Bagheri v. Bailey, M.D. et al

Filing 35

OPINION and ORDER denying 30 Motion for Summary Judgment. Signed by Judge James P. Jones on 6/22/15. (flc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ABINGDON DIVISION

KAREN TAYLOR BAGHERI,
ADMINISTRATOR OF THE ESTATE
OF SHAWN MATTHEW McKEE,
Plaintiff,
v.
DWIGHT L. BAILEY, M.D., ET AL.,
Defendants.

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Case No. 1:14CV00077
OPINION AND ORDER
By: James P. Jones
United States District Judge

S.D. Roberts Moore, Anthony M. Russell, Benjamin D. Byrd, and Andrew M.
Bowman, Gentry Locke, Roanoke, Virginia, for Plaintiff; James N. L. Humphreys
and Jimmie C. Miller, Hunter, Smith & Davis, LLP, Kingsport, Tennessee, for
Defendant Appalachian Emergency Physicians.
In this diversity action, the plaintiff Karen Taylor Bagheri, the Administrator
of the Estate of Shawn Matthew McKee (“McKee”), seeks recovery from the
defendants, including Appalachian Emergency Physicians (“AEP”), for alleged
malpractice associated with medical care McKee received at the Emergency
Department of Russell County Medical Center (“RCMC”) in Lebanon, Virginia.
AEP has moved for summary judgment. AEP asserts that the defendant Dwight L.
Bailey, M.D. (“Dr. Bailey”) — McKee’s treating physician — was an independent
contractor, thus precluding any claim for vicarious liability against AEP. For the
following reasons, I will deny AEP’s motion.

I.
The following facts are taken from the summary judgment record and unless
otherwise stated, are not disputed by the parties.
The decedent McKee went to the RCMC Emergency Department on June 7,
2013. Dr. Bailey was McKee’s treating physician. McKee was discharged the
same day with a diagnosis of acute bronchitis. On June 25, 2013, McKee died as a
result of pulmonary artery thromboembolism and bilateral pulmonary infarcts. The
plaintiff asserts that medical malpractice was the proximate cause of McKee’s
death.

More specifically, the plaintiff alleges that Dr. Bailey should have

diagnosed and treated McKee for either a pulmonary embolism or suspected
pulmonary embolism, and not acute bronchitis.
AEP is a Virginia corporation that “provides physician staffing for the
emergency departments of its hospital clients including . . . Russell County
Medical Center.” (Independent Contractor Physician Agreement 1, ECF No. 30-1,
hereafter the “Agreement.”) AEP entered into the Agreement with Dr. Bailey,
requiring him to provide “medical services in the field of emergency medicine” at
RCMC. (Id.) In addition to his work at the RCMC Emergency Department, Dr.
Bailey maintained an independent family practice in Russell County, Virginia. Dr.
Bailey’s independent medical practice is referred to as “Family Health Care
Associates, P.C.” (AEP’s Mot. for Summ. J. 2, ECF No. 30.)
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According to the Agreement, AEP required Dr. Bailey to perform, in part,
the following duties and responsibilities:
(1) Coverage. Provide emergency department coverage by
being physically present at the emergency department of the Hospital
at such times as scheduled by AEP . . . ;
(2)
Evaluation and Treatment. Evaluate, examine and treat
each patient presented for care at the Hospital . . . ;
(3) Supervision. Supervise physician extenders as requested
by AEP and, as requested by AEP from time to time, enter into
written practice protocols with such physician extenders addressing
supervision requirements and scope of practice matters;
(4) In-House Emergencies. Respond to all the Hospital inhouse emergencies and respond to all “codes” within the Hospital,
provided there is no conflict with patient care in the emergency
department of the Hospital;
(5)
Service Contracts. Take all actions necessary to comply
with the terms of AEP’s service contract with the Hospital in
providing professional services at the Hospital. Without limiting the
generality of the foregoing, the Physician specifically represents and
warrants that he/she will maintain all qualifications required of
physician providers thereunder and the Physician shall comply with
all federal, state and local laws, rules, ordinances and regulations, with
the Bylaws, Rules and Regulations of the Medical Staff and with the
Code of Conduct and other policies of the Hospital.
(Agreement § I.A, ECF No. 30-1.)
The Agreement required Dr. Bailey to exercise independent medical
judgment, but did not prevent AEP from:
(1) promulgating general rules governing the rendering of medical
care to patients; (2) promulgating specific rules for the purpose of
utilization and peer review; or (3) relieving the Physician of the care
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of an individual patient or of all patient care when, in the opinion of
AEP, inappropriate care is being rendered by the Physician or the
Physician is not observing such general and specific rules.
(Id. § I.H.)
Regarding scheduling requirements, the Agreement states that the
“[s]cheduling of the Physician services shall be by mutual agreement between AEP
and the Physician.” (Id. § I.B.) As general guidelines, the Agreement requires
equitable allotment of night, weekend, and holiday hours, and alludes to an
undefined, but minimum number of working hours. (See id. § I.B(1)–(2).) More
generally, Dr. Bailey states in his Affidavit that he would inform AEP of his
availability, and AEP would schedule him accordingly. (Bailey Aff. ¶ 4, ECF No.
30-1.)
As compensation, AEP was required to pay Dr. Bailey an hourly wage for
each hour of professional services rendered, with AEP providing a Form 1099 on
an annual basis. 1 Dr. Bailey was not entitled to any employee benefits, except that
at his “own cost and expense, [he] may elect to participate in the health and dental
insurance plans and physician self-directed IRA that AEP makes available to its
independent contractor physicians.” (Id. § II.B.) Under the Agreement, however,
AEP was required to provide Dr. Bailey with malpractice insurance at its own cost.

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Pursuant to the Agreement, “[a]ll professional fees generated by the services
performed by the Physician . . . shall be considered AEP’s revenue.” (Agreement § II.D,
ECF No. 30-1.)
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Lastly, the Agreement contains the following specific provision designating
Dr. Bailey as an “Independent Contractor”:
AEP and the Physician acknowledge that, in performing services
under the terms of this Agreement, the Physician is functioning as an
independent contractor. As such, the Physician is not an employee of
AEP. AEP shall not withhold any taxes and the Physician shall be
independently responsible for all taxes and insurance and thereby
shall indemnify AEP for any and all liability therefore. The Physician
shall not have any claim against AEP under this Agreement for
vacation, sick leave, retirement benefits, workers’ compensation,
disability or unemployment benefits, or employee benefits of any
kind.
(Id. § II.C.) According to his Affidavit, Dr. Bailey did not view himself as an
employee of AEP. (Bailey Aff. ¶ 5, ECF No. 30-1.)
II.
Summary judgment is appropriate when the record “shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). The relevant inquiry is “whether the
evidence presents a sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a matter of law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251–52 (1986). In considering a
motion for summary judgment, the court must view the facts and the reasonable
inferences to be drawn from the facts in the light most favorable to the party
opposing the motion. See Id. at 255; Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986).
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In its Motion for Summary Judgment, AEP asserts that it cannot be
vicariously liable in this case because Dr. Bailey was an independent contractor,
and not an employee of AEP. Under Virginia law,
[t]he doctrine of respondeat superior [or vicarious liability] imposes
liability on an employer for the negligent acts of its employees. If,
however, the negligent acts were performed by an independent
contractor rather than an employee, no master-servant relationship
exists between the contractor and employer, and the employer is not
liable for the negligent acts.
McDonald v. Hampton Training Sch. for Nurses, 486 S.E.2d 299, 300–01 (Va.
1997). In general, “whether a person is a servant or an independent contractor is a
question of fact for a properly instructed jury. When, however, the evidence
admits of but one conclusion, the question is one of law.” Hadeed v. Medic-24,
Ltd., 377 S.E.2d 589, 594 (Va. 1989).
As noted by the Virginia Supreme Court,
[t]he factors which are to be considered when determining whether an
individual is an employee or an independent contractor are well
established:
(1) selection and engagement; (2) payment of
compensation; (3) power of dismissal; and (4) power to control the
work of the individual. The fourth factor, the power to control, is
determinative. . . . This factor refers to control over the means and
method of performing the work. . . . It is immaterial whether the
employer exercises this control; the test is whether the employer has
the power to exercise such control.
McDonald, 486 S.E.2d at 301 (citations omitted); see also Richmond Newspapers,
Inc. v. Gill, 294 S.E.2d 840, 843 (Va. 1982) (stating that power of control is the

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most significant factor and that “other factors merely help to elucidate the manner
and degree of control”).
In sum, AEP contends that Dr. Bailey was an independent contractor,
because he exercised independent medical judgment in treating patients at RCMC
and they looked to him “only for results” in this regard. (AEP’s Mot. for Summ. J.
3, ECF No. 30.) Historically, there is some merit to AEP’s argument regarding
services performed by physicians. For example, as stated by one court, “[i]n the
past, Virginia courts held, as a matter of law, that physicians could not be
employees, on the grounds that a physician’s professional skill and judgment is
inherently not susceptible to external control.” Mann v. Sentara Hosps., Inc., 59
Va. Cir. 433, 444 (Va. Cir. Ct. 2002). However, the Virginia Supreme Court’s
ruling in McDonald abandoned such a rigid approach, resulting in the exercise of
professional judgment being merely a factor in evaluating an employer’s power to
control the means and method used to perform work by a physician.

See

McDonald, 486 S.E.2d at 303; cf. Cilecek v. Inova Health Sys. Servs., 115 F.3d
256, 260 (4th Cir. 1997) (noting that there is competition between hospitals and
physicians regarding work performance because of the duty each has to properly
discharge their independent responsibilities).
In this case, the summary judgment record contains facts cutting in favor of
both parties. For example, AEP and Dr. Bailey’s apparent intent to create an
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independent contractor relationship supports AEP’s position that Dr. Bailey was
not an employee. See Richmond Newspapers, 294 S.E.2d at 843-44. Similarly,
Dr. Bailey’s ability to exercise independent medical judgment in treating patients
at RCMC is evidence that he may have been an independent contractor. See
McDonald, 486 S.E.2d at 303. In contrast, however, AEP’s apparent ability to
exercise some degree of control over scheduling; its right to impose general rules
for patient care; and its provision of malpractice insurance and elective benefits
supports the possibility that Dr. Bailey was an employee.

Cf. id. at 304

(highlighting reimbursement of some physician expenses, including malpractice
insurance, restrictions on performing work for other employers, and requiring
compliance with hospital rules).

Working for wages is also an indicia of an

employee, Richmond Newspapers, 294 S.E.2d at 843, and Dr. Bailey agrees that he
was paid by the hour, without regard to the services he performed. (Bailey Dep.
19, ECF No. 33-1 (“It didn’t make any difference whether I saw ten patients an
hour or none.”).)
In short, the facts do not lead to a single conclusion in favor of AEP,
particularly when all facts and reasonable inferences must be drawn in favor of the
non-moving party for purposes of summary judgment. At a minimum, AEP’s
reliance on Atkinson v. Sachno, 541 S.E.2d 902 (Va. 2001), is misplaced, because
this case does not present a strictly legal determination based on a governmental
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entities’ engagement of a private practice physician to prepare medical eligibility
reports for applicants seeking disability benefits. Id. at 903–906. As a result, this
issue must be decided by a fact finder after presentation of the parties’ evidence.
See McDonald, 486 S.E.2d at 304; Hadeed, 377 S.E.2d at 595. For these reasons,
AEP is not entitled to summary judgment.
III.
For the foregoing reasons, it is ORDERED that AEP’s Motion for Summary
Judgment (ECF No. 30) is DENIED.
ENTER: June 22, 2015
/s/ James P. Jones
United States District Judge

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