The Michigan Supreme Court (MSC) recently reversed the judgment of the Michigan Court of Appeals (MCOA) and remanded the case of Markel v. Beaumont et al., to the Oakland County Circuit Court for further proceedings possibly ending a near six-year appellate saga on ostensible agency.

Background
In a 2018 medical malpractice lawsuit, Plaintiff claimed William Beaumont Hospital was vicariously liable for allegedly negligent treatment she received from a non-employee internist. The hospital obtained summary disposition arguing it was not vicariously liable because (1) there was no actual agency as the internist was not employed by the hospital, and (2) there was no ostensible agency as the hospital did not make any representations to the plaintiff that led her to believe that an agency existed between the hospital and the internist. Also, in her deposition, plaintiff did not recall who the internist was, and the hospital argued there was no evidence to support a reasonable belief by plaintiff that the internist was acting as a hospital employee.

On April 22, 2021, the MCOA¹ agreed that there was no showing of ostensible agency² as there was no evidence that the hospital did anything to have created a reasonable belief in the plaintiff’s mind that the internist was acting on behalf of the hospital.³ On December 7, 2022, the MSC disagreed, ruled that the MCOA used the wrong standard, and remanded the matter back to that court. Referencing its 1978 case of Grewe v. Mt. Clemens General Hospital, the MSC noted that through the act of presenting for treatment, a patient’s belief that a doctor was the hospital’s agent was in and of itself reasonable, unless the hospital did something to dispel that belief. Additionally, patient testimony was not required to establish ostensible agency.

On January 4, 2024, the MCOA again affirmed the trial court’s ruling. In doing so, it noted that the basis for Grewe’s decision was the doctrine of “agency by estoppel,” which required a showing of reasonable or justifiable reliance by the patient. Therefore, it was the plaintiff’s burden to establish that reliance, which she did not.⁴

The Latest Ruling
On July 9, 2025, the MSC remanded Markel again, back to the trial court. In doing so, the MSC also reversed the MCOA’s judgment noting that it erred by distinguishing between ostensible agency and agency by estoppel.  Moreover, although reliance was indeed important under Grewe, the MCOA incorrectly analyzed the reliance in the case.  Simply presenting to the hospital and looking to the hospital for treatment was sufficient to show reliance.  Therefore, the burden was on the hospital to show that it dispelled that reliance.

What Does This All Mean?
The MSC held that plaintiff had demonstrated “a genuine issue of material fact as to [the hospital’s] liability for medical malpractice under a theory of ostensible agency”.  Plaintiff presented for treatment at the hospital emergency room and was treated by an internist with whom she had “no prior relationship”.  The hospital had not set forth facts “establishing as a matter of law that it dispelled plaintiff’s reasonable belief” that the internist was the hospital’s agent.  The existence of an agreement between plaintiff’s primary care physician and the internist’s physician group was not enough to establish that plaintiff did not rely on the hospital for care as there was no evidence that plaintiff had knowledge of the agreement at the time of her admission.  Moving forward, hospitals will have to provide sufficient evidence that a patient presenting for treatment did not “rely” on the non-employee treating physicians being agents of the hospital. Our recommendation is that hospitals carefully review the Consent for Treatment forms patients sign upon admission to assure they dispel any belief that the providers treating the patients are necessarily hospital employees.  Specific language to include will vary with the institution. Feel free to reach out to Carlos Escurel or Silvia Mansoor at Foley, Baron, Metzger & Juip if you would like your Consent forms reviewed and revised to help address this issue.

^1. On November 6, 2019, the MCOA denied an Application for Leave, but on January 23, 2020, the MSC remanded the matter back to the court with an order to consider it as on leave granted.

^2. Other than noting that the trial court should not have considered actual agency arguments because the hospital did not specifically identify that as a claim it was challenging, the court did not address actual agency.

^3. Although there was some evidence about the doctor wearing a lab coat with Beaumont’s name on it and her telling the plaintiff that she was assigned by the hospital, the Court noted that the lab coat also had the name of her physician group on it and the plaintiff mischaracterized the testimony about the assignment.

^4. Although an argument could have been made that the emergency medicine doctors were Beaumont’s agents, the internist was not an emergency medicine doctor and actually did not see the patient until the second day she was at the hospital. She was just a passive participant in the system—there was no showing of reliance.