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.
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