Determining Agency in Medical Malpractice Cases

When a patient presents at a hospital or a practice affiliated with a hospital, whether the doctor is an employee of the hospital is usually the last thing on the patient’s mind. If the doctor’s treatment results in a medical malpractice claim, however, the identity of the doctor’s employer may become a central issue of the litigation.

With more Maine hospitals, particularly those in rural areas, hiring locum tenens physicians1 and other contractor physicians, the issue of agency is more likely to arise. A hospital may claim that a physician accused of negligence is not an employee or agent of the hospital, and, therefore, not covered by their insurance. The status of a physician or other provider is not determined by the hospital. It is a legal determination based on a fact-intensive analysis of the physician’s employment status. Many doctors are employees of hospitals. Even when they are not directly employed by the hospital, they may be shown to be agents of the hospital.

A successful plaintiff’s attorney recognizes this issue early in litigation and plans a case to document agency accordingly. Because an agency determination is so fact-specific, developing a strong record early and throughout the case is crucial.

The Law Court defines agency as “the fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.” Camden Nat’l Bank v. Crest Constr., Inc., 2008 ME 113, ¶ 19, 952 A.2d 213, 218. There are two general types of agency: actual and apparent.

Actual Agency

Actual agency can be through either express or implied authority. Both express and implied authority depend on the principal giving consent. Libby v. Concord General Mut. Ins. Co., 452 A.2d 979, 982 (Me. 1982). Both are established by the perceptions of the agent, not the third party. Id.

Express authority is “that authority which is directly granted to or conferred upon the agent . . . in express terms by the principal . . . “ Id at 981. Express terms may include an employment contract, statutory authority, or a statement from the principal.

If express terms are missing, actual agency can still be established through implied authority. Implied authority is “actual authority circumstantially proven from the facts and circumstances attending the transaction in question.” White v. MaineGeneral Medical Center, SOMSC-CV-2009-06 (Me. Super. Ct., Som. Cty, Sept. 24, 2010). In proving agency based on implied authority, an attorney should seek to establish facts demonstrating that the principal granted authority to the agent. Who hired office and support staff? Who determined staff responsibilities? Who trained the staff? Who paid the staff? Did the doctor practice at other hospitals? Did the doctor maintain his or her own office outside the hospital? Who was responsible for billing? See White, p. 5. These facts will all be considered in determining whether the doctor is acting on behalf of the hospital and subject to its control. If the facts support the claim, the doctor is considered an implied agent of the hospital.

Apparent Authority

Apparent authority goes to whether the principal knowingly permits the agent
to hold himself out as possessing authority. In other words, did the patient reasonably believe the doctor had the authority to act on behalf of the hospital? Was that belief traceable to the hospital’s manifestations? See Restatement (Third) of Agency § 2.03.

A plaintiff’s attorney should find out which facts her client relied on when
concluding that the doctor had the authority to act on behalf of the hospital. Did the doctor perform surgery at the hospital? Did the hospital feature the doctor in advertisements, on its website, or in other material? Was the doctor using business cards or other documents which featured the hospital letterhead? If so, was the client aware of these things before the negligent treatment? See Richardson v. Kalvoda, CUMSC-CV-10-648 (Me. Super. Feb, 11, 2014)2.

Extensive Discovery

Extensive discovery in areas concerning the physician’s employment status may seem far removed from the facts of alleged medical negligence and associated medicine in a claim. But if the issue of agency arises, it is best to be prepared. This is done by anticipating the issue before the first depositions are taken and by properly making a factual record of the issue throughout the discovery phase of litigation. This may include taking depositions, pursuant to M.R. Civ. P. 30(b)(6), of practice managers and hospital administrators. By getting ahead and staying ahead of the issue, a plaintiff’s attorney sets him or herself up for a favorable summary judgment decision and a favorable outcome for the client.

1 A locum tenens physician works on a temporary or part-time basis and is generally matched with a hospital through a staffing agency. Locum tenens is a Latin phrase that means “to hold the place of or to substitute.”
2 Note that Berman & Simmons attorneys Susan Faunce and Jodi Nofsinger successfully litigated two recent Superior Court cases in Maine that examine the issue of agency: Richardson v. Kalvoda and White v. MaineGeneral Medical Center.