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Hospital operating company not vicariously liable for city's nurse: case on point: Hohenleitner v. Quorum Health Resources, Inc., 2001 WL 1504238 N.E. 2d - MA. (Legal Focus on Hospital Law Issues).

ISSUE: One of the recurring issues in hospital law is whether a hospital operating companies are vicariously liable for the negligence of nurses not employed by them.. That was the issue with which the Massachusetts courts were confronted in this case in which a city engaged an operating company to operate its hospital. When a nurse, not employed by the operating company, but employed by the city allegedly injured a patient as a result of nursing negligence, the courts were confronted with the issue of whether or not the operating company was vicariously liable

CASE FACTS: Quincy City Hospital contracted with Quorum Health Resources, Inc. (Quorum), to operate a hospital. Quorum provided all of the personnel to operate the hospital other than those who were required by law to be city employees. The hospital was operated by Quorum under a written "contract for professional services," executed on January 3, 1989, between the city and Quorum's predecessor in interest. According to the contract Quorum was to act as the "manager" of the hospital. Quorum's employees were not deemed "employees of the city, except as may be required by law." Quorum and the city were not considered "partners or joint venturers in the operation" of the hospital. Quorum was to be "the agent of the city only for the purpose of carrying out its obligations" as agent under the contract. Quorum had general authority "to conduct, supervise, and manage the day-to-day operations of the hospital." Quorum had the specific authority and responsibility for the supervision and management of all employees of the hospital, including the determination of numbers and qualification of employees needed in the various departments and services of the hospital. The job and position descriptions for all employees of the hospital as well as the establishment of wage scales, rates of compensation, employee benefits, and rates and conditions of employment were all the responsibility of Quorum. Quorum also had authority and responsibility to evaluate all quality control aspects of the hospital operation and to implement, with board approval, "quality control programs designed to meet standards imposed by appropriate certifying agencies and to bring about a high standard of health care in accordance with board policies and resources available to the hospital." Ellen Zane, a Quorum employee, and under the contract, the director of the hospital, was in charge at the time an alleged of negligent conduct by a nurse working at the hospital. An incident arose in the ER as a result of which a patient, Carolyn Hohenleitner, brought suit against Quorum for the alleged negligence of the nurse. After a jury trial in the Superior Court, a jury returned a special verdict awarding damages to the plaintiff against Quorum. The jury found that Quorum was vicariously liable for the negligence of the nurse. However, the trial judge granted Quorum's motion for judgment notwithstanding the verdict (JNOV). The patient appealed.

COURT'S OPINION: The Supreme Judicial Court of Massachusetts affirmed the judgment of the trial judge in granting JNOV for Quorum. The court held, inter alia, that the plaintiffs evidence was insufficient as a matter of law to support the jury's special finding that Quorum was vicariously liable for the negligence of Nurse Farrag, who was employed by the city. The critical question put to the jury concerned Quorum's right to control or direct Nurse Farrag's treatment of the patient in the ER. Nurse Farrag was hired and paid by the city and assigned to work at the ER. Accordingly, the court found no vicarious liability on behalf of Quorum.

LEGAL COMMENTARY: Ellen Zane denied that she had any authority to "change the clinical efficacy of what was being done for a patient." She further testified that although it was Quorum's responsibility to ensure that the clinical or medical policy as determined by the Board was carried out, and it was her responsibility, as the director, to address clinical problems (such as mistakes being made or a nurse's failing to follow hospital policy). She could not "turn around and ask a nurse to change something." This was counter to hospital policy. It was not Quorum's responsibility, but it was the responsibility of the medical staff, consisting largely of independent physicians who were not hospital employees, who had responsibility for responding to clinical concerns. The issue was did Quorum have the right or power to control or direct the manner in which Nurse Farrag provided treatment to patients in the ER? The only way Quorum could be held vicariously liable was if it had the right to exercise control over the general activities of Nurse Farrag, which it did not.

Editor's Note: This case should serve as a guide to any entities considering engaging a third party to operate a facility for it. The case also serves as a guide to what, if any, specific provisions an operating company might wish to spell out in its contract with an entity which would clearly delineate the line of responsibility and clearly relieve the operating entity of any vicarious liability for employees not under its control.

A. David Tammelleo, JD, is a nationally recognized authority on health care law. Practicing law for nearly 40 years, he concentrates in health care law with the has presented seminars on medical, nursing and hospital law throughout the United States. In addition to his writings as Editor of Medical Law's Nursing Law's & Hospital Law's Reagan Reports, his legal articles have been published in the most prestigious health law journals. A prolific writer, his thousands of articles, as weel as his achievements as an attorney and lecturer, have won him recognition in Martindale_Hubbell's Bar Register of Preeminent Lawyers and Marquis Who's Who in American Law.
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Article Details
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Author:Tammelleo, A. David
Publication:Hospital Law's Regan Report
Article Type:Brief Article
Geographic Code:1USA
Date:Dec 1, 2001
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