Damgaard v. Avera Health – June 2015 (Summary)

CORPORATE NEGLIGENCE

Damgaard v. Avera Health, Civ. No. 13-2192 (RHK/JSM) (D. Minn. June 3, 2015)

The United States District Court for the District of Minnesota granted partial summary judgment in favor of two health care corporation defendants in a medical malpractice action, dismissing claims of direct corporate negligence against both defendants, vicarious liability against the parent corporation, and vicarious liability against the subsidiary corporation based on its failure to follow policies or procedures.

The plaintiff-patient presented to the hospital to deliver a baby and, during labor, the baby suffered from inadequate oxygen to the brain. The baby is now five years old and suffers from cerebral palsy, seizures, and a developmental delay and, as a result, is unable to feed herself, walk, or control her bodily functions. The plaintiff filed a medical malpractice lawsuit against the parent health care corporation and the subsidiary health care corporation, which employed the physician, based on corporate negligence.

The patient argued that the defendants were liable for direct corporate negligence based on a failure to adequately instruct, train, or supervise employees. The court disagreed, finding state law does not recognize direct corporate negligence. The court also stated that although negligent supervision is recognized, that requires a showing that the defendants failed to prevent the foreseeable misconduct of any employee, but here, plaintiff did not point to any evidence that suggested the physician’s alleged negligence was or should have been foreseeable to the defendants.

Although the defendants acknowledged that the subsidiary, as the employer of the physician, could be vicariously liable, the patient also argued that the parent company should be liable since it also was an employer of the physician. The court did not agree that the parent was also an employer, because the patient cited no evidence that the parent had control over the means and manner of the physician’s performance.

Finally, regarding the subsidiary, the court stated that the patient could not rely on the policies to establish vicarious liability because the state peer review statute provides that such policies cannot be admitted at trial. Also, the patient argued that the physician was negligent under the “borrowed servant” rule because she failed to provide appropriate trained and skilled personnel when she was not present, but the court found that the patient did not allege any negligence by the nurses.