LINDER, J.
Plaintiff underwent surgery performed by a physician whose office was in a building that defendant, a limited liability company (LLC), leased to medical providers.
We granted plaintiff's petition for review to resolve when a nonnegligent person or entity may be held vicariously liable on an apparent agency theory for physical injuries negligently inflicted by a medical professional. We conclude that, for such liability to arise, the injured party must have dealt with the negligent medical professional based on a reasonable belief, traceable to the putative principal's conduct or representations, that the medical professional was the principal's employee or was otherwise subject to the principal's right of control in providing the medical services that caused the injured party's injury. As we will explain, the record in this case was insufficient to permit a jury to find the LLC vicariously liable for the surgeon's negligence on that basis. We therefore affirm the judgment of the trial court and the decision of the Court of Appeals.
We review the record in the light most favorable to plaintiff, as the party opposing the motion for summary judgment. Bergmann v. Hutton, 337 Or. 596, 599, 101 P.3d 353 (2004). The LLC involved in this case—Willamette Spine Center, LLC—is in the business of commercially leasing real property. In furtherance of its business, the LLC leased two buildings under terms that permitted it to sublease offices in the buildings to medical professionals. The LLC denominated one of those buildings—the building involved in this case—as "Willamette Spine Center" and leased offices in it to medical professionals with specialties related to spinal care and treatment. The LLC placed a sign on the building's exterior identifying it as "Willamette Spine Center." A second sign in front of the building similarly read "Willamette Spine Center" and also displayed a logo consisting of the stylized initials "WSC."
The names of the various medical provider tenants were listed near the door into the office building. Some of the providers were themselves limited liability companies, held themselves out as such, and incorporated the words "Willamette Spine Center" into their professional names (i.e., "Willamette Spine Center Ambulatory Surgery, LLC" and "Willamette Spine Center Physical Therapy and Rehabilitation, LLC"). Other medical providers used their individual names only, without any reference to Willamette Spine Center. Although the LLC landlord did not require it, all or many of the tenants used business cards that included "Willamette Spine Center" and the WSC logo on them, either at the top of the card or as part of their office address. Their business cards then listed their names, professional credentials and specialty areas, and contact information. The contact information, such as phone numbers and e-mail addresses, differed among the various providers in the building.
One of the professionals who leased office space in the building was Dr. Freeman, a chiropractor who was also one of three members (i.e., owners) of the LLC landlord. Plaintiff had become acquainted with Freeman through plaintiff's work as a manager at a Starbucks coffee shop. From their conversations at the coffee shop, plaintiff knew that Freeman was a chiropractor and knew that he was "affiliated" with the Willamette Spine Center. Freeman, in turn, knew that plaintiff suffered from back pain. Freeman suggested that plaintiff, to address his back pain, seek care "from practitioners at his clinic, the Willamette Spine Center." Based on his acquaintance with Freeman, plaintiff relied on Freeman's recommendation and treated with Freeman at his office in the Willamette Spine Center building. At some point, Freeman referred plaintiff to a physical therapist in that building, and plaintiff consulted with and received treatment from that physical therapist. Eventually, Freeman determined that plaintiff should be evaluated for possible surgery. Telling plaintiff that he "would set [plaintiff] up with `one of the Willamette Spine Center surgeons,'" Freeman referred plaintiff to Dr. Borman, a
Borman was a tenant in the Willamette Spine Center building pursuant to an "association agreement" with Dr. Tiley, a physician who leased office space directly from the LLC. Through that association agreement, and with the LLC's knowledge and approval, Borman subleased space from Tiley. The two shared common areas (e.g., exam rooms, patient waiting rooms), while maintaining separate staff and separate professional offices. Borman's business cards had "Willamette Spine Center" and the WSC logo printed at the top. Printed below those words and logo was Borman's name, his credentials and specialty, and his individual email and phone contact information. Borman's letterhead did not have "Willamette Spine Center" or the WSC logo printed on it. All charges to Borman's patients were billed to Borman's individual professional accounts and processed through Borman's own office staff.
Plaintiff saw Borman at his office in the Willamette Spine Center building in August 2003. As part of his consultation with Borman, plaintiff filled out an "Initial Patient Health History" on a form that had only Borman's name printed on it, without any reference to Willamette Spine Center. Plaintiff, however, thought that all the tenants in the building where Freeman and Borman had their offices were "affiliated" with "the Willamette Spine Center." In particular, based on the fact that Borman's office was in the Willamette Spine Center building, plaintiff thought that Borman was "a Willamette Spine Center surgeon." Plaintiff was not aware of anything that suggested to him that Borman was "independent of the Willamette Spine Center."
Borman determined that surgery was appropriate for plaintiff, and plaintiff decided to have that surgery. In September 2003, Borman performed two surgeries on plaintiff that caused him permanent and disabling injuries. Both surgeries were performed in a local hospital, not in the Willamette Spine Center building.
Plaintiff brought this malpractice action against the LLC,
The LLC moved for summary judgment, arguing that its activities and representations provided no basis for it to be held vicariously liable for Borman's negligence. In particular, the LLC urged that the evidence did not permit a jury to find that the LLC had promoted itself as some form of group medical entity or held out Willamette Spine Center to be such an entity, as opposed to a professional office building for which the LLC was the landlord. The LLC also urged that no evidence established that the LLC had held Borman out as its agent. According to the LLC, to whatever extent plaintiff had relied on representations made by anyone other than the LLC that Borman was an agent of the LLC, those representations could not serve as a basis on which the LLC could be vicariously liable for Borman's negligence.
In response, plaintiff argued that a jury could conclude that the LLC, through its direct representations as well as acquiescence in representations made by the building tenants, held out Willamette Spine Center as a group medical entity and Borman as its authorized surgeon. Among other facts, plaintiff relied on the signage on the building, the tenants' (including Borman's) use of the building name and logo on their business cards, and Freeman's representations that he was affiliated with Willamette Spine Center as creating the appearance that Borman was the LLC's authorized agent. As noted earlier,
On review, although their arguments have become more refined, the parties largely renew the positions that they advanced to the trial court and to the Court of Appeals. They focus their arguments less on the applicable legal principles and more on how those legal principles apply in this specific context—viz., a malpractice action seeking to hold another person or entity (here, the LLC) vicariously liable for injuries caused by a physician's negligence. We begin by outlining the principles that control the legal analysis. We then turn to the record in this case and whether the evidence created a jury question on the LLC's liability.
The LLC's potential vicarious liability for Borman's negligent surgery requires consideration of two lines of settled agency law. The first identifies when a putative principal can be held responsible for the acts of another on an apparent agency theory. The second identifies when a principal can be held liable for the physical torts of an agent, actual or apparent.
Classically, an agency relationship "`results from the manifestation of consent by one person to another that the other shall act on behalf and subject to his control, and consent by the other so to act.'" Vaughn v. First Transit, Inc., 346 Or. 128, 135, 206 P.3d 181 (2009) (emphasis in Vaughn omitted) (quoting Hampton Tree Farms, Inc. v. Jewett, 320 Or. 599, 617, 892 P.2d 683 (1995)). The agency relationship can arise either from actual consent (express or implied) or from the appearance of such consent. See generally Taylor v. Ramsay-Gerding Construction Co., 345 Or. 403, 410, 196 P.3d 532 (2008) (so discussing). In either circumstance, the principal is bound by or otherwise responsible for the actual or apparent agent's acts only if the acts are within the scope of what the agent is actually or apparently authorized to do. Id.; see also Beeson v. Hegstad, 199 Or. 325, 330, 261 P.2d 381 (1953) (one cannot hold principal liable for an act that does not fall within the scope of agent's real or apparent authority).
In this case, plaintiff proceeds on a theory that Borman appeared to have authority to act as the LLC's agent, not that Borman had actual authority to do so.
As to the second key element— reliance—the third party, in deciding to deal with the apparent agent, must in fact rely on the principal's representation, and that reliance must be objectively reasonable. Jones, 274 Or. at 595-96, 547 P.2d 616; see also Badger, 311 Or. at 26, 803 P.2d 1178 (describing reasonable reliance by plaintiff). In assessing the reasonableness of the reliance, the analysis is influenced by what is customary and usual for certain positions or within certain professions. See Badger, 311 Or. at 24 n. 9, 803 P.2d 1178 (generally recognized duties of a position can influence appearance of authority to act as agent (quoting with approval Restatement (Second) of Agency § 27, comment a at 104 (1958))).
In this case, because plaintiff seeks to hold the LLC liable for Borman's physically injurious conduct, a second set of legal principles also comes into play. The sine qua non of a principal's vicarious tort liability is the principal's control of, or right to control, the agent's conduct. Significantly, vicarious liability for an agent's physical torts arises only if the principal has the right to control the agent's specific injury-causing conduct in particular. Jensen v. Medley, 336 Or. 222, 237-38, 82 P.3d 149 (2003). The principal's abstract right of control or right to control an agent in other respects is not enough. Id. The law therefore differentiates between employees and other agents for purposes of a principal's tort liability, with the result that, ordinarily, a principal is not liable for the negligence of a nonemployee, because a principal generally does not have the requisite right of control over those nonemployee agents. As this court explained in Vaughn:
346 Or. at 137-38, 206 P.3d 181 (emphasis and second brackets in original; footnote omitted).
Consequently, although a principal can be vicariously liable for the negligence of an agent who is not an employee, such liability arises only if the principal actually or apparently had a right of control over the agent's injury-causing actions "similar to the control that an employer exercises over an employee[.]" Vaughn, 346 Or. at 139, 206 P.3d 181.
This court has not previously addressed whether and under what circumstances vicarious liability for a physician's malpractice can be imputed to a putative principal on an apparent agency theory. Where the agency principles that we have outlined are satisfied, however, there is no reason why vicarious liability should not attach. The more significant question is how those tests should apply in the context of professional malpractice and, in particular, what must be shown to satisfy the requirement that a putative principal have a right—or an apparent right—of control over the tortious conduct of a medical professional. Because other courts have grappled extensively with vicarious liability in this context, we turn to the developed body of case law in other jurisdictions, which we consider helpful to our analysis.
Until recent decades, the requirement that the principal have a right (or apparent right) of control over an agent's injury-causing conduct has precluded vicarious liability for the malpractice of physicians and similar professionals. Traditionally, courts reasoned that medical professionals, because of the skill and judgment they exercised, were not subject either legally or practically to sufficient control by other persons or entities to expose those persons or entities to vicarious liability for a medical professional's negligence. See Bing v. Thunig, 2 N.Y.2d 656, 661-63, 163 N.Y.S.2d 3, 143 N.E.2d 3 (1957) (describing historical view of courts that physicians, due to the nature of their professional expertise, were not subject to hospital's right of control). That was true even when a physician was an employee of a hospital or other entity. See, e.g., Iterman v. Baker, 214 Ind. 308, 316-18, 15 N.E.2d 365 (1938) (so holding); see generally Bing, 2 N.Y.2d at 661-63, 163 N.Y.S.2d 3, 143 N.E.2d 3 (describing traditional view).
That thinking has given way, almost universally, to the recognition that entities that employ physicians both can, and in fact do, significantly control the overall delivery of medical services by such professionals, even if the entity does not direct a professional's discrete actions in treating individual patients. Hospitals are prime examples. Modern-day hospitals no longer are mere situses for medical services, as they once were, but instead are direct providers of medical care. Sword v. NKC Hosp., Inc., 714 N.E.2d 142, 151 (Ind.1999) (so observing; citing other authorities). In that changed role, hospitals regularly employ "a large staff of physicians, nurses and interns, as well as administrative and manual workers, and they charge patients for medical care and treatment[.]" Bing, 2 N.Y.2d at 666, 163 N.Y.S.2d 3, 143 N.E.2d 3. To ensure the quality of the medical services that they offer and provide, hospitals supervise and direct the general manner in which their employees deliver medical services on their behalf through such means as "hiring criteria, training, formal practice guidelines, hierarchical supervision structures, peer review groups and disciplinary measures." Harris v. Miller, 335 N.C. 379, 390, 438 S.E.2d 731 (1994) (footnote omitted; citing authorities).
A question left unanswered by those holdings has been whether a hospital or other entity can be held vicariously liable for a physician's malpractice on an apparent agency theory. The issue has arisen most commonly in circumstances where a hospital or other entity retains physicians as independent contractors, rather than as employees, and then offers and delivers medical services on its own behalf through those independent contractors. Most jurisdictions considering vicarious liability in that context have concluded that "liability for a doctor's negligence should be imputed to a [putative principal] when apparent authority, as defined in that jurisdiction, is established." Estate of Cordero v. Christ Hosp., 403 N.J.Super. 306, 313, 958 A.2d 101 (2008) (so observing in hospital context; citing representative cases); see generally Kashishian v. Port, 167 Wis.2d 24, 42-44, 481 N.W.2d 277 (1992) (characterizing vicarious liability for hospitals on apparent agency theory as a "growing trend"; citing cases). Drawing from familiar agency principles, courts typically have focused on two requirements as keys to imposing vicarious tort liability for a physician's malpractice on an apparent agency theory: first, whether the putative principal (such as a hospital) "held out" the physician as an employee or other agent to deliver medical services on the principal's behalf and subject to the principal's oversight or other control; second, whether the injured plaintiff reasonably relied on that holding out by looking to the principal as the provider of the care, and dealing with the physician as the principal's agent for that purpose. See Sword, 714 N.E.2d at 150-51 (synthesizing hospital cases); Petrovich v. Share Health Plan, 296 Ill.App.3d 849, 855-61, 231 Ill.Dec. 364, 696 N.E.2d 356 (1998) (using same two key considerations to determine vicarious liability of health maintenance organization for physician malpractice).
Cases involving hospitals have presented circumstances that most commonly have given rise to a basis for a finding of vicarious liability on an apparent agency theory. For the "holding out" element, the cases have "almost invariably" looked to the fact that modern-day hospitals are engaged in directly providing medical care and services, rather than merely providing a situs where medical professionals do so in furtherance of their individual medical practices. As part of their changed role as direct health care providers, hospitals are now run like businesses and promote themselves based on the superior quality of the health care they offer. See, e.g., Kashishian, 167 Wis.2d at 41-44, 481 N.W.2d 277 (so observing; citing cases and authorities). To that end, hospitals pervasively engage in sophisticated advertising and public relations campaigns designed to compete with other facilities and providers, and to attract the patronage of the public in the communities that they serve. Id. at 38, 481 N.W.2d 277 (describing hospitals as spending "billions" to nurture their images as full care health facilities). Even without commercial advertising, hospitals cultivate "high visibility" in their communities to present themselves as "vital to community health" rather than as mere facilities in which private physicians practice their professions. See Hannola v. City of Lakewood, 68 Ohio App.2d 61, 66, 426 N.E.2d 1187 (1980) (describing
With regard to the second element—reasonable reliance—the cases have focused on whether the plaintiff looked to and relied on the hospital as the direct provider of the medical services rendered. The fact that the patient relies on the reputation of the hospital itself as a care provider, and does not make an "independent selection as to which physicians" the patient will obtain care from, provides the factual basis for the reliance needed for the apparent authority analysis. Pamperin, 144 Wis.2d at 205-12, 423 N.W.2d 848 (internal quotation marks omitted) (discussing cases and so holding); see also Estate of Cordero, 403 N.J.Super. at 318-19, 958 A.2d 101 (canvassing cases and holding that reliance could be found based on fact that patient looked to hospital for care and physician was chosen by hospital). Conversely, the mere fact that medical services are provided on a hospital's premises is not enough to create vicarious liability. For example, if a patient seeks medical services from a physician who has staff privileges at a hospital and who uses the hospital merely as the situs for the physician's own medical practice, the necessary reliance on the hospital as a direct provider of care is lacking. See Houghland v. Grant, 119 N.M. 422, 428-29, 891 P.2d 563 (1995) (comparing physicians who contract to provide services on behalf of hospital to physicians with staff privileges engaged in independent medical practices; citing cases).
To be sure, vicarious liability for physician malpractice has not been limited to the hospital context; at least some courts have extended it to other entities as well, such as health maintenance organizations (HMO) and nonhospital patient treatment facilities. See, e.g., Boyd v. Albert Einstein Med. Ctr., 377 Pa.Super. 609, 616, 547 A.2d 1229 (1988) (HMO); Petrovich, 296 Ill.App.3d at 855, 231 Ill.Dec. 364, 696 N.E.2d 356 (HMO); Malanowski v. Jabamoni, 293 Ill.App.3d 720, 727, 228 Ill.Dec. 34, 688 N.E.2d 732 (1997) (university outpatient center). The factual circumstances of those cases, however, have brought them well within the reasoning of the hospital line of authority.
Boyd is illustrative. There, the HMO had contractually committed to provide health care services and benefits to subscribers. It provided those services through a limited selection of primary physicians who were screened by the HMO and who had to comply with the HMO's rules; the HMO gave subscribers no choice of with whom to consult for specialist care. All fees for services were paid directly to the HMO, not to the physicians. The court in Boyd concluded that there was a factual question as to whether the physicians, although independent contractors, were apparent agents of the HMO because the patient in that case had submitted herself to the care of the physicians at the HMO's invitation and subject to significant apparent control on the HMO's part. Boyd, 377 Pa.Super. at 621, 547 A.2d 1229. Other cases extending vicarious liability to entities other than hospitals have required similar representations by the entity, similar
In sum, the weight of authority in other jurisdictions is that, in a proper case, a hospital or other entity can be held vicariously liable for a physician's negligence on an apparent authority theory. We agree with those authorities.
With that legal backdrop, we turn to the record in this case to assess whether, based on it, a jury could find the LLC vicariously liable for Borman's negligence. In arguing that a jury could do so, plaintiff's central thesis is that the LLC, through various actions and inactions, promoted itself as a group medical entity and thereby assumed responsibility for the negligence of the medical providers that appeared to be a part of that entity. Plaintiff relies on the fact that the LLC placed signage on the building, designating it the Willamette Spine Center and using the WSC logo. Plaintiff likewise relies on the fact the individual medical practitioners in the building used business
Finally, plaintiff relies on the fact that Freeman referred to Willamette Spine Center as "his clinic" and to Borman as a "Willamette Spine Center surgeon." Plaintiff contends that, because Freeman was an owner/member of the LLC landlord of the building, Freeman's representations were those of the LLC itself, not of Freeman as a chiropractor, or at least a jury could so conclude. Taken together, plaintiff argues, the circumstances reasonably led plaintiff to believe that he was seeking treatment from an entity— "the" Willamette Spine Center—rather than from independent medical providers whose practices were in that building.
We disagree that the record in this case provides a sufficient basis to conclude that the LLC held itself out as a medical entity that was itself a provider of medical services that it delivered through agents, such as Borman, who were subject to the LLC's control. On the record before us, the LLC's role was typical of a landlord of a professional office building. As a landlord, the LLC developed the building for use as medical office space and leased the offices inside specifically to medical providers with specialties related to spinal care. The LLC then denominated the building "Willamette Spine Center" with signage and a logo. In doing so, the LLC did what is customary and usual for a landlord of a professional office building—it leased space to professionals with the same or related specialties (doctors, dentists, lawyers, engineers, architects, among others) in a single office building and gave the structure a "trade" name, one that is descriptive and memorable for purposes of marketing and promoting the practices of the professionals who have offices there. See, e.g., Slavik v. Parkway Hosp., 242 A.D.2d 376, 661 N.Y.S.2d 274, 275 (1997) (leasing corporation used trade name "Corona Medical & Dental Center" for office building housing independent medical and other health professionals); Hylton v. Flushing Hosp. and Med. Ctr., 218 A.D.2d 604, 630 N.Y.S.2d 748, 749 (1995) (owner of building leased to individual medical and dental practitioners used signage "Medical and Dental Services" on awning of building). At best for plaintiff, so denominating the building reasonably could convey to a third party that the practitioners in the building were associated in some way with one another. It could not reasonably convey that the building housed an entity that directly provided medical services and that the practitioners in the building were the entity's employees or subject to the entity's oversight, direction, or control. As the court observed in Hylton, to conclude that use of professional building trade names can create an apparent agency relationship between professional providers and the landlords of such buildings "would expose to liability for medical malpractice every landlord with the word `medical' appearing on its premises."
The other LLC representations on which plaintiff relies, both alone and in combination, similarly conveyed at most some form of association or affiliation among the tenants, not a principal-agency relationship with the requisite right of control on the part of the LLC. As plaintiff argues, the tenants used the building name and logo on their business cards, and the LLC reasonably should have expected that they would do so.
Plaintiff nevertheless urges that he reasonably perceived that he was dealing with a single entity (i.e., a single "group medical practice") because Freeman once referred to "his clinic, the Willamette Spine Center" and also referred to Borman as a "Willamette Spine Center surgeon." The parties disagree whether those two statements by Freeman are attributable to the LLC given, on the one hand, Freeman's status as one of the LLC members and, on the other, the fact that plaintiff knew nothing about the existence of the LLC or Freeman's role in it, and Freeman made the statements in the only capacity that plaintiff knew Freeman to have—as a chiropractor. We need not, however, resolve that disagreement.
Plaintiff's case also fails on the second key element for vicarious liability on an apparent agency theory—whether the plaintiff actually and reasonably relied on the LLC's representations by looking to Willamette Spine Center as an entity (real or reasonably perceived), rather than to a specific professional, for his care. By plaintiff's own account, he began treatment with Freeman because he and Freeman had met in the coffee shop in which plaintiff worked. Plaintiff knew that Freeman was a chiropractor and was "affiliated" with Willamette Spine Center. He chose to treat with Freeman "based on [their] acquaintance." Plaintiff did not describe having otherwise heard of or known anything about Willamette Spine Center. He did not describe wanting to obtain treatment through that perceived entity, regardless of the individual who delivered that care. The only conclusion that plaintiff's testimony supports is that Freeman's association with Willamette Spine Center was happenstance in terms of plaintiff's reliance; it was plaintiff's personal relationship with Freeman that led him to be treated by practitioners in that building.
No evidence thus supports a conclusion that, subjectively, plaintiff relied on the signage or any other representation by the LLC to believe that the LLC was itself a medical provider. Even if plaintiff had done so, however, that reliance would not have been reasonable. A key distinction between this case and other cases in which courts have found a basis for vicarious liability is that here, unlike in those cases, there was no actual entity (e.g., a hospital, an outpatient clinic) with which plaintiff dealt, or could have dealt. Inside the building denominated "Willamette Spine Center," all appearances were that the practitioners were independent medical providers. There was no common staff or even a common receptionist. Each medical provider in the building had his or her own office, own professional staff, and own exam and waiting rooms (although some, such as Borman and Tiley, shared certain limited spaces). Each medical provider used his or her own forms and billed to his or her own accounts for his or her services. Each had unique contact information, including phone numbers and e-mail addresses. The record suggests no means for plaintiff, or any other third party, to have contacted "Willamette Spine Center" as an entity or to deal with it as an entity, had plaintiff or anyone else tried. There was no phone number to call, no address or e-mail for correspondence, no receptionist to talk to, and no one in charge who oversaw the delivery of medical services and whom a patient could approach with question or complaints.
In consulting with Borman, plaintiff dealt with Borman as the independent provider that he was. By plaintiff's own description, Freeman "referred" him to Borman. Borman's name, along with those of all the other building tenants, was listed on the outside of the building, near the door. Borman had his own office, his own phone number and e-mail address, and his own staff. He shared common areas (exam rooms, waiting rooms) with only one other physician. Billings for his services were payable to his own accounts. His letterhead and patient forms had only his own name on them. To be seen by Borman, plaintiff had to fill out a new patient medical history. Borman performed surgery at a local hospital, not in the building where he had his office.
For those reasons, we conclude that the record is inadequate to permit a jury to hold the LLC liable for Borman's negligent surgery on the theory that Borman was the apparent agent of the LLC. Contrary to plaintiff's position, to impose liability on the LLC in this circumstance, it is not enough that the LLC contributed to the appearance that the medical practitioners in its building were affiliated in some way with each other and made beneficial referrals to each other. Rather, for the LLC to be liable for the medical malpractice of the professionals in the building, plaintiff had to look to the LLC, not individual medical providers, for his treatment, including the surgery that Borman performed. Plaintiff would have had to have dealt with Borman based on a reasonable belief, traceable to the LLC, that Borman was the LLC's employee or was otherwise subject to the LLC's right of control in performing that surgery. The facts and circumstances presented on this record would not permit a jury to so conclude. Consequently, the trial court correctly granted the LLC's motion for summary judgment.
The decision of the Court of Appeals and the judgment of the trial court are affirmed.
DE MUNIZ, C.J., specially concurred and filed an opinion in which DURHAM and WALTERS, JJ., joined.
DE MUNIZ, C.J., specially concurring.
I concur in the majority's evaluation that the record in this case is inadequate to permit a reasonable jury to conclude that defendant Willamette Spine Center, LLC held out Dr. Borman to plaintiff as its agent for the delivery of medical services. I do so because plaintiff has failed to present sufficient evidence that it was defendant—and not some other party—that was responsible for misleading plaintiff as to the affiliations of the providers at the "Willamette Spine Center." However, the majority also concludes that, even if plaintiff had established defendant's responsibility for the conduct alleged, no reasonable jury could find that plaintiff actually or reasonably relied on that conduct to infer that the Willamette Spine Center was a group medical clinic. In my view, that second holding is both incorrect and unnecessary to decide in this case. I write separately to express my view that the record in this case is sufficient for a reasonable jury to find that someone is holding out the individual providers in the Willamette Spine Center building as agents of a unified group medical clinic providing an array of medical services, in a manner that, upon proper proof of the identity of the principal, is sufficient to create a factual question about the principal's vicarious liability for Borman's malpractice.
In this case, the record shows that Dr. Freeman
The record also reflects that the Willamette Spine Center name and logo were used in public advertisements in a manner that strongly suggested the existence of a single, unified entity providing a broad range of medical services. A web page, once located at www.willamettespinecenter.com, prominently featured the name and logo described above and proclaimed that:
In addition, an internet telephone directory advertisement, also using the Willamette Spine Center name and stylized logo, described the center as a "Comprehensive Diagnostic Facility offering: Chiropractic[,] X-Ray, MRI & CT Scans[,] Precision Spine Injection, Diagnostic & Treatment[,] Spine Surgery[, and] Physical Therapy," and set out a list of medical practitioners under the heading "WSC Providers."
I agree with the majority to the extent that it holds that no reasonable jury could find, on the basis of that evidence, that defendant Willamette Spine Center, LLC held out Borman as its agent for the delivery of medical services. The only evidence in the record with regard to the actions of the LLC itself shows that the LLC leased the Willamette Spine Center building from another entity, subleased portions of that building to the various providers who practiced there, and
I part ways with the majority, however, to the extent that it holds that, even if plaintiff had established that the LLC had engaged in those acts, that evidence nonetheless would have been insufficient to permit a reasonable jury to hold the LLC vicariously liable for Borman's malpractice under the doctrine of apparent authority. Drawing all reasonable inferences in favor of plaintiff, as we must, I would hold that a reasonable jury could conclude from the above facts that someone was holding out Borman as an agent of the Willamette Spine Center in a manner that could subject the person or persons responsible for creating that impression to vicarious liability for his malpractice. In straining to find otherwise, the majority improperly fails to consider the evidence in the light most favorable to plaintiff. See ORCP 47 C (permitting the court to grant summary judgment only if, "based upon the record before the court viewed in a manner most favorable to the adverse party, no objectively reasonable juror could return a verdict for the adverse party"). For instance, the majority holds that a jury could not reasonably find that the use of the Willamette Spine Center name and logo on the providers' business cards implied a group medical practice, reasoning that the business cards "reasonably communicated the independence of the individual providers" because "each provider had his or her own individual contact information on the card as well, such as telephone numbers and email addresses." 351 Or. at 749, 277 P.3d at 516. However, while a reasonable jury could find that the lack of a central email address or telephone number implied the providers' independence, that is by no means the only reasonable inference a jury could draw from that evidence. A competing inference— and one more favorable to plaintiff—is that those providers carried on a group practice in the form of an entity represented by that name and logo, and perhaps simply chose not to share a central phone line or email address or include that information on their individual cards. Business cards routinely include individual contact information, even when an individual is employed by or affiliated with a larger entity. The inclusion of that information on Borman's card does not, in my view, render unreasonable any other inference more favorable to plaintiff that the providers' use of the Willamette Spine Center name and logo might suggest.
Similarly, the majority holds that the list of provider names next to the front door of the building could not reasonably be interpreted to suggest a group practice, because the providers were listed individually and, in some cases, designated as LLCs. Again, however, while a jury could interpret that evidence to indicate that the providers were independent, an equally plausible interpretation—and one more favorable to plaintiff—is that the names were listed together in that central location because the providers were affiliated with one another in a group medical practice. The designation of some of the providers as LLCs does not entirely discredit that inference: LLCs can affiliate with other entities in corporate forms just as natural persons can. See ORS 63.077(2)(g) (permitting an LLC to "[b]e a promoter, incorporator, general partner, limited partner, member, associate or manager of any partnership, joint venture, trust or other entity"). Indeed, the fact that some of those LLCs actually incorporated the designation "Willamette Spine Center" into their names could imply to a reasonable person a legally significant affiliation with the clinic.
To compound the problems created by the majority's erroneous treatment of the facts, the majority also errs in stating that, to establish vicarious liability for a nonemployee agent's physical conduct, the principal must appear to have a right to control the physical details of the manner of performance that is characteristic of an employee-employer relationship. 351 Or. at 737-38, 277 P.3d at 509. That statement is incorrect. Oregon law does not require a principal to appear to have a right to control the details of the manner of performance by an apparent agent.
The Restatement (Third) of Agency § 2.03 (2006), provides:
The Restatement (Second) of Agency § 267 (1958), provides:
The majority quotes those sources but does not apply the test that they describe. 351 Or. at 747 n. 5, 737-38, 746 n. 13, 277 P.3d at 514 n. 5, 509, 514 n. 13. Instead the majority declares the latter provision imposes specific right-to-control requirements that the provision does not contain. That is a mistake. The majority should not bury its statement in a footnote or claim that this court's case law agrees with the majority's mistaken view.
There is no unclarity in the above-quoted Restatement provisions, and no Oregon case adopts the majority's construction. The Restatement provisions correctly address the legal standard for determining the liability of a principal for the lack of due care of an apparent agent without any reference to a proof requirement concerning the principal's right to control the details of the tortious conduct of the apparent agent. That is so because apparent authority requires a showing, consistent with Section 2.03, of a reasonable belief, traceable to the principal's own conduct, that the apparent agent has authority to act in the matter in question on behalf of the principal, thus leading the tort victim to rely justifiably, as Section 267 provides, on the care or skill of the apparent agent as if that person were expressly authorized to act by the principal.
Later in its opinion, the majority sets out the legal standard for determining the vicarious liability of a principal in medical malpractice cases against healthcare entities.
The medical care industry has undergone vast structural changes in the last few decades. The independent physician who contracts for privileges at the local hospital or makes house calls to provide care for his roster of loyal patients is largely a relic of a bygone era. Modern medical care increasingly is being provided instead by doctors employed by or affiliated with HMOs, insurance companies, and hospitals, as a manifestation of the increasing dependence of the
For the reasons I have set out, I specially concur in the decision of the court.
DURHAM and WALTERS, JJ., join this opinion.
Restatement (Third) of Agency § 2.03 (2005).
As the comments to that section explain, courts over the years have frequently used the terms "apparent agency" and "apparent authority" interchangeably. Id. at comment b. The Third Restatement therefore now uses the doctrine of apparent authority to determine when a principal is bound by actors who appear to be agents but are not, as well as agents who act beyond the scope of their actual authority. Id. at comment a. The test under the Third Restatement has the same key features as the test that this court has adopted: the third party must "reasonably believe the agent to be authorized," and that belief must be "traceable" to a manifestation by the principal that the person with whom the third party dealt is the principal's agent. Id. at comment b. Apparent authority also includes concepts of "usual authority" and "customary authority" in determining whether "a substantial basis for a third party's belief" exists that the person with whom the third party dealt was acting as an agent for a principal in a particular circumstance. Id.
The reference to "other agent" leaves unclear whether, consistently with section 250 of the Restatement (Second) of Agency (cited earlier), the principal must appear to have a right to control the manner in which the harm-causing act is performed, even if the apparent relationship is not that of master-servant. As explained, under this court's decisions, vicarious liability for physical torts may be imputed to a principal outside the master-servant relationship only when that principal has an employer-like right to control the agent's (the nonservant agent's) injury-causing conduct. Section 267 is not specifically directed to the physical tort context. But it is in general accord with the test that we announce in this case if, in the context of vicarious liability for tortious conduct, it extends only to apparent agents who either are apparent employees or over whom the principal, through representations traceable to the principal, appears to exercise control or oversight over the injury-causing conduct. See 351 Or. at 740 n. 8, 277 P.3d at 510 n. 8.
To the extent plaintiff's theory is that Freeman had apparent authority to bind the LLC, that proposition poses a host of potential issues. Plaintiff dealt with Freeman only as a chiropractor. Nothing in the record suggests that plaintiff knew that the LLC existed or that Freeman was a member of it. Given that context, a key statement on which plaintiff relies (Freeman's one reference to Willamette Spine Center as "his" clinic) reasonably conveyed at most an individual and personal-to-Freeman interest or role in the association of practitioners in the building. The parties do not adequately explore whether such a statement by an LLC member can be attributed to the LLC, and we decline to resolve that question. See generally So. Seattle Auto Auction, Inc. v. Ladd, 230 Or. 350, 361-62, 370 P.2d 630 (1962) (one who deals with agent as principal can look only to agent for relief; no apparent authority can arise to bind principal); Water, Waste & Land, Inc. v. Lanham, 955 P.2d 997 (Colo. 1998) (agency principles pertaining to undisclosed and partially disclosed principals apply to LLC; party who deals with LLC member without knowing LLC exists or knowing LLC's identity can look to only individual member, not LLC).
