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Sword v. NKC Hosps., Inc. - 714 N.E.2d 142 (Ind. 1999)

Rule:

A hospital will be deemed to have held itself out as the provider of care unless it gives notice to the patient that it is not the provider of care and that the care is provided by a physician who is an independent contractor and not subject to the control and supervision of the hospital. A hospital generally will be able to avoid liability by providing meaningful written notice to the patient, acknowledged at the time of admission. Under some circumstances, however, written notice may not suffice if the patient had an inadequate opportunity to make an informed choice.

Facts:

Diana Sword lived in southern Indiana. Diana Sword and her husband entered Norton's Children's Hospital (Norton) in Louisville, Kentucky for the delivery of their first child. Sword did not know in advance who would administer the epidural on her. Norton aggressively marketed its services to the public. It stated in brochures that its Women's Pavilion was "the most technically sophisticated birthplace in the region." Dr. Luna came into Sword's room to administer the epidural. Soon after the delivery of her healthy baby, Sword began to have headaches which recurred every four to six weeks. Sword filed a case for medical malpractice against Dr. Luna and Norton. She alleged that these symptoms were a result of Dr. Luna's negligent placement of the epidural tubing and that Norton was liable. The trial court ruled on a choice of law question that it was bound to apply Indiana law rather than the law of Kentucky. The trial court then held that, as a matter of law, Norton could not be held liable for the injuries to Sword because she asserted that she was injured through the asserted negligence of an independent contractor physician who practiced at Norton. Finally, the trial court granted the summary judgment in favor of Norton. The Court of Appeals reversed the decision of the trial court and held that, under the doctrine of apparent or ostensible agency, Norton could be held liable for the alleged negligence of its independent contractor physician, and that the record established material issues of fact both on the question of apparent agency and causation.

Issue:

1. Was the trial court correct in applying the Indiana law rather than Kentucky law?

2. Was the application of the doctrine of apparent or ostensible agency appropriate? 

3. Was there a genuine issue of material fact, negating the propriety of granting the summary judgment?

Answer:

1. Yes. 2. Yes. 3. Yes.

Conclusion:

1. The Supreme Court of Indiana held that the Sword failed to give the required reasonable notice to Norton that Kentucky law should be applied to any of the substantive issues. By waiting until the summary judgment hearing, Sword raised a potentially strategy-altering issue without allowing Norton any opportunity to prepare. Providing notice for the first time at the summary judgment hearing, therefore, did not fulfill the purpose of the notice requirement.

2. The court held that the doctrine of apparent authority was applicable. The court observed that first, there was nothing in the record which indicated that the hospital did anything to put Sword on notice that it was her physician, an independent contractor, who was responsible for her medical care and not the hospital. Second, this was clearly not a case where Sword selected her own anesthesiologist prior to admission, for she specifically testified that she did not know who would administer the epidural until just before the procedure, and if she had any special knowledge of the hospital's employment arrangement with Dr. Luna or with the hospital's general employment practices with respect to physicians, it was not apparent on the record. Finally, Norton held itself out, through an extensive advertising campaign, as a full-service hospital which specialized in obstetric care.

3. The court held that there were genuine material issues of fact in dispute as to whether Dr. Luna was an apparent or ostensible agent of Norton and whether Norton could be held liable for any of Dr. Luna's asserted negligent acts. Therefore, the district court erred in granting the summary judgment in favor of Norton.

The court reversed the judgment of the trial court and remanded the case for further proceedings.

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