## Facts

- Diana Sword, an Indiana resident, chose Norton Children’s Hospital in Louisville, Kentucky, for childbirth.
- The hospital marketed its birth center, emphasizing specialized facilities and “24-hour access to an experienced anesthesiologist,” and these representations influenced Sword’s choice.
- During labor, Sword agreed to an epidural; after an initial anesthesiologist left, a second anesthesiologist performed the procedure.
- Viewing the record favorably to Sword, the anesthesiologist first attempted insertion high on the spine unsuccessfully, then placed the catheter in the lower back and administered the epidural.
- The anesthesiologist was an independent contractor, and the hospital did not inform Sword of his non-employee status.
- After delivery, Sword developed persistent headaches, sensitivity to light and noise, and numbness near the insertion site.
- Sword and her husband sued the hospital, alleging negligent epidural placement and seeking to hold the hospital vicariously liable.

## Issues

1. Whether Indiana or Kentucky law governed the malpractice claim against the hospital.
2. Whether a hospital may be vicariously liable under apparent (ostensible) agency for negligence of an independent-contractor physician, and whether the summary-judgment record presented a triable issue on that theory.
3. Whether the summary-judgment record presented a triable issue on medical causation.

## Decision

- Indiana law applied.
- Apparent/ostensible agency may apply to hospital–patient relationships, and the record contained genuine issues of material fact as to whether the hospital held itself out as the provider of anesthesiology services and whether Sword reasonably relied on that representation.
- The record also contained genuine issues of material fact on whether the anesthesiologist’s conduct caused Sword’s injuries.
- Summary judgment for the hospital was reversed on apparent agency and causation, and the case was remanded for further proceedings.

## Legal Principles

- A hospital’s formal use of independent-contractor physicians does not automatically bar vicarious liability.
- Under Indiana apparent (ostensible) agency, a hospital may be liable for a non-employee physician’s negligence when:
  - the hospital, by words or conduct, holds itself out as a provider of medical services, and
  - the patient reasonably looks to the hospital, rather than a particular physician, for care.
- Effective, meaningful notice that physicians are independent contractors can defeat reasonable reliance; absent such notice, reliance may be found where the hospital’s presentation of services suggests physician services are provided on the hospital’s behalf.
- On summary judgment, disputes over apparent agency and proximate causation must be tried when reasonable factfinders could differ based on the record.

## Conclusion

The court held that Indiana law governed and that the hospital was not entitled to summary judgment because fact questions existed as to whether the anesthesiologist acted with apparent authority created by the hospital’s representations and whether the epidural procedure caused Sword’s alleged injuries.


Sword v. NKC Hosps., Inc., 714 N.E.2d 142 (Ind. 1999)