which will on the basis of all past experience involve harm to others
through the torts of employees, and sought to profit by it, it is just
that [the employer], rather than the innocent injured plaintiff, should
bear [the risk]; and [liability is placed on the employer] because [the
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employer] is better able to absorb [the risks], and to distribute them,
through prices, rates or liability insurance, to the public, and so to
shift them to society, to the community at large.
Thus, fairness to the parties requires that a private hospital may be held vicariously liable under the
doctrine of respondeat superior solely for the acts of a state-employed physician resident when that
resident is found to be the agent or servant of the hospital.
IV. Denial of Summary Judgment
Having determined that LeBonheur may be held vicariously liable under the doctrine of
respondeat superior for the actions or omissions of state-employed physician residents who are
acting as agents or servants of LeBonheur, we must now consider whether LeBonheur is entitled to
summary judgment. We are required to “take the strongest legitimate view of the evidence in favor
of the nonmoving party, allow all reasonable inferences in favor of that party, and discard all
countervailing evidence.” Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993). The record indicates
that Dr. Citak and Dr. Martindale were physician residents in the University of Tennessee training
program and were working on rotation at LeBonheur at the time of Amman’s surgery. While on
rotation at LeBonheur, they provided treatment, services, or otherwise attended patients of
LeBonheur. Dr. Citak assisted in performing Amman’s surgery, and Dr. Martindale assisted in
providing the anesthesia care during the surgery. Moreover, Dr. Citak and Dr. Martindale were
required to follow the protocols, rules and regulations of LeBonheur. Viewing the evidence in a
light most favorable to Ms. Johnson, we hold that a genuine issue of material fact exists as to
whether Dr. Citak and/or Dr. Martindale were acting as LeBonheur’s agents or servants.
CONCLUSION
We hold that a physician resident may be the agent of both the State and a private hospital.
Further, the absolute immunity granted pursuant to Tenn. Code Ann. § 9-8-307(h) to a state-
employed physician resident is not removed by the creation of a dual master relationship. A material
issue of fact exists as to whether Dr. Citak and/or Dr. Martindale were acting as the agents of
LeBonheur at the time of Amman Johnson’s surgery. Accordingly, we affirm the Court of Appeals’
judgment affirming the trial court’s overruling of LeBonheur’s motion for partial summary
judgment. The case is remanded to the trial court for proceedings consistent with this opinion.
Costs of this appeal are taxed to the Appellant, LeBonheur Children’s Medical Center, for which
execution may issue if necessary.
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JANICE M. HOLDER, JUSTICE
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