Grewe v. Mount Clemens General Hospital
404 Mich. 240, 1978 Mich. LEXIS 425, 273 N.W.2d 429 (1978)
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Rule of Law:
A hospital can be held vicariously liable for the negligence of a physician with staff privileges if the patient looked to the hospital for treatment and had no pre-existing relationship with the physician, thereby establishing an agency by estoppel or apparent agency.
Facts:
- On March 20, 1967, Laverne Grewe (plaintiff) received an electrical shock at work, allegedly causing a dislocated shoulder.
- Grewe was subsequently admitted to the defendant Mt. Clemens General Hospital for treatment.
- Dr. Gerald Hoffman, an internist, examined Grewe and consulted with Dr. Robert O. Fagen, an orthopedic surgeon, who confirmed a dislocated right shoulder.
- Dr. Michael Fugle, an orthopedic resident, was designated to attempt to reduce the dislocation and made several unsuccessful attempts.
- Dr. A. Lewis Katzowitz, an internist with staff privileges at the hospital and an associate of Dr. Hoffman, also attempted to reduce the dislocation by placing his foot on Grewe's chest and pulling his arm, without first reviewing X-rays.
- Grewe eventually had to undergo surgery for the removal of bone fragments and repair of the biceps tendon and joint capsule, which he claimed resulted from the attempts to reduce his shoulder dislocation.
Procedural Posture:
- Laverne Grewe filed a lawsuit against Mt. Clemens General Hospital and Dr. Michael Fugle, alleging negligence.
- A jury in the trial court returned verdicts of no cause of action for both defendants in 1971.
- Grewe appealed to the Michigan Court of Appeals (intermediate appellate court).
- The Michigan Court of Appeals reversed the verdict and remanded for a new trial due to the trial court's restriction on cross-examination using medical textbooks, 47 Mich App 111 (1973).
- On remand, a jury in the trial court returned a verdict of no cause of action against Dr. Fugle but found for Grewe against the hospital, awarding $120,000 in damages.
- The hospital moved for a new trial or judgment notwithstanding the verdict, which the trial court denied.
- The hospital, as appellant, appealed to the Michigan Court of Appeals (intermediate appellate court), with Grewe as appellee.
- The Michigan Court of Appeals affirmed the trial court's judgment against the hospital, 74 Mich App 479 (1977).
- The Michigan Supreme Court granted the hospital, as appellant, leave to appeal, limited to three specific issues.
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Issue:
Does a hospital become vicariously liable for the negligence of a physician who holds staff privileges but is not an employee, if a patient looks to the hospital for treatment and has no prior patient-physician relationship with that doctor, based on a theory of apparent agency?
Opinions:
Majority - Per Curiam
Yes, a hospital can be held vicariously liable for the negligence of a physician with staff privileges under such circumstances. The Court first affirmed that the plaintiff’s pleadings and trial theory were broad enough to encompass negligence by other hospital 'agents' beyond Dr. Fugle, specifically Dr. Katzowitz, and that jury instructions allowed for finding the hospital independently liable. The critical question for determining hospital liability for a non-employee physician, under a theory of agency by estoppel, is whether the plaintiff looked to the hospital for treatment or merely viewed it as a facility where their existing physician would treat them. The evidence showed Grewe went to the hospital for treatment, expecting the hospital to provide it, and had no pre-existing patient-physician relationship with Drs. Hoffman or Katzowitz. The hospital did nothing to notify Grewe that Dr. Katzowitz was an independent contractor. Citing Bing v Thunig, the Court emphasized the modern view of hospitals as comprehensive care providers. Furthermore, Dr. Katzowitz’s own testimony indicated that the standard of practice for reducing a simple dislocated shoulder was consistent across specialties, dismissing the hospital's argument about the lack of an appropriate standard of care. The Court also found no reversible error regarding expert testimony or jury instructions on reducing damages to present worth.
Dissenting - Justice Coleman
No, the hospital should not be held liable, as the case was tried and argued on the theory that the hospital's liability was solely derivative of Dr. Fugle's alleged negligence. Justice Coleman argued that the majority's decision amounted to 'retrying the case' on appeal, unfairly rationalizing a verdict against the hospital based on Dr. Katzowitz's actions, even though he was not a defendant and the hospital had no opportunity to defend against that specific theory at trial. The dissent noted that the plaintiff's primary theory and the overwhelming majority of the trial judge's instructions explicitly linked the hospital's liability to Dr. Fugle's negligence. A last-minute, inconsistent instruction allowing the jury to find against the hospital but for Dr. Fugle caused serious confusion. Justice Coleman concluded that the hospital did not receive a fair trial and the verdict against it was inconsistent with the plaintiff's primary theory and the prevailing jury instructions.
Analysis:
This case significantly expands the scope of hospital liability by affirming the doctrine of apparent agency (or agency by estoppel) for non-employee physicians with staff privileges. It reflects a modern judicial understanding of hospitals as integral healthcare providers rather than mere facilities, establishing a precedent where patient perception of the hospital's role in providing care is paramount. Future cases will likely scrutinize whether hospitals adequately inform patients about the independent contractor status of their medical staff to avoid creating an impression of employment, thereby influencing patient intake procedures and disclosure practices within healthcare institutions.
