Background
A 14-month-old child presented to Munson Healthcare’s emergency department in May 2017 with vomiting, lethargy, and unresponsiveness. After initial tests revealed anemia and electrolyte abnormalities but no clear diagnosis, physicians ordered a CT scan of the child’s head. Dr. Kambrie Kato, a teleradiologist working remotely from her home in San Francisco, reviewed the images and reported no significant abnormalities. The child’s condition deteriorated, and he was transferred to Helen DeVos Children’s Hospital, where a second CT scan revealed severe abnormalities including a large blood clot in a deep cerebral vein. The child suffered permanent, significant brain damage as a result.
The parents sued Munson Healthcare for medical malpractice and vicarious liability for Dr. Kato’s alleged negligent misinterpretation of the first CT scan. They alleged that Dr. Kato was Munson’s ostensible agent, making the hospital vicariously liable for her negligence. Munson moved for summary disposition, arguing that because Dr. Kato worked remotely and had no direct contact with the family, she could not be an ostensible agent as a matter of law.
The Court’s Holding
The Michigan Court of Appeals reversed the trial court and held that genuine issues of material fact exist regarding whether Dr. Kato was Munson’s ostensible agent. The court applied the established ostensible agency doctrine, under which a hospital may be vicariously liable for an independent contractor physician if the patient reasonably believed the physician was the hospital’s agent and that belief was generated by the hospital’s conduct.
Following recent Michigan Supreme Court guidance in Markel v. William Beaumont Hospital (2025), the appellate court held that a patient who presents to a hospital emergency room for treatment by a physician with whom they have no prior relationship has a reasonable belief that the physician is the hospital’s agent—unless the hospital affirmatively dispels that belief. Critically, the court rejected Munson’s argument that direct personal interaction between patient and physician is a requirement for ostensible agency. The evidence showed that plaintiffs had no prior relationship with Dr. Kato, believed she was a hospital employee, and were never informed otherwise by hospital personnel. The mere existence of a contractual arrangement with the teleradiology company could not, as a matter of law, dispel the parents’ reasonable belief of agency.
The court also rejected Munson’s reliance on Dr. Slater’s business card identifying him as working for a different entity (Indigo), finding this did not establish that the parents should have known Dr. Kato similarly worked for an outside company. The court emphasized that when a patient presents to a hospital emergency room for treatment, the hospital’s operation of that emergency room with physicians the patient has no prior relationship with is itself the “act or neglect” generating the belief in agency.
Key Takeaways
- Hospitals may be vicariously liable for negligence by independent contractor physicians, including teleradiologists, under the ostensible agency doctrine.
- Direct personal interaction between patient and physician is not required to establish ostensible agency; what matters is whether the patient presented to the hospital for treatment and was treated by a physician with whom they had no prior relationship.
- A hospital cannot defeat an ostensible agency claim at summary disposition merely by pointing to a behind-the-scenes contract with a staffing company or showing the physician worked remotely.
- The hospital must affirmatively dispel a patient’s reasonable belief that medical personnel are its agents—passive silence or the existence of contractual arrangements does not suffice as a matter of law.
Why It Matters
This decision significantly expands potential hospital liability for negligence by teleradiologists and other off-site specialist physicians. It makes clear that the physical location of a physician or lack of face-to-face patient contact does not immunize hospitals from vicarious liability claims, particularly in emergency settings where patients have no opportunity to research their providers’ employment status. The ruling rejects a narrow reading that would have required direct patient-physician interaction, instead anchoring the ostensible agency analysis in whether the patient sought treatment at the hospital emergency room.
For hospitals and healthcare providers, the decision underscores the importance of clearly communicating to patients the employment status and independence of all physicians involved in their care, not just those with whom they have direct contact. The ruling increases litigation risk for institutions contracting with teleradiology and other remote specialty services, as summary dismissal of vicarious liability claims will be more difficult even when contractual relationships demonstrate independent contractor status.