A Muddle in the Law

Recently a Superior Court judge in Massachusetts refused to dismiss claims against a local hospital in a medical malpractice case based on the alleged negligence of an anesthesiologist during a surgical procedure at the hospital.  Although the doctor in question was the hospital’s Chief of Anesthesia, he was technically an employee of a separate corporation (that presumably had a contract with the hospital).  Before the surgery, the patient had signed a form that included an acknowledgement of her awareness that “many of the physicians providing services to me in this facility are independent contractors and are not employees.”

Had the anesthesiologist been an employee of the hospital (which the judge accepted he was not), the hospital would have been liable for his negligence under the ancient doctrine of respondeat superior so long as it occurred within the scope of his employment, which would of course have been the case.

Nevertheless, said the judge, the hospital might still be liable under a theory of “apparent authority” for which the judge—admitting this was a question of first impression for Massachusetts—cited cases from 26 other states and portions of the Restatements of (the laws of) Agency and Torts.  “Apparent authority” is a legal concept relating to contracts whereby someone purporting to act as an agent for someone else could without any actual authority bind that other person to a contract with a third party if (1) that third party reasonably believed the “agent” was actually authorized and (2) the belief was based, at least in some measure, on an appearance of authority for which the other person was responsible.

The problem with the Superior Court judge’s decision—and with almost all the cases and the Restatements—is an attempt to squeeze a readily understandable principle of justice and law into boxes where it does not quite fit.  For example, the Restatement of Agency characterizes the principle as a matter negligence by an “apparent agent,” while the Restatement of Torts wrestles with an “apparent servant [or employee].”  What all these cases and the Restatements are reaching for is what the law calls an “estoppel,” of which there are already many in the law.  (Many of the cases in fact expressly recognize that “apparent authority” is itself an estoppel and cite as precedents cases based on still different estoppels, such as one called “agency by estoppel,” not to be confused with “apparent authority.”)  An estoppel is always a statement by the law that you can’t have something both ways—that you can’t have your cake and eat it too.

What all the decisions cited by the judge have in common is that someone was injured relying on a level of quality service that was expressly or implicitly promised to them by a party making money from their reliance.  It has little or nothing to do with whether or not the injured people believed they were dealing with an “agent” (assuming they had the least inkling what that is in law) or with a “servant” or “employee.”  The real crux of the offense creating liability is their having been led down the garden path of trust by someone who profits from that and then disclaims legal responsibility because their connection to the negligent party is an arms-length one.

If this case goes to the Appeals Court or further, that Court should jettison this misguided baggage, language, and analysis of the prior cases and conflicting Restatements and define this estoppel anew.

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