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Yarbrough v. Northwestern Memorial Hospital

Court of Appeals of Illinois, First District, Fifth Division

August 19, 2016

CHRISTINA YARBROUGH and DAVID GOODPASTER, on Behalf of Hayley Joe Goodpaster, a Minor, Plaintiffs-Appellants,

         Appeal from the Circuit Court of Cook County, No. 10 L 296 The Honorable William Gomolinski, Judge, presiding.

          JUSTICE BURKE delivered the judgment of the court, with opinion. Presiding Justice Reyes and Justice Gordon concurred in the judgment and opinion.


          BURKE, JUSTICE

         ¶ 1 This interlocutory appeal arises from a medical negligence action that plaintiffs Christina Yarbrough and David Goodpaster brought against Northwestern Memorial Hospital (NMH) and Northwestern Medical Faculty Foundation (NMFF), stemming from the premature birth of their daughter, Hayley Joe Goodpaster. NMH filed a partial motion for summary judgment, which the trial court denied. NMH requested that the trial court certify a question of law pursuant to Illinois Supreme Court Rule 308 (eff. Feb. 26, 2010) regarding the doctrine of apparent authority in the medical negligence context. The trial court ultimately issued a certified question sua sponte. Following this court's denial of NMH's subsequent petition for leave to appeal, the Illinois Supreme Court directed us to consider the question certified by the trial court as follows:

"Can a hospital be held vicariously liable under the doctrine of apparent agency set forth in Gilbert v. Sycamore Mun. Hosp., 156 Ill.2d 511 (Ill. 1993), and its progeny for the acts of the employees of an unrelated, independent clinic that is not a party to the present litigation?"

         ¶ 2 For the reasons that follow, we answer the question in the affirmative.

         ¶ 3 I. BACKGROUND

         ¶ 4 We begin by setting forth the facts to the extent necessary to address the issues on appeal. In this endeavor, we rely on the pleadings, motions for summary judgment, and associated briefing, and the discovery evidence contained in the record on appeal.

         ¶ 5 Plaintiffs alleged that Yarbrough, believing she was pregnant, went to Erie Family Health Center, Inc. (Erie), a federally funded, not-for-profit clinic, on November 14, 2005, after searching the Internet for a nearby clinic offering free pregnancy testing. After receiving a positive pregnancy test, healthcare workers at Erie inquired where Yarbrough would receive prenatal care. Yarbrough was advised that if she obtained prenatal care from Erie, she would deliver at NMH and receive additional testing and care at NMH, including ultrasounds. She was given pamphlet and flyer information regarding scheduling tours and classes at NMH. Plaintiffs alleged that based on her knowledge of NMH's reputation and the information provided by Erie, Yarbrough believed that if she received prenatal care from Erie, she would be receiving treatment from NMH health care workers.

         ¶ 6 Plaintiffs alleged that when Yarbrough was eight weeks pregnant, she experienced vaginal bleeding and went to the Advocate Illinois Masonic Medical Center (Advocate) on November 30, 2005. An ultrasound was performed and she was diagnosed with having a bicornuate uterus. The emergency department notified Erie. Yarbrough received an ultrasound at Erie on December 2, 2005, and she was told that she had a shortened cervix but did not have a bicornuate uterus. No other follow-up regarding a uterine abnormality was performed. She continued receiving prenatal care at Erie. She also received a 20-week ultrasound on February 21, 2006, at NMH, which was interpreted by Dr. William Grobman. Plaintiffs alleged that as a result of the failure to identify and address appropriately Yarbrough's bicornuate uterus and shortened cervix, she delivered Haley Goodpaster prematurely at 26 weeks' gestation on April 8, 2006, via emergency cesarean section. As a result of the premature delivery, Hayley Goodpaster suffered numerous medical complications.

         ¶ 7 Plaintiffs filed their initial complaint on December 28, 2009. Count I alleged medical negligence by Dr. Grobman, as an actual or apparent agent of NMFF, in performing and interpreting Yarbrough's 20-week ultrasound. Count II alleged medical negligence against NMH based on the prenatal care Yarbrough was provided at Erie, asserting that Erie was NMH's actual or apparent agent. NMH moved for summary judgment. The trial court granted the motion as to all claims related to Erie as NMH's agent. The trial court granted plaintiffs leave to file an amended complaint.

         ¶ 8 In the amended complaint filed on August 22, 2013, plaintiffs again alleged medical negligence against NMFF in count I based on Dr. Grobman's conduct.[1] In count II, plaintiffs alleged medical negligence against NMH based on the doctrine of apparent authority. Plaintiffs alleged that health care providers at Erie (Dr. Raymond Suarez, Dr. Virgil Reid, Janet Ferguson, CNM, and Elizabeth O. McKelvey, CNM) were the apparent agents of NMH and rendered negligent prenatal care in failing to properly scan, diagnose, and treat Yarbrough for a shortened cervix and bicornuate uterus, leading to preterm delivery.

         ¶ 9 In support of their apparent authority claim, plaintiffs set forth numerous allegations regarding the close ties between NMH and Erie in order to satisfy the elements of Gilbert v. Sycamore Municipal Hospital, 156 Ill.2d 511, 524-25 (1993).[2] Plaintiffs alleged that Erie was founded as a project between NMH and Erie Neighborhood House in 1957, and NMH provides financial support, technological assistance, and strategic support through board membership. Plaintiffs alleged that in 1998, NMH's parent company, Northwestern Memorial Corporation (NMC) (now Northwestern Memorial HealthCare (NMHC)) and Erie entered into an "Affiliation Agreement" with the stated purpose of increasing NMC's "services to the community, building on our current substantial commitments and partnerships" and to "provide clarity and continuity to the historical relationship between the Parties." The agreement called for Erie to utilize NMH as a "primary site for acute and specialized hospital care for its patient population, " and NMC would arrange to treat Erie patients in need of more comprehensive care. Further, plaintiffs alleged that the agreement provided for joint marketing efforts, a board seat designated for an NMH representative, committee participation, and consideration of Erie providers for medical staff membership at NMH.

          ¶ 10 Plaintiffs further alleged that NMH held out Erie as its agent in its published materials and on its website. Plaintiffs alleged that NMHC published annual reports and community service reports that discussed Erie. For example, plaintiffs alleged that the 2005 community service report stated that NMHC improves access to health care "[t]hrough partnerships with community health centers"; it was committed to the community and to building "collaborative relationships with a number of neighborhood based centers"; Northwestern Memorial Foundation granted $1 million annually to the hospital's "Community Service Expansion Project, " which "provides key funding for *** [Erie] sites on the West and Northwest sides"; and the project funded facility improvements and physician salaries. It stated that Erie physicians were "affiliated with Northwestern Medical Faculty Foundation, a multispecialty group practice with more than 500 physicians covering more than 40 specialties." The 2005 report included a statement from an Erie patient who was treated by an obstetrician who led "Woman's Health at Erie" and was on staff at NMH. Further, the report discussed its "longstanding affiliations with community-based health centers" in ensuring that patients "have access to quality primary and specialty care regardless of their ability to pay" and that it has "shared a relationship with Erie Family Health Center for more than 45 years." Plaintiffs alleged that the 2006 community service report stated that "Northwestern Memorial, in collaboration with [Erie] has provided the information technology infrastructure, educational tools and access to facilities with mammography equipment" and that 11.2% of the babies delivered at NMH's Prentice Women's Hospital in 2006 received prenatal care at Erie.

         ¶ 11 With regard to NMH's website, plaintiffs alleged that NMH listed Erie under "Our Health Partners, " along with a link to Erie's website, and promoted that it has a "formal and long-standing" affiliation with Erie, including two members on Erie's board of directors. Plaintiffs alleged that Erie's website similarly promoted its relationship with NMH and stated that it "partners with Northwestern Memorial Hospital *** to increase access to specialized medical care and state-of-the-art medical technologies. Patients who are in need of services not offered at Erie are eligible to receive care at these hospitals." Further, Erie's website stated that all Erie doctors "have faculty status at Northwestern University Feinberg School of Medicine." Plaintiffs alleged that NMH was aware of Erie's website but did not monitor or review it and never instructed Erie to change it.

         ¶ 12 NMH moved for partial summary judgment as to all apparent authority claims related to the alleged negligence of employees or agents of Erie. NMH argued that NMH did not hold out Erie as its agent and Erie and its employees did not hold themselves out as agents of NMH. NMH asserted that Erie was an independent, federally funded community health center comprised of 10 clinics in the Chicago area, it was not named as a defendant, and Erie's employees were working onsite at Erie within the scope of their employment with Erie. NMH argued that neither it nor Erie represented that Erie was an outpatient facility of NMH and there was no legal partnership or joint marketing efforts. NMH asserted that Erie has its own management structure, budget, board of directors, employees, and facility. NMH asserted that although it provides some charitable funding to Erie and has a small presence on its board, NMH has no control over Erie.

         ¶ 13 In support of its argument that there was no evidence of an apparent agency relationship between NMH and Erie, NMH relied on the deposition testimony of Holli Salls, vice president of public relations for NMH; Doctor Daniel Derman, vice president of operations at NMH; William Kistner, vice president of internal audit for NMHC; and Yarbrough. Salls testified that NMH does not bring pamphlets about NMH to independent medical groups to distribute to their patients, NMH did not do any joint marketing with other entities between 2004 to 2006, and Erie has never sought to do any joint promotional marketing. Salls testified that she was aware that Erie discussed its affiliation with NMH on its website. Salls testified that Erie did not obtain her permission to do so, but NMH has never told Erie not to promote the affiliation between them. Salls testified that use of the word "partner" in promotional materials was not meant in the legal sense, but merely described collaborative activities.

         ¶ 14 Dr. Derman acknowledged in his deposition that NMH's website stated that NMH had "formal and long-standing affiliations with two federally qualified health center partners, Near North Health Services Corporation and Erie Family Health Center" and that it had two representatives on Erie's board of directors. Further, NMH's website listed Erie under "Our Health Partners" and stated that Erie "was founded in 1956 as a project of volunteer physicians from Northwestern Memorial and Erie Neighborhood." Dr. Derman also acknowledged NMH's press releases discussing NMH's partnership initiatives with Erie in treating diabetes and women's health, promoting the fact that NMH and Erie "worked together to provide information about transportation, navigating and processes for accessing additional diagnostic services if needed, " and developing educations programs together. Dr. Derman acknowledged that Erie's website listed NMH under "Our Partners" and "Hospital Affiliations" and it stated that "Erie partners with" NMH, among other hospitals, "to increase access to specialized medical care and state-of-the-art medical technologies. Patients who are in need of services not offered at Erie are eligible to receive care at these hospitals." Further, Derman acknowledged that Erie's website stated, "All Erie pediatricians, internists, OB/GYN physicians and family physicians have faculty status at Northwestern University Feinberg School of Medicine, " and that medical students and residents from Northwestern train at Erie. Dr. Derman testified that he was aware that Erie has a website but his office does not review the information on Erie's website.

         ¶ 15 Dr. Derman reviewed the affiliation agreement during his deposition and acknowledged that, in it, NMC agreed to cause NMH to consider Erie staff for hospital privileges. Further, the parties agreed to "jointly participate in collective marketing efforts as they relate to the affiliation of the parties" and that the other party "may publicize and refer to this affiliation agreement and their affiliation with each other with the prior consent of the other party." The agreement also contained an "independent contractor" provision indicating that the parties did not have a joint venture, partnership, or employer/employee relationship.

         ¶ 16 Dr. Derman testified that NMH does not employ Erie staff and does not provide Erie with any equipment or supplies, lab coats, or promotional material. Dr. Derman testified that NMH makes charitable contributions to Erie of approximately $333, 000 and $600, 000 per year, passes along grant money, and does not charge Erie patients for care given at NMH. Derman testified that NMH makes charitable contributions to Erie and other organizations because "we're just good community members and we try to support other people that are doing good in the community." NMH has also provided Erie with free informational technology support services.

         ¶ 17 Kistner testified in his deposition that he has served on Erie's board of directors since 2002, and he was the chairman for two years. At one point, there was a second NMHC representative on the board. Kistner explained that as indicated in the affiliation agreement, Erie must follow specific guidelines to satisfy Federally Qualified Health Center (FQHC) governance requirements, which requires 51% or more of the board to be composed of patients and community members, while the remaining 49% may be nonpatients, but "no more than 50 percent of the 49 percent can derive more than 10 percent of their income from the healthcare field." He signed a conflict of interest statement indicating that his fiduciary responsibility was to Erie when acting as a board member. He testified that Erie operates as an independent entity and its community board members are "very vocal." Kistner testified that he could not recall any collective marketing efforts in the 10 years of his board membership. Kistner testified that in 2006, Erie's revenue was approximately $25 million; approximately 60% came from patient revenue and 40% came from grants from various organizations, including NMH or NMC.

         ¶ 18 Yarbrough testified in her deposition that she found Erie by searching the Internet for a clinic where she could obtain a pregnancy test without having health insurance. When the test was positive, someone at Erie asked what her plans were for prenatal care. Yarbrough testified that she "asked questions about the doctors there, what hospital I would be going to, things like that. That's when I chose Erie Family Clinic." The Erie clinic was approximately five blocks from where she lived at the time. She filled out paperwork for Medicaid and scheduled her first appointment. She was also given written materials or a pamphlet about Erie. She testified that she was informed that she "would have ultrasounds done at Women's Prentice Hospital, which is part of Northwestern, and that's where I would most likely deliver the baby."

"Q. Did anybody at Erie say anything to suggest to you that Erie Family Health Center and Northwestern Memorial Hospital were the same entity?
A. I was under the impression that they were.
Q. And what would give you that impression?
A. Most likely because of the delivery at Northwestern, the delivery privileges.
Q. So that if you had gone to Dr. Smith whose office was on Michigan Avenue and you were told you would most likely deliver at Northwestern, would you have drawn the inference that Dr. Smith's practice and Northwestern were actually the same entity?
A. Yes.
Q. But in terms of whether anybody at Erie said, hey, we are Northwestern and Northwestern is part of us, fair to say nobody said anything like that?
A. No one said that, but they also never said that they weren't."

         ¶ 19 Yarbrough testified that after being treated for vaginal bleeding at Advocate on November 30, 2005, and being diagnosed with a bicornuate uterus, she went to Erie on December 2, 2005, where she was examined by Dr. Suarez and midwife McKelvey. Dr. Suarez performed an ultrasound and informed her that she did not have a bicornuate uterus. She was told that she had a shortened cervix. Yarbrough returned to Erie several times after that for routine appointments, a urinary tract infection, and a lab test. She had the routine 20-week ultrasound performed at NMH on February 21, 2006, and she continued with her regular prenatal visits at Erie after that. Yarbrough testified that on April 5, 2006, she experienced severe cramps and back pain. She called Erie and was told to go to NMH. She was admitted to the hospital and delivered her daughter three days later via a cesarean-section ...

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