Appellate Reports

Markow v. Rosner — Appellate court isn’t buying hospital’s vicarious liability based upon ostensible agency of a physician associated with the hospital

Jeffrey I. Ehrlich
2016 November

Medical malpractice; ostensible agency; hospitals and physicians: Markow v. Rosner (2016) __ Cal.App.4th __ (Second Dist., Div. 1.)

Plaintiff Markow was treated for serious neck pain stemming from an auto accident by Dr. Rosner, a pain-management specialist. Rosner was a partner of General Anesthesia Specialists Partnership Medical Group (GASP). He was also the medical director of the Cedars Sinai pain center. Rosner gave his patients business cards imprinted with Cedars’s name, which did not mention GASP. In addition, with Cedars’s authorization, Rosner used a Cedars logo in his letterhead when corresponding with referring physicians. There were no signs in the pain center offices informing patients that Rosner worked for GASP.

Over the four-and-one-half-year period that Rosner treated Markow, Markow signed and initialed 25 Conditions of Admissions forms bearing Cedars’s name and logo. When Markow began his treatment with Rosner, the form included a bold face paragraph, printed in a larger pitch than surrounding text, stating that, “In accordance with California law which prohibits the Corporate practice of Medicine, physicians are independent contractors and are neither employed by nor agents of this facility. Patient recognizes that Physicians furnishing services to the Patient, including without limitation Emergency Room physicians, radiologists, pathologists and anesthesiologists, are all independent contractors with Patient for the purposes of the provision of professional services and are not employees or agents of Cedars–Sinai Medical Center for such purposes. _____ (Initial here).”

A few months after Markow began treatment the form was amended to state,


All physicians and surgeons furnishing services to the Patient, such as radiologists, pathologists, anesthesiologists and the like, are independent contractors and are not employees or agents of the Hospital. These physicians may bill separately for their services.”

In 2010 Rosner performed a nerve-block procedure on Markow at the base of his skull, which he conceded was “very rare” and quite “risky.” Markow was in tremendous pain immediately after the procedure, and within the next few weeks, became quadriplegic. At trial, plaintiffs and their experts advanced two different causes for Markow’s paralysis: Either Rosner used an iodine-based contrast to which Markow was allergic or Rosner caused mechanical trauma to Markow’s cervical cord during the procedure.

The jury found that Rosner was negligent. It also found the Cedars was negligent, but that its negligence was not a substantial factor in causing Markow’s quadriplegia. But it found that Cedars was vicariously liable for Markow’s damages because it “intentionally or carelessly” created the impression that Rosner was its agent. Although Rosner was the only defendant found to have caused Markow’s injuries, the jury, in direct contradiction of the special verdict’s instructions, allocated 60 percent of the fault to Rosner and 40 percent to Cedars. After reducing damages for noneconomic losses to $250,000 pursuant to MICRA, Rosner’s damages award totaled $5.2 million.

The trial court denied Cedars’s post-trial motions to strike the award against it. Reversed.

Markow argued that the admissions form was ambiguous because it did not explain whether a doctor who was a director of the hospital’s pain center was an independent contractor. By a 2-1 margin, the appellate court rejected this argument. “The Conditions of Admissions form as amended in July 2006 was also all-inclusive: “All physicians and surgeons furnishing services to the Patient, such as ... anesthesiologists and the like, are independent contractors and are not employees or agents of the Hospital.” (Italics added.) This language is simply not susceptible to an interpretation that would exclude Rosner, an anesthesiologist, because he was the director of the pain center.”

Ultimately, the court held that, “Markow indisputably either knew or should have known, based upon the Conditions of Admissions forms that he initialed and signed on multiple occasions, the “Authorization for & Consent to Surgery or Special Diagnostic or Therapeutic Procedures or Blood Transfusions” forms that he also signed on at least eight occasions, and Rosner’s status as Markow’s personal physician, that Rosner was not Cedars’s agent or employee, but was instead an independent contractor. The court accordingly held that Cedars was entitled to JNOV.

Medical Malpractice; MICRA; “Professional Services;” driving to accident scene; Statute of Limitations: Aldana v. Stillwagon (2016) 2 Cal.App.5th (Second Dist., Div. 6.)

Stillwagon, a paramedic supervisor, was driving his employer’s pickup truck. He was en route to the location of an injured fall victim to supervise the responding emergency medical technicians (EMTs) and, if necessary, provide assistance. While en route, he collided with a vehicle being driven by Aldana. A year and a half later, Aldana sued him for negligence. The trial court granted Stillwagon’s motion for summary judgment, which argued that Aldana’s action was time-barred under MICRA’s one-year statute of limitations. Reversed.

MICRA’s one-year statute of limitations applies to “an action for injury or death against a health care provider based upon such person’s alleged professional negligence.” (Civ. Code, § 340.5.) MICRA defines “professional negligence” to mean “a negligent act or omission to act by a health care provider in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death, provided that such services are within the scope of services for which the provider is licensed and which are not within any restriction imposed by the licensing agency or licensed hospital.” (§ 340.5, subd. (2), italics added.)

The trial court relied on Canister v. Emergency Ambulance Service (2008) 160 Cal.App.4th 388, which held that EMTs are health care providers and negligence in operating an ambulance qualifies as professional negligence when the EMT is rendering services that are identified with human health and for which he or she is licensed. The Court questioned whether Canister was correctly decided, and also distinguished it, since Stillwagon was not driving an ambulance when the accident occurred.

The Court held that Stillwagon’s conduct of driving to location of an accident victim did not constitute “professional services” under MICRA, and therefore MICRA’s shorter statute of limitations did not apply. Driving to an accident victim is not the same as providing medical care to the victim. “A paramedic’s exercise of due care while driving is not “necessary or otherwise integrally related to the medical treatment and diagnosis of the patient,” at least when the patient is not in the vehicle. Accordingly, MICRA does not apply here. A contrary rule would sweep in not only negligence in performing the duties that health care providers owe to their patients in the rendering of medical diagnosis and treatment, but negligence in performing the duties that they owe to all simply by virtue of operating in public.”

998 Offers; scope of release; claims extending beyond the claims at issue in the lawsuit: Ignacio v. Caracciolo (2016) 2 Cal.App.5th 81 (Second Dist., Div. 8.)

Defendant Marilynne Caracciolo was sued in a personal-injury action by Yolanda Ignacio. Caracciolo made an offer to settle under Code Civ. Proc., § 998 for $75,000, which Ignacio rejected. At trial, Ignacio obtained a $70,000 judgment. Caracciolo sought to tax Ignacio’s costs, and to recover her own costs, under section 998. The trial court denied the motion, finding that Caracciolo’s offer was invalid because it required Ignacio to execute a release that extended beyond the claims asserted in the claim against her. Affirmed.

It is well-established that a purported section 998 offer “requiring the release of claims and parties not involved in the litigation is invalid. And requiring resolution of potential unfiled claims not encompassed by the pending action renders the offer incapable of valuation, and hence invalid. Here, the release attached to the offer extended to “any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, damages, judgments, orders, and liabilities of whatever kind and nature in law, equity, or otherwise, whether now known or unknown, suspected or unsuspected, that have existed or may have existed or which do exist, or which hereinafter can, shall or may exist, ...” The Court observed that this language “is incredibly broad, and encompasses numerous claims the releasors may have against the releasees beyond those at issue in the lawsuit.” The release applied not just to all claims arising out of the April 10, 2013, pedestrian/auto accident at issue in the case, but to “any and all claims” the releasees may have against the releasors, whether those claims were known or unknown, and which have existed or which could exist in the future. “Such an unlimited release goes well beyond the scope of the litigation, and renders the offer invalid under section 998.” For example, the release would extend to claims by Ignacio against Caracciolo’s attorneys or investigators for violation of her right to privacy during the investigation of the claim. Because the release encompassed more than section 998 allowed, the trial court properly concluded that the 998 offer was invalid.

Independent contractors; claims by contractor’s employees against hirer; retained control: Regalado v. Callaghan (2016) __ Cal.App.5th __ (Fourth Dist., Div. 1).

Callaghan, a homeowner, hired Dunn’s Designer Pools, a contractor, to build a pool and spa at his home. Regalado, Dunn’s employee, suffered injuries when he installed a propane-fueled pool heater on Callaghan’s property. At trial, Callaghan was found 40% liable for Regalado’s injuries, and judgment was entered against him for $3 million. Affirmed.

Callaghan, a licensed concrete subcontractor, wanted to build a dream house for his wife in the Coachella Valley. He decided to act as an owner-builder for his home project. An owner-builder is a property owner that obtains permits for the construction job at his or her own home and serves as the person responsible for the construction, similar to a general contractor. After obtaining a building permit for the house, Callaghan did the concrete work himself and hired licensed subcontractors to complete other work. Callaghan was at the site daily, kept track of progress, and asked his subcontractors whether things were ready so that he could call for inspections.

To minimize noise, Callaghan wanted the pool equipment to be stored in an underground vault. He purchased and installed a pre-engineered vault. He then hired a plumbing subcontractor to run propane lines to the house and backyard. Under the contract, Callaghan was responsible for obtaining permits. Callaghan did not know that a propane- fueled heater should not be placed underground because it is dangerous to do so. Callaghan obtained permits for the pool and spa. The site plan he submitted to the County in connection with his pool and spa application depicted a pool vault. But Callaghan did not obtain separate permits for the vault and propane line or have the County inspect the vault.

Regalado was injured in an explosion in the vault as he was testing the equipment. Regalado sued Callaghan for negligence and premises liability. Regalado alleged that Callaghan negligently installed the underground vault and unventilated propane heater in that vault. Regalado asserted that Callaghan knew or should have known the installation of the unventilated pool heater was dangerous. At trial, Regalado argued that Callaghan was liable because Callaghan retained control over the project by submitting plans, pulling permits, and calling for inspections, furnished the vault and propane line, asked Dunn’s to put the pool equipment in the vault, and did not get separate permits for the vault and propane line while representing to Dunn’s that he did so.

Generally, when employees of independent contractors are injured in the workplace, they cannot sue the party that hired the contractor to do the work. Rather, by hiring an independent contractor, the hirer implicitly delegates to the contractor any tort law duty it owes to the contractor’s employees to ensure the safety of the specific workplace that is the subject of the contract. One exception to this rule applies where the hirer’s retained control over safety conditions at the jobsite affirmatively contributes to the employee’s injuries.

The Court rejected Callaghan’s argument that there was insufficient evidence to support a judgment based on “retained control.” The County and Regalado’s expert testified that the vault and propane line required a permit. According to Regalado’s expert, the purpose of obtaining permits and inspections is to ensure the work is done safely. Callaghan was responsible for obtaining permits and calling for inspections. Thus, there was sufficient evidence that he retained control over safety conditions. 

Jeffrey I. Ehrlich Jeffrey I. Ehrlich

Jeffrey I. Ehrlich is the principal of the Ehrlich Law Firm in Claremont. He is a cum laude graduate of the Harvard Law School, an appellate specialist certified by the California Board of Legal Specialization, and an emeritus member of the CAALA Board of Governors. He is the editor-in-chief of Advocate magazine, a two-time recipient of the CAALA Appellate Attorney of the Year award, and in 2019 received CAOC’s Streetfighter of the Year award.  He is also the chair of the California Academy of Appellate Lawyers’ Task Force on Generative AI and the Law.

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