Cady v. Schroll

1

IN THE SUPREME COURT OF THE STATE OF KANSAS

No. 103,499

ANGELA CADY,
Appellant,

v.

JOHN SCHROLL, M.D.,
Defendant,

WOMEN'S CARE, P.A.,
Appellee,

CRISTINE CARRIKER, M.D., MAUREEN KING, M.D.,
MICHAEL MAGEE, M.D., JULIE MARTIN, M.D.,
BRENDAN MITCHELL, M.D., ANGELA PIQUARD, M.D.,
and ROBERT SUGAR, M.D.,
Defendants.


SYLLABUS BY THE COURT


1.
By enacting K.S.A. 40-3403(h), which provides that a health care provider "shall
have no vicarious liability or responsibility for any injury . . . arising out of the rendering
of or the failure to render professional services . . . by any other health care provider," the
Kansas Legislature clearly abrogated vicarious liability where both health care providers,
as defined in K.S.A. 40-3401(f), are qualified for coverage under the Health Care
Stabilization Fund created by the Health Care Provider Insurance Availability Act,
K.S.A. 40-3401 et seq.

2.
K.S.A. 40-3403(h) absolves a health care provider not just from vicarious liability
but from any responsibility, including independent liability, if the injured party's damages
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are derivative of and dependent upon the rendering of or the failure to render professional
services by another health care provider.

3.
K.S.A. 40-3403(h) bars a professional corporation's liability for negligent
supervision of a health care provider employed by the corporation if the employee is
qualified for coverage under the Health Care Stabilization Fund created by the Health
Care Provider Insurance Availability Act, K.S.A. 40-3401 et seq., the plaintiff's injuries
are derivative of and dependent upon the employee's actions in rendering professional
services to the plaintiff, and no employee of the professional corporation who is not
qualified for coverage provided negligent care and treatment to the plaintiff.

Review of the judgment of the Court of Appeals in an unpublished opinion filed June 17, 2011.
Appeal from Johnson District Court; JANICE D. RUSSELL and DAVID W. HAUBER, judges. Opinion filed
January 24, 2014. Judgment of the Court of Appeals affirming the district court is affirmed. Judgment of
the district court is affirmed.

Roger P. Wright, of Wright, Green & Baughman, L.L.C., of Lee's Summit, Missouri, argued the
cause, and Lance V. Baughman and Theodore M. Green, of the same firm, were with him on the briefs for
appellant.

BK Christopher, of Horn Aylward & Bandy, LLC, of Kansas City, Missouri, argued the cause,
and Jessica J. Shaw and John B. McEntee, Jr., of the same firm, were with her on the briefs for appellee.

The opinion of the court was delivered by

LUCKERT, J.: K.S.A. 40-3403(h) provides that a health care provider qualified for
coverage under the Health Care Stabilization Fund created by the Health Care Provider
Insurance Availability Act (HCPIAA), K.S.A. 40-3401 et seq., "shall have no vicarious
liability or responsibility for any injury . . . arising out of the rendering of or the failure to
render professional services . . . by any other health care provider who is also qualified
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for coverage under the fund." Past decisions of this court have interpreted this provision
broadly, concluding it bars a covered health care provider's vicarious liability and any
other responsibility, including independent or direct liability, for claims caused by the
professional services of another health care provider. Angela Cady argues these cases
were wrongly decided, are distinguishable, or have been effectively overruled.
Consequently, Cady contends the district court and Court of Appeals in Cady v. Schroll,
No. 103,499, 2011 WL 2535004 (Kan. App. 2011) (unpublished opinion), erred in
relying on those cases and holding that her action against Women's Care, P.A., the health
care provider that employed her physician, was barred by K.S.A. 40-3403(h). We
disagree and affirm the district court and the Court of Appeals.

FACTS AND PROCEDURAL BACKGROUND

Cady filed suit against her obstetrician, John Schroll, M.D., and Schroll's
employer, Women's Care, P.A., after Schroll provided Cady's prenatal care during her
pregnancy in 2004. Cady alleges that Schroll touched her inappropriately and made
sexually charged comments during her office visits. Unbeknown to Cady, Schroll had
previously been disciplined by the Kansas State Board of Healing Arts (Board) for his
inappropriate and unprofessional behavior with two other patients.

In Cady's petition, she named Schroll, Women's Care, and seven other physicians
as defendants. Schroll and the other physicians were employed by and shareholders of
Women's Care, a professional corporation. She asserted four claims against the
defendants: medical negligence, negligent infliction of emotional distress, negligent
supervision, and intentional infliction of emotional distress. In her petition, Cady alleged
Women's Care was (1) vicariously liable for the acts and omissions of Schroll and (2)
independently liable because it failed to supervise Schroll, failed to prevent him from
engaging in inappropriate conduct with her, failed to inform her of Schroll's prior
disciplinary record, and failed to institute safeguards to prevent Schroll's conduct.
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Cady made several factual allegations to support these claims. Specifically, she
alleged that before she became Schroll's patient, Women's Care knew about Schroll's
prior inappropriate conduct and knew he had been disciplined by the Board. Cady further
alleged that Women's Care had documented this knowledge in a "letter of concern" sent
to Schroll in which Women's Care indicated that Schroll's inappropriate conduct had
continued despite Women's Care's concerns having been discussed with Schroll,
suggested Schroll be evaluated by a psychologist, and requested that a nurse be present
during all of Schroll's patient examinations. Despite these concerns and requests, Cady
asserted that Schroll was the only Women's Care employee present when the
inappropriate conduct occurred.

As legal proceedings progressed, Cady entered into a separate settlement
agreement with Schroll, and the district court dismissed the case against him with
prejudice. The district court also dismissed with prejudice all of Cady's claims against the
other physicians named in the lawsuit. Cady does not appeal any claims involving Schroll
or the other physicians. Consequently, this appeal focuses solely on the liability, or lack
thereof, of Women's Care.

Women's Care's potential for liability was ruled upon by the district court after
Women's Care filed a motion to dismiss and, subsequently, a motion for summary
judgment. The district court, treating both motions as ones for summary judgment, held
that Cady's claims against Women's Care were barred by K.S.A. 40-3403(h). The Court
of Appeals affirmed the district court. Cady, 2011 WL 2535004, at *5. This court granted
Cady's petition for review under K.S.A. 20-3018(b) and has jurisdiction under K.S.A.
60-2101(b).




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STANDARD OF REVIEW

If a district court considers uncontroverted facts not contained in the pleadings
when ruling on a motion to dismiss, the motion is treated as a motion for summary
judgment. "Summary judgment is appropriate when the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, show that there is
no genuine issue as to any material fact and that the moving party is entitled to judgment
as a matter of law." Law v. Law Company Building Assocs., 295 Kan. 551, 561, 289 P.3d
1066 (2012). An appellate court reviewing a district court's ruling on a motion for
summary judgment applies the same legal standard and, because the motion is considered
on uncontroverted facts and under the same standard as the district court, reviews the
matter de novo as a question of law, granting no deference to the district court's
judgment. Law, 295 Kan. at 561; Adams v. Board of Sedgwick County Comm'rs, 289
Kan. 577, 584, 214 P.3d 1173 (2009).

In this case, resolution of the motions for summary judgment depends on an
interpretation of K.S.A. 40-3403(h). Interpretation of a statute is also a question of law.
As under the summary judgment standard, an appellate court exercises unlimited review
and does not grant deference to the district court's interpretation of a statute. See Stewart
Title of the Midwest v. Reece & Nichols Realtors, 294 Kan. 553, 557, 276 P.3d 188
(2012).

SUMMARY JUDGMENT APPROPRIATE ON CLAIM OF VICARIOUS LIABILITY

Applying these standards to Cady's first claim that Women's Care is vicariously
liable for Schroll's actions simply because Women's Care was Schroll's employer, the
district court and the Court of Appeals concluded the claim was barred by K.S.A.
40-3403(h). Cady, 2011 WL 2535004, at *5. Before us, Cady does not dispute that the
legislature clearly "abrogate[d] vicarious liability where both health care providers, as
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defined by K.S.A. 40-3401(f), are covered by the Health Care Stabilization Fund."
Glassman v. Costello, 267 Kan. 509, 523, 986 P.2d 1050 (1999). And Cady does not
dispute that both Schroll and Women's Care are health care providers who are qualified
for coverage under the Health Care Stabilization Fund created by the HCPIAA.

Cady did raise some alternative arguments before the Court of Appeals regarding
whether K.S.A. 40-3403(h) applies under the facts of this case because of an exception
provided for in K.S.A. 40-3403(q) (liability for claims relating to health care provider's
sexual acts or activity). But those arguments have not been raised before this court, and,
consequently, any argument that there was error in granting summary judgment to
Women's Care on Cady's claim of vicarious liability based on K.S.A. 40-3403(q) has
been waived. See Martin v. Naik, 297 Kan. 241, 245, 300 P.3d 625 (2013) (argument
addressed by Court of Appeals but not raised in petition for review is waived).

Exceptions placed aside, we have no qualms concluding that under K.S.A.
40-3403(h) Women's Care has no vicarious liability simply because it was Schroll's
employer. See Black's Law Dictionary 998 (9th ed. 2009) (defining "vicarious liability"
as "[l]iability that a supervisory party [such as an employer] bears for the actionable
conduct of a subordinate or associate [such as an employee] based on the relationship
between the two parties").

INDEPENDENT LIABILITY

Consequently, our focus is on Cady's contention that Women's Care is
independently or directly liable for its own conduct, namely, failing to supervise Schroll
in order to prevent him from engaging in inappropriate conduct with her. While Cady
made broader claims in her petition against Women's Care, such as negligently failing to
inform her of Schroll's prior disciplinary record, she limits the issue in her brief to this
court to whether the Court of Appeals erred because "Kansas law and the facts support
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plaintiff's claim that defendant had a duty to supervise its physician employee." Hence,
any other claim is waived. See Miller v. Johnson, 295 Kan. 636, 688, 289 P.3d 1098
(2012).

In arguing that Women's Care should be independently liable because of its failure
to supervise Schroll, Cady relies on Marquis v. State Farm Fire & Cas. Co., 265 Kan.
317, 334-35, 961 P.2d 1213 (1998), and its holding that a Kansas employer who
negligently hires, trains, and supervises employees can be directly liable because of the
employer's negligence, as opposed to being vicariously liable on the theory that the
employer, as the master of the negligent party, is responsible for an employee's
negligence. See, e.g., Schmidt v. HTG, Inc., 265 Kan. 372, Syl. ¶ 10, 961 P.2d 677, cert.
denied 525 U.S. 964 (1998); Kansas State Bank & Tr. Co. v. Specialized Transportation
Services, Inc., 249 Kan. 348, Syl. ¶ 1, 819 P.2d 587 (1991); Plains Resources, Inc. v.
Gable, 235 Kan. 580, 590, 682 P.2d 653 (1984).

The Court of Appeals recognized the distinction between vicarious and direct
liability. But the Court of Appeals also noted that "neither Marquis nor any other case has
held that a claim for damages based on negligent supervision does not 'arise out of' the
wrongful acts that weren't stopped by better supervision." Cady, 2011 WL 2535004, at
*2. This point was significant, according to the Court of Appeals, because it was
considering an issue of "statutory interpretation involving K.S.A. 40-3403(h), not
whether Kansas law provides a separate claim for negligent supervision," and the statute
could and did bar all responsibility for damages "aris[ing] out of the independent acts of
another healthcare provider." 2011 WL 2535004, at *2, 5. In interpreting K.S.A.
40-3403(h), the Court of Appeals viewed "the key terms" as "'responsibility' and 'arising
out of.'" 2011 WL 2535004, at *2.

First addressing the phrase "arising out of," the Court of Appeals stated:

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"Certainly much narrower terms could have been used, such as 'caused by' or 'directly
caused by' or 'solely caused by.' But the legislature chose 'arising out of.' Other courts
have recognized that 'arising out of' is a broad term that should reasonably be interpreted
broadly. [Citations omitted.] Even if, as Cady alleges, Women's Care might have
prevented Schroll's improper conduct through better supervision, we think it clear that her
claims arose out of his conduct." 2011 WL 2535004, at *2.

Turning to the term "responsibility," the Court of Appeals acknowledged Cady's
argument that the word "vicarious" modifies both the words "liability" and
"responsibility" and that vicarious liability is distinct from independent or direct liability.
But the Court of Appeals noted that this interpretation of K.S.A. 40-3403(h) was rejected
in McVay v. Rich, 255 Kan. 371, 377-78, 874 P.2d 641 (1994), and Lemuz v. Fieser, 261
Kan. 936, 940-41, 933 P.2d 134 (1997). In those cases, this court interpreted K.S.A.
40-3403(h) as absolving a hospital from vicarious liability and any independent
responsibility arising from the professional services of another health care provider
covered by the HCPIAA.

The Court of Appeals also rejected Cady's argument that this holding was altered
in Aldoroty v. HCA Health Services of Kansas, Inc., 265 Kan. 666, 962 P.2d 501(1998).
The Court of Appeals concluded the opinion in Aldoroty was not inconsistent with
McVay or Lemuz but rather was distinguishable from those decisions because the
defendant hospital in Aldoroty was held liable for "negligently render[ing] direct medical
care to a patient," a duty that did not "'arise out of' another provider's conduct or
treatment." Cady, 2011 WL 2535004, at *4.

Finally, the Court of Appeals concluded:

"We see no reason to modify the understanding of the word 'responsibility' that is
consistently found in the two opinions of McVay and in Lemuz. First, when the legislature
fails to modify a statute to avoid a standing judicial construction of the statute, we
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presume the legislature intended the statute to be interpreted as we have done. [Citation
omitted.] Second, this interpretation is in line with the broad purpose of the Health Care
Provider Insurance Availability Act, K.S.A. 40-3401 et seq., which was designed to
lessen a perceived crisis in medical-malpractice claims by placing some limits on claims
while also providing adequate insurance coverage to pay when medical negligence
caused injury. [Citations omitted.]" Cady, 2011 WL 2535004, at *4.

In asking us to reverse the Court of Appeals' and district court's decisions, Cady
presents several alternative arguments: (1) McVay and Lemuz are contrary to the
language of K.S.A. 40-3403(h) and should be overruled; (2) those decisions are
distinguishable and should not be applied here; (3) the holding and rationale of those
decisions was altered by this court's subsequent decisions in Aldoroty, which was
discussed by the Court of Appeals, and Glassman, which was cited to the Court of
Appeals but not discussed in its opinion; and (4) under Aldoroty and Glassman Women's
Care is not entitled to summary judgment.

1. Interpretation of K.S.A. 40-3403(h)

First, we consider Cady's argument that this court erroneously interpreted K.S.A.
40-3403(h) in the decisions in McVay and Lemuz. To address these arguments, we must
examine the language of the statute and the reasoning behind the holdings in McVay and
Lemuz. We begin with a discussion of the terms of K.S.A. 40-3403(h). For ease of
reference, we will set it out again, this time in full. It states:

"A health care provider who is qualified for coverage under the fund shall have
no vicarious liability or responsibility for any injury or death arising out of the rendering
of or the failure to render professional services inside or outside this state by any other
health care provider who is also qualified for coverage under the fund. The provisions of
this subsection shall apply to all claims filed on or after July 1, 1986." (Emphasis added.)

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As we have noted, Cady does not dispute that both Women's Care and Schroll are
health care providers qualified for coverage under the fund. See K.S.A. 40-3401(f)
(definition of "health care provider"). Her arguments focus on other portions of K.S.A.
40-3403(h), in particular the phrases "no vicarious liability or responsibility" and "for any
injury or death arising out of the rendering of or the failure to render professional
services . . . by any other health care provider." (Emphasis added.)

A few fundamental rules govern our interpretation of these phrases. The most
fundamental rule of statutory interpretation is that the intent of the legislature governs if
that intent can be ascertained. This court must first attempt to ascertain legislative intent
by reading the language of the statute and giving common words their ordinary meanings.
When a statute is plain and unambiguous, this court does not speculate as to the
legislative intent behind it and will not read into the statute something not readily found
in it. Stewart Title, 294 Kan. at 557. But when the statute's language or text is unclear or
ambiguous, this court employs "canons of construction, legislative history, or other
background considerations to divine the legislature's intent and construe the statute
accordingly. [Citation omitted.]" 294 Kan. at 564-65.

K.S.A. 40-3403(h) falls under the category of a statute that is unclear and
ambiguous. The ambiguity arises because both of the phrases on which we focus are
susceptible to multiple meanings.

As to the first phrase, as she did before the Court of Appeals, Cady contends the
word "vicarious" modifies both "liability" and "responsibility." She urges the application
of a general rule of syntax under which "an initial modifier 'will tend to govern all
elements in the series unless it is repeated for each element.'" Washington Educ. Ass'n v.
National Right to Work Legal Defense Foundation, Inc., 187 Fed. Appx. 681, 682 (9th
Cir. 2006) (unpublished opinion) (quoting The American Heritage Book of English
Usage 53 [1996]). This court has, on occasion, applied this rule when interpreting a
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statute. E.g., Rounsavell v. Tipton, 209 Kan. 366, 367-68, 497 P.2d 108 (1972) (in statute
requiring service by "'restricted registered or certified mail,'" the adjective "restricted"
modified both "registered" and "certified mail"); Hulme v. Woleslagel, 208 Kan. 385,
390, 395, 493 P.2d 541 (1972) (in statute requiring change of judge for "'personal bias,
prejudice ,or interest of the judge,'" the word "personal" appeared "as an adjective
modifying the nouns bias, prejudice, or interest").

On the other hand, a general rule of statutory construction provides that a court
should not "read out" words in a statute. Unruh v. Purina Mills, 289 Kan. 1185, 1194,
221 P.3d 1130 (2009). Under this rule, we must consider the import of the word
"responsibility" following the word "liability." Black's Law Dictionary 1427 (9th ed.
2009) defines "responsibility" as "liability." Thus, if Cady's interpretation of K.S.A.
40-3403(h) is correct, the statute would be read to eliminate "vicarious liability" and then
to repeat itself. This reading essentially renders meaningless the legislature's use of the
word "responsibility."

Although the McVay court did not discuss this rule of statutory construction, it
opted to make the word "responsibility" meaningful. It determined the word "vicarious"
modifies only the word "liability" and not the word "responsibility," making the
legislature's use of the two terms significant because a different meaning is conveyed
even though the two terms overlap in meaning. This conclusion was summarized in
Lemuz, 261 Kan. at 940, when the court stated: "McVay interpreted the [term
"responsibility"] as absolving a hospital not just from vicarious liability but from any
responsibility, including independent liability, for the acts of a physician."

Clearly, there is enough uncertainty in the meaning of the phrase "vicarious
liability or responsibility" that it can be considered ambiguous. Likewise, the phrase
"arising out of" is ambiguous as demonstrated by decisions of this court that have applied
the phrase in multiple ways.
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One interpretation of the phrase "arising out of" that is favorable to Cady can be
found in Marquis, 265 Kan. 317, the case Cady relies on to support the distinction
between vicarious liability and liability for an employer's independent tort. In Marquis,
this court was asked to determine whether a contractor's insurance policy provided
coverage related to damages arising from an automobile accident when the claim was that
the employer negligently hired, retained, or supervised the employee who was driving at
the time of the accident. The contractor's policy contained an exclusion for "'bodily injury
or property damage arising out of the ownership, maintenance, use or entrustment of
others of any aircraft, auto, or watercraft owned or operated by or rented or loaned to any
insured.'" (Emphasis added.) 265 Kan. at 328. The insurance company argued this
provision excluded any claims for negligent hiring, retention, or supervision of the
automobile driver because such claims arose out of an accident involving the use of an
automobile owned by the insured. The Marquis court disagreed. The court determined
"the theory of liability rather than the cause of the accident governs coverage." 265 Kan.
at 328-29.

In reaching this conclusion, the Marquis court noted it was adopting a minority
reading of the phrase "arising out of." 265 Kan. at 329-30. The majority view of other
state courts construing the same exclusion in contractors' policies focuses on causation,
not on the theory of liability. The majority view is that "'the claim for negligent
supervision is not independent of, but inextricably intertwined with, the employee's use
of the truck, [and] any breach by the employer to supervise such use is necessarily
deemed to have arisen therefrom.' [Citation omitted.]" 265 Kan. at 330.

But the Marquis court felt compelled to reject the majority view because of rules
governing the interpretation of exclusions in insurance contracts. One of these rules states
that "[g]enerally, exceptions, limitations, and exclusions to insurance policies require
narrow construction on the theory that the insurer, having affirmatively expressed
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coverage through broad promises, assumes the duty to define any limitations on that
coverage in clear and explicit terms." Marquis, 265 Kan. at 327. In applying this rule, the
court noted that the contractor's insurance policy specifically excluded negligent
entrustment but not negligent supervision. Yet, "Kansas law recognizes negligent
supervision as a separate and distinct theory in addition to theories of negligent hiring and
negligent retention," just as it recognizes the separate theory of negligent entrustment.
265 Kan. at 331. Further, in a separate homeowner's policy held by the insured, the same
insurance company specifically excluded negligent supervision. Based on these
comparisons, the court concluded the insurance company had recognized the viability of
negligent supervision as a theory of liability and had also recognized the need to exclude
the theory from coverage in its homeowner's policy. Nevertheless, it had not specifically
defined the limitation on coverage in its contractor's policy and therefore should not be
allowed to claim the exclusion. 265 Kan. at 331.

In Crist v. Hunan Palace, Inc., 277 Kan. 706, 714-16, 89 P.3d 573 (2004), this
court questioned the reasoning in Marquis but applied stare decisis principles and decided
its holding controlled the contract interpretation issue in that case. The discussion in Crist
included references to Kansas cases in which the Marquis holding had not been extended.
277 Kan. at 714. This line of other cases has more application in this case than does
Marquis because the rules regarding insurance exclusions that controlled Marquis do not
drive the interpretation of K.S.A. 40-3403(h). And in circumstances where an insurance
exclusion is not at issue, Kansas has interpreted the phrase "arising out of" in a manner
that is consistent with the majority rule of looking at causation rather than the theory of
liability. Several of these cases arise in the context of determining insurance coverage
rather than insurance exclusion.

For example, the Court of Appeals has recognized the words "arising out of" are
"very broad, general, and comprehensive terms . . . ordinarily understood to mean
'originating from,' 'having its origin in,' 'growing out of' or 'flowing from.'" Garrison v.
14

State Farm Mut. Auto. Ins. Co., 20 Kan. App. 2d 918, 923, 894 P.2d 226 (quoting
Cameron Mut. Ins. Co. v. Ward, 599 S.W.2d 13, 15 [Mo. App. 1980]), aff'd 258 Kan.
547, 907 P.2d 891 (1995). In Garrison, the issue was whether an injury arose out of the
use of an automobile when a hunter accidentally discharged his shotgun while exiting a
car, injuring the car's driver. This court, in affirming the Court of Appeals' determination
that the phrase "arising out of" conveyed a broad concept of causation, held the injury
"was a natural and reasonable incident arising out of the use of the car for hunting." 258
Kan. at 554.

This court adopted a similar focus on causation when interpreting two insurance
statutes in Farmers Ins. Co. v. Southwestern Bell Tel. Co., 279 Kan. 976, 982, 113 P.3d
258 (2005), stating: "The legislature's use of the phrase 'arising out of' in K.S.A. 40-284
and K.S.A. 40-3104(f) supports a broad definition" of the term "liability" when
considering if a claim arises out of the use of an automobile. Likewise, in Pestock v. State
Farm Auto. Ins. Co., 9 Kan. App. 2d 188, 189, 674 P.2d 1062 (1984), the Court of
Appeals held "[t]he phrase 'arising out of the . . . use of' imparts a more liberal concept of
causation than 'proximate cause.' [Citation omitted.]"

This focus on causation is consistent with the approach adopted in McVay, 255
Kan. 371. In that case, Anita McVay alleged that a hospital had negligently granted or
continued a physician's privileges when it knew or should have known the physician was
incompetent. In addition, McVay asserted that the hospital was negligent in not properly
providing or performing a quality assurance program. Despite these claims of direct
liability against the hospital for its own negligence, this court noted that McVay "would
have [had] no claim against the hospital if she had not been injured" by the physician, her
claim against the hospital was "derivative of and dependent upon her claim" against the
physician, and her "injury arose out of the rendering of professional services" by the
physician. 255 Kan. at 376-78.

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This court in McVay did not expand on its reasoning but endorsed the analysis of
the Court of Appeals in the decision under review, McVay v. Rich, 18 Kan. App. 2d 746,
859 P.2d 399 (1993). The Court of Appeals had adopted the focus on causation after
examining the legislative history of K.S.A. 40-3403(h). In determining the significance of
that legislative history, the McVay Court of Appeals looked to this court's opinion in Bair
v. Peck, 248 Kan. 824, 845, 811 P.2d 1176 (1991), in which this court held that K.S.A.
40-3403(h) does not violate Sections 1, 5, or 18 of the Kansas Constitution Bill of Rights.

The Bair court explained that K.S.A. 40-3403 "was originally enacted in 1976 to
address the perceived medical malpractice crisis, including the problems of obtaining and
maintaining affordable malpractice insurance and maintaining the availability of medical
services in Kansas." 248 Kan. at 827. Ten years later, however, those goals had not been
achieved. "In response to the continued increase in the cost of obtaining medical
malpractice insurance and after recommendations of the Special Committee on Medical
Malpractice [citation omitted], the legislature enacted additional major tort reforms in
1986," including the provision that was codified as subsection (h) of K.S.A. 40-3403. 248
Kan. at 828.

The Special Committee explained its purpose in proposing K.S.A. 40-3403(h) in
its report to the legislature, stating:

"'The Committee notes that licensees in medicine and surgery are now required
to pay medical malpractice premiums and surcharges as individuals and, additionally,
must pay these costs for professional associations they may belong to (albeit at a reduced
rate). The Committee believes this dual coverage requirement is not necessary to protect
the public welfare and is aggravating a problem that already exists with high insurance
costs.' [Proposal No. 47—Medical Malpractice,] Report on Kansas Legislative Interim
Studies to the 1986 Legislature, p. 859 [(December 1985)]." Bair, 248 Kan. at 833.

16

The Special Committee also explained its intent regarding the function of K.S.A.
40-3403(h), noting:

"[Recommendation] Other Insurance Changes. The bill requires partnerships of
persons who are health care providers to obtain the mandatory insurance coverages so
that vicarious liability of one health care provider for another may be abolished if both
are covered by the Fund. Further, insurers may exclude from coverage liability for those
health care providers already required to maintain professional liability insurance.'
[Report on Kansas Legislative Interim Studies to the 1986 Legislature,] p. 861." Bair,
248 Kan. at 833.

The first sentence of this recommendation is clearly limited to vicarious liability,
but the second sentence can be read to express a broader intent to eliminate the need for
double coverage. The McVay Court of Appeals read this broader intent as encompassing
responsibilities that are not strictly vicarious liability, as long as the injury arose from the
rendering of or failure to render professional services by another health care provider
required to obtain insurance coverage as mandated by the HCPIAA. 18 Kan. App. 2d at
752-53. Recognizing this legislative intent, the Court of Appeals in McVay concluded:

"If a hospital's insurer knows the hospital will only be liable for the negligence of its
employees and agents who are not qualified under the fund, malpractice insurance rates
should be stabilized.
"K.S.A. 1992 Supp. 40-3403(h) applies to all health care providers. Further, the
statute eliminates not only vicarious liability but also responsibility for any injury arising
out of the rendering of or failure to render professional services by another health care
provider who is also covered by the fund. [Citation omitted.]" 18 Kan. App. 2d at 752.

In endorsing this rationale on petition for review, this court's McVay decision
essentially resolved the ambiguities in K.S.A. 40-3403(h) in a way that furthers the
legislative intent of eliminating the need for a health care provider to obtain insurance
17

coverage for damages arising out of another health care provider's care and treatment of a
patient even if a theory of direct or independent liability has been asserted.

But Cady also argues the McVay interpretation violates the rule of statutory
construction that restrains a court from reading words into a statute. See Bergstrom v.
Spears Manufacturing Co., 289 Kan. 605, 609, 214 P.3d 676 (2009). According to her,
the McVay holding, which was reiterated in Lemuz, 261 Kan. 936, requires adding the
word "other" before the word "responsibility." We disagree. Rather than add a word, this
court simply declined to modify the word "responsibility" with the word "vicarious" and
gave the word "responsibility" its ordinary, unqualified meaning. An additional word,
such as "other," might have made the statute clearer, but additional words did not have to
be added to interpret the statute in a manner consistent with the apparent legislative
intent.

In summary, none of Cady's arguments persuade us that this court erroneously
interpreted K.S.A. 40-3403(h) in McVay and Lemuz. As our discussion has indicated,
K.S.A. 40-3403(h) is obviously ambiguous. Compare Marquis v. State Farm Fire & Cas.
Co., 265 Kan. 317, 328-29, 961 P.2d 1213 (1998) (interpreting phrase "arising out of" to
require focus on "the theory of liability rather than the cause of the accident") with
Garrison, 258 Kan. at 554 (interpreting phrase "arising out of" as incorporating broad
concept of causation). Therefore, the McVay Court of Appeals had appropriately
consulted legislative history to resolve the ambiguities in K.S.A. 40-3403(h). Further, as
we have discussed, this court's interpretation of the phrase "arising out of" in McVay, 255
Kan. 371, is consistent with the interpretation of that phrase by this court in contexts
other than insurance exclusions and by a majority of other courts in all contexts.
Consequently, we find no reason to overrule McVay and Lemuz as Cady asks us to do.
See Miller v. Johnson, 295 Kan. 636, 653, 289 P.3d 1098 (2012) ("The doctrine of stare
decisis maintains that once a point of law has been established . . . [a] court of last resort
will follow that rule of law unless clearly convinced it was originally erroneous or is no
18

longer sound because of changing conditions and that more good than harm will come by
departing from precedent.").

Instead, we reaffirm the holding in those cases that K.S.A. 40-3403(h) absolves a
health care provider not just from vicarious liability but from any responsibility,
including independent liability, where the injured party's damages are derivative of and
dependent upon the rendering of or the failure to render professional services by another
health care provider.

2. McVay and Lemuz Are Not Distinguishable

Alternatively, Cady argues that McVay v. Rich, 255 Kan. 371, 874 P.2d 641
(1994), and Lemuz v. Fieser, 261 Kan. 936, 933 P.2d 134 (1997), are factually
distinguishable and should not be applied. She notes that those decisions involved claims
where a plaintiff sued a hospital rather than a physician's group; involved independent
contractors as opposed to employees; arose on claims based on the corporate negligence
theory rather than on a failure to supervise theory; and were based in part on K.S.A.
65-442(b), a statute that does not apply to Women's Care.

Cady is correct that her claims are distinguishable from those in McVay and Lemuz
because Schroll was an employee of Women's Care, which is a physician's group, as
opposed to an independent contractor with a hospital, which was the situation in McVay
and Lemuz. And the claims in McVay were based on a theory often referred to as
corporate negligence, which relates, at least in part, to the duty to "'exercise reasonable
care to employ a competent and careful contractor . . . .' Restatement (Second) of Torts §
411 (1963)." McVay, 255 Kan. at 376-77. Nevertheless, these distinctions are not as
meaningful as Cady suggests. The language of K.S.A. 40-3403(h) does not premise
immunity on the type of health care providers involved, the nature of the relationship
between the two health care providers, or the nature of the theory of liability.
19


Regarding the type of health care provider involved, while K.S.A. 40-3403(h) is
ambiguous in many respects, the legislature clearly did not intend to distinguish between
hospitals and medical practice groups formed by individual providers or any other health
care provider. K.S.A. 40-3401(f) defines the term "health care provider" to include
various licensed individuals, medical care facilities, professional corporations and limited
liability companies organized by health care providers, and other entities.

Likewise, there is no indication the legislature intended to distinguish between
employee-employer, independent contractor, or even less formal relationships. For
example, focusing on the term "vicarious liability," the term Cady admits is
unambiguous, Kansas law historically recognized that a "physician may be vicariously
liable for the negligence of other members of the health care team under the so-called
'captain of the ship' theory." Glassman v. Costello, 267 Kan. 509, 523, 986 P.2d 1050
(1999); see, e.g., Oberzan v. Smith, 254 Kan. 846, 850, 869 P.2d 682 (1994) (recognizing
that as "captain of the ship" surgeon exercising staff privileges at hospital was liable for
actions of hospital employees assisting with surgery); Voss v. Bridwell, 188 Kan. 643,
Syl. ¶ 3, 364 P.2d 955 (1961) (surgeon exercising staff privileges had liability for
anesthetist in hospital's residency program). The captain-of-the-ship theory applied even
though the surgeon did not employ or contract with the other health care providers in the
operating room. Yet in Glassman, one of the cases relied on by Cady, this court
recognized that K.S.A. 40-3403(h) abrogated vicarious liability based on the captain-of-
the-ship theory. 267 Kan. at 523. Clearly, K.S.A. 40-3403(h) makes no distinction based
on the nature of the relationship between the health care providers, and we find no basis
to distinguish McVay or Lemuz on this basis.

Nor does K.S.A. 40-3403(h) impose conditions relating to the theory of liability
asserted in a petition. Instead, as we have discussed, the focus is on the source or cause of
the plaintiff's injuries, not on the theory of liability. In addition, while McVay's claims
20

fell within the scope of the corporate negligence doctrine, this court explicitly declined to
reach the question of whether Kansas should adopt the corporate negligence theory
because the "unambiguous language of K.S.A. 65-442(b) and K.S.A. 40-3403(h) requires
the conclusion that those statutes bar McVay's claim[s] against the hospital." McVay, 255
Kan. at 377. As we have discussed, this decision was based, at least in part, on the court's
focus on causation rather than the nature of the theory. Likewise, in this case we need not
determine whether a duty to supervise theory applies in the situation of a licensed
physician who is a shareholder of a corporation. Rather, assuming the theory is viable, we
must determine if under the facts Women's Care can be liable as a matter of law.

Also, there are obvious parallels between the claims made by McVay and those
made by Cady. In McVay, this court recognized that the term "corporate negligence" was
an umbrella term encompassing many "independent duties a hospital may owe to a
patient," including such things as the duty to exercise reasonable care in granting and
renewing staff privileges to independent-contractor physicians, "the duty to monitor and
review patients' treatment and progress[,] and the duty to make and enforce rules." 255
Kan. at 375. In many respects, these duties are similar to the duties Cady claims Women's
Care owed to her—the duty to retain competent agents and to supervise.

Further, regardless of whether the liability arises from the negligent hiring and
supervision of an independent contractor or an employee-employer relationship, the
policy behind imposing liability on the principal is the same: making liable the entity or
person who was in a position to protect the patient, who profited from the business
relationship with the injured patient, and who is often best able to pay for the damages.
See Marquis, 265 Kan. at 331 (discussing duty to supervise); McVay, 255 Kan. at 377
(discussing corporate negligence); Plains Resources, Inc. v. Gable, 235 Kan. 580, 590,
682 P.2d 653 (1984) (discussing duty to hire and retain competent employees); see also
Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 523, 622 N.E.2d 788 (1993)
(discussing policy reasons for recognizing vicarious liability of hospital for acts of
21

independent-contractor physician). We recognize that K.S.A. 40-3403(h) arguably
undermines the public policy behind these theories of liability and diminishes the
protections otherwise available to patients. But "courts 'are not free to act on . . . [their
own] view of wise public policy' in matters governed by legislation. [Citation omitted.]
Courts should instead 'leave the guidance of public policy through statutes to the
legislature.' [Citations omitted.]" In re Marriage of Hall, 295 Kan. 776, 784, 286 P.3d
210 (2012). Our task is to determine if there is any reason to discern a legislative intent to
distinguish between employees and independent contractors or various theories of
liability, and we can find none.

The final distinction argued by Cady is that K.S.A. 65-442(b), which is discussed
extensively in McVay and Lemuz, is not at issue in this case. K.S.A. 65-442(b) applies
only to "licensed medical care facilit[ies]," and Women's Care does not fall within that
term's definition. See K.S.A. 65-425(h) (defining "medical care facility" to generally
mean "a hospital, ambulatory surgical center or recuperation center"). Cady makes a two-
fold argument: (1) the application of K.S.A. 65-442(b) and its clear intent infected the
McVay court's reading of K.S.A. 40-3403(h), and (2) K.S.A. 65-442(b) demonstrates that
the legislature knew how to clearly provide for immunity from liability but did not do so
in K.S.A. 40-3403(h).

We agree with Cady that K.S.A. 65-442(b) is a clearer and less ambiguous statute.
K.S.A. 65-442(b) states:

"There shall be no liability on the part of and no action for damages shall arise
against any licensed medical care facility because of the rendering of or failure to render
professional services within such medical care facility by a person licensed to practice
medicine and surgery if such person is not an employee or agent of such medical care
facility."

22

As Cady indicates, the phrases "no liability" and "no action for damages" are crystal
clear. And in interpreting statutes we frequently point to parallel statutes and note that the
language in one statute may illustrate that the legislature knows how to state something
that is omitted in another statute. See State v. Nambo, 295 Kan. 1, 4-5, 281 P.3d 525
(2012). Nevertheless, using different language in two statutes does not necessarily mean
that both cannot be interpreted in a manner consistent with legislative intent. And
although the McVay court discussed both statutes, in large part it analyzed them
separately and reached conclusions specific to K.S.A. 40-3403(h). Moreover, as we have
discussed, the legislative history supporting the McVay court's interpretation of K.S.A.
40-3403(h) is specific to that provision. Finally, as revealed in the decisions in Aldoroty
v. HCA Health Services of Kansas, Inc., 265 Kan. 666, 962 P.2d 501 (1998), and
Glassman, 267 Kan. 509, which we will discuss in more detail in the next section of this
opinion, we do not believe K.S.A. 40-3403(h) was intended to have the same scope as
K.S.A. 65-442(b). While K.S.A. 65-442(b) bars all of a medical care facility's liability for
a physician's care and treatment of a patient if the physician is not an employee or agent
of the medical care facility, K.S.A. 40-3403(h) limits the bar of liability only to damages
arising out of the other health care provider's actions or inactions. As Aldoroty and
Glassman demonstrate, through the causation requirement in K.S.A. 40-3403(h) the
legislature left open the possibility of two health care providers having liability. Thus,
there was a reason for the legislature to use different language in the two statutes.

Simply put, K.S.A. 40-3403(h) does not premise its bar of responsibility based on
any of the distinctions Cady attempts to make between the facts of this case and those
involved in McVay or Lemuz.

3. Aldoroty and Glassman Did Not Overrule McVay and Lemuz

Cady further suggests that Aldoroty and Glassman changed the way this court
interprets and applies K.S.A. 40-3403(h). We, therefore, next consider the impact of
23

those decisions and conclude that Cady's reading of the holdings in those cases is shaded
by her attempt to impose the Marquis reading of "arising out of" on our interpretation of
K.S.A. 40-3403(h).

In Aldoroty, the plaintiff sued three radiologists and a hospital, alleging that
negligence delayed his diagnosis of lymphoma. Aldoroty was an employee of the hospital
and participated in annual health audits provided to employees. Aldoroty's theory of
liability was that his illness had progressed because radiologists failed to detect changes
in chest X-rays and that their failure was at least partially attributable to the hospital's
failure to furnish the radiologists with previous films for comparison. Plaintiff's experts
faulted the radiologists on several grounds, including reading X-rays without verifying
whether there were previous films that could be compared. As to the hospital's liability,
even the hospital did not dispute its duty to retrieve the records and make the previous X-
rays available to the radiologists.

One argument advanced by the hospital was that it could not be held liable under
McVay and K.S.A. 40-3403(h) unless it was 100 percent at fault because it could not be
held liable for injuries arising out of the radiologists' negligence. And the hospital
contended it could not be 100 percent at fault because the "'[p]laintiff's theory and the
facts dictate that at least some negligent act by a physician was required for injury to
result.'" Aldoroty, 265 Kan. at 680.

The Aldoroty court was not persuaded by the hospital's arguments. The court
distinguished McVay, noting that Aldoroty was not seeking to hold the hospital liable for
the radiologists' actions but for the failure of hospital employees to retrieve prior X-rays
from storage and furnish them to the radiologists. The court also noted that the hospital's
"duty and the radiologists' duty were close links in the same small chain, and it was up to
the jury to compare their fault." Aldoroty, 265 Kan. at 682.

24

The Court of Appeals in this case rejected Cady's arguments that Aldoroty
effectively overruled McVay. The Court of Appeals reasoned:

"There is no indication in Aldoroty that the court considered its opinion in that
case in any way to be inconsistent with McVay or Lemuz. We see nothing inconsistent in
finding the hospital could be sued when it negligently rendered direct medical care to a
patient (by failing to provide the records of past X-rays when it had undertaken a duty to
do so) even though it may not be sued for negligent supervision of another covered
provider. Under Aldoroty, a healthcare provider may be liable for specific acts of
negligence where the duty is separate from the services of another healthcare provider.
That liability doesn't 'arise out of' another provider's conduct or treatment. [Citation
omitted.]" Cady v. Schroll, No. 103,499, 2011 WL 2535004, at *4 (Kan. App. 2011)
(unpublished opinion).

Cady, in suggesting the Court of Appeals' reading of Aldoroty was in error, notes
that the Aldoroty court distinguished McVay and Lemuz because they were "confined to
application to the corporate negligence theory." Aldoroty, 265 Kan. at 682. But Cady
ignores the reason the Aldoroty court felt the distinction was important.

The Aldoroty court noted that the duty alleged in McVay was "to select and retain
only competent and careful physicians" and "[t]hat duty arose in a function completely
separate from the surgical services provided by the hospital." Aldoroty, 265 Kan. at 682.
In contrast, Aldoroty "did not seek to hold [the hospital] liable for his physical harm
caused by the hospital's negligence in selecting and retaining the radiologists" or even its
own employees. 265 Kan. at 682. Rather, Aldoroty alleged hospital employees, who were
not medical providers required to obtain insurance under the HCPIAA, owed him a duty
related to his care and treatment that was independent of the duty owed by the
radiologists. And Aldoroty's injuries arose at least in part because the hospital's
employees were negligent in caring for him, not just in failing to appropriately retain or
supervise an employee or independent contractor. 265 Kan. at 682; see Culp v. Sifers, 550
25

F. Supp. 2d 1276, 1285 (D. Kan. 2008) (granting summary judgment in favor of
professional association appropriate where plaintiff failed to direct the court to "any
particular duty owed to plaintiff" related to the course of treatment and the "plaintiff
would have no claim against the professional association if [the surgeon] had not
negligently injured her").

The same distinction can be made between McVay and the other decision on
which Cady relies, Glassman, 267 Kan. 509, a case not specifically discussed by the
Court of Appeals. As in Aldoroty, Glassman arose after two health care providers were
negligent in the care and treatment of a patient. The case involved an anesthesia-related
death of a patient during a cesarean section delivery of her healthy child. The patient's
heirs-at-law sued the certified registered nurse anesthetist and the obstetrician. The heirs-
at-law claimed the obstetrician was negligent in (1) failing to direct and monitor the nurse
anesthetist as required by K.S.A. 65-1158(b) (stating "[a] registered nurse anesthetist
shall perform duties and functions in an interdependent role as a member of a
physician . . . directed health care team"); (2) beginning surgery after the failure of a
spinal anesthesia; (3) ignoring the nurse anesthetist's report that the patient was not
intubated; and (4) continuing with surgery when he knew or should have known the
patient was inappropriately intubated.

The heirs-at-law conceded that the adoption of K.S.A. 40-3403(h) meant the
obstetrician could not be vicariously liable as he historically would have been under the
captain-of-the-ship doctrine. Nevertheless, the survivors contended they were seeking to
hold the obstetrician liable for his individual actions and inactions in the operating room,
not just for vicarious liability. This court agreed, noting that the abrogation of liability in
K.S.A. 40-3403(h) did not mean, as the obstetrician had argued, that there was no
possible liability. Rather, the obstetrician could be liable "in light of the individual
technical duties of the different health care providers." 267 Kan. at 526.

26

The court explained that the patient "died due to hypoxia brought about by
inadequate anesthetic induction and a failure to intubate prior to initiation of the cesarean
section" and, while the induction and intubation were tasks performed by the nurse
anesthetist, the obstetrician had a statutorily imposed "duty of direction." Glassman, 267
Kan. at 513, 526. Rather than communicating with the anesthetist to assure the induction
was adequate and the patient had been intubated before initiating the surgery, the surgeon
conducted the cesarean section. There was evidence the obstetrician had been told the
patient was not intubated and that the obstetrician should have known from the tones
emitted by the oximeter that the patient's level of oxygen was decreasing. These factual
issues suggested a jury should determine the comparative fault of the two health care
providers, both of whom had some active role in causing the mother's death. See 267
Kan. at 523-24, 526.

Thus, the obstetrician's liability did not arise from the nurse anesthetist's
negligence but from his own negligent care and treatment of the patient. In other words,
the heirs' claim against the obstetrician did not arise out of the nurse anesthetist's actions
but out of the obstetrician's own actions, and K.S.A. 40-3403(h) did not apply.

Because both Aldoroty and Glassman dealt with situations where two health care
providers were negligent in providing care and treatment to a patient and the patient's
injuries arose from the actions of each provider, those cases present a different situation
than McVay or Lemuz. In McVay and Lemuz, the injuries arose out of the actions of the
physician, and the hospital's liability would have arisen only from the failure to supervise
the physician. Given these differences, we reject Cady's argument that Aldoroty and
Glassman altered the holdings in McVay and Lemuz.




27

4. Aldoroty and Glassman Do Not Prevent Summary Judgment

Finally, Cady argues that Aldoroty and Glassman prevent summary judgment in
favor of Women's Care. We disagree.

Cady's claims against Women's Care are more akin to those in McVay and Lemuz
than those in Aldoroty and Glassman. Cady makes no claim that any employee of
Women's Care who was not covered by the HCPIAA negligently treated her, so we do
not have a factual situation like Aldoroty and Glassman. Instead, her claims against
Women's Care for negligent supervision are like those asserted in McVay, and all of her
claimed damages derive from the alleged wrongful acts of Schroll. Paraphrasing what
this court said in McVay, Cady "would have [had] no claim against [Women's Care] if
she had not been injured" by Schroll, her claim against Women's Care was "derivative of
and dependent upon her claim" against Schroll, and her "injury arose out of the rendering
of professional services" by Schroll. See McVay, 255 Kan. at 376-78. Consequently,
K.S.A. 40-3403(h) bars Women's Care's liability, and the district court did not err in
granting summary judgment.

Judgment of the Court of Appeals affirming the district court is affirmed.
Judgment of the district court is affirmed.

JOHNSON, J., concurs in result.