CUNDIFF V. JEWISH HOSPITAL
KDC APPELLATE CASE SUMMARY
Rebecca Cundiff, as the Executrix of the
Estate of Phillip Cundiff v. Dr. Allen Cheng, et al.
Case nos. 2019-CA-374-MR & 2019-CA-457-MR
April 16, 2021 Opinion
The Kentucky Court of Appeals recently issued an important opinion dealing with Kentucky’s agency liability analysis. In Rebecca Cundiff, as the Executrix of the Estate of Phillip Cundiff v. Dr. Allen Cheng, et al., 2021 WL 1431855 (Ky. App. Apr. 16, 2021), the Court returned Kentucky’s agency analysis to its roots of control and departed from the multi-factorial test that has sowed confusion for years. In addition, the Court performed the first appellate application of the Supreme Court’s opinion in Sneed v. Univ. of Louisville, 600 S.W.3d 221 (Ky. 2020).
The facts are relatively straightforward: Phillip Cundiff had a medically necessary cardiac bypass surgery in July 2015. The surgery was performed at Jewish Hospital by Dr. Allen Cheng, a University of Louisville Physicians, Inc., employee. During the procedure, Cundiff had significant bleeding, requiring Dr. Cheng to re-open his chest and control with surgical sponges packed around the heart. A few days later, Dr. Cheng performed a follow-up procedure to remove the surgical sponges and close Cundiff’s chest. Dr. Cheng removed two sponges not listed in Cundiff’s medical chart. Due to the emergent nature of Cundiff’s bleeding, there was confusion as to how many sponges had been used. Thus, Dr. Cheng ordered intraoperative x-rays to ensure all sponges had been removed. Dr. Erik Dowden, a nondefendant radiologist employed by Radiology Specialists of Louisville (also not named as a defendant), read the x-rays and reported no sponges were in Cundiff’s chest. Relying on Dr. Dowden’s report, Dr. Cheng closed Cundiff’s chest. A subsequent CT scan, however, showed Dr. Dowden’s x-ray read was incorrect and two surgical sponges were remaining in Cundiff’s chest cavity, allegedly causing significant permanent injury.
Cundiff’s counsel never attempted to include Dr. Dowden, or any other radiologist, as a named defendant in the case, despite disclosing a radiology expert critical of Dr. Dowden. Instead, Cundiff’s theory was that Jewish Hospital was vicariously liable for Dr. Dowden’s conduct. The Jefferson Circuit granted summary judgment on the issue before trial (which resulted in a defense verdict) and Cundiff appealed that determination, arguing that Dr. Dowden was Jewish Hospital’s actual and ostensible agent.
The Court began its actual agency analysis by pointing out that historically Kentucky had recognized nine factors stemming from the Restatement of Agency and the Restatement (Second) of Agency “in quite different ways in two separate branches of our jurisprudence”: (1) “whether a third party is liable to a claimant for a tortfeasor’s negligence based on the doctrine of respondeat superior”; and (2) “whether an employee-employer relationship implicates the legislative scheme, not whether the employer was responsible for his employee’s tortious conduct.” Id. at 6–7. The use of the Restatement factors in these two branches has, as the Court pointed out, caused confusion for decades.
The Court then engaged in a historical review of the factors and how they came to be used in such different contexts. In doing so, the Court pointed out that the nine factors have always related to control, even including Restatement (Second) of Agency § 220 in its entirety for the first time. The Court made clear that “[t]he critical factor for purposes of respondeat superior liability is control.” Id. at 10. The Court even pointed out that the Restatement (Third) of Agency § 7.07 “eliminated the nine factors to focus on control as the critical factor justifying a master’s respondeat superior liability.” Id.
But the Court pointed out that confusion exists because previous “opinions have not clearly explained why respondeat superior jurisprudence always emphasizes the control element, while non-respondeat superior jurisprudence had good reasons to, and does, de-emphasize it.” Id. at 11. In the initial interpretations of novel workers’ compensation statutes, “Section 220(2) proved helpful in determining the employee-employer relationship for tax purposes.” Id. at 12. Eventually “Professor Arthur Larson published his much-heralded work that became known simply as Larson’s Workmen’s Compensation Law (1952)” where he “incorporated, word-for-word, only that part of Section 220(2) that made up the nine factors and discussed them in the context of workers’ compensation law.” Id. at 13. Kentucky courts latched on to Larson’s work and his use of the factors and they “took on a life of their own, entirely disengaged from the rest of the Restatement of Agency, and especially disengaged from Section 2 and Section 220(1), both of which undeniably emphasized the element of the master’s control of the servant’s work.” Id. at 16. In those non-respondeat superior liability cases, no factor was emphasized more than another—this analysis, however logical it may be in those cases, seeped into respondeat superior cases.
The Court disentangled these two areas of Kentucky law: “While the nine factors were serving our non-respondeat superior jurisprudence as a crutch in its struggle to find footing, Kentucky respondeat superior jurisprudence applied the full Restatement in a long line of cases.” Id. at 22. In other words, since the Restatement’s first cite in respondeat superior cases in 1943’s Courier Journal & Louisville Times Co. v. Akers, 175 S.W.2d 350 (Ky. 1943), “the decisive factor was whether the master controlled or had the right to control the specific work of the alleged tortfeasor.” Id. at 22. After all, even before the Restatement was cited, “the master’s control over his servant, and thereby his ability to safeguard against the servant’s tort, is the raison d’être of respondeat superior liability.” Id. at 8. And on this “pivotal question,” the Cundiff Estate actually admitted that “Jewish Hospital did not control the radiologists’ work” in its brief—summary judgment, therefore, was appropriate.
Returning actual agency’s analytical focus to control is a welcome announcement and departure from the factors’ perpetual misuse, both by courts and plaintiff’s attorneys. Defense counsel has long advocated that control is the key to vicarious liability, but courts had simply refused to endorse that as clearly as the Court of Appeals did here. This opinion should be cited in every vicarious liability motion for summary judgment going forward, especially because it thoroughly rejects any attempt at arguing summary judgment should be denied simply because some factors may weigh in favor of vicarious liability.
As for ostensible agency, the Court’s analysis was a straightforward application of the Supreme Court’s Sneed decision. Notably, though, this is the first appellate opinion interpreting or applying Sneed since it was issued in April 2020. The Court started, however, by pointing out that Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255 (Ky. 1985), was limited to its facts, i.e. emergency-room providers. In the Court’s view, “scheduled medical procedures involving specialists who never see the patient in person . . . present categorically different sets of facts that, generally speaking, making a finding of ostensible agency less likely.” Id. at 26.
Relying on Sneed, the Court emphasized that “Jewish Hospital took reasonable steps to notify patients they would be treated by independent contractor physicians” by presenting Cundiff and his wife with multiple consent forms to sign that indicated his care may be provided by physicians not employed by the hospital. Id. at 30. These forms could have been clearer, the Court admitted, but they were sufficient to defeat the oft-cited presumption of agency in Paintsville Hosp., as the Supreme Court held in Sneed. In an attempt to overcome Sneed, the Cundiff Estate claimed that radiologists wore identification badges that “would have given Cundiff the impression the radiologists were indeed employees if [he] did meet one of them.” Id. at 28. The Court rejected this out of hand: “We fail to see how badges Cundiff never saw on a doctor he never met could possibly create an impression of an employee-employer or agent-principal relationship.” Id.
The Court’s analysis was entirely consistent with Sneed. If a hospital (or any other entity, for that matter) undertakes reasonable steps to notify the public that they may receive services from individuals who are not employees, ostensible agency is inappropriate. The entity does not have to notify the public in a perfect manner as long as there is no evidence of deception or other evidence indicating the entity is holding out the individuals as employees.
The importance of this opinion, especially in medical-malpractice cases where agency issues are routinely litigated, cannot be overstated. As previously outlined in this publication, Kentucky’s agency analysis (or traditional respondeat superior, as the Court of Appeals used in Cundiff) has long been confusing and change was welcome.[1] Returning the analysis’s focus to control is a positive development for defense counsel and should result in summary judgment being more routinely granted.
*Note: At the time of this publication, the Cundiff Estate has requested discretionary review with the Kentucky Supreme Court, and Jewish Hospital and Dr. Cheng have filed responses. The Cundiff Estate sought discretionary review only as to the Court of Appeals’ application of Sneed. An order on the Cundiff Estate’s motion is not expected for a number of months. KDC members should monitor developments closely and KDC will provide updates as they become available.
[1] See Joey Wright, Kentucky Agency Analysis — The Time has Come for Change, Common Defense Spring/Summer 2020.