Horn v. National Hospital Association , 169 Or. 654 ( 1942 )

Although I believe that the circuit court was justified in sustaining the defendant's motion for a nonsuit, I do not concur in the majority's reasoning, and believe that their statement of the facts contains errors.

The majority assume that the defendant (a) owed the plaintiff a duty; and (b) breached the duty. After the majority have engaged in those assumptions they declare that the evidence does not show that the defendant's breach of its duty to the plaintiff caused her any damage, and therefore conclude that she failed to establish a cause of action. It must be borne in mind that the only ruling made by the circuit court which is under attack sustained the defendant's motion for a nonsuit. The case did not get beyond that point.

As we all know, a cause of action consists of (a) a duty owed by the defendant to the plaintiff; (b) a breach of that duty by the defendant; and (c) damage to the plaintiff as the proximate result of the breach. When all three have been established, a nonsuit cannot be ordered.

In order to establish a cause of action, a plaintiff need not prove large damages. If it appears that he is entitled to recover only nominal damages, a nonsuit cannot be directed. Accordingly, in this case, if it appeared when the plaintiff rested that she was entitled to recover a judgment for one dollar, the motion for nonsuit should have been denied. That is necessarily true because a complaint which prays for a judgment for one dollar only is not subject to demurrer because of the small sum sought.

Let us now see whether the record showed, when the plaintiff rested, that she had sustained any damage from the negligent failure to diagnose her illness correctly.

In Smith v. Pallay, 130 Or. 282, 279 P. 279, this court said:

"Some damages are always presumed to follow from the violation of any right or duty implied by law."

In Lee, Inc., v. Pacific Telephone Telegraph Co., 154 Or. 272, 59 P.2d 683, we said:

"Whether the plaintiff can show, upon trial, that it has sustained any actual damage by reason of the mistake complained of is a matter of future determination, but the rule is well established that nominal damages may be recovered for the bare infringement of a right unaccompanied by any actual damage."

From Sherman and Redfield on Negligence, Rev. ed., § 836, the following is taken:

"When a plaintiff alleges that his person has been injured and proves the allegation, the law implies damages."

The following was taken from 25 C.J.S., Damages, § 6, page 465:

"Where the evidence shows the violation or infringement of a legal right, the law will presume damages sufficient to sustain an action."

If this action is based upon the contract which the plaintiff's husband and the defendant signed — and I believe that it is — then it is clear that the plaintiff was entitled to recover at least nominal damages, for in an action for a breach of contract damage is always inferred: Rainier v. Masters, 79 Or. 534,154 P. 426, 155 P. 1107, L.R.A. 1916E, 1175; and Sedgwick on Damages, 9th ed., §§ 97, 98 and 106. Upon the other hand, if this is an action of tort in the nature of one upon the case, then also the plaintiff was entitled to receive from the defendant at least nominal damages, and therefore the motion for a nonsuit should have been denied. See, in addition to the above authorities, especially McCormick on Damages, §§ 22 and 23.

It must be remembered that this cause is before us upon an order which sustained the defendant's motion for a nonsuit. Therefore, since the plaintiff was entitled to recover at least nominal damages (provided the defendant breached a duty which it owed to the plaintiff), the motion should have been denied.

It is true that this court has sustained an order directing a nonsuit notwithstanding the fact that the plaintiff was possibly entitled to receive nominal damages: Edd v. Western UnionTelegraph Co., 127 Or. 500, 272 P. 895; and see also Lippold v.Kidd, 126 Or. 160, 269 P. 210, 59 A.L.R. 875. In the latter decision the statement about the motion for a nonsuit was unnecessary. The Edd decision was based upon the maxim de minimis; under it a reversal will not be ordered for the sole purpose of enabling a party to recover a judgment of only one dollar. But if the entry of a judgment for nominal damages will establish title to real property, vindicate some right, permit the recovery of costs; or have some other similar effect, the erroneous allowance of a nonsuit will be deemed reversible error: 3 Am. Jur., Appeal and Error, § 1004, page 559; and 5 C.J.S., Appeal and Error, § 1914, page 1415.

My reading of the record convinces me that it contains substantial evidence showing that the alleged failure of Dr. Goffin to properly diagnose the plaintiff's illness caused her to undergo much suffering. I am convinced that compensatory damages could be awarded if it were shown that the physician just mentioned was the defendant's employee.

It seems desirable to take brief note of the illness from which the plaintiff suffered when she entered the defendant's office. The majority's opinion, I believe, attributes to her more illnesses that were not connected with her diseased gall bladder than the record warrants. I also believe that the paper signed by Dr. Jones, and from which the majority quote in support of their statement that the plaintiff was afflicted with an acute attack of appendicitis just before Dr. Jones removed her appendix, cannot be used for that purpose. It must be borne in mind that Dr. Goffin's four-day examination of the plaintiff disclosed no condition of the appendix requiring an operation. He was asked, and answered, as follows:

"Q. You wouldn't consider that it needed an operation at that time?

"A. I wouldn't until it was necessary, no; she might, — it might clear up and be all right again."

Dr. Goffin's written report of his findings said: "Diagnosis: Constipation with probable chronic appendicitis. Treatment: Diet and medication." Dr. Butler, the X-ray specialist who examined the plaintiff (March 9, 1937), gave her what he termed an "opaque enema" preparatory to his examination, and after the latter reported in writing his findings as follows: "Appendix was partially filled and tender on pressure." In weighing the effect of the words "tender on pressure", it must be remembered that the plaintiff had had for months severe pains in the abdomen, had vomited after virtually every meal, and that the record indicates that this distress was the result of her diseased gall bladder. Two days after Dr. Goffin had analyzed the plaintiff's condition as "Constipation with probable chronic appendicitis," Dr. Jones, without having made any additional examination, removed the appendix. Dr. Jones did not testify. The paper upon which the majority rely was not a hospital chart nor any other sort of medical record. It was nothing more than a bill for Dr. Jones' services which he sent to the defendant. It was written upon a printed form supplied by the defendant to physicians who performed services for which they expected the defendant to pay. The purpose of the forms was to enable the physician to present his account in itemized form to the defendant and obtain payment for his services. The heading of the paper is "National Hospital Association." Shortly there follow these lines: "Please give information requested below as completely as possible and submit bill as soon as patient is discharged." Those words are followed by a space in which the physician is required to make an itemized statement of his services and charge. The space is divided into three columns entitled, respectively, Date of Treatment, Nature of Treatment Rendered Must Be Shown, and Charges. In the first column Dr. Jones entered a notation for each visit which the plaintiff made to his office. In the second he entered the words which the majority quote about the plaintiff's acute attack of appendicitis. In the third he entered the charges which he had made, including $50 for the operation. The charges totaled $75.50. After he had made these entries he mailed the paper to the defendant in order to obtain from it payment for his services.

It is evident that the entries upon the sheet in question were not made in the regular course of duty, like those upon a hospital chart — all of them were made at the same time. I know of no rule of law which makes any entry upon this paper evidence against the plaintiff of the truth of the entry. Although the plaintiff did not state the purpose to which she expected to apply this paper upon its reception in evidence, it is very clear that she did not offer it for the purpose of showing that she was afflicted with appendicitis. Her purpose, manifestly, was to show that the defendant had undertaken to render medical service to her. She thought that the defendant's possession of this paper and its payment of Dr. Jones' charges would support her contention that the defendant had taken her case into its care. Without further analysis, I express my conclusion that the use of this paper for the purpose of showing the condition of the plaintiff is unwarranted. I think that it is especially unwarranted when we are determining what action should be taken upon a motion for a nonsuit.

The majority, after quoting from the statement of account rendered by Dr. Jones to the defendant (described in the preceding paragraph), say: "The foregoing evidence concerning the condition of the appendix is undisputed." I do not concur in that statement, and believe that the record contains substantial evidence showing that the plaintiff's appendix was not diseased and that it was not the cause of her illness. However, a continuance of the discussion is unnecessary.

If it is sought to say that the failure to discover the gall bladder condition was neutralized by the weakened condition caused by the appendix operation, then, I believe that we ought to say that the record presented an issue as to whether or not the claim made by the defendant that she was suffering from appendicitis was true. I repeat, Dr. Goffin's diagnosis was "probable chronic appendicitis," and that there is evidence in the record which shows that the gall stones, and not the appendix, was the cause of the plaintiff's suffering.

As already stated, I believe that the record contains substantial evidence showing that the failure of the physicians to properly diagnose the plaintiff's illness entitled her to an award of compensatory damages if the defendant is liable to her. But, since I do not believe that the defendant is liable for the damage, an extensive review of the evidence showing damage is not necessary. The following, however, may be in order. It will be remembered that the plaintiff called upon Dr. Goffin March 8 to 12, 1937. Dr. Goffin failed, however, to discover the gall stones and, in fact, ordered no X-ray photographs of the gall bladder region. He testified that he found that the plaintiff was "suffering more from a chronic appendical trouble than any other condition of her body, and also very nervous. * * * So I advised her to wait and go back to her other doctor." The plaintiff testified that Dr. Goffin gave her "a bottle of some tablets for me to take and he said for me to go home and take them, and he says, `You will be all right.'" It will be noticed that he did not advise a removal of her appendix. Dr. Goffin swore that his examination of the plaintiff showed that her chest, heart and lungs were normal; she met successfully the blood test, urine test, etc. He found that she was, however, "a very sensitive woman and of a very delicate, — what we call a sympathetic nervous system, * * * Otherwise she was quite strong constitutionally." He did not claim that she could not have undergone a gall bladder operation had he discovered the need for one. Such being the situation, is it not reasonable to infer that if Dr. Goffin had discovered the aggravated condition of the plaintiff's gall bladder before she left his office he would have advised some immediate action concerning it? He swore that her symptoms were as indicative of gall stones as of appendicial trouble. It seems to me that the answer to the question just stated must be in the affirmative. Had he discovered the diseased gall bladder, it is common sense to say that he would not have inferred that her suffering was due to a "probable chronic appendicitis." The words in quotation were taken from Dr. Goffin's written findings. And had something then been done about her gall bladder the agonizing suffering which this woman endured in the succeeding weeks would have been avoided. I repeat, before Dr. Jones removed the plaintiff's appendix her condition had not changed and he made no further examination. Thus, I believe that the record contains evidence showing that the failure to properly diagnose her condition subjected the plaintiff to compensatory damages. For the foregoing reasons, I cannot concur in the statements made in the opinion of the majority nor in their reasoning.

Let us now determine whether the defendant was responsible for the damages which followed from the failure to exercise due care in making the diagnosis. It could not be responsible for the damages unless Dr. Goffin was its employee. It seems desirable at the outset to take notice of two statements which appear in the majority's opinion. One is: "Dr. Jones sent her to the National Hospital Association clinic `to find out what was wrong.' She arrived at the clinic on Monday, March 8th, 1937." The other statement is: "Following March 11th, the last of plaintiff's examinations in defendant's office, * * *." That statement indicates that examinations by a physician were made in the defendant's office. Let us see whether the defendant maintained a clinic and whether any examinations of the plaintiff were made by physicians in the defendant's office.

The defendant, according to Mr. C.C. Bechtold, its manager, maintains in the Mohawk building in Portland general offices, together with "an X-ray department, a laboratory, a drug department, physiotherapy." In the same building Dr. Goffin is located. His equipment is his own and he himself pays the rent for the two rooms which he occupies. "He is compensated," according to Mr. Bechtold, "on a monthly retainer and also is paid on a fee basis for work that he does, depending on the work he does." Dr. Goffin said that he was compensated with "a monthly fee," although, in response to the questioning of plaintiff's counsel, he adopted the word "salary". In consideration of it he attended to persons who were sent to him by the defendant. Dr. Goffin receives, in addition to the persons sent to him by the defendant, patients who come to him independently of the defendant. He estimated that twenty-five per cent of his time was consumed with individuals who were sent to him by the defendant and that the other seventy-five per cent was consumed with other patients. According to Mr. Bechtold, Dr. Goffin "gets paid more if he handles patients in the hospitals or the sanitariums, depending on the work that he does." Those sent to Dr. Goffin by the defendant's office were not required to accept him as their physician, but were at liberty to go to any other physician whose name was upon the defendant's list.

Mr. Bechtold testified that Dr. Frank Butler "has charge of the X-ray department, he makes oral fluoroscope examinations." For that purpose he, like Dr. Goffin, was paid a monthly salary. Although the testimony is scant, it seems that Dr. Butler, like Dr. Goffin, devoted only a part of his time to persons sent by the defendant. Mr. Bechtold further testified that the X-ray work was done by "a technician that takes X-ray. She doesn't do the fluoroscopic work."

The facts just mentioned are the only ones in the record which indicate whether or not the defendant maintained a clinic. The operation of X-ray machines does not constitute the practice of medicine: Doumitt v. Diemer, 144 Or. 36, 23 P.2d 918. I believe that the foregoing facts do not show that the defendant operated or maintained a clinic. I also believe that the plaintiff was not given a medical examination in any office kept by the defendant.

Let us now revert to the contract between the defendant and the plaintiff's husband. It was signed by the contracting parties June 1, 1936. The husband was in the logging business and the plaintiff did the cooking for about twenty-five men who were in her husband's employ. The contract refers to the defendant by the designation "the Medical Contractor." It says:

"The Medical Contractor hereby promises and agrees to bear the expense of Medical and Surgical Services, Services by Specialists, Hospital Care, Medicines, Surgical Supplies and Orthopedic Appliances, Nursing, Dental Services, Ambulance, X-ray and Clinical Laboratory Diagnoses, Physical Therapy and Prophylaxes for the employees of the Employer engaged in its sawmill and logging operations in the State of Oregon by Physicians and Surgeons and Specialists, Hospitals, Druggists and/or other parties designated by the Medical Contractor, and subject to the provisions, conditions and limitations contained in this agreement. * * * provided that the liability of the Medical Contractor hereunder is limited to reasonable care in designating doctors, hospitals, nurses, druggists and/or other parties required for the purposes of this agreement; it being understood, however, that the doctors, hospitals and/or other parties designated by the Medical Contractor shall be acceptable to the Employer. Employes hereunder shall have the right to apply to any Physician, Surgeon, Hospital and/or other party designated by the Medical Contractor in its several districts; * * * The benefits of this agreement are hereby extended to apply, for present employees, to * * * Chronic Conditions such as * * * Gall Bladder Conditions, * * * excepting for conditions enumerated in this provision that become active or manifestly existing on the date hereof."

The above is the opening paragraph of the contract. The other paragraphs are largely explanatory. It will be observed from the language just quoted that the defendant did not undertake to provide medical treatment for anyone. It went no further than to promise (a) to maintain lists of competent physicians to whom workmen could go when they needed attention; and (b) to pay physicians after they had rendered service to workmen. The plaintiff makes no contention that the defendant had contracts with physicians whose names appeared upon its lists whereby it could exercise control or direction over them.

When the plaintiff became ill she went to Dr. Jones in Redmond and asked for his professional services. Dr. Jones was upon the defendant's accredited list of physicians, and therefore his services were available to her and to all workmen whose employers had contracted with the defendant. Before the plaintiff called upon Dr. Jones neither she nor her husband had asked the defendant whether she could avail herself of that privilege. The contract itself entitled the employee to select any physician upon the defendant's list, and rendered the defendant responsible for the charge. When the plaintiff called upon Dr. Jones she brought with her a paper which the witnesses termed a ticket. A book of them was delivered by the defendant to Mr. Horn when the contract was signed. When an employee became ill he was issued one of the tickets and it constituted the physician's authority for rendering service at the defendant's expense.

It is seen from the foregoing that Dr. Jones was selected by the plaintiff. She makes no claim against the defendant on account of that physician's course of treatment. We add that when he failed to effect a cure he advised the plaintiff to go to the defendant's Portland office, explaining, so the plaintiff said, that "they had better equipment and things to find out what was wrong."

Whether a person who was receiving the services of a general practitioner, like Dr. Jones, should have the attention of a specialist was a question, according to Mr. Bechtold, to be "determined by the doctor who has the patient." He swore that Dr. Goffin was not the only specialist in Portland to whom patients were referred, and added that a patient was at liberty to change physicians with the same freedom as if the defendant were not liable for payment.

March 8 the plaintiff and her husband entered the defendant's office and there Mr. Horn talked to a person by the name of Page who was in charge. Mr. Page referred the plaintiff to Dr. Goffin. Possibly it is unnecessary to add that no one contends that Mr. Horn and Mr. Page entered into a new contract in their brief discussion. Mr. Horn was merely trying to find out how his wife should proceed to obtain, at the defendant's expense, a diagnosis by a specialist.

When the plaintiff entered Dr. Goffin's office she described her illness and gave its history. Dr. Goffin examined her heart, lungs, chest and abdomen. Then the plaintiff visited the defendant's laboratory where some specimens of her blood and urine were examined. The second day the plaintiff visited the defendant's X-ray department where an X-ray negative was made of her abdomen and fluoroscopic examinations were made of some other regions of her body. The third day the examinations were continued and upon the fourth day Dr. Goffin reported to the plaintiff and her husband his findings.

Whether, in any case, a blood or urine test should be made or X-ray examinations conducted was, according to Mr. Bechtold, a question solely for the physician. He explained that "the attending doctor uses his own judgment about it. He handles it just the same as he would a private patient." The results of blood and urine tests, of X-ray examinations, etc., were not sent to the defendant, but were given either to the patient or to his physician. In the present instance, according to Mr. Bechtold, all of the tests that were made were ordered by Dr. Goffin, and the results were sent to him.

There is no claim that the defendant's X-ray department failed to take the pictures and make the fluoroscopic examinations in exact conformity to Dr. Goffin's directions. Nor is there any claim that Dr. Butler neglected to read properly the X-ray plate which his department made upon Dr. Goffin's order. Likewise, the plaintiff does not argue that the defendant's laboratory made an incorrect analysis of the specimens which Dr. Goffin sent to it. The sole contention submitted by the plaintiff is that Dr. Goffin in making his diagnosis omitted an examination of the plaintiff's gall bladder.

The question now presents itself: Was Dr. Goffin the defendant's employee when he made the diagnosis; that is, was he the defendant's alter ego when the negligent omission took place? If the answer is no, the defendant is not liable and the motion for the nonsuit was properly sustained.

In this case, unlike in Giusti v. Weston Co., 165 Or. 525,108 P.2d 1010, the defendant did not undertake to provide medical, surgical or hospital service for anyone. The decision in that case quoted from the contract which that defendant signed, as follows:

"* * * provide medical and surgical and hospital services, including dental services, medicines, medical and surgical appliances * * *."

In the case now before us the defendant agreed to do nothing more than to

"bear the expense of Medical and Surgical Services, Services by Specialists, Hospital Care, Medicines, Surgical Supplies and Orthopedic Appliances * * *."

The record affords no basis for a finding that the defendant went beyond its contract and selected a physician for the plaintiff. The brief conversation which took place on March 8 between Mr. Horn and Mr. Page was merely a means of putting the contract into operation so far as the services of a specialist were concerned. The plaintiff was at liberty to accept or reject Dr. Goffin as she saw fit. There is no claim that the defendant interfered with or directed Dr. Goffin in his diagnosis of the plaintiff's condition. So far as the evidence discloses, Dr. Goffin was free to proceed in any way that his sense of duty and professional responsibility dictated. It is clear that the defendant did not limit Dr. Goffin in the amount of attention which he could give to the plaintiff. It will be recalled that he devoted a part of each of four days to the plaintiff's case and that there was available to him the facilities of a laboratory and of an X-ray department. No one limited him in the use of those facilities and he made such use of them as he thought was necessary. It is true that he did not order an X-ray examination of the plaintiff's gall bladder, but it is clear that his omission to ask for such an examination was not in any way the result of anything which the defendant did or neglected to do.

The record demands a finding that Dr. Goffin determined not only what he should do in diagnosing the plaintiff's condition, but also how he should do it. All of this was left exclusively to his judgment.

The plaintiff, in arguing that Dr. Goffin was the defendant's employee, does not lay stress upon the fact that he received monthly compensation from the defendant for the services which he performed. Month by month he took care of people for whose medical attention the defendant was liable and, accordingly, month by month, it was indebted to him. An independent contractor, as well as an agent, is paid for the work which he performs; and the manner of payment is rarely controlling.

There is no touchstone by which an agent can be readily distinguished from an independent contractor. Both perform work, both are paid for what they do, and both sustain relations with others. An agent performs a service, whereas an independent contractor produces a result. The agent as he proceeds with his work is under direction and control. The independent contractor, having agreed to do nothing except produce a result, is "his own boss." Agents frequently work upon the premises of their principals. Independent contractors generally have offices or headquarters of their own. Since an agent acts under the advice and control of his principal, he is generally engaged in a calling which lends itself to such control. An independent contractor often is engaged in a type of activity in which control or supervision by outside sources would be highly undesirable, as, for instance, the calling of a medical specialist.

Normally, the physician falls within the category of an independent contractor, but he may make himself the agent or the employee of someone who sends him to perform medical service for another. Giusti v. Weston Co., supra, and Jenkins v. GeneralHospital, 90 W. Va. 230, 110 S.E. 560, 22 A.L.R. 323, the two decisions upon which the plaintiff particularly relies, are each an instance in which the physician had become an employee of an organization which, in turn, was required to perform medical services for others. Being an employee, the physician was necessarily subject to the control of his employer; therefore, the latter was responsible for the physician's malpractice under the doctrine of respondeat superior. The facts in each of those cases are readily distinguishable from those in the instant case.

If a physician sent by a person to perform medical service for another is not the employee of the one who sent him and is not subject to his direction, the negligence of the physician will not be imputed to the person who sent him, unless he was incompetent and that fact was known. See 41 Am. Jur., Physicians and Surgeons, page 223, § 112.

In the present instance, the fact that Dr. Goffin monthly received compensation from the defendant for his work cannot of itself demand a holding that he was the defendant's employee. The facts that he performed his work upon his own premises, and that his calling as a specialist demanded that he be left free from control, are persuasive that he was an independent contractor. But the fact that the defendant's contract required it to do nothing except to pay for services performed, and that it reserved to itself no right to exercise control over the person for whose services it was required to pay, in my belief, settles this case and demands a holding that Dr. Goffin was not the defendant's employee.

The plaintiff availed herself of the rights afforded by the contract under review. It gave her the privilege of securing medical attention at the defendant's expense. She, however, took those rights as she found them; that is, as they were meted out by the contract which her husband and the defendant had signed. One of the limitations upon the contractual rights was that the defendant should be liable to her only in the event that it failed to exercise reasonable care "in designating Doctors, Hospitals, Nurses, * * *." It is not claimed, however, that the defendant breached that provision of the contract. For the following two reasons I believe that the motion for the nonsuit was properly sustained: (1) Dr. Goffin was not the defendant's employee; and (2) the liability limitation clause exempts the defendant from liability.