Smith v. Ohio State University Hospitals

Because I do not agree with the conclusion reached by the majority, I respectfully dissent. The crucial issue in this case is whether Jeffrey York, M.D., was acting as an employee of the Ohio State University Hospitals when he performed surgery on the plaintiff, Claude E. Smith. As noted by the majority, the relevant statutes for purposes of determining whether one is entitled to *Page 417 immunity are R.C. 2743.02(A), 9.86 and 109.36. R.C. 109.36 currently defines an officer or employee as follows:

"(A) `Officer or employee' means any person who, at the time a cause of action against him arises, * * * is employed by the state or any person that, at the time a cause of action againstthe person, partnership, or corporation arises, is rendering medical * * * services pursuant to a personal services contractor purchased service contract with a department, agency, or institution of the state * * *." (Emphasis added.)

Thus, pursuant to R.C. 109.36, 9.86 and 2743.02, a person has personal immunity if he or she is an employee as defined by R.C.109.36 and if his or her actions are within the scope of employment.

Although I agree that this court should apply the prior version of R.C. 109.36, I am persuaded that York was rendering medical services pursuant to a personal services contract with a department, agency, or institution of the state and is, therefore, entitled to immunity. Clearly, University Hospitals entered into a contractual obligation with the Department of Rehabilitation and Correction ("DRC") to provide medical services to the inmates at the Orient Correctional Institution. University Hospitals then entered into an agreement with the Department of Surgery Corporation ("DSC") to provide these services. As noted by the majority, York was required to be an employee and shareholder of DSC in order to accept the position as assistant professor of urology/surgery at the Ohio State University.

Before it was amended in October 1994, R.C. 109.36 read as follows:

"`Officer or employee' means any person who, at the time a cause of action against him arises, * * * is employed by the state or * * * is rendering medical * * * services pursuant to a personal services contract * * * with a department, agency, or institution of the state. * * *"

I would find that the prior version of R.C. 109.36 was broad enough to support a finding of immunity, given the facts of this case. I also believe that the amended language of R.C. 109.36 was simply added to help clarify that one is entitled to immunity when rendering medical services pursuant to a contract with a department, agency, or institution of the state, regardless of whether that contract is labeled a "personal services" contract or a "purchased services" contract.2 The reality is that hospitals often contract out for medical services, *Page 418 such as emergency room services. Yet given the majority's reading of the prior version of R.C. 109.36, a state hospital could avoid liability by simply placing a corporate entity between itself and the doctors that rendered services on behalf of the hospital.

At oral argument, and in the briefs, both appellants argue that the language "pursuant to a personal services contract" essentially requires that York be a party to a personal services contract. Appellants also argue that a corporation, such as DSC, cannot be a party to a personal services contract, given DSC's corporate nature. Therefore, appellants argue that, even if York was rendering medical services pursuant to the contract between DSC and University Hospitals, the contract did not qualify as a "personal services" contract, since DSC is a corporation and not an individual. Research has revealed only one case that addressed the issue of whether a corporation could be a party to a personal services contract, and that case specifically stated that a personal services contract existed notwithstanding the corporate nature of one of the parties. See Ford, Bacon Davis,Inc. v. Holahan (C.A.5, 1962), 311 F.2d 901, 904.

Moreover, I would note that the language of R.C. 109.36 requires that one be rendering medical services pursuant to a personal services contract; the statute does not specify that one be a party to a personal services contract. I would also note that there are two agreements in this case: one agreement between University Hospitals and DRC, and one agreement between University Hospitals and DSC. It is undisputed that University Hospitals is an institution of the state for purposes of R.C.109.36(B) and (D). Thus, if York was rendering medical services pursuant to either one of these agreements, and if either one of these agreements constitutes a personal services contract, I would find that York's conduct falls within the language of the statute.

The majority takes note of the fact that the agreement between University Hospitals and DSC did not dictate which of the various doctors affiliated with DSC would provide the care. The majority also notes that if York had a personal services contract with anybody, it would have to be with his direct employer, DSC. Apparently, the majority is convinced that, in order to constitute a personal services contract, someindividual must either be a party to the contract or, at a minimum, be named in the contract.

I believe the flaw in this argument is that it centers on the actual parties to a contract or individuals named therein, rather than the nature of the contract, i.e., a contract forpersonal services. Generally speaking, a personal services contract is one in which the provider of the services is vested with discretion in accomplishing *Page 419 the assigned tasks because his skills, knowledge, experience and expertise are unique to the area and cannot be duplicated by others not similarly qualified. See Yellow Cab of Cleveland,Inc. v. Greater Cleveland Reg. Transit Auth. (1991), 72 Ohio App.3d 558,563, 595 N.E.2d 508, 510-511.

Clearly a surgeon's skills, knowledge, experience and expertise are unique and cannot be duplicated by others not similarly qualified. University Hospitals entered into an agreement with DSC because it was seeking out DSC's expertise in providing qualified surgeons to help University Hospitals meet its contractual obligation to DRC.

Moreover, given that the nature of the contract between University Hospitals and DRC was to provide specialized skills, and given that York was operating on Smith pursuant to and because of that very contract, I would find that York is entitled to immunity.

As noted by the majority, the issue in this case is not simply resolved, because the relationship between University Hospitals and DSC, given these facts, is unusual. Most of the cases cited by the parties involve fact patterns where a physician wears two hats: one when he or she works as an employee for the benefit of the state hospital, and one when he or she works as an employee of the private corporation for the private corporation's benefit.

This is not a case where York performed surgery on a private patient for a fee, no part of which was paid over to University Hospitals. See Klingel v. Ohio State Univ. Hosp. (1995), 72 Ohio Misc.2d 25, 655 N.E.2d 457; Katko v. Balcerzak (1987), 41 Ohio App.3d 375, 536 N.E.2d 10; and Cox v. Ohio State Univ. Hosp. (Mar. 2, 1994), Ct. of Cl. No. 92-08038, unreported.

In the instant action, York was conducting business, via DSC, in order to fulfill University Hospitals' contractual obligations to DRC. Moreover, DSC was paid a lump sum each month; DSC was not getting paid on a fee-for-service basis. More important, York's efforts in this case were not solely to improve the financial condition of DSC, as they were in theKlingel case; rather, York's efforts were to help University Hospitals fulfill its contractual obligation to DRC. Arguably, York's efforts did not improve the financial condition of DSC insofar as DSC provided those services for approximately thirty to thirty-five percent per patient of what DSC would charge a private patient.

Thus, I would find that the instant action does not involve a "scope of employment" question, insofar as York was not handling patients on a fee-for-service basis and handing the profits over to DSC. Cf. Nichols v. Villarreal (1994), 94 Ohio App.3d 173,640 N.E.2d 557. Rather, University Hospitals was paying DSC a lump sum for York's services. Given that York was only performing surgery on Smith because University Hospitals had a contract with *Page 420 DRC, and given that his performance was because of and "pursuant to" that contract, I would find that York is entitled to immunity under the former version of R.C. 109.36.

For those reasons, I believe that the above factors support the trial court's conclusion that York was acting pursuant to a personal services contract, and was acting as an employee of University Hospitals for purposes of R.C. 109.36. Accordingly, I would overrule Smith's first assignment of error and University Hospitals' sole assignment of error.

However, I would sustain Smith's second assignment of error. R.C. 9.86 provides that an employee will be entitled to immunityunless the employee's actions were manifestly outside the scope of his or her employment or official responsibilities, or unlessthe officer or employee acted with malicious purpose, in badfaith, or in a wanton or reckless manner. It is undisputed that York performed a prostatectomy on Claude E. Smith, and that the person who was to receive the prostatectomy was Claude A. Smith.

York testified that he performed the prostatectomy on Smith in July 1992 based on an ultrasound-assisted biopsy of April 1992. The biopsy report identified the patient as Claude E. Smith. York testified that the name and identification numbers on the patient's chart all indicated that Claude E. Smith was the patient with cancer and was the patient in need of surgery. Unfortunately, the record does not contain this chart, nor is there anything in the record to reflect whether Claude E. Smith consented (or refused to consent) to this surgery. The record does not contain any testimony by Claude E. Smith, and, again, there is no consent form in the record to demonstrate that Claude E. Smith consented to this surgery. The only testimony pertaining to this issue is York's, and he did not affirmatively testify that he received consent; nor did he testify that Claude E. Smith ever refused consent. Given the state of the record, and given that the weight to be given the evidence and the credibility of witnesses are primarily for the trier of fact, I would affirm the trial court's finding that York acted within the scope of his employment when he operated on Smith. State v.DeHass (1967), 10 Ohio St.2d 230, 39 O.O.2d 366, 227 N.E.2d 212.

However, I would also find that the trial court failed to address the issue raised in Smith's second assignment of error.

In his second assignment of error, Smith argues that York failed to advise him of his suspicion that the wrong person had been operated upon. It is Smith's contention that York withheld true facts regarding his medical condition and that this constitutes malicious purpose, bad faith, and/or a wanton or reckless manner for purposes of R.C. 9.86. Thus, Smith argues that the Court of Claims erred in concluding that York did not act with malicious purpose, in bad faith, or in a *Page 421 wanton or reckless manner and further argues that the Court of Claims erred because it simply did not address York's actions after the surgery.

I would find that there is evidence to support the trial court's conclusion that York did not act outside the scope of his employment when he operated on Smith. However, the trial court failed to make any finding as to whether York's actions after the operation were within the scope of his employment and/or whether York acted with malicious purpose, in bad faith, or in a wanton or reckless manner. Thus, I would sustain Smith's second assignment of error and remand for the sole purpose of having the trial court determine whether York's actions after the surgery were within the scope of employment and are entitled to immunity.

For all of the above reasons, I respectfully dissent.

2 I do believe that, under the current version of R.C.109.36, the agreement between University Hospitals and DSC fits more neatly into the "purchased services contract" language. But I would also find that the majority opinion has restricted the meaning of "personal services contract" under the prior statute in an effort to give some effect to the meaning of "purchased services contract" in the current version. Again, it is my contention that the prior version was broad enough to give York immunity, but that the amendment to the statute helps to further clarify what protection was intended by the statute all along.