Maryland Appellate Court Rejects Hospital Liability For Apparent Agency In Medical Malpractice Case

162017_132140396847214_292624_nIn its unreported opinion filed on March 21, 2017, the Court of Special Appeals of Maryland (“Maryland Appellate Court”) rejected the Maryland medical malpractice plaintiff’s argument that two of the named defendants could be held liable for the death of the decedent (one defendant was the sole member (parent) of another defendant that in turn was the sole member (parent) of the defendant hospital that employed the emergency room physician who was allegedly negligent in the care of the plaintiff’s decedent).

The Underlying Facts

The decedent was transported by ambulance on June 24, 2012 to a Maryland hospital, complaining of prolonged chest pain. The emergency room medical staff recommended that he be admitted to the hospital but he chose to be discharged, against medical advice. Three days later, he began experiencing severe chest pain while driving, which prompted him to stop and call an ambulance. The decedent was transported to the defendant hospital where he was examined by an emergency room physician.

The emergency room physician diagnosed the decedent with a hiatal hernia, atypical chest pain, and GERD, instructing the decedent to take protonix daily, tylenol for pain as needed, follow up with his primary care physician, and obtain a cardiology referral for further investigation of the etiology of his pain. The next morning, the decedent died at home while attempting to go to sleep in a chair. An autopsy determined that the decedent died from hypertensive and atherosclerotic cardiovascular disease with significant blockages in several arteries in his heart.

The Maryland Medical Malpractice Lawsuit

The plaintiff subsequently filed her Maryland medical malpractice wrongful death lawsuit against the three defendants, alleging that competent medical care would have correctly diagnosed the decedent’s condition and saved his life. The plaintiff’s medical expert’s opinion was that the standard of care was violated by the defendant hospital and that its parent entities (the other two defendants) were equally responsible for failing to establish proper protocols for the evaluation of cardiac patients in an emergency room setting and for the review of prior medical records.

The two defendant parent entities filed a motion for summary judgment and argued that it was undisputed that the health care providers who allegedly rendered negligent treatment to the decedent were employees of the defendant hospital, and not them, and therefore the claim against them based on vicarious liability must fail as a matter of law. They also argued that there was no evidence to establish the essential elements of a medical malpractice claim against them. After initially denying the two defendants’ motion for summary judgment, the trial court subsequently reconsidered and granted their motion for summary judgment. The plaintiff appealed.

The Maryland Appellate Court Decision

The Maryland Appellate Court stated that even assuming that the defendant hospital has the duty as a hospital to establish protocols for the evaluation and treatment of persons appearing in its emergency room with cardiac or cardiac-like symptoms, nothing in Maryland law supports the assumption of that duty by the parent or grandparent corporation of the hospital. The Maryland Appellate Court held that a parent corporation is generally insulated from the debts, obligations, and torts of its subsidiaries, absent the piercing of the corporate veil to prevent fraud or enforce a paramount equity.

Plaintiff’s Apparent Agency Argument

The plaintiff argued that the two defendants are liable under the principle of apparent agency: evidence presented to the trial court demonstrated that the two parent defendants portrayed their relationship with the defendant hospital as one which gave the public confidence that best practices were in place for all patients, including those with cardiac conditions. The plaintiff argued that as a result, the two parent defendants gave the impression to the public that they were principals of the defendant hospital.

The Maryland Appellate Court stated that the doctrine of apparent agency can be expressed in three elements: 1. Did the apparent principal create, or acquiesce in, the appearance that an agency relationship existed? 2. Did the plaintiff believe that an agency relationship existed and rely on that belief in seeking the services of the apparent agent? 3. Were the plaintiff’s belief and reliance reasonable?

The Maryland Appellate Court stated that the doctrine of apparent agency has both subjective and objective elements: a plaintiff must show that the plaintiff subjectively believed that an employment or agency relationship existed between the apparent principal and the apparent agent, and that the plaintiff relied on that belief in seeking medical care from the apparent agent. But the plaintiff must also show that the apparent principal created or contributed to the appearance of the agency relationship and that the plaintiff’s subjective belief was “justifiable” or “reasonable” under the circumstances—an objective test.

The Maryland Appellate Court held in this case that there was nothing in the record evidencing that the decedent had any awareness of the affiliation between one of the two parent defendants and the defendant hospital, and therefore it follows that the decedent could not have had any subjective belief that the defendant hospital was an agent of the parent defendant (there was nothing in the record that demonstrates that the decedent believed that the defendant hospital was an agent of the parent defendant).

Source Johnson v. University of Maryland Medical System Corporation, No. 0396.

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This entry was posted on Wednesday, April 5th, 2017 at 5:22 am. Both comments and pings are currently closed.

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