New Health Care Liability Action Opinion: Trial Court's Dismissal of Vicarious Liability Claims Against Hospital Upheld on Appeal Because the Alleged Agent, a Physician, Had Been Released by the Plaintiff's Conservator

The Tennesse Court of Appeals has released its opinion in Hamilton ex rel. McGill v. Methodist Healthcare Memphis Hospitals, No. W2022-00054-COA-R3-CV (Tenn. Ct. App. Oct. 16, 2023). The opinion's syllabus reads:

This appeal arises from a health care liability action filed in circuit court by a conservator on behalf of a ward. After a three-week jury trial resulted in a mistrial, the conservator took a nonsuit. The conservator refiled the complaint against only one defendant hospital, asserting that it was vicariously liable for the actions of a doctor based on a theory of apparent agency. The defendant hospital moved for summary judgment on the basis that the conservator had entered into a consent agreement agreeing not to sue the doctor in the refiled suit if the doctor agreed to withdraw his motion for discretionary costs. According to the defendant hospital, this agreement releasing the alleged agent from liability extinguished the conservator’s right to pursue a vicarious liability claim against the principal. In response, the conservator took the position that the consent agreement was not binding because it was never approved by the probate court that appointed her. The circuit court granted summary judgment to the defendant hospital, finding that the order appointing the conservator authorized her to dispose of property, execute instruments, enter into contracts, pursue legal causes of action, and manage money, thereby authorizing her to enter into the consent agreement. The circuit court found nothing in the order of appointment, the relevant statutes, or caselaw that would impose a mandatory requirement for approval of the settlement by the probate court. Because the conservator had released the alleged agent from liability, the circuit court found that the conservator could not pursue vicarious liability claims against the defendant hospital. The conservator filed a motion to alter or amend, asking the circuit court to consider an “Advisory Opinion” of the probate court on the matter. The circuit court denied the motion, explaining that it respectfully disagreed with the Advisory Opinion of the probate court. The conservator appeals. We affirm and remand for further proceedings.

Here is a link to the opinion: HamiltonDianne2OPN.pdf (tncourts.gov).

NOTE: This opinion is correct and a reminder of why one does not release the agent if one wants to pursue a vicarious liability claim against the principal based on the agent's conduct. This opinion also offers a good discussion about the recent statutory changes affect settlements involving minors and the disabled.