In a recent malpractice opinion in Acree v. Bayhealth Med. Ctr., a Delaware Superior Court provides a ruling of interest to any Delaware medical malpractice lawyer looking to find more deep pockets that are vicariously liable for a health care provider’s care. In this case, the focus is on a staffing agency that provided an orthopedic surgeon to a hospital.
Facts of Acree v. Bayhealth Med. Ctr.
An orthopedic surgeon performed an arthroscopic procedure on a patient’s right knee at a medical center owned by Bayhealth. Complications and a post-operative infection arose after the surgery, which, the patient alleges, will necessitate a total knee replacement.
Instead of filing a lawsuit against the surgeon or any other individuals allegedly at fault, the patient chose to sue Bayhealth Medical Center and Premier Orthopedic Bone and Joint Care. Why not sue the doctor? It is easier for a jury to find a hospital or corporation responsible than making the doctor the face of the defense. Jurors would rather not directly blame the doctor.
The lawsuit also alleges that Weatherby, is a national staffing agency that recruits and places physicians with hospitals around the country, is vicariously liable. Weatherby placed the orthopedic surgeon whose care is at issue, with Bayhealth Medical Center at its Kent General site in Dover. Since 2012, Weatherby has provided numerous physicians to assist with staffing at Bayhealth facilities. The lawsuit alleges these entities are vicariously liable for the harm inflicted by their agents and employees. Weatherby disputes this, asserting that the surgeon was offering medical care to the patient as an independent contractor.
In the initial stages of the case, Weatherby moved for summary judgment, primarily basing its argument on the terms of two contracts: one between Weatherby and the surgeon, and another between Weatherby and Bayhealth. The patient contested this motion initially on the grounds that issues of agency status are typically factual matters, and also because discovery on the matter was not yet complete.
The Court decided to postpone its ruling on the motion and allowed the parties time to conduct limited discovery concerning the surgeon’s employment status. The parties opted for targeted discovery and Weatherby refiled its motion.
Oddly, during the supplemental briefing phase, neither party addressed the Restatement (Second) of Agency §220 factors (“Section 220”). Did both sides think they would lose under that analysis? The Delaware Supreme Court, in Fisher v. Townsend, clarified that questions of respondeat superior in Delaware depend on the application of these factors. As a result, the court had to ask the parties to provide additional written arguments addressing the Section 220 factors and to offer compulsory or persuasive authority examining the status of a professional placed in a facility or business by a professional staffing agency.
The Nuts and Bolts of the Staffing Agreement
The case under consideration involves three deposition transcripts and two contracts as part of the summary judgment record. One contract is between Weatherby and Bayhealth, and the other is between Weatherby and the unnamed surgeon. The patient’s allegations are viewed in light of these materials.
Weatherby, a Florida-based medical staffing agency, contracts separately with doctors and healthcare facilities, placing physicians in these facilities as per need. In 2012, Weatherby contracted with Bayhealth to provide physicians for their facilities in Delaware. Weatherby was responsible for the costs of travel and housing for the physicians it placed, paid them directly, and provided their medical malpractice insurance. The agreement, however, asserted that these physicians were independent contractors, and Weatherby declined responsibility for their clinical decisions.
The second contract, between Weatherby and the surgeon, has similar stipulations. The surgeon was labeled as Weatherby’s independent contractor, and Weatherby was positioned as an entity arranging medical coverage. The surgeon had a one-year, uninterrupted placement at Bayhealth and was prohibited from accepting a position with Bayhealth during the contract term or for two years after.
The surgeon’s obligations included maintaining a medical license, providing high-standard medical services, preserving patient records, informing Weatherby of any disciplinary proceedings, and submitting to drug screening and background checks. Weatherby had the right to terminate the surgeon if any of these obligations were breached.
Depositions provided additional insights. The surgeon described an ongoing and exclusive assignment at Bayhealth, with a Weatherby contact person acting as an intermediary. The surgeon was paid directly by Weatherby after recording hours in their time portal. Another deposition, from Gregory Prine, Weatherby’s Rule 30(b)(6) designee, elaborated on Weatherby’s business model. Weatherby balanced physicians’ preferences and facilities’ needs, conducted background checks, and arranged the details of the physicians’ assignments. Prine stated that Weatherby maintained contact with physicians about quality of life issues and considered them to be independent contractors.
Finally, Bayhealth’s Rule 30(b)(6) designee, testified that Weatherby remained involved throughout the physician’s placement. Bayhealth communicated directly with Weatherby to address any disciplinary issues, unless it was an emergency. In such cases, Weatherby’s assigned “handler” would address the matter with the physician. This seems like a pretty important fact in this calculus of control, right?
Still, Weatherby argued that the surgeon was an independent contractor as they didn’t control his clinical decisions, despite managing some non-clinical aspects of his work. Sounds like a pretty narrow interpretation Why would the line get drawn there? Of course, the patient’s medical malpractice lawyer contended that the surgeon’s status should be decided by a jury and urged the court to apply Section 220 factors, arguing that Weatherby controlled significant aspects of the surgeon’s work.
Respondeat Superior Law in Delaware
A vicarious liability claim has been lodged against the healthcare provider by the plaintiff. If a master/servant relationship existed between the healthcare provider and the medical practitioner, the healthcare provider would be held vicariously responsible for any harm negligently inflicted by the medical practitioner on the plaintiff. Conversely, if the medical practitioner offered the medical care as an independent contractor, the healthcare provider would not bear potential liability.
In Delaware’s agency law, a principal’s vicarious liability largely depends on the extent of the principal’s control over the other party. A master/servant relationship arises if the principal has the right to control the time, manner, and method of performing the work, as opposed to only requiring certain outcomes as per the contract.
The determination of whether an individual is a servant or an independent contractor relies on the specific facts of each case. The title the parties choose to label themselves is relevant but not decisive, especially when the status might affect a third party’s rights. Thus, even if two parties contractually define one as an independent contractor, the question of status remains almost entirely factual. Therefore, no single rule dictates whether a given relationship should be classified as a master/servant or independent contractor relationship.
The Delaware Supreme Court has explicitly adopted Section 220 factors as the criteria for determining this status. Section 220 mandates the Court when considering a motion for summary judgment, and the fact-finder, if necessary, to take into account these ten factors:
- the extent of control, which, by the agreement, the master may exercise over the details of the work;
- whether or not the one employed is engaged in a distinct occupation or business;
- the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
- the skill required in the particular occupation;
- whether the employer or the workman supplies the instrumentalities, tools, and place of work for the person doing the work;
- the length of time for which the person is employed;
- the method of payment, whether by the time or by the job;
- whether or not the work is part of the regular business of the employer;
- whether or not the parties believe they are creating the relation of master and servant; and
- whether the principal is or is not in business. Restatement (Second) of Agency § 220 (1958).
The Court’s Ruling
So the court did its job and applied these Section 220 factors to this case. But the backdrop of this analysis is that agency status is a factual issue, and is typically not appropriate for summary judgment. This is due to the varying degrees of control required to establish a master-servant relationship, a central point in the case.
The first factor, the degree of control, was found to be in favor of independent contractor status. While the healthcare provider held significant general control over the medical professional, including hiring and firing rights and competition restrictions, it did not control the details of the work. In this case, the litigant’s claim against the healthcare provider pertained to the medical professional’s surgical procedures and clinical decision-making, tilting the evidence toward independent contractor status.
The second factor, whether the medical professional was engaged in a distinct occupation or business, was found to be neutral. The healthcare provider doesn’t directly offer medical services to patients but provides medical professionals who do. The existence of a non-compete clause in the medical professional’s contract indicated a possible master/servant relationship, adding further complexity to the case.
The third and fourth factors, involving the type of occupation and the level of skill required, pointed towards independent contractor status, given that the medical professional in question was a highly skilled orthopedic surgeon.
The fifth factor, looking at who provides the tools for work, was found to be neutral. The healthcare provider, the medical professional, and the hospital were in a tripartite relationship, with the hospital providing the location and tools for surgery and follow-up care under a service agreement with the healthcare provider. The healthcare provider also procured malpractice insurance for the medical professional, which could be considered a work instrumentality.
The sixth factor, the length of the employment, and the seventh, the method of payment, both strongly pointed towards a master/servant relationship. The medical professional was under a long-term, exclusive contract with the healthcare provider and was paid by the hour for services rendered.
The eighth factor, whether the work is part of the employer’s regular business, also suggested a master/servant relationship. The healthcare provider is in the business of placing medical professionals with medical facilities, and the claim of negligence was based on the actions of a medical provider.
The ninth factor, whether the parties believe they are creating a master/servant relationship, favored independent contractor status. Both the medical professional and the healthcare provider considered the medical professional to be an independent contractor.
The tenth factor, whether the principal is in business, leaned towards a master/servant relationship. The healthcare provider is in the business of placing medical professionals, such as the medical professional in question, for a fee.
Final Scorecard and Ruling
If you are keeping score, the court found that four Section 220 factors strongly pointed towards independent contractor status, with two leaning neutrally, and three strongly suggesting a master/servant status.
So the Superior Court ruled that the ability of the healthcare provider to hire and fire the medical professional, along with the payment method and the long-term exclusive employment contract, could lead a reasonable jury to conclude that the medical professional was the servant of the healthcare provider. Further testimony provided additional support for this viewpoint. As such, the court deemed summary judgment inappropriate.