California Jury Instruction CACI 3709 Ostensible Agent

New September 2003; Revised November 2019

Nakase Wade | California Business Lawyers & Corporate Lawyers

Give this instruction with CACI No. 3701, Tort Liability Asserted Against Principal—Essential Factual Elements, if the plaintiff is relying on the doctrine of ostensible agency to establish the principal-agent relationship in CACI No. 3701.

A somewhat different instruction is required to hold a hospital responsible for the acts of a physician under ostensible agency when the physician is actually an employee of a different entity. In that context, it has been said that the only relevant factual issue is whether the patient had reason to know that the physician was not an agent of the hospital. (See Markow v. Rosner (2016) 3 Cal.App.5th 1027 [208 Cal.Rptr.3d 363]; see also Mejia v. Community Hospital of San Bernardino (2002) 99 Cal.App.4th 1448, 1454 [122 Cal.Rptr.2d 233].)

•Agency Is Actual or Ostensible. Civil Code section 2298.

•“Ostensible Agency” Defined. Civil Code section 2300.

•“Ostensible Authority” Defined. Civil Code section 2317.

•When Principal is Bound by Ostensible Agent. Civil Code section 2334.

•“ ‘[O]stensible authority arises as a result of conduct of the principal which causes the third party reasonably to believe that the agent possesses the authority to act on the principal’s behalf.’ ‘Ostensible authority may be established by proof that the principal approved prior similar acts of the agent.’ ‘ “[W]here the principal knows that the agent holds himself out as clothed with certain authority, and remains silent, such conduct on the part of the principal may give rise to liability. …” …’ ” (Chicago Title Ins. Co. v. AMZ Ins. Services, Inc. (2010) 188 Cal.App.4th 401, 426–427 [115 Cal.Rptr.3d 707], original italics, internal citations omitted.)

•“Whether an agent has ostensible authority is a question of fact and such authority may be implied from circumstances.” (Pierson v. Helmerich & Payne Internat. Drilling Co. (2016) 4 Cal.App.5th 608, 635 [209 Cal.Rptr.3d 222].)

•“ ‘It is elementary that there are three requirements necessary before recovery may be had against a principal for the act of an ostensible agent. The person dealing with the agent must do so with belief in the agent’s authority and this belief must be a reasonable one; such belief must be generated by some act or neglect of the principal sought to be charged; and the third person in relying on the agent’s apparent authority must not be guilty of negligence.’ ” (Associated Creditors’ Agency v. Davis (1975) 13 Cal.3d 374, 399 [118 Cal.Rptr. 772, 530 P.2d 1084], internal citations omitted.)

•“Ostensible agency cannot be established by the representations or conduct of the purported agent; the statements or acts of the principal must be such as to cause the belief the agency exists.” (American Way Cellular, Inc. v. Travelers Property Casualty Co. of America (2013) 216 Cal.App.4th 1040, 1053 [157 Cal.Rptr.3d 385].)

•“Liability of the principal for the acts of an ostensible agent rests on the doctrine of ‘estoppel,’ the essential elements of which are representations made by the principal, justifiable reliance by a third party, and a change of position from such reliance resulting in injury.” (Preis v. American Indemnity Co. (1990) 220 Cal.App.3d 752, 761 [269 Cal.Rptr. 617], internal citation omitted.)

•“But the adequacy of the notice is only one of the many fact questions that arise under ostensible agency. The jury must also determine whether the patient entrusted herself to the hospital, whether the hospital selected the doctor, and whether the patient reasonably believed the doctor was an agent of the hospital.” (Whitlow v. Rideout Memorial Hospital (2015) 237 Cal.App.4th 631, 641 [188 Cal.Rptr.3d 246].)

•“Where a patient seeks to hold a hospital liable for the negligence of a physician, the doctrine of ostensible agency is now commonly expressed as having two elements: ‘(1) conduct by the hospital that would cause a reasonable person to believe that the physician was an agent of the hospital, and (2) reliance on that apparent agency relationship by the plaintiff.’ Generally, the first element is satisfied ‘when the hospital “holds itself out” to the public as a provider of care,’ ‘unless it gave the patient contrary notice.’ Nonetheless, a hospital’s ‘contrary notice’ may be insufficient ‘to avoid liability in an emergency room context, where an injured patient in need of immediate medical care cannot be expected to understand or act upon that information.’ Reliance upon an apparent agency is demonstrated ‘when the plaintiff “looks to” the hospital for services, rather than to an individual physician.’ Ultimately, ‘there is really only one relevant factual issue: whether the patient had reason to know that the physician was not an agent of the hospital. As noted above, hospitals are generally deemed to have held themselves out as the provider of services unless they gave the patient contrary notice, and the patient is generally presumed to have looked to the hospital for care unless he or she was treated by his or her personal physician. Thus, unless the patient had some reason to know of the true relationship between the hospital and the physician—i.e., because the hospital gave the patient actual notice or because the patient was treated by his or her personal physician—ostensible agency is readily inferred.’  ” (Markow, supra, 3 Cal.App.5th at p. 1038, internal citations omitted.)