Medical malpractice; Vicarious liability; Grewe v Mt Clemens Gen Hosp; Ostensible agency & agency by estoppel

In an order in lieu of granting leave to appeal, the court reversed the Court of Appeals judgment (see eJournal # 80855 in the 1/19/24 edition) and remanded the case to the trial court for further proceedings. The court held that, applying the appropriate test, plaintiff established a genuine issue of material fact as to defendant-Beaumont’s “liability for medical malpractice under the theory of ostensible agency.” It previously remanded the case to the Court of Appeals to apply the appropriate test under Grewe. The court found that the “Court of Appeals erred by distinguishing between ostensible agency and agency by estoppel.” The court noted that Michigan law “has not distinguished between the terms. Our courts have used ‘ostensible agency’ and ‘agency by estoppel’ interchangeably.” It concluded that the Court of Appeals majority was “correct that reliance is relevant under the Grewe test, i.e., the test for ostensible agency or agency by estoppel.” But the majority erred “in its analysis of plaintiff’s reliance. Reliance may be found where the patient presents to the hospital and is ‘“looking to the hospital for treatment.”’” In this case, plaintiff presented for treatment at the hospital ER “and was treated at the hospital by a doctor with whom she had no prior relationship.” The court found that Beaumont did “not set forth facts establishing as a matter of law that it dispelled plaintiff’s reasonable belief that” defendant-Dr. Lonappan was its agent. The court disagreed “with the Court of Appeals majority that the existence of an agreement between plaintiff’s primary care physician and” defendant-Hospital Consultants, “Dr. Lonappan’s employer, without more, establishes that plaintiff did not rely on Beaumont for care. . . . As an initial matter, the agreement goes not to reliance, but to whether plaintiff’s belief that Dr. Lonappan was Beaumont’s agent was reasonable, as the agreement pertains to whether plaintiff had a preexisting relationship with Dr. Lonappan.” The court added that, even “if the agreement could pertain to reliance, there is no evidence that plaintiff had any knowledge of the agreement at the time that she was admitted. Therefore, the mere existence of the agreement does not, as a matter of law, rebut [her] reasonable belief that Dr. Lonappan was Beaumont’s agent, or dispel plaintiff’s reliance on that belief when she was treated by Dr. Lonappan.”

Dissenting, Justice Zahra found that the majority essentially “improperly assumes a patient’s reliance based solely on their arrival at the hospital, which invariably results in being assigned an attending physician by the hospital, particularly in an emergency setting.”