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plaintiffnegligencestatutetrialmotioncorporationmotion to dismiss
plaintiffnegligencestatuteappealtrialcorporation

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Pediatric Neurosurgery, P.C. v. Russell, 44 P.3d 1063

Facts

Michael Russell Neil was born with spina bifida and was treated by Dr. Robert Hendee and Dr. Edward McLeary from 1981 to 1989. The plaintiffs alleged that the negligent treatment by the doctors caused Michael's condition to worsen from an incomplete paraplegic to a quadriplegic. Dr. Hendee incorporated Pediatric Neurosurgery in 1983, and Dr. McLeary joined as a shareholder and employee in 1986. The plaintiffs initially sued the doctors individually and later amended their complaint to include the professional corporation, claiming it was vicariously liable for the doctors' negligence.

Michael Russell Neil was born with spina bifida, an incomplete closure of the spine. He was treated from the time of his birth, in 1981, until 1989 by first Dr. Robert Hendee and then his partner Dr. Edward McLeary.

Issue

Whether the statute authorizing the formation of professional medical services corporations, C.R.S. § 12–36–134, abrogated the long-standing rule of law that an employing entity cannot exercise control over a physician's practice.

We granted certiorari on the following issue: 'Whether the statute authorizing the formation of professional medical services corporations, C.R.S. § 12–36–134, abrogated the long-standing rule of law that an employing entity cannot exercise control over a physician's practice.'

Rule

Section 12–36–134 allows professional corporations to practice medicine and be vicariously liable for the negligence of their physician employees, creating an exception to the corporate practice of medicine doctrine.

The statute plainly provides, 'Persons licensed to practice medicine … may form professional service corporations for the practice of medicine.' § 12–36–134(1), 4 C.R.S. (2001).

Analysis

The court determined that section 12–36–134 permits professional corporations to practice medicine and be liable for the negligent acts of their employees. The court noted that the trial court's dismissal was based on the incorrect application of the corporate practice of medicine doctrine, which historically prevented corporations from being held liable for physicians' negligence. Since the motion to dismiss conceded that the doctors were employees of the corporation, the court held that the corporation could be held vicariously liable under the theory of respondeat superior without needing to establish control over the doctors.

The court noted that the trial court's dismissal was based on the incorrect application of the corporate practice of medicine doctrine, which historically prevented corporations from being held liable for physicians' negligence.

Conclusion

The Supreme Court affirmed in part and reversed in part, holding that Pediatric Neurosurgery could be held vicariously liable for the negligent acts of its physician employees and remanded the case for further proceedings.

Thus, we remand this case to the court of appeals to return this case to the trial court to reinstate the plaintiffs' complaint against Pediatric Neurosurgery, P.C.

Who won?

The plaintiffs prevailed in part, as the Supreme Court established that the professional corporation could be held vicariously liable for the negligence of its employees, contrary to the trial court's dismissal.

The plaintiffs prevailed in part, as the Supreme Court established that the professional corporation could be held vicariously liable for the negligence of its employees, contrary to the trial court's dismissal.

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