Apparent Agency Extends Beyond the Four Walls of a Hospital

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November 1, 2016
Justin DeLuca
SmithAmundsen Health Care Alert

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No longer are claims of apparent agency restricted to the conduct of healthcare providers working within the four walls of a hospital.  In Yarbrough v. Northwestern Memorial Hospital, the First District answered the question of whether a hospital can be vicariously liable under the doctrine of apparent agency for the acts of the employees of an unrelated, independent clinic that is not party to the present litigation, with a resounding yes. 

In Yarbrough, plaintiffs filed a malpractice action against Northwestern Hospital alleging negligent prenatal care received at Erie Family Health Center, a federally-funded, not-for-profit clinic.  Northwestern filed a partial motion for summary judgment as to all apparent agency claims related to the conduct of the employees or agents of Erie, arguing that it did not represent that the clinic was an outpatient facility of Northwestern and that  Erie was an independent health center that was not named as a defendant.  After denying Northwestern’s motion, the trial court, sua sponte, entered an order certifying the question as to whether a hospital should be held vicariously liable under the doctrine of apparent agency set forth in Gilbert v. Sycamore Municipal Hospital and its progeny for the acts of the employees of an unrelated, independent clinic that is not a party to the present litigation.

The appellate court made it clear that claims of apparent agency go beyond the four walls of a hospital, as long as the plaintiff proves the elements of apparent authority:  (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.

The court reasoned that the first two elements were clearly met as Northwestern promoted itself as a community-oriented hospital that collaborates with neighborhood centers, like Erie, to provide quality health care and because Northwestern and Erie had an affiliation agreement, stating that Northwestern would be the primary site for acute and specialized hospital care for patients.  The third element was met because the plaintiffs’ relied on Northwestern for prenatal treatment due to its relationship with Erie Family Health Center.

The Court made it clear that it did not matter that Erie was not named as a defendant.  As long as a plaintiff establishes all of the elements of apparent authority, courts may apply the apparent agency theory outside the four walls of a hospital.  A plaintiff is not required to name the individual physician or his or her employer as a defendant in order to hold the principal or hospital liable.  This decision creates another expansion of the apparent agency theory, allowing plaintiffs alternative ways to seek recovery from various health care providers, even those not named as defendants in litigation.