Opinion
FSTCV075003525S
02-22-2017
Barbara Tiplady, Administratrix v. Samuel Maryles, M.D
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT (#285.00)
Kenneth B. Povodator, J.
Background
This is a wrongful death action in which the plaintiff claims that Dr. Maryles failed to act appropriately with respect to the decedent's reported five-day history of headaches and vomiting, resulting in an alleged failure to diagnose the medical condition that caused the decedent's demise. This action was previously tried to a jury in September of 2012, resulting in a defense verdict. The Appellate Court reversed the judgment and remanded the matter for a new trial.
The plaintiff's decedent had gone to the Stamford Hospital Emergency Department (Emergency Room), the basis for the interaction between Dr. Maryles and the decedent. At the time, Stamford Hospital had contracted with an independent entity to provide medical services in the Emergency Room/Department; the defendant Emergency Medicine Physicians Ltd., --the moving party--claims that it was not involved in the interaction between doctor and patient in any manner that might allow liability. It claims that it was not negligent in any direct sense and it has no possible vicarious liability based on the conduct of the doctor. On those bases, it has moved for summary judgment.
The motion was filed after the case had been remanded for a new trial, and the initial brief that had been filed was quickly updated to reflect a thenrecent Supreme Court decision relating to apparent agency--a significant issue in this case. The plaintiff sought an extension of time to respond, claiming a need for extensive discovery, properly noting that prior to the current motion, no attempt seemingly had been made to obtain a dispositive ruling in a case that was commenced in 2007.
The motion was argued on January 9, 2017, with the case scheduled for commencement of jury selection on February 22, 2017 (recently moved to February 24, 2017). Despite the limited time available for writing this decision, the court appreciated the desire/need for the moving defendant to know, as soon as possible, whether it remained a party for purposes of trial, and the court has attempted to accommodate that goal. As discussed below, the court concludes that it must remain a party.
Facts
The defendant, in moving for summary judgment, relies on the following claimed-to-be-undisputed facts (moderately edited from the version set forth in the defendant's brief):
EMP Management Group, Ltd., d/b/a Emergency Medicine Physicians Ltd., is an Ohio limited liability company. (In order to avoid any confusion with a similarly named entity, hereafter it generally will be identified as " LTD"). It is a Medical Services Organization that provides advice and services regarding the management and control of the business and affairs of companies that retain its services.
Emergency Medicine Physicians of Fairfield County, LLC is a Connecticut Limited Liability Company, legally distinct from LTD (and hereafter will be referred to as LLC, to minimize confusion with LTD).
LTD and LLC entered into a management agreement, a copy of which was submitted as part of the summary judgment submission. Paragraph 4 of the Management Agreement, entitled " Nature of Relationship, " states as follows:
Nothing herein shall constitute or create a partnership or joint venture between Manager [EMP Management Group, Ltd.] and Company [Emergency Medicine Physicians of Fairfield County, LLC]. All debts and liabilities to third persons incurred by Manager on behalf of Company in the course of its operations shall be the debts and liabilities of the Company only; and Manager shall not be liable for any such obligations by reason of its management, supervision, direction or operation on behalf of Company. Each person engaged in the operation of the business of the Company shall be deemed to be an employee of Company and not of Manager. In the performance of its duties hereunder, Manager shall act as an independent contractor of Company. Manager shall have sole discretion over the time, effort and skill spent and the means chosen to fulfill its obligations hereunder. Further, Manager shall exercise its own judgment in deciding how, when and where it shall perform its services.
Paragraph 2 of the Management Agreement provided that LTD was to provide LLC with staffing and personnel management services. With the involvement of LTD, Dr. Maryles was hired by LLC (and a copy of that agreement was submitted as part of the summary judgment submission). Pursuant to that agreement, Dr. Maryles was an employee of LLC at all times relevant to the plaintiff's complaint.
Pursuant to the employment agreement, LLC had
sole authority and discretion in respect to [Dr. Maryles] and all other physicians/employees of [Emergency Medicine Physicians of Fairfield County, LLC], to make and coordinate appointments of patients with employees, to determine the fee for services to patients, submit billings for services rendered, to collect, compromise, settle, adjust or abandon billings so rendered, and to determine all other matters pertaining to the relationship among its personnel and the relationship between its personnel and others utilizing the services provided by [Emergency Medicine Physicians of Fairfield County, LLC].
Against this factual backdrop, LTD claims that Dr. Maryles was never directly/contractually employed by LTD, sufficient to allow LTD to be held vicariously liable for his alleged malpractice. It also claims that it had no responsibility to train Dr. Maryles, precluding any direct liability for failing to do so.
The plaintiff, of course, disagrees, noting that Dr. Maryles, in prior testimony, had stated (admitted?) that he had been employed by LTD. Further, while legally distinct, it is clear that LTD and LLC are not " strangers" but rather closely-related entities, not only apparent from the similarity of full names but also from the extent of interrelatedness, starting with the management agreement between the parties as accentuated by the fact that the same individual signed the management agreement on behalf of both entities.
Exploring further the plaintiff's version of relevant facts--with the burden only being that he must establish the existence of a material issue of fact that precludes granting of the motion--the plaintiff expands upon the relationship between LTD and LLC, starting with LTD having established LLC through its own legal department, for purposes of providing services at Stamford Hospital.
The initial Operating Agreement between the two EMP entities provides that
The initial operating agreement provided for termination of the agreement upon addition of any members to LLC. The management agreement, in turn, recited the attachment of an operating agreement, but no such operating agreement was attached to the management agreement as submitted by the parties. Giving the plaintiff as non-moving party the benefit of favorable inferences, the court will treat that initial operating agreement as still in effect in a practical sense, both because of the " missing" attachment and because there was no evidence presented that members were added so as to trigger that automatic termination provision.
[EMP Ltd.] shall direct, manage and control the business of [EMP of Fairfield] to the best of [EMP Ltd.'s] ability and shall have full and complete authority, power and discretion to make any and all decisions and to do any and all things which [EMP Ltd.] deems to be reasonably required in light of [EMP of Fairfield]'s business and objectives. [EMP Ltd.] shall have full authority to bind [EMP of Fairfield] and to make any decisions required to operate [EMP of Fairfield].
Discussion
Preliminary
At the outset, the court perceived there to be two separate--relatively independent--issues presented: was the moving party vicariously liable for the alleged malpractice of Dr. Maryles; and was the moving party directly liable for its negligence with respect to training, screening, etc.?
Initially, and until recently, the court tried to analyze the two issues separately. As a relatively recent development, however, the court discovered an analysis that suggested some level of convergence of the two concepts.
In Moser v. Bertram, 1993- NMSC 040, 115 N.M. 766, 768, 858 P.2d 854, 856 (1993), the court culled the following excerpts from the Restatement (Second) of Agency: The Restatement (Second) of Agency, Section 358(1), states: 'The agent of a disclosed or partially disclosed principal is not subject to liability for the conduct of other agents unless he is at fault in appointing, supervising, or cooperating with them.' The reporter's notes add:
[']The cases are unanimous in holding that a servant or other agent is not liable for the derelictions of fellow workers or other agents of the same principal. In the absence of wrongful directions or wrongful control or some other element involving wrongful conduct, the doctrine of respondeat superior does not apply to agents who are not masters .['] Restatement (Second) of Agency § 358 app. at 602 (1984). (Emphasis added.)
It is not clear whether this was a " loose" use of terminology, or whether the case can readily be extrapolated to other situations. As will be discussed below, the situation here is far from the linear--and therefore more susceptible to analysis--presented in Moser or most other cases addressing tiers of agents.
Indeed, the Third edition of the Restatement now incorporates not only previously recognized categories such as subagents but also coagents (§ 1.04(1)) and the further refinement of superior and inferior coagents (§ 1.04(9)).
Merits
As implicit from the preliminary review of the facts as relied upon by the plaintiff, the plaintiff's position is that anything done or not done by LLC is actually conduct of LTD. In this regard, the court notes the actual extent of control over LLC contemplated by the operating agreement--even beyond the passage quoted above. Immediately after that passage, § 9.2 negates the authority of anyone else--specifically including any " attorney-in-fact, employee or other agent" of LLC--to " bind [LLC] in any way, to pledge its credit or to render it liable pecuniarily for any purpose."
Still further, the operating agreement gave LTD, as manager, the authority to terminate the existence of LLC. Section 12 of the operating agreement, providing for dissolution of LLC, sets forth two scenarios: dissolution by court order or " a result of the decision of the Member and/ or the Manager to dissolve" (emphasis added).
It is against this expanded factual backdrop that the plaintiff contends that the motion must be denied, that there is at least a material issue of fact as to vicarious liability (predicated on the degree of control) and as to direct liability for the failure to ensure that Dr. Maryles was properly trained, not only in the active sense of providing training but also in the sense of screening/vetting prior to his being hired.
In that last respect, the plaintiff identifies the scope of LTD's role in the process by which Dr. Maryles--and physicians in general--had been recruited and screened, prior to his formal employment at Stamford Hospital by LLC. The plaintiff refers to language in the agreement between the EMP defendants, quoted above, which indicates that all decisions with regard to LLC are in EMP Ltd.'s hands. There also was evidence presented as to the actual screening procedures utilized at the relevant time. LTD does not dispute that it played a material role--the only role with respect to EMP entities--in the hiring of Dr. Maryles, including any screening or vetting that did or should have taken place.
Stamford Hospital had to approve of the assignment of any doctor to its facility, so it effectively had a veto power. The evidence suggests that it relied--to at least some degree--on the screening done by the EMP defendants.
As something of an aside, the court notes that appellate courts generally do not get to pick and choose which fact patterns form the bases of pronouncements of legal principles--a specific fact pattern provides a context for articulation of legal principles, but the legal principle is not limited to the precise fact pattern of the case in which the principal is articulated (especially if there are few such appellate cases on a given point). Part of the challenge for advocates as well as the court is determining which existing cases, articulating potentially relevant principles, are best adaptable to the situation at hand. The issue of actual or apparent agency with respect to a hospital, as presented in Menzie v. Windham Community Memorial Hospital, 774 F.Supp. 91, 97 (D.Conn. 1991), discussed in Cefaratti, 321 Conn. at 612, is reasonably well-established, especially post- Cefaratti . The agency/parent agency issue presented by this motion--not involving the hospital--is essentially " one off" from that more typical situation. Perhaps oversimplified, in the hospital situation the question is somewhat linear--did the hospital hire the doctor directly (actual agency) or did the hospital hire an intermediary entity to provide medical services, with that entity hiring the doctor, thereby creating a potential for a claim of apparent agency, the Cefaratti paradigm?
In this regard, the court is a bit puzzled by the use of a quoted passage from A-G Foods, Inc. v. Pepperidge Farm, Inc., 216 Conn. 200, 579 A.2d 69 (1990), explicitly applicable to intentional torts--there is no claim of intentional tort in this case.
The current motion does not involve either scenario. Not directly applicable/adaptable from Cefaratti or other identified cases, the present situation involves the relationship between such an intermediary entity and another familial entity, one with attributes of a parent of the intermediary entity and attributes of status as an agent of that intermediary entity.
The defendant is correct that there is no direct/contractual employment relationship between LTD and Dr. Maryles, in a formal sense. However, the plaintiff repeatedly notes that the doctor, himself, thought that he was an employee of LTD, at least at one time (according to his prior testimony).
The court believes that graphic representations of the positions and evidence may be helpful in understanding the issue as presented.
Given the fact that the LTD formed LLC for the purpose of providing medical services at Stamford Hospital, and the seemingly-undisputed fact that Dr. Maryles was, by contract, an employee of LLC, the following graphic simplistically represents the presumptive relationship among the non-hospital defendants:
Recognizing that it could not claim that it created LLC but had no other relationship to LLC, LTD has acknowledged that it had a management agreement with LLC, but nonetheless claims that it had no vicarious responsibility for the conduct of Dr. Maryles, suggesting the following graphic relationship:
In light of the extensive management duties and prerogatives given to LTD by the management agreement between LTD and LLC, as emphasized by the plaintiff (and the seeming absence of anyone else with any degree of control within LLC), coupled with its status as " parent, " the functional relationship between the two EMP entities suggests that it might be appropriate to modify the foregoing schematic to reflect the status of LTD as both subordinate to, but also controlling, the LLC (as set forth in the management agreement):
This perhaps can be illustrated even more compactly, for purposes of the issues before the court:
Returning to an issue raised by the plaintiff--the " admission" by Dr. Maryles that he was employed by LTD. The court's recollection is that during argument, the court expressed doubt as to whether an owner of a relatively minor to almost de minimis interest in an entity can make admissions on behalf of that entity, solely based on that level of ownership. According to Dr. Bagnoli's deposition errata sheet submitted in connection with this motion, Dr. Maryles' interest in 2015 was approximately 0.01%, and that tends to confirm the court's doubts about treating a statement made by Dr. Maryles as an admission of an entity in which his interest was so small.
However, for purposes of summary judgment, the non-moving party is entitled to the benefit of all favorable inferences (as long as they do not enter the realm of speculation and conjecture), Walker v. Housing Authority, 148 Conn.App. 591, 597, 85 A.3d 1230, 1235 (2014). If a relatively sophisticated employee such as Dr. Maryles, having an explicit employment contract with LLC, cannot readily distinguish between employment by LTD and employment by LLC, inferentially based on conduct of the EMP parties consistent with the above schematics of relationships, then how can the court conclude that there is no material issue of fact as to the existence of vicarious liability of LTD, when the conduct of the parties relating to authority and control is confusing the doctor himself?
This is not a situation where a parent entity simply created an independent subordinate entity. This is not a situation where a parent entity created an independent subordinate entity and the two entities shared administrative functions for the sake of efficiency (benefits administration, etc.). This is not a situation where a parent entity created an independent subordinate entity and the two entities shared administrative functions, and the same individuals had controlling positions in both entities, while maintaining independent existence and operation. In this case, the parent entity created a subordinate which then ceded back to the parent, by way of management contract, the right to control all decision-making by the subordinate. Given the posture of the case--summary judgment--the burden is on the moving party to negate any material issue of fact. In this muddled context, LTD has not conclusively demonstrated that it cannot be vicariously liable for the conduct of Dr. Maryles.
The concept of " employee" is not immutable. In Commission on Human Rights & Opportunities v. Echo Hose Ambulance, 322 Conn. 154, 159, 140 A.3d 190, 192 (2016), the court recognized two different tests for employment status that have been used in connection with discrimination claims. In Cannizzaro v. Marinyak, 312 Conn. 361, 93 A.3d 584 (2014), the court--perhaps imprecisely?--discussed the defendant's control over a worker sometimes in terms of his status as a worker for someone hired by the defendant (seemingly a contractor) while at other times as if the worker were a direct employee of the defendant (" Accordingly, we cannot conclude that under the facts of this case, the defendant knew or should have known of the necessity to exercise control over her employees to avoid the risk that an inebriated employee would injure a third party in a motor vehicle accident on the way home from her property" (312 Conn. at 372-73)).
To return to basic legal principles, the court notes that there has been something of an erosion of the concept that a party is not responsible for the acts of someone not properly characterized as an employee-type agent. If an independent contractor is performing a nondelegable duty, the principal is responsible for any nonfeasance or misfeasance of the independent contractor, not because there is liability for the conduct of the contractor (in a vicarious liability sense), but rather because the contractor did not fulfill the principal's own obligation. Gazo v. Stamford, 255 Conn. 245, 257, 765 A.2d 505 (2001). Cefaratti imposes respondeat superior liability in connection with the existence of an apparent agency, notwithstanding the absence of any agency-type relationship. Note that only in the instance of an apparent agent (or apparent agency) is there a concern for the " appearance" to the party seeking to impose liability--actual agency, or the nondelegable duty exception, does not require the claimant to establish an appearance of agency. An obvious example is that an employer is responsible for the negligence of an employee in the operation of a motor vehicle in the course/scope of employment, regardless of whether there was any indication to the claimant that an agency relationship existed or might have existed, i.e., there is no requirement relating to whether a relationship was apparent.
Therefore, the defendant's argument that there was no conduct satisfying (potentially satisfying) Cefaratti is not determinative, and likewise the existence of the written contract between LLC and Dr. Maryles is not conclusive as to the absence of responsibility of LTD.
Again, the burden is on the defendant to establish a lack of material issue of fact, roughly the equivalent of certainty, that it has no vicarious liability in connection with the alleged malpractice of Dr. Maryles. Again, LTD did not simply create LLC as a separate legal entity in order to isolate its functions from those of LTD (and thereby isolate itself from liability). This is not a situation in which the principals of LTD also were involved in theoretically-autonomous management of LLC. LTD went one step further: in addition to being the parent of LLC, it also contractually became the manager and decision-maker for LLC (at least insofar as the contract provisions cited by the plaintiff are concerned) and seemingly the sole decision-maker, precluding a definitive answer to the question: who is in charge?
The defendant also argues that it has no direct liability, because it had no obligation to train Dr. Maryles. Assuming that to be true--and the foregoing discussion may prevent that point from being definitively determined at this stage--framing the issue in that manner is something of a distortion of the actual claim. The claim directed to both EMP defendants is not as specific as framed by the defendant: " EMP also negligently failed to ensure that Dr. Maryles was properly trained and qualified to provide emergency medical care to patients in the Hospital's emergency department, prior to Dr. Maryles' care and treatment of Linda M. Jablonski" (where EMP is defined as a collective term for both LLC and LTD). As discussed in the plaintiff's opposition, LTD played a role in screening and vetting doctors to be hired by its various " subsidiary" entities, including LLC, which not unreasonably can encompass ensuring that doctors to be hired for various hospitals under the EMP LTD umbrella, before being hired, were adequately trained and qualified. Gazo is even more instructive here, in that despite the absence of any pre-existing responsibility to persons such as the plaintiff's decedent, a negligent undertaking on behalf of someone with a duty to the plaintiff's decedent may result in liability, 255 Conn. at 249-58.
The issue before the court is not whether there is a proximate causal connection between any shortcomings in the screening/vetting process and the ultimate injury, but rather whether the defendant has negated any possibility of such a linkage. Clearly, however one may characterize the relationship between LTD and LLC, the plaintiff has articulated that LTD's undertaking was performed in a negligent manner, and if that negligence caused harm, there is potential liability notwithstanding any isolation of liability that might exist based on corporate structures. The court, of course, is limited to consideration of the issues/grounds advanced by the moving party in its motion, Greene v. Keating, 156 Conn.App. 854, 115 A.3d 512 (2015), and LTD has not negated the possible existence of liability for a failure to ensure that doctors screened by LTD and assigned to Stamford Hospital through LLC were adequately trained for the duties which they were hired to perform.
A number of statutes have been enacted to preclude liability in certain volunteer-type situations where negligent performance might otherwise lead to liability. See, e.g., General Statutes § 52-557b (Good Samaritan law); General Statutes § 52-557f et seq. (qualified immunity for making property available for recreational use); General Statutes § 52-557l (immunity of food donors).
Conclusion
The defendant LTD is correct in stating that summary judgment can be used to narrow issues and/or remove a party prior to trial when the party has no potential liability. The burden/threshold is high--no material issue of fact which, as the court previously noted, is roughly equivalent to certainty. The issue, then, is not whether a moving party has a good argument or a great argument or a convincing argument; the issue is whether, in practical terms, there is absolutely no merit to the contrary argument.
It is clear that LTD has not negated the " direct" claim of negligence to the requisite degree of certainty (no material issue of fact). It was the manager for LLC and appears to have been the sole decision-maker for LLC; if the decision to hire Dr. Maryles was flawed due to inadequate screening and his inadequate training (as claimed by the plaintiff), the active role of LTD seemingly precludes exoneration by way of summary judgment.
The vicarious liability situation is less clear--far more muddied/muddled. At trial, the burden will be on the plaintiff to prove his claims; now, however, the burden is on the defendant to make it clear that there can be no liability (to prevail on this pre-trial motion). LTD created LLC; it created/promulgated the procedures and manuals to be used by LLC employees (including mandatory consultation with non-LLC personnel (mostly if not entirely its own personnel or personnel associated with other subordinate entities) in situations similar to that involving the plaintiff's decedent); it appears to be the sole decision-maker for LLC; it has the apparent authority to dissolve LLC (in its capacity as manager); and even Dr. Maryles was apparently of the belief that he was employed by LTD (or was unable to distinguish between the two entities).
To the extent that the issues are distinct, it is clear that the defendant cannot prevail on its direct liability argument. To the extent that vicarious liability and direct liability converge in some sense, Moser, supra, the result is the same. To the extent that vicarious liability properly must be treated as distinct, the confusing interrelationship of the EMP parties precludes a clear determination that vicarious liability cannot be established. Although the court is extraordinarily reluctant to use " too complicated" as a reason to deny summary judgment, the burden is on the moving party to establish sufficient clarity, which the court finds lacking here.
For all of these reasons, and with the imminence of commencement of jury selection and trial necessitating a decision, the summary judgment motion filed by Emergency Medicine Physicians Ltd. must be denied.