Opinion
CIVIL ACTION NO. SA-02-CA-687-FB
March 30, 2004
ORDER CONCERNING MOTION FOR SUMMARY JUDGMENT
Before the Court are: (1) Defendant United States' Motion to Dismiss or in the Alternative, Motion for Summary Judgment; (2) Plaintiffs' Response to Defendant United States' Motion to Dismiss or in the Alternative, Motion for Partial Summary Judgment; (3) Defendants Miller, Johnson, and Shah's Response to Defendant United States' Motion to Dismiss or, in the Alternative, Motion for Summary Judgment; (4) Defendant United States' Reply to Plaintiffs' Response to Defendant's Motion to Dismiss or in the Alternative, Motion for Summary Judgment; (5) the United States' Reply to Co-Defendant Physician's Response to the United States' Motion to Dismiss, or in the Alternative, Motion for Summary Judgment, and (6) Plaintiffs' Surreply to Defendant United States' Reply to Plaintiffs' and Codefendants' Responses to Motion to Dismiss or, in the Alternative, Motion for Partial Summary Judgment. The Court has also considered the supplemental evidence in support of plaintiffs' response to defendant United States' motion for summary judgment. At issue before the Court is whether the United States is liable for the acts or omissions of Dr. Atiya and Dr. Bitner when they provided care to Mr. Klein. The United States contends the doctors were the borrowed employees of the University of Texas Health Science Center (UTHSC) at the time, and therefore, the United States is not liable for their actions. Plaintiffs contend Dr. Atiya and Dr. Bitner were under the complete control of the Audie Murphy Veteran's Hospital (VA) while they were treating Mr. Klein and therefore were not borrowed employees of UTHSC. In addition, plaintiffs contend that other staff and employees of the VA were negligent in the treatment of Mr. Klein so the United States cannot be completely dismissed from the case even if the Court were to agree with defendant's borrowed employee/servant argument.
Background
As set forth by the defendant United States, the VA entered into a contract with UTHSC for UTHSC to operate a residency program for physicians completing their medical studies in surgery and anesthesiology residencies. The contract was in effect during the time Mr. Klein received treatment at the VA. The training of the residents is conducted by staff physicians who are board certified in the particular medical speciality in which the resident is being trained. Patients treated in a residency program are the patients of the staff physician and not the resident. The staff physicians were employees of UTHSC.
The Residency Program involved UTHSC, the VA, and University Hospital. UTHSC provided the residents for the program, the VA and UTHSC paid University Hospital for the residents' time, and University Hospital then paid the residents their salaries, withheld taxes, and gave them their assignments. Defendant notes that under the terms of the contract, UTHSC would supply experienced board certified staff physicians in each of the specialities to train the residents. The UTHSC/VA contract provides that the staff practitioners, i.e. staff physicians, supervising the surgery and anesthesiology residents are required to "hold a faculty appointment at the University of Texas Health Science Center at San Antonio" and they "shall not be considered VA employees for any purposes and shall be considered employees of" UTHSC. The UTHSC staff physicians supervised all patient care provided by the residents in the program. The VA provided the residency program with patients, patient care facilities, and afforded the residents status as federal employees for purposes of professional liability coverage under the Federal Tort Claims Act (FTCA).
Policy Memorandum 11-93-69 provides that the staff practitioners were responsible for the care provided to each patient; all residents function under the supervision of staff practitioners, and the staff practitioners have the responsibility to direct the care of the patient and provide the appropriate level of supervision. The memorandum also provides that the supervising staff physicians are accountable for the actions of the resident. Dr. Atiya and Dr. Bitner were residents at the time they provided care to Mr. Klein. The United States contends that it is not liable for the acts or omissions of these residents because they were the borrowed employees of UTHSC when they provided care to Mr. Klein. The defendant relies on St. Joseph Hospital v. Wolff, 94 S.W.Sd 513 (Tex. 2002), to support its motion. Plaintiffs contend that the proper application of that case here should result in the denial of defendant's motion for summary judgment.
Summary Judgment Standard
A motion for summary judgment should be granted when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. Civ. P. 56(c). A dispute concerning a material fact is considered "genuine" if the evidence "is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby. Inc. 477 U.S. 242, 248 (1986). It is not the Court's function to "weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249. The Court must determine if there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. Of course, in ruling on a motion for summary judgment, all inferences drawn from the factual record are viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986).
If the party moving for summary judgment carries its burden of producing evidence which tends to show there is "no genuine issue of material fact, the nonmovant must then direct the court's attention to evidence in the record sufficient to establish the existence of a genuine issue of material fact for trial." Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). The nonmoving party may not rely upon mere conclusory allegations to defeat a motion because allegations of that type are not competent summary judgment evidence and are insufficient to defeat a proper motion. Id. In fact, if the "nonmoving party rests merely upon conclusory allegations, improbable inferences, and unsupported speculation," a motion for summary judgment may be granted even in cases "where elusive concepts such as motive or intent are at issue." Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.).cert. denied, 513 U.S. 871 (1994).
The party opposing the motion also may not rest on the allegations contained in the pleadings but "must set forth and support by summary judgment evidence specific facts showing the existence of a genuine issue for trial." Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). In meeting this requirement, the party must "identify specific evidence in the record" and "articulate the precise manner in which that evidence supports his or her claim." Id. Rule 56 of the Federal Rules of Civil Procedure does not impose upon this Court the "duty to sift through the record in search of evidence to support a party's opposition to summary judgment." Id. (quotingSkotak v. Tenneco. Resins. Inc. 953 F.2d 909. 915-16 n. 7 (5th Cir.), cert. denied, 506 U.S. 832 (1992)). A summary judgment will only be precluded by disputed facts which are material, i. e." might affect the outcome of the suit under the governing law."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Factual disputes which are irrelevant or unnecessary to the issue will not preclude summary judgment. Id.
St. Joseph Hospital v. Wolff
At issue in St. Joseph Hosp. v. Wolff, 94 S.W.Sd 513, 517 (Tex. 2002), was "whether a teaching hospital that sponsors a medical residency program is vicariously liable for a resident's negligent treatment of a patient, occurring while the resident, as part of the residency training program, was receiving training at another hospital under the immediate supervision of another medical institution's agent." Although the court concluded there was "no evidence to support the jury's findings of joint enterprise, joint venture, `mission' or non-employee respondeat superior, or ratification," the court found the "undisputed evidence proved conclusively, or as a matter of law, that when the resident treated the patient he was acting as the borrowed employee of the medical institution supervising him." Id. Therefore, plaintiffs were not allowed to recover from the teaching hospital.The plaintiff in St. Joseph was severely injured and admitted to Austin's Brackenridge Hospital. Id. An attending physician and a third-year resident perform a tracheostomy on the plaintiff and "inserted a breathing tube in her throat." A few days following the procedure, the resident examined the plaintiff, noticed she was bleeding from the surgical wound but did not alert the attending physician, his substitute, or the chief resident. Plaintiff survived cardiac and respiratory arrest but suffered "permanent, severe brain damage."Id. at 518. The court described the resident's status as follows:
At all times during his treatment of Wolff, Villafani [the resident] was enrolled in an integrated general surgery residency program. The program was operated by St. Joseph Hospital ("St. Joseph") in Houston, the sponsoring institution, and the Central Texas Medical Foundation ("Foundation"), a participating institution. The Foundation is a certified health organization operated by physicians under Texas Law that was formed for the purpose of operating a residency program. The Foundation is based in Austin. Harshaw, Wolff's attending physician, was also the Foundation's Director of Surgical Education.Id. (footnote containing citation omitted). In addition, the court examined the program contract which was entered into between St. Joseph and the Foundation and provided:
St. Joseph operated a general surgery residency program and wished to "provide extensive experience in general surgery for the surgical residents in training." The Program Contract also stated that the Foundation provided health care treatment at Brackenridge Hospital (which is owned by the City of Austin) through residency training programs and the Foundation "desire[d] the services of postdoctoral surgical residents to assure the availability of qualified surgeons in the future."
* * * * *
The Program Contract also provided, among other things, that:
• the St. Joseph-appointed Academic Chief was responsible for "direct[ing] the total General Surgery Residency Program"; appointing residents to the program; providing for their training (via St. Joseph's teaching staff) while they were assigned to St. Joseph Hospital; and assigning residents for training with the Foundation in Austin (subject to the Foundation's approval).
• the Foundation-appointed Director was responsible for supervising (via the Foundation's teaching staff) the residents while they were assigned to the Foundation; consulting with the Academic Chief on "matters related to the academic aspects of the Integrated Program"; appointing members of the Foundation's surgical teaching staff (subject to the Academic Chief's approval); and making specific training assignments of residents and teaching staff of the Foundation (again subject to approval).
• the assignment of residents to the Foundation by the Academic Chief was subject to the Foundation's prior approval, which could be withdrawn with written notice if a resident failed to meet the Foundation's standards. On withdrawal of approval, the Foundation could immediately suspend the resident from any activities at Brackenridge.
• the Foundation would pay a pro-rata share of a resident's stipend while the resident was assigned to and on rotation with the Foundation. A resident assigned to the Foundation would also receive from St. Joseph any fringe benefits agreed to between them, but the Foundation would reimburse St. Joseph for the costs of those benefits. The Foundation would also pay the residents a housing stipend.
• St. Joseph would provide residents with professional liability insurance coverage.
• the Director could participate in recruiting residents for the program, but the Foundation was not responsible for recruiting or selecting residents or for St. Joseph's recruiting costs.Id at 521-22. The Program Contract also provided the following information concerning patient care:
The residents assigned to the Integrated Program will provide direct patient care under the supervision of the teaching staff of [the Foundation]. [The Foundation's] teaching staff will be under the supervision and direction of [the Foundation's] Director of Surgical Education. While in supervised clinical training as provided in this contract, each resident will be immediately responsible to the member of [the Foundation's] teaching staff, designed by [the Foundation's] Director of Surgical Education, under whose direct clinical supervision and control the resident is working. [The Foundation's] Director of Surgical Education will be responsible to St. Joseph Hospital's Academic Chief of General Surgery for meeting the academic needs of the residents in the Integrated Program while they are training with [the Foundation.] St. Joseph Hospital's Academic Chief of General Surgery will cause supervised clinical training of each resident to be provided by the physician-practitioner members of St. Joseph Hospital's general surgery teaching staff who are responsible for the supervised clinical training of the residents in St. Joseph Hospital's General Surgery Residency Program when the residents in the Integrated Program are assigned to St. Joseph Hospital. [The Foundation] will not control the details of the medical tasks performed by the residents at St. Joseph Hospital; furthermore, St. Joseph Hospital will not control the details of the medical tasks performed by the residents when they are assigned to [the Foundation] save through consultation between the mutual consent of the Academic Chief of General Surgery at St. Joseph Hospital and [the Foundation's] Director of Surgical Education.Id. at 522-23 (emphasis in original). The court also explained that the resident had a written contract with St. Joseph but not with the Foundation. Id at 523-24. Pursuant to the contract, St. Joseph was obligated to provide Villafani with residency training as well as "pay Villafani a stipend, to give him three weeks of vacation, and to provide him uniforms, laundry service, a parking space, life and health insurance, a room when assigned to night duty, and professional liability insurance." Although the contract provided that Villafani would not be St. Joseph's employee or agent, St. Joseph "withheld taxes, social security, and Medicare from [his] pay check and reported his wages and the amounts withheld to the IRS on a Form W-2, which is used for employees." Id. at 524. The evidence also showed that the Foundation reunbursed St. Joseph for the "residents' (including Villafani's) salaries and benefits while they were on rotation with the Foundation. . . . The Foundation also paid residents (including Villafani) a housing stipend during their rotation at Brackenridge and provided workers' compensation insurance. While Villafani was on rotation at Brackenridge, the Foundation set Villafani's work schedule and considered him to be its employee, but St. Joseph set Villafani's vacation time and sick leave." Id.
Based on the record, the court concluded the evidence was undisputed that "the Foundation or its agents had the right to direct and control the details of Villafani's medical treatment" in this instance, and therefore, he was "acting as the borrowed employee of the Foundation as a matter of law." Id. at 542. The court explained that the accreditation program required:
St. Joseph, as the sponsoring institution, to assume "final responsibility" for the residency program and for the education quality of that program. Thus, St. Joseph, as the sponsoring hospital, had control over the residents' academic training and exercise that control in the context of setting the parameters of the residents' responsibilities at various stages in their residency experience. Similarly, St. Joseph set Villafani's rotation schedule and could limit the number and kind of patients he saw and the kinds of procedures he performed.
But with respect to the details of patient care at Brackenridge Hospital, St. Joseph's degree of control was quite different. As set forth earlier, the [accreditation program] requirements unambiguously acknowledged and required residents such as Villafani to be supervised-foremost by the attending physician, but also by other, more senior residents. It is undisputed that while a resident was on rotation at Brackenridge, Harshaw, the Foundation's Director of Surgical Education under the Program Contract, was responsible for the residents through the Foundation's teaching staff, which Harshaw appointed subject to the approval of St. Joseph. As Director, Harshaw was also responsible for the residents' specific training assignments. If a resident did not meet the Foundation's standards, the Foundation could withdraw its approval of the resident and immediately suspend him or her from any activities at Brackenridge.
It is also undisputed that Paragraph G of the Program Contract provided that St. Joseph would "not control the details of the medical tasks performed by the residents when they are assigned to CTMF [the Foundation] save through consultation between and the mutual consent of the Academic Chief of General Surgery at St. Joseph Hospital and CTMF's Director of Surgical Education."
Finally, it is undisputed that Harshaw, the Foundation's Director of Surgical Education, was also Wolff's attending physician. It was he who assigned Villafani to assist him in providing Wolff's medical treatment and who was responsible for overseeing and directing the details of that treatment.
These undisputed facts establish conclusively, or as a matter of law, that Villafani was the Foundation's borrowed employee when he treated Wolff. Because the Foundation had the right to direct and control the details of Villafani's medical treatment of Wolff, St. Joseph cannot be vicariously liable as an employer for Villafani's actions.Id. at 543.
Defendant argues the exact same situation is present in this case. The UTHSC/VA residency program contract provides that the staff physicians must be members of the UTHSC faculty and that they would at all times be considered employees of UTHSC. The Chief of each medical specialty would be a member of the UTHSC faculty appointed by UTHSC. The Chief of each specialty in the program would assume accountability for all professional and administrative activities within the program and "professionally direct the research, education and training programs." University Hospital controlled the resident's work schedule, scheduled their vacations, and withheld their taxes. Most importantly, the contract provided that the residents would be under the supervision of the UTHSC staff when providing care to patients during their training. Although the VA did provide malpractice coverage, hospital facilities, patients, and other support services such as parking and laundry service, the VA did not supervise or control the actions of the residents at anytime during their training or patient care.
Despite defendant's analysis and interpretation of St. Joseph, the plaintiffs believe that case is "rendered inapposite and irrelevant by the facts of the case and the fact that the federal government is involved as an employer." Unlike the resident in St. Joseph, the residents here were assisted by VA hospital employees, who also committed negligent acts, and were federal employees certified by the defendant to be its employees acting in the course and scope of their employment at the time the acts were committed. Plaintiffs also contend that the contracts in this case demonstrate the residents were under the complete control of the VA Hospital while they were treating and caring for patients. Plaintiffs rely on the following excerpts from contract documents:
VA retains full responsibility for the care of patients, including the administrative and professional functions pertaining thereto. While in the VA facility, students and residents are subject to VA rules and regulations.
VA and the affiliated school have a shared responsibility for the academic enterprise. The school accepts primary responsibility for the integrated education programs conducted with VA; and VA retains full responsibility for the care of patients, including administrative and professional functions pertaining thereto.
Based on the contract documents, plaintiffs contend it is clear the VA retained full responsibility for the care of its patients and protected residents from personal liability under the FTCA. The only responsibilities assigned to the UTHSC staff physicians were to supervise the residents within the scope of their academic training program, which according to plaintiffs excluded post-operative care such as intubation and extubation. This care fell under the VA's purview. Moreover, plaintiffs maintain that even the fact that UTHSC staff were in supervisory positions at the VA did not effect a transfer of control by the VA to either those staff physicians or to UTHSC.
In support of this assertion plaintiffs refer the Court to US' s Exhibit 2 but without reference to the specific page on which this language is found. The Court could not find the language which specifically excluded elements of "routine and standard patient care" which plaintiff referenced.
In addition, plaintiffs take issue with the fact that on July 16, 2002, the United States filed a Notice of Substitution and a Certification that Dr. Bitner and Dr. Atiya were at all times acting within the course and scope of their federal employment with the government. Then, after an additional eight months passed and the statute of limitations has run for the plaintiffs to add any other defendants, the United States filed this motion claiming it is not liable for these federal employees acting in the course and scope of their employment with the federal government at the time the negligent acts were committed because they were really acting as UTHSC employees at this time. Plaintiffs argue that not only are these two positions inconsistent, they are "supremely unfair." As the record reflects, Dr. Atiya signed a letter accepting an appointment authorization to work as a resident at the VA and took an oath of office when he was appointed, and the federal government certified these residents were in the course and scope of their employment claiming that this was the "exclusive remedy afforded to the Plaintiffs." See United States Memorandum in Support of Notice of Substitution (docket #3) (Government agrees that at time of alleged negligence Dr. Bitner and Dr. Atiya were employees of United States while practicing medicine at the VA; were acting in the course and scope of their federal employment; Section 2679(b) of Title 28 United States Code provides the Federal Tort Claims Act is the exclusive remedy for such claims; upon certification that an individually-named federal defendant was acting within scope of employment with respect to the acts or omissions alleged, action is deemed by "operation of law to be one against the United States of America under the FTCA, and the United States is substituted for the named defendant"). Plaintiffs state that case law supports a finding that residents are "only" employees of the federal government and not employees of the residency program for purposes of medical malpractice committed at VA Hospitals. Ezekiel v. Michel, 66 F.3d 894 (7th Cir. 1995); Costa v. United States, 845 F. Supp. 64 (D. R.I. 1994).
In response, defendant contends it has not taken inconsistent positions because its certification of these doctors as federal employees does not prevent them from being the borrowed employee of UTHSC. The essence of the borrowed servant doctrine is that the borrowed employee is under the employ of more than one employer. Therefore, it is entirely consistent for Dr. Bitner and Dr. Atiya to be federal employees acting within the course and scope of their federal employment yet be under the direction and control of UTHSC. The cases relied upon by the plaintiffs are distinguishable as contrary to the law of this circuit and because the residents in those cases were supervised and trained by VA physicians.
In Ezekiel, plaintiff was a nurse employed at the VA hospital and the resident was employed by the VA hospital and assigned to a psychiatric residency position. Ezekiel v. Michel, 66 F.3d 894, 895 (7th Cir. 1995). The injury to plaintiff occurred during the last year of Dr. Michel's residency program "under the auspices of the Chicago Medical School." Id. at 896. According to the Chief of Human Resources of the VA Hospital, "resident physicians receive specialized training and supervision under VA hospital staff and are considered employees of the VA hospital." Id. Although plaintiff and her husband sued Dr. Michel in his individual capacity, the United States, as it did in the case here, intervened and asked to be substituted as the defendant based on the certification that Dr. Michel was, at the time of the injury, a federal employee "acting within the scope of his employment." Id. The United States also sought to have the complaint dismissed for lack of subject matter jurisdiction because the injured employee was also an employee of the federal government and therefore, her action was precluded by the Federal Employees' Compensation Act. The United States also argued, in the alternative, that plaintiff failed to exhaust her administrative remedies under the Federal Tort Claims Act. Id. Initially, the district court found that Dr. Michel was not a federal employee, but reversed its position after being influenced by the "degree of supervision and control the VA hospital's medical staff had over him." Id at 896-97. The court also rejected plaintiffs' "argument that the Government should be equitably estopped from asserting that Dr. Michel was a federal employee because, in prior cases, the United States avoided liability under the FTCA by characterizing civilian physicians at VA hospitals as independent contractors." Id. at 897. After substituting the United States as the proper party defendant, the district court dismissed the case because the plaintiff was a federal employee and for plaintiff's failure to exhaust her administrative remedies.
On appeal, the court characterized the sole issue as "whether Dr. Michel, a licensed physician participating in a psychiatric rotation residency program at the VA hospital and receiving no compensation directly from the VA hospital, was a federal employee within the meaning of the Federal Tort Claims Act." Id. Although the plaintiffs asked the court to consider the degree of supervision and control the VA hospital asserted over Dr. Michel in determining his employment status, the court reaffirmed its prior position that the "`strict control' test is inappropriate to determine whether a resident physician in training is a federal employee or an independent contractor for purposes of invoking the FTCA immunity." Id. at 901-02. The court explained:
Delving into the degree of control exercised by the Department of Veterans Affairs over the individual physicians working for the VA hospitals may be of little utility in determining whether physicians are federal employees, since those physicians clearly covered by the FTCA may also be considered independent contractors under the "strict control" test. (Citation omitted).
On the other hand, the "strict control" test may be a rational approach to determine a physician's status where the physician's provision of services was pursuant to a contractual agreement and his or her relationship to the government is not unambiguously governed by statute to be an employer-employee relationship.
In any event, even if we were to apply the "strict control" test to the present case, the result would be the same. Dr. Michel was a resident physician in training, and not a board certified psychiatrist. His principal role at the VA hospital was to receive specialized training in the field of psychiatry and experience in performing patient care assignments. As such, Dr. Michel was certainly subject to a higher degree of supervision and control by the VA hospital medical staff than would be a private physician acting as an independent contractor under contract with the government.Id., at 903. The court also noted that the Chicago Medical School, the co-sponsor of the residency program "considered Dr. Michel to be under the direct supervision and control of the VA hospital's medical staff or any other approved hospital while serving in that facility's training program." In a footnote, the court wrote:
Even if Dr. Michel could also be considered an employee of the Chicago Medical School, it does not change our analysis. Dr. Michel was under the supervision and control of the VA hospital's psychiatric medical staff at that particular time in his residency training program while providing medical services for the VA hospital. Under the "borrowed servant" doctrine, an employee directed or permitted by his employer to perform services for another may become the servant of such other in performing the services if the temporary employer exercises such control over the conduct of the employee as would make the employee his servant. See Restatement (Second) of Agency § 227 (1958). Thus, even assuming that Dr. Michel's primary employer was the Chicago Medical School, his primary employment with the residency program will not prevent him from being considered an employee of the government.Id., at 903 n. 16. The court also found the fact that no one from the VA's staff was actually supervising Dr. Michel of no consequence. Id., at 904. "The concept of supervision," according to the court, "does not connote the continuous presence of a superior. Where as here the resident's challenged conduct involved the simple and routine medical task of drawing blood from a patient, it could hardly be expected that a VA medical staff member should have been on site to supervise him." Id. Accordingly, the court found Dr. Michel was a government employee even if the "strict control" test were applied. Id. In Costa v. United States Department of Veteran's Affairs, 845 F. Supp. 64, 64-65 (D. R.I. 1994), the issue before the court was whether to allow the United States to substitute itself for the Department of Veterans Affairs, a physician, and residents, serving part of their residency at a VA hospital, pursuant to the Federal Tort Claims Act. Plaintiff underwent a surgical procedure performed by a doctor and resident and received post-operative care and treatment from a second resident. Id at 66. Plaintiff claims the negligence of these doctors caused her injuries. Id The United States argued that the Department of Veterans Affairs could not be sued directly, that the physicians were employees of the VA hospital and entitled to immunity, and the United States must be substituted in as the defendant.Id Plaintiff argued the physicians were independent contractors and not employees of the VA. Id
In discussing the status of the two resident doctors, the court provided the following analysis:
As residents, Dr. McLeod's and Dr. Cavanaugh's positions are different from Dr. Lathrop's. Residents are normally employees of their respective residency programs. Dr. McLeod's residency was with Brown University while Dr. Cavanaugh's was with the Women Infants Hospital. As residents, these two doctors would rotate to different hospitals in Rhode Island to gain experience in various areas of medical practice. Plaintiff argues that since Dr. McLeod was under contract to Brown University and Dr. Cavanaugh was under contract to Women Infants, they were employees of those respective residency programs. That assertion is valid. But plaintiff continues by arguing that those doctors were, therefore, precluded from becoming employees of the VA Hospital. This is where plaintiff's argument goes awry. Despite the biblical advice that no servant can serve two masters, the modern common law tells us otherwise. Under the lent servant doctrine, an employee of one employer can serve another. According to the Restatement, "A servant directed or permitted by his master to perform services for another may become the servant of such other in performing the services." Restatement (Second) of Agency § 227 (1958). The same factors are used to determine employment status with respect to the first employer as the second. Id. cmt. c. The Restatement further notes that, "If . . . the temporary employer exercises such control over the conduct of the employee as would make the employee his servant were it not for his general employment, the employee as to such act becomes a servant of the temporary employer." Id. cmt. d. Thus, if the two residents here are considered employees of the VA Hospital under the Lilly approach ["strict control test" used in the 10th Circuit, Lilly v. Fieldstone, 876 F.2d 857 (1989)], their primary employment with their respective residency programs will not prevent them from being entitled to immunity as government employees.
According to the depositions submitted by plaintiff, Drs. McLeod and Cavanaugh were temporarily appointed to the VA Hospital as residents. While there, they had no independent patient load, nor did they have the privilege to admit patients. At all times they were subject to direct supervision and control by attending VA physicians. Neither ever used independent judgement in the treatment of a patient. As residents, they observed and often gave input into patient care, but final decisions were made by either a senior resident or the attending physician. Although Drs. Cavanaugh and McLeod were employees of their respective residency programs, it is clear to the Court that while they served at the VA Hospital they were under the complete control of the Hospital through its employees. Thus, under the lent servant doctrine, they are also considered employees of the VA Hospital and thus the United States government.Id. at 68-69. Accordingly, the court allowed the United States to substitute in as the defendant for these residents.
Here, the United States does not dispute that Dr. Bitner and Dr. Atiya were federal employees for purposes of the FTCA but contends they were the borrowed servants of UTHSC. Although the courts in Ezekiel and Costa were focused on the employee issue, both based their decisions in part on the fact that the residents received their supervision and training from VA physicians/employees. From the Court's review of the record thus far, it appears the direct supervision and training of Dr. Bitner and Dr. Atiya came from UTHSC and not the VA. Therefore, the Court does not find these cases support plaintiffs' argument.
In their next argument, plaintiffs contend the United States could be held liable for the actions of Dr. Bitner and Dr. Atiya if these residents are found to be the dual employees of the VA and UTHSC. In support of this contention, plaintiffs cite Palmer v. Flaggman, 93 F.3d 196, 198 (5th Cir. 1996). Based on Palmer, plaintiffs maintain the borrowed servant inquiry only becomes relevant after one determines whether an employee's actions are within the scope of his general employment. Assuming they are, both employers will be vicariously liable for the employee's actions.
Plaintiffs state that ordinarily the entity with the "right to control" the employee at the time of the accident is the "employer." The "right to control" test is applied in both a borrowed servant and a dual employer situation. In a true borrowed servant situation, an employee of a general employer temporarily works for another, special employer. If the special employer has the exclusive right to control the manner and details of the work during the temporary period, the employee is a borrowed servant, and the special employer becomes the employer during the temporary term. If, the employee remains under the control of the general employer while performing services for the special employer, however, the worker remains an employee of the general employer. Plaintiffs claim Dr. Bitner and Dr. Atiya remained under the control of both the federal government and the VA while working at the hospital. Either way, the residents qualified as dual employees because both employers shared the right to control them. According to the plaintiffs, the key difference between the two doctrines is that under the borrowed servant doctrine, the general employer relinquishes the right to control the employee to the special employer while both employers share control under the dual employer doctrine.
Based on this analysis, plaintiffs claim the argument presented by the United States makes no sense. To be the borrowed servants of UTHSC, the VA had to be the general employer of the residents and had to have relinquished all control to UTHSC. Although the facts here do not support that contention, plaintiffs contend the dual employee situation is supported. In addition, even if the assumption is made that the federal government became the general employer, plaintiffs maintain there is no inference the VA surrendered complete control over the employees as set forth in Starnes v. United States, 139 F.3d 540 (5th Cir. 1998); Ward v. Gordon, 999 F.2d 1399 (9th Cir. 1993);Abraham v. United States, 932 F.2d 900 (11th Cir. 1991).
With respect to the argument of "complete control," the United States, in response, states it is not sure where plaintiffs' theory came from but it certainly is not Texas law. Based on St. Joseph Hospital v. Wolff, 94 S.W.3d 513, 527 (Tex. 2002), all that is required under Texas law is that the borrowing employer "direct and control the employee with respect to the details of the particular work at issue." Moreover,Palmer v. Flaggman does not support plaintiffs' complete control theory either. Here, the UTHSC contract clearly states that UTHSC will" [p]rofessionally direct 100 percent all operative cases"; the staff practitioners are "responsible for the care provided to each patient" and "all residents will function under the supervision of staff practitioners"; the staff practitioners have the responsibility to "direct the care of the patient and provide the appropriate level of supervision based on the nature of the patient's condition, the likelihood of major changes in the management plan, the complexity of care; and the experience and judgment of the resident being supervised"; the "supervising staff physician is held accountable for the actions of the resident and in effect establishes that a given resident is capable of performing a given procedure or treatment on a given patient"; and UTHSC was to provide surgical services to include clinic visits, follow-up care, SICU, and new workload for the Cardiothoracic Surgery residency. In addition, it was agreed that the staff practitioners/physicians were not to be considered VA employees for any purpose and were to be considered the employees of the contractor, UTHSC. Defendant asserts the contract language could not be more clear that the residents were not dual employees but were under the direct control of UTHSC.
Physician defendants Miller, Johnson and Shah acknowledge in their response to the defendant's motion (docket #45) that at all relevant times, they were employees of UTHSC. As set forth in defendant's exhibit 1, at Tab D, section 3, "Physicians assigned by the Contractor [UTHSC] to perform the services covered by this contract shall . . . hold a faculty appointment at the University of Texas Health Science Center at San Antonio."
In reviewing the cases cited by the plaintiffs in support of their complete control and dual employer arguments, the Court notes that all of these malpractice actions were brought against active duty military physicians assigned to private hospitals. Starnes v. United States, 139 F.3d 540, 541 (5th Cir. 1998) ("Dr. Hardiman was on active duty in the United States Army at the time and was on rotation at SRCH [Santa Rosa Children's Hospital] pursuant to a Military Training Agreement . . . between the United States Army and SRCH"); Palmer v. Flaggman, 93 F.3d 196, 198 (5th Cir. 1996) ("Dr. Graham was an active-duty commissioned officer in the United States Air Force, and was assigned to NCH [Bedford-Northwest Community Hospital, Inc.] to complete a residency in orthopedic surgery"); Ward v. Gordon, 999 F.2d 1399, 1400 (9th Cir. 1993) ("[a]t the tune of the alleged negligence, Gordon, an active-duty officer in the United States Army, was enrolled in a six-month residency program at Children's Hospital and Medical Center"); Abraham v. United States, 932 F.2d 900, 901 (11th Cir. 1991) (suit filed "alleging two military physicians who were participating in surgical rotations at University Hospital"). In addition, all of these cases were decided before the Texas Supreme Court applied the borrowed servant doctrine to physicians. Starnes, 139 F.3d at 543 ("Texas courts have yet to apply the borrowed servant doctrine to physicians"). Two of the cases, Ward v. Gordon, andAbraham v. United States, involved the application of the borrowed servant doctrine under Washington and Florida law and are therefore distinguishable.
It appears that plaintiffs' theory of exclusive control evolved from these cases. The four factors which are considered significant in determining the borrowed servant issue under Washington law are: "(1) whether the `borrowing master' has the right to hire and fire the servant; (2) whether the `borrowing master' has the right to direct the manner in which the servant performs his duties; (3) whether the value of any equipment the servant brings with him has any bearing on the servant's continued relationship with the `borrowing master'; and (4) whether the `borrowing master' exclusively controls or has the exclusive right to control the servant." Ward v. Gordon, 999 F.2d 1399, 1403 (9th Cir. 1993) (emphasis added). Likewise, the Florida Supreme Court held that "an employer may be relieved of its respondeat superior liability through the borrowed servant doctrine only if another employer assumes complete control of the servant."Abraham v. United States, 932 F.2d 900, 902 (11th Cir. 1991) (emphasis added). Thus, these cases are distinguishable.
In reversing the district court's finding that Dr. Hardiman was the borrowed servant of the SRCH and the United States motion for summary judgment on liability, the court of appeals in Starnes v. United States wrote:
The lack of an express provision indicating that SRCH had control over Dr. Hardiman's patient care, the provisions of the Agreement which did indicate that the United States accepted liability for the negligence of its employees undergoing training, and the absence of Texas case law applying the borrowed servant doctrine to physicians, lead the court to conclude that the borrowed servant defense does not apply to absolve the government of liability for Dr. Hardiman's alleged negligence.Starnes, 139 F.3d at 543. Prior to reaching its decision, the court recognized the borrowed servant doctrine had been applied in Palmer but distinguished that case by noting that the agreement in that case gave "exclusive control over the military residents to the hospital. . . . [and the] hospital agreed to obtain liability insurance to satisfy any claims brought against the resident." Id.
In Palmer, the court was asked to determine whether "under Texas state law, the scope of employment inquiry is separable from the control inquiry and the ultimate issue of liability." Palmer, 93 F.3d at 201. If these issues are separable, the court concluded that the borrowed servant doctrine would not prevent the doctor from being within the course and scope of his employment. The court acknowledged that most cases involving more than one employer focused on and resolved the issue of who had "`control' over the tortfeasor, and hence the liability." Recognizing that Texas courts had not directly addressed the dual employer issue, the court was faced with deciding the issue as it believed "the Texas Supreme Court would have decided it, if confronted with the issue directly." Palmer, 93 F.3d at 202. The court theorized that the scope of employment was separate from the control inquiry based on the fact that Texas law was clear in allowing a person to serve a general and special employer simultaneously but assigning liability only to the "`special employer' who had control over the act in question." Id., at 204. Therefore, the court concluded an employee could simultaneously serve two masters and act within the scope of employment for two employers. Id. Prior to reaching its holding the court stated:
In addition, we note that, in the absence of the written agreement between the Air Force and HCH, the "borrowed servant" doctrine could conceivably not absolve the Air Force of liability under Texas law. At least one Texas court has stated that "unless the obligations of the masters conflict . . . there is no reason to exculpate one and bind the other vicariously for the sin of the servant." Even if the borrowing master is liable for the acts of the servant, "the general employer remains liable if the act fell within the scope of the employee's general employment." The borrowed servant inquiry seems to become relevant only after one determines whether an employee's actions are within the scope of his general employment.Id. The court concluded that Texas law did not include, for purposes of deciding scope of employment, the additional element of control. Id. Control was only relevant to ultimate liability. The court found that the doctor was acting within the scope of employment with the United States and therefore, the United States could properly be substituted in for the defendant, as the United States did in the instant case. Id The court did not address the ultimate issue of liability as is presented in the motion now before this Court. However, the foregoing cases do support defendant's position that the residents can be within the course and scope of employment with the federal government and the government can be absolved of liability based on the borrowed servant doctrine. The Court finds such a case here.
Specifically, the court stated:
Because answering the control question assigns the liability in these cases, the Texas courts have not elaborated on whether the tortfeasor was also within the scope of the non-liable defendant's employment, or whether a tortfeasor is legally able to act simultaneously within the scope of employment of two defendants where only one is ultimately liable."
Accordingly, based upon the foregoing discussion and the argument and authorities presented by the defendant United States, IT IS HEREBY ORDERED that Defendant United States Motion Dismiss and/or in the Alternative, Motion for Summary Judgment (docket #34) is GRANTED IN PART and DENIED IN PART such that Dr. Bitner and Dr. Atiya are considered borrowed servants of UTHSC for purposes of this case and the United States is not liable for their acts. However based on the Supplemental Evidence submitted in this case, IT IS ORDERED that Defendant United States is not DISMISSED from this case because the issue of liability as to VA staff and respiratory therapist remain. IT IS FURTHER ORDERED that nothing in this order shall be construed as implying in any form whatsoever that the Court considers the physician defendants vicariously liable for the residents' actions or imposes liability on them based on the borrowed servant doctrine. Those issues are not before this Court.
It is so ORDERED.