Present: Carrico, C.J., Lacy, Keenan, Koontz, Kinser, and
Lemons, JJ.
MARGARET L. ATKINSON
OPINION BY
v. Record No. 000934 JUSTICE LAWRENCE L. KOONTZ, JR.
March 2, 2001
ROMAN SACHNO, JR., M.D.
FROM THE CIRCUIT COURT OF THE CITY OF STAUNTON
Humes J. Franklin, Jr., Judge
In this medical malpractice case, we consider whether the
trial court properly held that a physician providing consultant
services for an agency of the Commonwealth was not an
independent contractor and was entitled to the protection of the
doctrine of sovereign immunity from liability for his alleged
acts of negligence.
BACKGROUND
The material facts are not in dispute. Dr. Roman Sachno,
Jr., is a licensed physician specializing in internal medicine
in a private practice in Staunton, Virginia. Since 1972, Dr.
Sachno has contracted with Disability Determination Services
(DDS), a division of the Virginia Department of Vocational
Rehabilitation, to serve as a consultant physician. Pursuant to
this contract, Dr. Sachno performs various examinations of
claimants for DDS, which is responsible for making disability
determinations for claimants applying for Social Security and
Supplemental Security Income disability benefits.
When DDS determines that the available medical evidence
needed to make a disability determination is insufficient, it
refers the claimant to a consultant physician to undergo a
special “consultative examination” to obtain the needed medical
information. The contract provides that the specific “type of
examination (complete or limited) and/or test(s) purchased
depends upon the specific additional evidence needed for
adjudication after DDS has obtained all available medical
evidence of record.” (Emphasis added). DDS does not provide
treatment or therapeutic services. Thus, the consultant
physicians are utilized by DDS for the limited purpose of
obtaining additional medical evidence to assist DDS in
determining a claimant’s eligibility for disability benefits.
Pursuant to the detailed consultant procedures contained in
the contract, DDS schedules appointments with Dr. Sachno for
claimants to undergo the consultative examinations. Although
Dr. Sachno is not required to accept any referrals from DDS, he
has agreed to perform two or three of these examinations per
week. After an examination is scheduled, DDS sends an
authorization letter to Dr. Sachno detailing the examination
and/or tests to be conducted by him. If Dr. Sachno determines
that further diagnostic tests are necessary, he is required to
obtain authorization from DDS before performing such tests.
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Without specific authorization from DDS, he is not compensated
for conducting additional tests.
In addition to the authorization letter, DDS provides Dr.
Sachno with “consultative examination requirements” which set
forth the various protocols and tests that must be performed in
specific examinations. Dr. Sachno is instructed to examine the
claimant in accordance with the protocols applicable to specific
examinations referred to in the authorization letter. The
protocols and designated tests merely outline what additional
evidence is needed to adjudicate the disability claim. For
example, the protocols and examination outline for the
assessment of a claimant's respiratory status requires the
physician to complete a detailed history and physical
examination of the patient, including a report of (1) height and
weight, without shoes; (2) ancillary studies as indicated on the
authorization; (3) diagnosis; (4) treatment and response; and
(5) prognosis. The consultant physician is free to delegate
certain parts of the examination to qualified support staff.
Dr. Sachno examines claimants referred by DDS in his
private office, using his own medical equipment. DDS does not
assist, directly or indirectly, Dr. Sachno in carrying out these
examinations. After a particular examination is completed, Dr.
Sachno submits a report detailing the results of the examination
to DDS. These reports are considered the property of the Social
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Security Administration. Dr. Sachno then bills DDS for each
examination that he has completed. He is paid a fixed fee by
the Commonwealth for the examination of each claimant referred
to him by DDS under a maximum fee schedule provided by DDS.
Claimants do not pay a fee to Dr. Sachno. No taxes or other
withholdings are deducted from the checks Dr. Sachno receives
from the Commonwealth for his services. Dr. Sachno does not
receive any benefits, such as health insurance, and he will not
receive retirement benefits from the Commonwealth as a result of
his contract with DDS.
It was in the capacity as a consultant physician that Dr.
Sachno examined Margaret L. Atkinson, the plaintiff below.
Atkinson had applied for Social Security disability benefits,
and DDS had referred her to Dr. Sachno in order to verify her
inability to perform work-related activities. Dr. Sachno was
requested to evaluate Atkinson’s respiratory and arthritic
impairments. Dr. Sachno’s examination of Atkinson included,
among other things, ordering a chest X-ray. This X-ray
reflected a possible 12mm nodule which the radiologist reported
as not ruling out “an active process including metastatic
disease.” Dr. Sachno did not advise Atkinson regarding the
results of this X-ray and the contents of the accompanying
report that he received from the radiologist. Approximately
five months later, Atkinson was diagnosed with lung cancer.
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Thereafter, Atkinson filed a motion for judgment against Dr.
Sachno for medical malpractice alleging that he negligently
failed to advise her of the results of the chest X-ray. Dr.
Sachno responded by filing a plea of sovereign immunity.
Following the receipt of briefs, the trial court conducted
a hearing on the plea of sovereign immunity. Atkinson argued
that Dr. Sachno, based upon the undisputed facts, is an
independent contractor and not an employee of the Commonwealth
who may be entitled to the protection of sovereign immunity.
The trial court initially ruled that “[i]ndependent contractors
are not entitled to the protection of sovereign immunity” and
then proceeded to determine whether Dr. Sachno was an employee
of the Commonwealth or an independent contractor. Relying
primarily upon the four-part test for determining whether a
master and servant relationship exists that this Court approved
in Hadeed v. Medic-24, Ltd., 237 Va. 277, 288, 377 S.E.2d 589,
594-95 (1989), the trial court ruled, as a matter of law, that
Dr. Sachno is not an independent contractor.
After deciding that Dr. Sachno was not an independent
contractor, and by implication that he is therefore an employee
of the Commonwealth, the trial court applied the test
established in James v. Jane, 221 Va. 43, 53, 282 S.E.2d 864,
869 (1980), to determine whether Dr. Sachno is entitled to the
protection of sovereign immunity. The trial court concluded
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that Dr. Sachno is entitled to sovereign immunity and sustained
his plea. By final order entered on February 15, 2000, the
trial court dismissed Atkinson’s claim with prejudice. We
awarded Atkinson this appeal.
DISCUSSION
The doctrine of sovereign immunity is indeed alive and well
in Virginia. City of Virginia Beach v. Carmichael Development
Company, 259 Va. 493, 499, 527 S.E.2d 778, 781 (2000); Messina
v. Burden, 228 Va. 301, 307, 321 S.E.2d 657, 660 (1984).
Furthermore, in order for the purposes of the doctrine to be
fully realized, the immunity afforded by the doctrine cannot be
limited to the sovereign only. The cloak of immunity must be
extended to “some people who help run the government . . . for
the state can only act through individuals.” Messina, 228 Va.
at 308, 321 S.E.2d at 661.
The determination that a particular individual is entitled
to the protection of sovereign immunity frequently involves
unique factual considerations when that individual is a
physician. See, e.g., Benjamin v. University Internal Medicine
Foundation, 254 Va. 400, 403, 492 S.E.2d 651, 652 (1997); Lee v.
Bourgeois, 252 Va. 328, 331, 477 S.E.2d 495, 497 (1996).
Essentially this is so because while the Commonwealth may have
an interest and involvement in the function performed by the
physician to accomplish a governmental objective, the means and
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methods used by the physician to exercise his or her required
professional skill and judgment with regard to patients is not
readily subject to the control and direction of others. That
control, or lack of it, is the most significant factor in such
cases in resolving issues of sovereign immunity and respondeat
superior, which are, however, separate and distinct legal
concepts.
In James, we refused to grant immunity to a physician who
was a full-time member of the faculty of a Commonwealth medical
school. 221 Va. at 55, 282 S.E.2d at 870. In that case, we
established a four-part test to determine whether a physician
who was an employee of the Commonwealth was entitled to the
protection of sovereign immunity. Id. at 53, 282 S.E.2d at 869.
Subsequently, we applied that test in Lohr v. Larsen, 246 Va.
81, 85, 431 S.E.2d 642, 644 (1993). Application of the James
test, however, presupposes that the physician seeking the
protection of sovereign immunity is an employee or agent of the
Commonwealth. In other words, the James test is not applicable
if the individual is an independent contractor and, thus, not an
employee or agent of the Commonwealth. ∗ Contrary to Dr. Sachno’s
∗
In McDonald v. Hampton Training School for Nurses, 254 Va.
79, 486 S.E.2d 299 (1997), we observed that the trial court
incorrectly relied upon the sovereign immunity cases of James
and Messina in concluding that a physician was an independent
contractor. McDonald, 254 Va. at 81 n.1, 486 S.E.2d at 301 n.1.
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assertions in this case, the trial court properly ruled that
independent contractors are not entitled to the protection of
sovereign immunity. So that no doubt will exist on that issue,
we expressly hold that while some employees or agents of the
Commonwealth may be entitled to the protection of sovereign
immunity, all independent contractors are excluded from that
protection.
Accordingly, the dispositive question in this appeal is
whether Dr. Sachno is an employee or agent of the Commonwealth,
or is an independent contractor. We defined an independent
contractor in Epperson v. De Jarnette, 164 Va. 482, 486, 180
S.E. 412, 413 (1935). There we stated that an independent
contractor is
[a] person who is employed to do a piece of work
without restriction as to the means to be employed, and
who employs his own labor and undertakes to do the work
according to his own ideas, or in accordance with plans
furnished by the person for whom the work is done, to
whom the owner looks only for results.
Id.
Whether a person is an independent contractor or an
employee is generally a question of fact for a jury; however,
when “the evidence admits of but one conclusion, the question is
We specifically rejected the applicability of James and Messina
to issues regarding respondeat superior, thus limiting their
application to sovereign immunity issues. Id.
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one of law.” Hadeed, 237 Va. at 288, 377 S.E.2d at 594. This
case presents such a question of law.
We recognize that there are abundant tests and criteria
that can be used to determine whether the relationship between
the individual and the Commonwealth is that of an independent
contractor or an employee. See Ross v. Schneider, 181 Va. 931,
939, 27 S.E.2d 154, 157 (1943)(noting numerous criteria to
determine relationship); The Texas Co. v. Zeigler, 177 Va. 557,
566, 14 S.E.2d 704, 707 (1941)(recognizing that many potential
tests exist for determining whether a person should be
classified as an independent contractor). A survey of the many
tests and cases “makes it clear that the individual
circumstances of each case play an important part in answering
the query.” The Texas Co., 177 Va. at 566, 14 S.E.2d at 707.
In Hadeed, a case involving the issue of a physician’s
status as an employee or independent contractor, we used four
factors to resolve that issue: (1) selection and engagement;
(2) payment of compensation; (3) power of dismissal; and (4)
power to control the work of the individual. It is well
established that the fourth factor, the power of control, is
determinative. 237 Va. at 288, 377 S.E.2d at 594-95. We will
apply the Hadeed analysis here.
The following facts are pertinent to that analysis. Dr.
Sachno conducts his full-time practice of internal medicine in
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his private office, using his own equipment, and employing his
own support staff. The number of examinations he may perform in
a given week for DDS is not substantial when compared to the
volume of his regular patients. Dr. Sachno is not obligated to
accept any referrals from DDS. He is paid a fixed fee for the
examination of each claimant referred to him by DDS. No
withholdings of any form are deducted from his compensation
received from the Commonwealth for conducting these
examinations. Dr. Sachno considers himself to be “an
independent physician that is asked to do certain work for the
State.” These facts weigh heavily in support of the conclusion
that Dr. Sachno is an independent contractor and not an employee
or agent of the Commonwealth. However, consideration of the
fourth factor, the power of control, established in Hadeed
compels that conclusion in this case.
The numerous regulations, protocols, and procedures under
which Dr. Sachno must perform the various examinations and tests
sought by DDS merely ensure that the specific and objective
medical evidence needed by DDS is obtained. Indeed, the
contract between Dr. Sachno and DDS provides that the type of
examination and/or tests “purchased” by DDS depends upon the
specific additional medical evidence needed by DDS to resolve a
particular disability claim. In this context, Dr. Sachno
essentially provides a product to DDS: a report detailing the
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results of the requested examinations and/or tests, and
providing objective medical evidence, if any, of a claimed
impairment. Accordingly, the various regulations, protocols,
and procedures under which Dr. Sachno produces that report, or
product, do not constitute control by DDS of the means and
methods by which he performs the examinations and tests.
Rather, Dr. Sachno exercises his professional judgment in making
the medical assessments of a particular claimant’s condition in
order to accurately produce the report requested by DDS. See
McDonald, 254 Va. at 86, 486 S.E.2d at 303 (exercise of
professional judgment by a physician is a factor in determining
extent of control).
Finally, that Dr. Sachno is required to obtain additional
authorization before performing any diagnostic test not
specifically listed in the authorization letter is the result of
pragmatic and monetary concerns, and is not evidence that DDS
controls, or has the right to control, the means and methods by
which Dr. Sachno performs the examinations and tests that are
authorized. The DDS justifies this requirement on the basis
that frequently the information obtainable from additional tests
is already in a claimant’s file and, thus, additional tests
would cause an unnecessary duplication of expense.
“It is only by consideration of all the facts
pertaining to the relationship in any case, including
the provisions of the contract, the actual conduct of
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the parties, and the conditions of the business in
which they are engaged, that it can be determined
whether the [individual] is endowed with that control
over his own methods and means of doing the work which
is the test of an independent contractor.”
The Texas Co., 177 Va. at 568, 14 S.E.2d at 708 (quoting Gulf
Refining Co. v. Brown, 93 F.2d 870, 873 (4th Cir. 1938)).
Because the evidence in this case “admits of but one
conclusion” under Hadeed, we hold, as a matter of law, that Dr.
Sachno is an independent contractor, and not an employee or
agent of the Commonwealth. We further hold that because Dr.
Sachno is an independent contractor he is not entitled to the
protection of sovereign immunity with regard to Atkinson’s claim
against him for medical malpractice.
CONCLUSION
For the reasons stated above, the trial court erred in
sustaining Dr. Sachno’s plea of sovereign immunity.
Accordingly, the final order dismissing the case will be
reversed, and the case remanded to the trial court for further
proceedings consistent with the views expressed in this opinion.
Reversed and remanded.
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