Ramos v. Preferred Medical Plan, Inc. (Full Text)

NOT FINAL UNTIL TIME EXPIRES
TO FILE REHEARING MOTION
AND, IF FILED, DISPOSED OF.

IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
THIRD DISTRICT
JANUARY TERM, A.D. 2003

ANGEL R. RAMOS and CELINA
R. RAMOS, individually and
for an on behalf of their
son, ANGEL RAMOS, JR., a
minor,

Appellants,

Appellee.

CASE NO. 3D02-1392

vs.
PREFERRED MEDICAL PLAN,
INC.,

**
**
**
**
**
**
** LOWER
TRIBUNAL NO. 98-18399
**
Opinion filed April 16, 2003.
An appeal from the Circuit Court for Dade County, Thomas S.
Wilson, Jr., Judge.
Podhurst, Orsek, Josefsberg, Eaton, Meadow, Olin & Perwin and
Joel Perwin, for appellants.
Carlton Fields and Robert E. Biasotti, for appellee.

Before SCHWARTZ, C.J., and COPE and WELLS, JJ.

COPE, J.
Angel and Celina Ramos appeal an adverse summary judgment in

a medical malpractice case. We conclude that there are disputed
issues of material fact on the issue of apparent agency, and remand
for further proceedings.

I.
Plaintiffs-appellants Angel and Celina Ramos are members of
Preferred Medical Plan, Inc., a health maintenance organization
(“HMO”). Preferred enters into contracts with physicians to
provide medical services to its members. As between Preferred and
contracting physicians, the physicians are independent contractors.
Preferred’s members must obtain medical services from
physicians with whom Preferred has contracted. From Preferred’s
approved list, the plaintiffs selected Dr. Gregory Fox as their
primary care physician.
The plaintiffs consulted Dr. Fox regarding the medical
condition of their minor son, who suffered from gynecomastia. Dr.
Fox referred the plaintiffs to Dr. Ignacio Fleites, a participating
general surgeon, who is the chief of surgery at Westchester General
Hospital. Dr. Fleites performed the surgery, and was paid by
Preferred for the operation. There was a $400 co-payment for the
surgery, which the plaintiffs paid to Preferred.
The plaintiffs brought suit against Dr. Fleites, Preferred,
and Westchester General Hospital. They alleged that removal of the
excess breast material associated with gynocomastia had been

improperly performed, leaving scarring and a depression in the
chest area.
So far as pertinent here, the plaintiffs alleged that Dr.
Fleites was the apparent agent of Preferred. The trial court
entered summary judgment in favor of Preferred, and the plaintiffs
have appealed.1

II.
While this case was pending on appeal, the Florida Supreme
Court announced its decision in Villazon v. Prudential Health Care
Plan, Inc., 28 Fla. L. Weekly S 267 (Fla. March 27, 2003). The
trial court did not have the benefit of this decision at the time
it entered summary judgment, and the newly announced Villazon
opinion requires reversal for further proceedings.
In Villazon, as here, an HMO entered into contracts with
independent contractor physicians under which the physicians agreed
to provide medical services to HMO members. The Florida Supreme
Court ruled that an HMO can be held vicariously liable for the acts
of an independent contractor physician if the physician is acting
either (a) as the actual agent or (b) as the apparent agent of the
HMO. Id. at S 270-71.
The present case involves only a claim of apparent agency, not

1 Settlements were reached with the other defendants.
3

a claim of actual agency. The plaintiffs assert that Dr. Fleites
was the apparent agent of Preferred.

The Illinois Supreme Court has discussed the issue of apparent
agency at length in Petrovich v. Share Health Plan of Illinois,
Inc., 719 N.E.2d 756 (Ill. 1999). We find the reasoning of that
decision helpful here. The Petrovich decision states in part:
Because HMOs may differ in their structures and the cost-
containment practices that they employ, a court must
discern the nature of the organization before it, where
relevant to the issues. As earlier noted, Share is
organized as an independent practice association (IPA)-
model HMO. IPA-model HMOs are financing entities that
arrange and pay for health care by contracting with
independent medical groups and practitioners.
This court has never addressed a question of whether
an HMO may be held liable for medical malpractice. . . .
Courts . . . should not be hesitant to apply well-settled
legal theories of liability to HMOs where the facts so
warrant and where justice so requires.
. . . .
As a general rule, no vicarious liability exists for
the actions of independent contractors. Vicarious
liability may nevertheless be imposed for the actions of
independent contractors where an agency relationship is
established under either the doctrine of apparent
authority or the doctrine of implied authority.
. . . .
We now hold that the apparent authority doctrine may
. . . be used to impose vicarious liability on HMOs. . .
. Courts in other jurisdictions have likewise concluded
that HMOs are subject to this form of vicarious
liability. . . .

To establish apparent authority against an HMO for
physician malpractice, the patient must prove (1) that
the HMO held itself out as the provider of health care,
without informing the patient that the care is given by
independent contractors, and (2) that the patient
justifiably relied upon the conduct of the HMO by looking
to the HMO to provide health care services rather than to
a specific physician. Apparent agency is a question of
fact.

A. Holding Out
The element of “holding out” means that the HMO, or
its agent, acted in a manner that would lead a reasonable
person to conclude that the physician who was alleged to
be negligent was an agent or employee of the HMO. Where
the acts of the agent create the appearance of authority,
a plaintiff must also prove that the HMO had knowledge of
and acquiesced in those acts. Significantly, the
holding-out element does not require the HMO to make an
express representation that the physician alleged to be
negligent is its agent or employee. Rather, this
element is met where the HMO
holds itself out as the
provider of health care
without informing the
patient that the care is
given by independent
contractors.
Vicarious

liability under the
a p p a r e n t a u t h o r i ty
doctrine will not attach,
however, if the patient
knew or should have known
t h at th e p hy s ic i a n
providing treatment is an
independent contractor.
. . . .

A plaintiff must also prove the element of
“justifiable reliance” to establish apparent authority
against an HMO for physician malpractice. This means
that the plaintiff acted in reliance upon the conduct of
the HMO or its agent, consistent with ordinary care and
prudence.
The element of justifiable reliance is met where the
plaintiff relies upon the HMO to provide health care
services, and does not rely upon a specific physician.
This element is not met if the plaintiff selects his or
her own personal physician and merely looks to the HMO as
a conduit through which the plaintiff receives medical
care.
Id. at 763-68 (emphasis added; citations omitted).
Florida’s law of apparent agency is substantially identical to
that expressed in the Illinois decision, except that in Florida the
test for apparent agency has been stated as a three-part test where
Illinois uses a two-part test. Under Florida law there is

a three-prong test under general agency law in order to
determine the existence of apparent agency: first,
whether there was a representation by the principal;
second, whether a third party relied on that
representation; and, finally, whether the third party
changed position in reliance upon the representation and
suffered detriment.
Almerico v. RLI Ins. Co., 716 So. 2d 774, 777 (Fla. 1998)
(citations omitted); see also Villazon, 27 Fla. L. Weekly at S 271.
III.
We conclude that disputed issues of material fact remain
regarding the issue of apparent agency. Under Petrovich, the first
question is whether “The HMO holds itself out as the provider of

health care without informing the patient that the care is given by
independent contractors.” 719 N.E.2d at 766.
Preferred’s own promotional literature indicates that it
operates several full-service medical centers. (R. 881). “All of
your medical care will be coordinated through the medical center
that you originally chose on your application. This procedure will
enable your primary physician to maintain a master medical record
for you in order to ensure the continuity and quality of care that
you should have as a member of Preferred Medical Plan.” (R. 882).
The member information includes, “You MUST see your Primary Care
Physician in order to be treated. If it is necessary for you to
see a specialist, it will be arranged for you. You CANNOT go on
your own to a specialist without a written referral from your
Primary Care Doctor.” (R. 885).
Consistent with these policies, the plaintiffs consulted the
primary care physician, Dr. Fox, who made the referral to Dr.
Fleites. Under Preferred’s rules, Dr. Fox could only refer the
plaintiffs to a surgeon who was one of Preferred’s participating
providers. Preferred paid Dr. Fleites the fee for the surgery.
The plaintiffs paid the $400 co-payment to Preferred.
As outlined in the Petrovich decision, the foregoing facts
would lead a reasonable person to conclude that Preferred had
undertaken to be the provider of health care services and that Dr.

Fleites was acting on its behalf.
The Petrovich decision also holds, however, that “[v]icarious
liability under the apparent authority doctrine will not attach .
. . if the patient knew or should have known that the physician
providing treatment is an independent contractor.” Petrovich, 719
N.E.2d at 637.
The file contains a copy of the Preferred’s Individual Medical
and Hospital Services Contract. It provides in part, “The
relationship between Health Plan and Participating Providers that
are not Health Plan employees is an independent contractor
relationship. Such Participating Providers are not agents or
employees of Health Plan, nor is Health Plan, or any employee of
Health Plan, an agent or employee of any such Participating
Provider.” As an initial matter, Preferred markets its services in
English and Spanish. The promotional material quoted earlier is
made available to subscribers in both languages. The plaintiffs
are Spanish speaking. The Individual Medical and Hospital Services
Contract is found in this record in the English language only.
Leaving aside the language issue, the contractual provision
just quoted is, in any event, not clear enough to dispose of the
apparent agency issue. The contract indicates that those persons
who are not Health Plan employees are independent contractors. The
contractual provision does not advise the subscriber who is an

employee and who is not.
Preferred points to the medical consent form signed by Mrs.
Ramos prior to the surgery, which was performed at Westchester
Hospital. The medical consent form included, “I acknowledge that
all physicians and surgeons furnishing services, including all
radiologists, pathologists, anesthesiologists and emergency room
physicians, are independent contractors and are not employees or
agents of the hospital.” Mrs. Ramos is Spanish speaking. She
testified that this part of the consent form was not translated for
her, while other parts were. Thus, this form is not dispositive of
the issue.
Preferred correctly states that the contract between Preferred
and Dr. Fleites describes Dr. Fleites as an independent contractor.
While that is true, it is not dispositive on the issue of apparent
agency. For apparent agency purposes, the question is what the
plaintiffs knew or reasonably should have known. There is no
indication that the plaintiffs ever saw the contract between
Preferred and Dr. Fleites or had any reason to know of its
contents.
The next question for purposes of the apparent agency analysis
is reliance. As explained in Petrovich, this element is met “where
the plaintiff relies on the HMO to provide health care services,
and does not rely upon a specific physician. This element is not

met if the plaintiff selects his or her own personal physician and
merely looks to the HMO as a conduit through which the plaintiff
receives medical care.” 719 N.E.2d at 768.
The summary judgment record indicates that the plaintiffs met
this part of the test. The plaintiffs chose their primary care
physician from Preferred’s list. That physician, Dr. Fox, referred
the plaintiffs to Dr. Fleites, the surgeon on Preferred’s approved
list. As stated in the instructions Preferred gives its patients,
“If it is necessary for you to see a specialist, it will be
arranged for you.” (R. 885).
The final question is whether there was a change of position
and detrimental reliance. Again, this element is met. The
operation was performed on the minor child. For purposes of this
summary judgment, the plaintiffs’ factual claims of bad result and
physical injury are accepted as true.
For the stated reasons, the summary judgment is reversed and
the cause remanded for further proceedings.