Hospitals and the Landlord Defense
Hospitals and the Landlord Defense
April 14, 2003
By JIM ORR
Texas Lawyer Contributors
In these times of doctors maintaining little or no medical-malpractice insurance, lawyers representing injured plaintiffs are seeking additional grounds on which to hold hospitals responsible for medical negligence occurring at their facilities. Lawyers representing hospitals, in response, are thinking up new ways to fight back. One punch used recently is the assertion of what I call the "landlord defense."
In the landlord defense, the hospital argues that it simply provides floors, walls and doors to doctors, just like a landlord provides only a structure for a tenant. The hospital asserts that everything that happens under the roof of the hospital is the responsibility of the doctors and that they are completely independent. This argument potentially could be asserted in cases involving allegations of negligent hospital policies or procedures; negligent failure to treat or monitor a patient in the hospital; negligent quality control; or negligent training or instruction of medical staff.
The argument is rooted in statute. A hospital alleges that even if it desired to take an active role in the care given in its facility, the Medical Practice Act -- §155.002 of the Texas Health and Safety Code -- and §2.01 of the Texas Business Corporation Act prohibit it from doing so. Relying on these statutory provisions, the hospital argues that it, being an entity, cannot practice medicine because only a person can practice medicine and that one must have a medical license to practice medicine - a license not available to an entity. The hospital even may point to case law such as the 5th Court of Appeals' 1986 opinion in Flynn Brothers Inc., et al. v. First Medical Associates, et al., in which the Dallas court held that a corporation made up of laypersons employing physicians to treat patients for profit constituted the unlawful practice of medicine.
Often, a hospital argues that a board of directors, an administrator and an organized medical staff governs it. The board selects an administrator and delegates day-to-day management of the hospital to that administrator. These day-to-day activities include supervising the hospital's finances, nursing, planning and marketing functions. As an organization, the hospital is unique in that decisions concerning its staff, equipment, supplies and policies are made by medical staff committees. Physicians who are neither employees nor agents of the hospital comprise these committees. The physicians on these committees are legally independent of the hospital and are governed by the other physicians through the organized medical staff. Thus, the hospital argues, everything of which the plaintiff complains was determined, committed or omitted by individuals (i.e., physicians) on the medical staff committees for whose negligence the hospital is not responsible. In support of this argument, a hospital may cite cases such as the Texas Supreme Court's 1998 opinion in Baptist Memorial Hospital System v. Rhea Sampson, which held that a hospital is not liable for the acts and omissions of a physician because physicians are independent contractors.
A hospital then typically attempts to keep the plaintiff from learning anything about what happened in these committees or the processes related to these committees. It refuses to disclose the identity of the members of the committees that allegedly made all decisions about the medical care given in the hospital. The hospital refuses to provide this information on the basis of the nebulous medical committee privilege set forth in §161.032 of the Texas Health and Safety Code. The hospital may further assert that even if the plaintiff could identify the members of the committee and establish negligence by or through them, the hospitalcannot be held liable for the negligence of committee members. Why? Because the members themselves are immune from liability for all actions taken or recommendations made within the scope of the functions of the committee pursuant to §161.033 of the Texas Health and Safety Code, as long as the physician acted without malice. Thus, in the end, the hospital will attempt to characterize everything that goes on in the hospital related to patient care as practicing medicine by physicians or committees made up of physicians, for whose negligence the hospital cannot be held responsible.
Challenging the Defense
What are the responses to the landlord defense? They begin with the assertion that the landlord defense is contrary to Texas law. As held in Tenet Health Ltd. v. Zamora (2000), a 13th Court of Appeals opinion out of Corpus Christi:
A hospital is not a mere hostelry providing room and board and a place for physicians to practice their craft, but owes independent duties of care to its patients... A hospital owes duties directly to its patients to provide appropriate and usable medical equipment, to keep its premises in a reasonably safe condition, to not negligently allow termination of medical care and to use reasonable care in formulating the policies and procedures that govern its medical staff and non physician personnel, to exercise reasonable care in the selection of its medical staff, and to periodically monitor and review the medical staff's competence.
The fact that a hospital owes the above duties directly to the patient and can be held liable for them is echoed by many other cases, including, without limitation, the 10th Court of Appeals in Waco's 1979 decision in Air Shields Inc. v. Spears, the 6th Court of Appeals in Texarkana's 1999 decisions in Mills v. Angel and Joe and Carolyn McCombs, Individually and on Behalf of the Estate of Samantha McCombs v. Children's Medical Center, as well as the 2nd Court of Appeals in Fort Worth's 1997 decision in Denton Regional Medical Center and Epic Healthcare Group Inc. v. Lawrence "Butch" LaCroix, Individually and as Next Friend of Katherine "Kathy" LaCroix and as Next Friend and Parent of Lawryn LaCroix.
In fact, in 2002 Dallas' 5th Court of Appeals found in Mason v. IHS Cedars Treatment Center of Desoto Texas Inc. that the trial court erred in granting summary judgment for a hospital when the plaintiff's claims alleged that the hospital "failed to have adequate policies and procedures in place for patient care and discharge." The court concluded in Mason that "appellants' evidence raises a fact issue on whether the inadequacy of policies and procedures set in motion a... chain of events that led to a reasonably foreseeable injury or result." A hospital likely will be unable to cite a single case supporting the contention that hospitals do not owe duties directly to their patients.
A plaintiff in a med-mal case also can reference an often-used treatise in the area of hospital liability. "Texas Hospital Law," by Richard Griffith and Dewey Johnston, states that "a hospital may be liable independently of its employees' negligence." The authors go on to say that "[h]ospital liability arises as a direct result of a failure to perform a duty owed directly to the patient... which is called corporate or institutional negligence."
The landlord defense is negated by national industry standards as well. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) places numerous obligations directly on the hospital with respect to patient care. For example, Standards PE.1 through PE.1.9 set forth many requirements with respect to the initial assessment of patients in the hospital. Standards PE.2 through PE.2.4 require that a hospital reassess patients at regular intervals and upon changes in the patient's condition. Standard R1.1.2.1 requires that informed consent be obtained. Standards TX.1 through TX.8 set forth numerous requirements with respect to planning and providing care, medication use, nutritional care, operative procedures and rehabilitation care. Standards LD.1.10 through LD.1.10.2 require that the hospital consider the use of clinical practice guidelines, which must be selected and implemented, reviewed and approved by hospital leaders. Standard MS.6.2 requires that patients have a medical history taken and an appropriate physical examination performed by a qualified physician. Standard MS.6.4 requires that individuals providing treatment do so only in their area of competency. Federal law, pursuant to 42 CFR §§488.5 and 488.10, provides that a hospital accredited by JCAHO meets the conditions for participation in Medicare and Medicaid. Likewise, 42 CFR §417.124 requires that every health maintenance organization ensure that its affiliated institutional providers be accredited by JCAHO or certified by Medicare.
Public policy also is a strong argument against the landlord defense. A plaintiff can argue that if courts lend credence to this defense, it eliminates accountability for many aspects of patient care. For example, if a hospital being sued for failing to prevent bed sores has insufficient policies and procedures for the prevention of bed sores, the nurses could claim that they were following doctor's orders as set forth in the hospital policy determined by a medical committee. The hospital could claim that it had nothing to do with the policy because the medical staff determined it. The medical staff could claim that they are immune from liability for any actions or recommendations taken as members of a medical committee. The treating doctor could say he or she relied on the nurses to do their jobs. Everyone potentially escapes liability.
The landlord defense is a creative and innovative argument. However, it can and should be defeated by an equally strong assertion of case law, industry standards and public policy considerations.
Jim Orr is a partner in the 12-lawyer firm of Heygood, Orr, Reyes, Pearson & Bartolomei, with offices in Dallas, Arlington, San Antonio, Austin and Seguin. He is a graduate of Baylor University with a B.B.A. degree and the University of Michigan Law School. He is board certified in personal-injury trial law by the Texas Board of Legal Specialization, board certified in civil trial advocacy by the National Board of Trial Advocacy and has tried more than 50 cases to jury verdict.
Copyright 2003, Texas Lawyer. All rights reserved. Reprinted by permission.
<< BACK TO PERSONAL INJURY ARCHIVE
April 14, 2003
By JIM ORR
Texas Lawyer Contributors
In these times of doctors maintaining little or no medical-malpractice insurance, lawyers representing injured plaintiffs are seeking additional grounds on which to hold hospitals responsible for medical negligence occurring at their facilities. Lawyers representing hospitals, in response, are thinking up new ways to fight back. One punch used recently is the assertion of what I call the "landlord defense."
In the landlord defense, the hospital argues that it simply provides floors, walls and doors to doctors, just like a landlord provides only a structure for a tenant. The hospital asserts that everything that happens under the roof of the hospital is the responsibility of the doctors and that they are completely independent. This argument potentially could be asserted in cases involving allegations of negligent hospital policies or procedures; negligent failure to treat or monitor a patient in the hospital; negligent quality control; or negligent training or instruction of medical staff.
The argument is rooted in statute. A hospital alleges that even if it desired to take an active role in the care given in its facility, the Medical Practice Act -- §155.002 of the Texas Health and Safety Code -- and §2.01 of the Texas Business Corporation Act prohibit it from doing so. Relying on these statutory provisions, the hospital argues that it, being an entity, cannot practice medicine because only a person can practice medicine and that one must have a medical license to practice medicine - a license not available to an entity. The hospital even may point to case law such as the 5th Court of Appeals' 1986 opinion in Flynn Brothers Inc., et al. v. First Medical Associates, et al., in which the Dallas court held that a corporation made up of laypersons employing physicians to treat patients for profit constituted the unlawful practice of medicine.
Often, a hospital argues that a board of directors, an administrator and an organized medical staff governs it. The board selects an administrator and delegates day-to-day management of the hospital to that administrator. These day-to-day activities include supervising the hospital's finances, nursing, planning and marketing functions. As an organization, the hospital is unique in that decisions concerning its staff, equipment, supplies and policies are made by medical staff committees. Physicians who are neither employees nor agents of the hospital comprise these committees. The physicians on these committees are legally independent of the hospital and are governed by the other physicians through the organized medical staff. Thus, the hospital argues, everything of which the plaintiff complains was determined, committed or omitted by individuals (i.e., physicians) on the medical staff committees for whose negligence the hospital is not responsible. In support of this argument, a hospital may cite cases such as the Texas Supreme Court's 1998 opinion in Baptist Memorial Hospital System v. Rhea Sampson, which held that a hospital is not liable for the acts and omissions of a physician because physicians are independent contractors.
A hospital then typically attempts to keep the plaintiff from learning anything about what happened in these committees or the processes related to these committees. It refuses to disclose the identity of the members of the committees that allegedly made all decisions about the medical care given in the hospital. The hospital refuses to provide this information on the basis of the nebulous medical committee privilege set forth in §161.032 of the Texas Health and Safety Code. The hospital may further assert that even if the plaintiff could identify the members of the committee and establish negligence by or through them, the hospitalcannot be held liable for the negligence of committee members. Why? Because the members themselves are immune from liability for all actions taken or recommendations made within the scope of the functions of the committee pursuant to §161.033 of the Texas Health and Safety Code, as long as the physician acted without malice. Thus, in the end, the hospital will attempt to characterize everything that goes on in the hospital related to patient care as practicing medicine by physicians or committees made up of physicians, for whose negligence the hospital cannot be held responsible.
Challenging the Defense
What are the responses to the landlord defense? They begin with the assertion that the landlord defense is contrary to Texas law. As held in Tenet Health Ltd. v. Zamora (2000), a 13th Court of Appeals opinion out of Corpus Christi:
A hospital is not a mere hostelry providing room and board and a place for physicians to practice their craft, but owes independent duties of care to its patients... A hospital owes duties directly to its patients to provide appropriate and usable medical equipment, to keep its premises in a reasonably safe condition, to not negligently allow termination of medical care and to use reasonable care in formulating the policies and procedures that govern its medical staff and non physician personnel, to exercise reasonable care in the selection of its medical staff, and to periodically monitor and review the medical staff's competence.
The fact that a hospital owes the above duties directly to the patient and can be held liable for them is echoed by many other cases, including, without limitation, the 10th Court of Appeals in Waco's 1979 decision in Air Shields Inc. v. Spears, the 6th Court of Appeals in Texarkana's 1999 decisions in Mills v. Angel and Joe and Carolyn McCombs, Individually and on Behalf of the Estate of Samantha McCombs v. Children's Medical Center, as well as the 2nd Court of Appeals in Fort Worth's 1997 decision in Denton Regional Medical Center and Epic Healthcare Group Inc. v. Lawrence "Butch" LaCroix, Individually and as Next Friend of Katherine "Kathy" LaCroix and as Next Friend and Parent of Lawryn LaCroix.
In fact, in 2002 Dallas' 5th Court of Appeals found in Mason v. IHS Cedars Treatment Center of Desoto Texas Inc. that the trial court erred in granting summary judgment for a hospital when the plaintiff's claims alleged that the hospital "failed to have adequate policies and procedures in place for patient care and discharge." The court concluded in Mason that "appellants' evidence raises a fact issue on whether the inadequacy of policies and procedures set in motion a... chain of events that led to a reasonably foreseeable injury or result." A hospital likely will be unable to cite a single case supporting the contention that hospitals do not owe duties directly to their patients.
A plaintiff in a med-mal case also can reference an often-used treatise in the area of hospital liability. "Texas Hospital Law," by Richard Griffith and Dewey Johnston, states that "a hospital may be liable independently of its employees' negligence." The authors go on to say that "[h]ospital liability arises as a direct result of a failure to perform a duty owed directly to the patient... which is called corporate or institutional negligence."
The landlord defense is negated by national industry standards as well. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) places numerous obligations directly on the hospital with respect to patient care. For example, Standards PE.1 through PE.1.9 set forth many requirements with respect to the initial assessment of patients in the hospital. Standards PE.2 through PE.2.4 require that a hospital reassess patients at regular intervals and upon changes in the patient's condition. Standard R1.1.2.1 requires that informed consent be obtained. Standards TX.1 through TX.8 set forth numerous requirements with respect to planning and providing care, medication use, nutritional care, operative procedures and rehabilitation care. Standards LD.1.10 through LD.1.10.2 require that the hospital consider the use of clinical practice guidelines, which must be selected and implemented, reviewed and approved by hospital leaders. Standard MS.6.2 requires that patients have a medical history taken and an appropriate physical examination performed by a qualified physician. Standard MS.6.4 requires that individuals providing treatment do so only in their area of competency. Federal law, pursuant to 42 CFR §§488.5 and 488.10, provides that a hospital accredited by JCAHO meets the conditions for participation in Medicare and Medicaid. Likewise, 42 CFR §417.124 requires that every health maintenance organization ensure that its affiliated institutional providers be accredited by JCAHO or certified by Medicare.
Public policy also is a strong argument against the landlord defense. A plaintiff can argue that if courts lend credence to this defense, it eliminates accountability for many aspects of patient care. For example, if a hospital being sued for failing to prevent bed sores has insufficient policies and procedures for the prevention of bed sores, the nurses could claim that they were following doctor's orders as set forth in the hospital policy determined by a medical committee. The hospital could claim that it had nothing to do with the policy because the medical staff determined it. The medical staff could claim that they are immune from liability for any actions or recommendations taken as members of a medical committee. The treating doctor could say he or she relied on the nurses to do their jobs. Everyone potentially escapes liability.
The landlord defense is a creative and innovative argument. However, it can and should be defeated by an equally strong assertion of case law, industry standards and public policy considerations.
Jim Orr is a partner in the 12-lawyer firm of Heygood, Orr, Reyes, Pearson & Bartolomei, with offices in Dallas, Arlington, San Antonio, Austin and Seguin. He is a graduate of Baylor University with a B.B.A. degree and the University of Michigan Law School. He is board certified in personal-injury trial law by the Texas Board of Legal Specialization, board certified in civil trial advocacy by the National Board of Trial Advocacy and has tried more than 50 cases to jury verdict.
Copyright 2003, Texas Lawyer. All rights reserved. Reprinted by permission.
<< BACK TO PERSONAL INJURY ARCHIVE