The Oregon Supreme Court last month held that an LLC that leased office space to a physician could not be held liable on an apparent agency theory for physical injuries suffered by the physician's patient.
In Eads v. Borman, the injured patient contended that the landlord, Willamette Spine Center, LLC, through signage on the building and other representations, created the appearance that the building housed a group medical entity of which the physician was an agent. Plaintiff claimed that that the LLC thereby created an apparent agency relationship with the physician.
The Supreme Court noted that an agency relationship can arise from the appearance of consent by one person to allow another to act on its behalf. And a principal can be vicariously liable for the negligence of an agent who is not an employee, but only if the principal actually or apparently had a right of control over the agent's injury-causing actions.
The Court then surveyed other states' treatment of apparent agency in the context of medical malpractice. The Court agreed with those authorities that a hospital or other entity can be held vicariously liable for a physician's negligence on an apparent authority theory if the entity held itself out as a direct provider of medical care, and if plaintiff relied on those representations by looking to the entity, rather than the physician, as the provider of care.
In this case, the Court concluded that there was insufficient evidence that the landlord LLC held itself out as a provider of medical services that it delivered through agents such as its tenant, plaintiff's physician. Further, there was insufficient evidence that plaintiff relied on any representation by the LLC to believe that the LLC was itself a medical provider. On that basis, the Court found no apparent agency relationship and affirmed summary judgment for the LLC.