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Minnesota Supreme Court Holds Hospital Liable For Negligence of Independent Contractor Physicians

August 12, 2020 Coverage News

July 29, 2020 (Saint Paul, MN): The Minnesota Supreme Court has held that a hospital may be held vicariously liable for the professional negligence of an independent contractor based on a theory of apparent authority. Popovich v. Allina Health Sys., No. A18-1987, --- N.W.2d---, 2020 WL 4342927, at *6 (Minn. July 29, 2020).  Popovich greatly expands the potential liability of medical providers and represents a departure from the state’s previous application of the common law doctrine of apparent authority. 

In Popovich v. Allina Health Sys., a patient was treated and released at one emergency room before seeking treatment at a second emergency room, at a different hospital, with worsening symptoms.  The physicians in the second emergency room diagnosed the plaintiff with a serious stroke, the plaintiff suffered permanent brain damage, and a lawsuit was commenced.  The plaintiffs alleged that if the physicians in the first emergency had recognized the stroke symptoms then the patient would not have sustained catastrophic injuries from the stroke.  Additionally, plaintiffs alleged that Allina Health Systems was vicariously liable for the negligence of the physicians and radiologist in the first emergency room under the doctrine of apparent authority.  Allina Health owns and operates both of the hospitals where plaintiff sought treatment. 

Minnesota courts have long held that a business or individual is vicariously liable, under the doctrine of respondeat superior, for the negligence of employees, including hospital employees.  Minnesota courts have also held that a business or individual may be vicariously liable for the negligence of independent contractors under the doctrine of apparent authority—provided the principal holds an agent out “as having authority” or “knowingly” permits the agent to act on their behalf, and the agent is negligent.  Popovich extends vicariously liability based on allegations of apparent authority to the hospital setting, provided the plaintiff can satisfy a two-factor test: (a) that the hospital held itself out as a provider of emergency room care, and (a) the patient relied on the hospital, rather than a specific doctor working at the hospital, to select the personnel to provide medical services.

As noted in the dissenting opinion, Popovich makes hospitals strictly liable for the negligence of independent contractors based on an “unworkable” reliance requirement.  A plaintiff can satisfy the first factor by alleging the hospital had signage or advertisements showing it provides emergency room care.  Since virtually all hospitals provide emergency room care the first factor is essentially meaningless.  As to the second factor, a plaintiff can avoid summary judgment merely by testifying he or she relied on the hospital, as opposed to an individual practitioner at the hospital, in deciding where to seek treatment—a subjective state of mind a hospital will have no means to disprove.

Popovich sets a dangerous precedent.  Future plaintiffs may assert claims of vicarious liability against hospitals for negligent acts committed by independent contractors outside of the emergency room.   And as long as the hospital holds itself out as providing the service in question, Popovich will likely be interpreted as allowing a claim of vicarious liability to be asserted.

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