Schau v. Morgan , 241 Wis. 334 ( 1942 )

The order from which appeal is taken denied a motion of the appellant Evangelical Deaconess Society of Wisconsin, a corporation, for a summary judgment dismissing the complaint as to it. On January 29, 1942, the plaintiff-respondent commenced this action against the defendants, Dr. James E. Morgan and Evangelical Deaconess Society of Wisconsin, a corporation. It is a malpractice action.

The complaint in substance alleges that plaintiff is a married woman, twenty-four years of age, the mother of a child five years of age; that she is engaged in keeping house for her family in the city of Milwaukee; that defendant Morgan is a physician and surgeon by profession, duly licensed to practice his profession in Wisconsin, and resided in the city of Milwaukee; that the defendant Evangelical Deaconess Society of Wisconsin is a corporation duly organized under the laws of Wisconsin, engaged in the maintenance and operation of a hospital for hire, located in the city of Milwaukee; that during the entire period of plaintiff's pregnancy, beginning with the month of January, 1941, and until the birth of the child hereinafter mentioned, defendant doctor was the attending physician, for which services he was paid; that on the 9th day of August, 1941, at about 2 o'clock in the afternoon, under the advice and order of the defendant doctor, plaintiff went to the hospital of the defendant society to have her child delivered; that defendant doctor promised plaintiff to be with her at said hospital from the time of her arrival, for which he had arranged, until said child was born, for which services said hospital was paid. It is further alleged:

"5. That upon information and belief, the defendant hospital and the defendant doctor through their agents, servants and employees carelessly, negligently and wilfully mishandled, cared, treated and attended to the plaintiff at and just prior to the delivery of her child; that during her last minutes of pregnancy, to wit, at and just prior to the time the careless, negligent and wilful treatment were administered to the plaintiff by the defendants, as aforesaid, the fetus of said plaintiff was alive and that the pulse of said fetus was normal. That while the plaintiff was at said defendant hospital at all times herein mentioned both defendants were in control of said plaintiff and of the care and attention administered to the plaintiff.

"6. That the wilful, careless and negligent acts of the defendant at all times herein mentioned were as follows:

"(a) The defendants through their agents, servants and employees failed to handle and treat said plaintiff while in her last minutes of pregnancy at the said defendant hospital efficiently and properly; that the defendants through their agents, servants and employees held the legs of said plaintiff close together and that they prevented by means of force the plaintiff from bending over; that by holding plaintiff's legs together and by preventing her from bending over, as aforesaid, they prolonged the ``labor pains' and delayed the delivery of plaintiff's child.

"(b) That the defendants owed a duty to the public and especially to the plaintiff to administer the care, treatment and attention to the plaintiff through their agents, servants and employees carefully, safely, and efficiently and that by conducting themselves as heretofore described in paragraphs 5 and 6, subsection (a), the defendants failed to carry out their duty.

"(c) That the defendant doctor failed to be at the said defendant hospital at the time the care and treatment, mentioned in paragraphs 5 and 6, subsection (a), was administered to the plaintiff.

"(d) That the defendant doctor owed a duty to the public and especially to the plaintiff to be with her at the said defendant hospital, and which defendant doctor promised to do and upon which promise the plaintiff had a right to rely and did rely; that by his being absent at the time and place, mentioned in paragraphs 5 and 6, subsections (a) and (c), the said defendant doctor failed to fulfil his duty as well as his promise."

It is further alleged that as a result of the conduct of both defendants plaintiff's child was asphyxiated and delivered dead on the 9th day of August, 1941; that as a result of said dead child plaintiff suffered a nervous shock, humiliation, pain and mental anguish, grief and sorrow, loss of companionship and affection, to her damage, etc.; that the conduct of the defendants as alleged was the sole and proximate cause of the damage to plaintiff.

The defendants answered separately. The defendant Evangelical Deaconess Society of Wisconsin admits its corporate existence but alleges that it is and at all of the times referred to in the complaint was a charitable institution organized and existing for charitable, benevolent, and educational purposes; that it is a corporation without capital stock; that no dividends or pecuniary profits have ever or can be declared to the members of said corporation; denies that it through any agent, servant, or employee carelessly, negligently, or wilfully mishandled, cared, treated, or attended to the plaintiff at or prior to the delivery of her child; denies that plaintiff's child was asphyxiated or delivered dead on account any careless, negligent, or unskilful acts or omissions of it or of any officer or servant.

Upon its answer and the affidavit of J.P. Meyer, D.D., said defendant on March 6, 1942, moved for an order for summary judgment in its favor and against the plaintiff dismissing the action. Dr. Meyer, in his affidavit states that he is the superintendent of defendant's hospital; that the defendant Evangelical Deaconess Society of Wisconsin is and at all the times referred to was a charitable institution maintaining a hospital where plaintiff was a patient; that among other things the articles of incorporation of said defendant provide as follows:

"Article 2. . . . (a) There shall be no capital stock of this society, same being formed for benevolent, charitable and educational purposes.

"(b) There shall be declared no dividend or pecuniary profits of this society.

"Article 3. It is the object of this society (a) To nurse the sick, and to exercise care for poor and aged by deaconesses, according to the constitution and by-laws of this society.

"(b) To found and support a deaconess home where deaconesses shall be educated and trained, and from which they shall be sent as nurses, and where sick and aged under circumstances, provided by by-laws may be admitted and receive attendance. . . ."

that the constitution and by-laws provide:

"Sec. 2. Said society is formed without capital stock, and no dividends or pecuniary profits shall be declared to the members of said society. Same is organized and shall be conducted for benevolent, charitable and educational purposes.

"Sec. 3. Purpose of this society shall be: (a) To establish and maintain a hospital and to exercise charity. (b) To found and support a home and a training school where deaconesses and nurses shall live and be educated. (c) To found or maintain other benevolent institutions as the society authorizes from time to time."

that said provisions above quoted in the articles of incorporation and constitution and by-laws were in effect at all times referred to in the complaint and still are in full force and effect; that no dividends of any kind have ever been declared and none can be under its articles of incorporation, constitution and by-laws; that said society operates its hospital at a loss; that the hospital charged an average of $3.30 a day for ward beds during 1941; that the cost to the hospital was an average of $4.62 to operate each of said beds per day; that during 1941 the hospital took care of forty-four complete charity cases and eighteen partial charity cases which were taken in the hospital as such. In addition discounts were given to patients in a large number of cases where patients represented financial inability to pay the entire amount of the bills of said defendant at its usual rates; that allowances were made to students of $790.22; that complete charity cases alone cost the hospital in 1941, $4,211.08; that it has been at all times necessary for the hospital to make up the financial deficit in its operations by soliciting and receiving subscriptions as charity from persons in order to enable said defendant to carry on its work and fulfil its purposes; the income for said defendant in said institution being derived from fees from patients being insufficient to enable it to operate and carry on its work; that said defendant maintains a training school for nurses and an educational setup for the development of medical men; that the work involved in teaching and instruction is carried on on a voluntary basis by doctors and others; that the defendant is recognized as a charitable institution by the state and national governments and is given the benefit of all tax exemptions permitted by such governments to charitable and benevolent institutions.

Dr. Meyer further declares that this action has no merit, and that said defense, based upon the character of the defendant, is sufficient to defeat the plaintiff in this action, and that a summary judgment dismissing the complaint should be ordered by the court.

The plaintiff's attorney filed a counteraffidavit which in substance states that as the attorney for the plaintiff prior to the commencement of this action he had a conference with J.P. Meyer, superintendent of the defendant deaconess society; that said J.P. Meyer stated to affiant as follows:

"We carry insurance against such claims and we will at once turn over your claim to our insurance company and their attorneys."

that said defendant hospital did turn over the claim herein to its insurance carrier, to wit, St. Paul-Mercury Indemnity Company and their lawyers; that affiant had numerous conferences with Merton Griffin, agent and attorney for said insurance company, in regard to a possible settlement of the claim herein, and that no settlement could be reached; that on the 8th day of December, 1941, the said insurance company, through its attorney, Merton Griffin, delivered to affiant a document entitled, "Information Authorization," to be signed by the plaintiff, for the purpose of authorizing said insurance company to obtain information from the defendant James E. Morgan, M.D.; that affiant knows from his own investigation and from the conferences that the defendant hospital is insured against the claim alleged in the complaint and that its insurance carrier is the St. Paul-Mercury Indemnity Company, and for which insurance-policy contract defendant hospital paid a substantial fee, and that said insurance company will satisfy any judgment rendered against defendant hospital.

Said affiant further states upon information and belief that Attorneys Quarles, Spence Quarles are retained by said insurance company, whose interest in this case is to salvage any loss for itself, if any; that the amount sued for is less than the amount of liability limited by the insurance policy, and that said defendant hospital will incur no loss and no expense, monetary or otherwise, in this lawsuit; that the source of indemnity in the event any judgment is rendered against the defendant hospital for the claim involved will not come out of the funds of defendant hospital but that said insurance company will indemnify such a judgment in accordance with the terms of their insurance-policy contract.

He further states that defendant hospital is not a charitable institution, and that the plaintiff and defendant hospital contracted that she be received as a paid patient upon terms agreed in advance between them; that the amount claimed of and due by her at the termination of her stay pursuant to their agreement was paid by the plaintiff to defendant hospital on the 14th day of August, 1941, in the sum of $43.

On March 9, 1942, the court entered an order denying the motion for summary judgment with $10 costs. The defendant Evangelical Deaconess Society of Wisconsin appeals from this order. The summary-judgment statute, sec. 270.635, so far as here material, provides:

"(1) Summary judgment may be entered . . . in any civil action.

"(2) the judgment may be entered in favor of either party, on motion, upon the affidavit of any person who has knowledge thereof, . . . if on behalf of the defendant, such evidentiary facts, including documents or copies thereof, as shall show that his denials or defenses are sufficient to defeat the plaintiff, together with the affidavit of the moving party, either that he believes . . . that the action has no merit . . . unless the opposing party shall, by affidavit or other proof, show facts which the court shall deem sufficient to entitle him to a trial."

The affidavits must state evidentiary facts. Fuller v.General A. F. L. Assur. Corp. 224 Wis. 603, 610,272 N.W. 839; Ehrlich v. Frank Holton Co. 228 Wis. 676,682, 280 N.W. 297, 281 N.W. 696.

That a charitable institution is not liable under the doctrine of respondeat superior for the negligence of its servants has been repeatedly held by this court. Morrison v. Henke,165 Wis. 166, 160 N.W. 173; Bachman v. Young Women'sChristian Asso. 179 Wis. 178, 191 N.W. 751;Schumacher v. Evangelical Deaconess Society,218 Wis. 169, 260 N.W. 476.

In Schumacher v. Evangelical Deaconess Society, supra, p. 172 (involving same defendant as here), the court said:

"The basis of the rule adopted by this court exempting charitable hospitals from liability for the negligence of their servants is above stated to be that, because these hospitals perform a quasi-public function, akin to that performed by municipalities in performing governmental functions, justice and public policy require that the doctrine of respondeatsuperior shall not be applied. The reason for the rule as applied to the negligent acts of servants applies with equal force whether the negligent act be of a nurse or other employee employed by the hospital, or the negligence of fits manager or managing board in selecting the nurse or other employee. Furthermore, the hospital can act only through its agents in selecting its employees. The agent who selects the employees is an agent of the hospital corporation in no different sense than is the employee whom the corporation through its agent selects. The duties of the two agents are different, but the agency relation is the same, and if the doctrine of respondeat superior does not apply to the acts of one such agent, it should not to the acts of the other."

The plaintiff's counsel, in his affidavit, states that the appellant carried insurance against such claims as here made. Assuming that to be the fact, it is wholly immaterial. The weight of authority in jurisdictions where the question has been raised is to the effect that the carrying of liability insurance by a charitable institution is immaterial. In Enman v.Trustees of Boston University, 270 Mass. 299,170 N.E. 43, the court held that evidence to show the carrying of liability insurance was immaterial. At page 301 the court said:

"The policy was not admissible to prove that because of it the defendants were deprived of the exemptions from liability which otherwise it as a charitable corporation would enjoy."

Further, the court said:

"The basis on which the defendant's legal responsibility for torts rests would not be changed by its entering into a contract with an insurance company by which the latter for a consideration and within specified limits undertakes to assume responsibility for damages resulting from accidents for which the defendant might be found to be liable, even though thereby to a certain extent the diversion of the funds of the defendant to that purpose might be avoided. The ruling excluding the policy as evidence was right."

Again, in McKay v. Morgan Memorial Co-op. Industries Stores, 272 Mass. 121, 126, 172 N.E. 68, the court said:

"There was no error in excluding a liability insurance policy covering the defendant corporation, offered by the plaintiff, accompanied by a waiver of all rights against the defendant except as it was protected under such policy. The defendant by taking out liability insurance would not enlarge its liability for negligence, even though by reason of such insurance damages might be paid to the plaintiff without diverting funds held for charitable purposes." To same effect see Stonaker v. Big Sisters Hospital, 116 Cal. App. 375, 2 P.2d 520; Williams v. Church Home, 223 Ky. 355,3 S.W.2d 753; Mississippi Baptist Hospital v. Moore,156 Miss. 676, 126 So. 465.

We will take notice that public-liability insurance policies cover the cost of defense. When a charitable institution is made a defendant it must defend the action whether or not it can be held liable. No doubt, charitable institutions deem it good business judgment to protect themselves against the costs of the defense of such actions, as well as from loss through liability imposed by law.

The statement in the affidavit of plaintiff's attorney "that the said defendant hospital is not a charitable institution" is a conclusion of law. The statute requires the statement of evidentiary facts. In Fuller v. General A.F. L. Assur.Corp., supra, where the affidavit of counsel was to the effect that affiant is familiar with the facts set forth in the answer, and that all allegations of fact contained in said answer are true, at page 610 the court said:

"This amounts to nothing more than a second verification by the attorney, and in no sense complies with the requirements of the statute. [Sec. 270.635.] The statute requires, as a condition precedent to the entry of a summary judgment in favor of a defendant, that an affidavit by some person who has knowledge thereof shall set forth such evidentiary facts, including documents or copies thereof, as shall show that his denials or defenses are sufficient to defeat the plaintiff, together with an affidavit of the moving party that the action has no merit." To same effect see Warren Webster Co.v. Pelavin, 241 Mich. 19, 216 N.W. 430; Cowan O. R. Co.v. Miley P. Co. 112 Cal. App. 773, 295 P. 504; Phillips v.Investors' Syndicate, 145 Misc. 361, 259 N.Y. Supp. 462;Dodwell Co. v. Silverman, 234 A.D. 362, 254 N.Y. Supp. 746; Rosenthal v. Halsband, 51 R.I. 119,152 A. 320; Sterling Homes Co. v. Stamford Water Co. (2d Cir.)79 F.2d 607.

The fact that plaintiff was a paid patient at defendant's hospital does not alter the rule of charitable immunity. Morrison v. Henke, supra. For a list of cases to same effect see 14 A.L.R. 602.

We must conclude that the mere assertion in the affidavit plaintiff's counsel "that the said defendant hospital is not a charitable institution" does not create an issue as opposed to the affidavit of Dr. Meyer which contains copies of material documents, the articles of incorporation, constitution and bylaws of the Evangelical Deaconess Society of Wisconsin. These evidentiary facts show the actual charitable, benevolent, and educational practices of the appellant. Appellant's motion for summary judgment should have been granted.

By the Court. — Order reversed. Cause remanded with directions to grant appellant's motion for a summary judgment.