Hill v. St. Clare’s Hospital, 67 N.Y.2d 72 (1986)

A physician who owns a medical clinic held out to the public as offering medical services may be vicariously liable for the malpractice of a treating doctor, and a plaintiff who releases the original tortfeasor bears the burden of proving the extent to which the release reduces the claim against subsequent tortfeasors who aggravated the initial injuries.

Summary

Birdell Hill sustained injuries and was treated at St. Clare’s Hospital, where a fracture was missed. He then sought treatment at the Benjamin A. Gilbert Medical Clinic, owned by Dr. Bono but staffed by other physicians. Dr. Carranza misdiagnosed and improperly treated Hill’s foot injuries, resulting in further complications. Hill sued the original tortfeasors (responsible for the initial injury) and later St. Clare’s Hospital and Dr. Bono. Hill settled with the original tortfeasors and executed a general release. The Court of Appeals addressed whether Dr. Bono could be vicariously liable for Dr. Carranza’s malpractice and the impact of the release on the claims against St. Clare’s and Dr. Bono. The court held that Bono could be vicariously liable and that Hill had the burden of proving how the release should affect the damages award against the subsequent tortfeasors.

Facts

Birdell Hill was injured in an elevator accident on June 30, 1972. He was taken to St. Clare’s Hospital, where doctors misdiagnosed his injuries as soft tissue damage. Hill then sought treatment at the Benjamin A. Gilbert Medical Clinic, which was owned by Dr. Bono, who had taken over the practice while Dr. Gilbert was incapacitated. Dr. Carranza, practicing at the clinic, misdiagnosed Hill’s foot fractures and dislocation, applying a cast improperly. This improper treatment aggravated Hill’s injuries, leading to permanent deformity and complications.

Procedural History

Hill and his wife sued the original tortfeasors and settled for $57,000, executing a general release. They then sued St. Clare’s Hospital and Drs. Bono and Carranza. The defendants amended their answers to include the release as an affirmative defense. The trial court denied any offset for the prior settlement, placing the burden of proof on the defendants. The jury found in favor of Hill against both defendants. The Appellate Division affirmed, holding that the denial of offset was proper and sufficient evidence supported Dr. Bono’s liability. The Court of Appeals granted leave to appeal.

Issue(s)

1. Whether a physician who owns a medical clinic can be held vicariously liable for the malpractice of another physician practicing at the clinic, even if the owner-physician did not directly participate in or control the treatment?

2. Whether the plaintiff, having released the original tortfeasors, bears the burden of proving the extent to which that release reduces their claim against the subsequent tortfeasors (hospital and physician) who aggravated the original injuries?

Holding

1. Yes, because a physician who owns a medical clinic which is held out to the public as offering medical services may be held vicariously liable for the malpractice of a treating doctor even though the owner-physician neither participates in nor controls the diagnosis made or treatment prescribed.

2. Yes, because General Obligations Law § 15-108 (a) imposes upon the plaintiff who releases the original tort-feasor the burden of proving the extent to which his release reduces his claim against a hospital or physician who through malpractice aggravates the original injuries.

Court’s Reasoning

Regarding vicarious liability, the court distinguished between the liability of hospitals for their employees and the non-liability for independent physicians. However, it invoked the doctrine of apparent or ostensible agency, as established in Hannon v. Siegel-Cooper Co. (167 NY 244). The court emphasized that if a clinic holds itself out to the public as providing medical services, it can be held liable for the malpractice of the physicians practicing there, even if those physicians are technically independent contractors. The court found sufficient evidence for the jury to determine whether Dr. Bono owned the clinic and represented it as offering medical services.

Regarding the release, the court noted the common-law rule that releasing the original tortfeasor barred actions against subsequent tortfeasors, but that General Obligations Law § 15-108 abrogated that rule. The statute states a release does not discharge other tortfeasors but reduces the claim against them. The court reasoned that while the statute provides for a reduction, it doesn’t specify who bears the burden of proving the reduction amount. Drawing from Derby v. Prewitt (12 NY2d 100, 105), the court stated that “considerations of reason and basic fairness” dictate that the plaintiff, who controlled the settlement with the original tortfeasors, bears the burden of proving what portion of the settlement was intended to cover the aggravation of injuries caused by the subsequent tortfeasors. The court emphasized that failing to place the burden on the plaintiff would create the risk of double recovery.

The court clarified that the reduction is the *greatest* of (1) the amount stipulated by the release, (2) the consideration paid, or (3) the released tortfeasor’s equitable share of the damages. The equitable share should be based on the *damage inflicted* by each tortfeasor, not the culpability of their acts.