Hospital May Be Liable for Negligence of Staff Physician Who Does Not Reveal She Is an Independent Contractor

By Michael Zerres

Apparent Authority Doctrine Upheld in New Jersey

On October 29, 2008, the NJ Appellate Division, in a case I am actually handling, made it clear that hospitals can be liable for the neglect of a so-called ‘independent contractor’ physician if it is not made clear to the patient that the physician is not a hospital employee.

In the unfortunate matter involving the Estate of Ramona Cordero v. Dr. Zaklama and Christ Hospital, it was held that, under the doctrine of “Apparent Authority” an anesthesiologist who does not disclose to a patient that she is an independent contractor may be reasonably assumed by the patient to be a hospital employee, and, thus, hold the hospital responsible for the neglect of that doctor as an agent or employee of the hospital. In this case, my clients wife/mother underwent a relatively simple surgical procedure at Christ Hospital, namely, the insertion of a catheter so that she could receive hemodialysis. Prior to the procedure, she was introduced to Dr. Selvia Zaklama, an anesthesiologist on staff at the hospital, who was employed by Hudson Anesthesiology – a group contracted by the hospital to provide anesthesia services to patients admitted at the hospital. Without any information to the contrary, Ms. Cordero assumed that this physician, who was provided by the hospital, was employed by the hospital. Unlike her attending physician, Ms. Cordero had no prior relationship with this doctor, who was randomly assigned to provide anesthesia for the surgery. In fact, the doctor wore a name tag with the name “Christ Hospital” on it, and, the hospital listed her as one of its anesthesiologists on its website. During the short surgery, Dr. Zaklama failed to timely intervene by administering quick acting medications when Ms. Cordero’s blood pressure began to drop; as a result Ms. Cordero went into cardiac arrest, restricting the flow of oxygen to her brain, and, causing her to become permanently brain damaged. After remaining in a vegetative state for 3 1/2 years, she died as a consequence of her brain injury.

The Appellate Division, in Cordero v. Christ Hospital, ruled that where a physician on staff at a hospital, such as a anesthesiologist or emergency room doctor, does not make it clear to the patient that he or she does not work for the hospital, but is an independent contractor, it is reasonable for a patient to assume that the hospital has supplied that doctor, rendering the hospital vicariously liable for the fault of the physician under a doctrine known as “respondeat superior”.

Quoting the Court, “Imputation of liability based on apparent authority prevents a principal from choos[ing] to act through agents whom it has clothed with the trappings of authority and then determin[ing] at a later time whether the consequences of their acts offer an advantage.” Restatement (Third) of Agency, § 2.03 comment c (2006). On that ground, a principal is vicariously liable for its agent’s tortious conduct “when actions taken by [an] agent with apparent authority constitute the tort . . . .” Id. at § 7.08; see id. at comment b (discussing the rationale for tort liability based on apparent authority). When a hospital’s conduct permits a patient to “properly assume” a doctor is rendering treatment in behalf of the hospital, principles of apparent authority prohibit the hospital from avoiding liability by relying on “secret limitations . . . in a private contract between the hospital and the doctor.”

In this case, while the family has obtained a settlement against the doctor and her group, they are now permitted to proceed with their case against the presumed employer of the doctor, Christ Hospital – who, has prior to the Appellate Division’s decision, denied any responsibility for the conduct of Dr. Zaklama. It would also seem that if Dr. Zaklama is regarded as an agent\employee of the Hospital, it must now provide her with its liability and excess insurance coverage, and, its exposure would the same as it would be for an other employee. In fact, in at least one other case I have handled involving an “apparent authority” issue (that one involving an emergency room physician) I have successfully recovered over and above the hospital’s statutory “cap”, since the hospital was considered the ’employer’ of the physician, and, would have been vicariously responsible for any damages awarded against the ER physician.

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