Schnurr v. Banner

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

JOSEPH SCHNURR, et al., Plaintiffs/Appellants,

v.

BANNER HEALTH, et al., Defendants/Appellees.

No. 1 CA-CV 24-0434

FILED 02-27-2025

Appeal from the Superior Court in Maricopa County
No. CV2019-097698
The Honorable Adam D. Driggs, Judge

AFFIRMED

COUNSEL

Shah and Associates, PLLC, Tempe
By Zaheer A. Shah
Co-Counsel for Plaintiffs/Appellants

Consumer Attorneys PLC, Scottsdale
By Michael Yancey III, David A. Chami (argued)
Co-Counsel for Plaintiffs/Appellants

Jones, Skelton & Hochuli, PLC, Phoenix
By Eileen Dennis GilBride (argued)
Co-Counsel for Defendants/Appellees Banner Health dba Banner Gateway
Medical Center
 SCHNURR, et al. v. BANNER, et al.
Decision of the Court

Slattery Petersen, LLC, Phoenix
By Elizabeth A. Petersen
Co-Counsel for Defendants/Appellees Banner Health dba Banner Gateway
Medical Center

MEMORANDUM DECISION

Chief Judge David B. Gass delivered the decision of the court, in which
Presiding Judge Brian Y. Furuya and Vice Chief Judge Randall M. Howe
joined.

G A S S, Chief Judge:

¶1 The father and sons of decedent K.G. 1 appeal the superior
court’s grant of summary judgment for Banner Health (Banner) on claims
of medical malpractice and wrongful death. We affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 On December 17, 2017, K.G. began experiencing chest pain.
Her father, Joseph Schnurr, took her to urgent care, where they were told
to go to the emergency room. Schnurr then drove K.G. to Banner’s
emergency room.

¶3 Upon arrival, Schnurr signed a form titled Condition of
Admission and Treatment (the admission form). The form told her
“emergency room physician[s] . . . are generally not employees or agents of
the hospital.”

¶4 Kevin Aister, D.O., was K.G.’s emergency room physician at
Banner. Banner furnished Dr. Aister with equipment and support staff who
assisted with his treatment of K.G. Dr. Aister ordered an EKG, blood tests,
and a chest x-ray. After diagnosing K.G. with pleurisy or lung
inflammation, Dr. Aister discharged her. The next day, K.G. was found
dead in her home from an aortic dissection.

¶5 When Dr. Aister treated K.G., he was under contract with
Emergency Physicians Southwest, P.C. (EPS). Dr. Aister testified he had no
“traditional employer-type arrangements” with Banner. Consistent with

1 We use initials to preserve the decedent’s anonymity.
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that testimony, Dr. Aister’s employment contract was with EPS, not Banner.
That contract:

• Required Dr. Aister “render professional medical services [] as an
independent contractor of [EPS] at [Banner.]”

• Required Dr. Aister to render medical services “consistent with the
applicable bylaws, policies, rules, agreements, and requests of
[Banner.]”

• Required EPS to “determine the start time and duration of” Dr.
Aister’s shifts, “in conjunction with [Banner.]”

• Allowed EPS’s “designated billing company . . . to bill and collect
for” Dr. Aister’s medical services.

• Allowed Dr. Aister to provide “services at other healthcare
facilities.”

Dr. Aister testified about his relationship with EPS and with Banner. He
said he asked EPS, not Banner, for schedule adjustments and time off. He
said EPS compensated him and provided him with retirement benefits and
health insurance. Dr. Aister also said, “Banner did not direct the care that
[he] provided to [his] patients . . . and [t]hat was done based upon his own
medical judgment.” And Dr. Aister owned and operated [his] own
independent medical practice throughout the contract’s term.

¶6 Schnurr and K.G.’s two sons (collectively plaintiffs) sued for
medical malpractice and wrongful death, naming Dr. Aister, EPS, and
Banner as defendants. After years of litigation, the court granted Banner
summary judgment after finding Banner could not be liable for Dr. Aister’s
alleged negligence because no material fact established Dr. Aister was
Banner’s agent.

¶7 The court has jurisdiction over plaintiffs’ timely appeal under
Article VI, Section 9, of the Arizona Constitution, and A.R.S. § 12-2101.A.1.

DISCUSSION

¶8 Plaintiffs challenge the superior court’s grant of summary
judgment for Banner. Plaintiffs argue the court should reverse because of
genuine disputed issues of material fact about Dr. Aister’s actual or
apparent agency with Banner.

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¶9 The court reviews grants of summary judgment de novo,
viewing the evidence and all reasonable inferences in the light most
favorable to plaintiffs as the non-moving party. Roebuck v. Mayo Clinic, 256
Ariz. 161, 165 ¶ 11 (App. 2023). Summary judgment is appropriate when
“the facts produced in support of the claim or defense have so little
probative value . . . that reasonable people could not agree with the
conclusion advanced by the proponent of the claim or defense.” Orme Sch.
v. Reeves, 166 Ariz. 301, 309 (1990); see also Ariz. R. Civ. P. 56(a).

¶10 Plaintiffs seek to hold Banner liable under a theory of
respondeat superior, arguing Dr. Aister was Banner’s agent. Plaintiffs bear
the burden of proving an agency relationship, whether actual or apparent.
See Brown v. Ariz. Dep’t of Real Est., 181 Ariz. 320, 326 (App. 1995). Because
the moving party here, Banner, does not bear the burden of proof, it need
only show the absence of evidence in the record supporting an essential
element of the claim. See Nat’l Bank of Ariz. v. Thruston, 218 Ariz. 112, 117
¶ 22 (App. 2008). Once the moving party makes that showing, the burden
“shifts to the non-moving party to present sufficient evidence” of a genuine
dispute of material fact. Id. at 119 ¶ 26.

I. Dr. Aister was not Banner’s actual agent.

¶11 Plaintiffs argue the superior court erred when it found Dr.
Aister was not Banner’s actual agent. The existence of an actual agency
relationship is generally a fact question and becomes a legal question only
if all material facts are undisputed. Ruesga v. Kindred Nursing Ctrs., L.L.C.,
215 Ariz. 589, 596 ¶ 21 (App. 2007). The material facts here are not in
dispute.

¶12 This case involves a doctor who staffed Banner’s emergency
room under a contract between the doctor’s medical group and the hospital.
Plaintiffs argue Dr. Aister was Banner’s actual agent. To prevail on an actual
agency claim, Plaintiffs must establish sufficient relational facts between
Banner and Dr. Aister. 2 See Evans v. Bernhard, 23 Ariz. App. 413, 416–17
(1975); see also Beeck v. Tucson Gen. Hosp., 18 Ariz. App. 165, 169–71 (1972);

2 Arizona case law has blended the concepts of employer-employee
relationships and actual agency relationships in the physician-hospital
context. See Gregg v. Nat’l Med. Health Care Servs., Inc., 145 Ariz. 51, 55 (App.
1985) (establishing a test for actual agency and applying it in an employer-
employee analysis); Amick v. Banner Health, 1 CA-CV 22-0401, 2023 WL
5217704, at *8 ¶ 46 (Ariz. App. Aug. 15, 2023) (mem. decision) (deriving the
test for actual agency exclusively from employer-employee cases).
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Gregg v. Nat’l Med. Health Care Servs., Inc., 145 Ariz. 51, 54 (App. 1985)
(“[T]he fact that a physician or surgeon is on a hospital staff does not
necessarily make him an employee of that hospital.”).

¶13 In assessing relational facts, the focus is the degree of the
hospital’s control over the physician. See Gregg, 145 Ariz. at 55
(acknowledging actual agency requires hospitals to have a right to control
“the conduct of the alleged servant-physician”). In the context of an actual
agency relationship between a hospital and a medical professional, the
court has considered whether the following relational facts were true: (1)
the hospital arranged services for the physician’s patients, (2) the hospital
handled all billing, (3) the hospital paid the physician and set his schedule,
(4) the hospital furnished the facilities, equipment, and support staff, (5) the
physician exclusively provided services at the hospital, (6) the physician
headed a hospital department, and (7) the physician provided services
under hospital rules and procedures. See Beeck, 18 Ariz. App. at 169–71.

¶14 Beeck determined a radiologist was an employee and thus an
actual agent of a hospital. Id. In Beeck, the radiologist held a leadership
position at the hospital and signed a long-term contract agreeing not to
practice elsewhere. Id. at 169. The hospital paid him, set his hours, handled
billing, and provided him with facilities, equipment, and support staff. Id.
at 170. The hospital had the right to control the radiologist’s standards of
performance and required him to comply with the hospital’s rules and
regulations. Id. Based on these facts, Beeck concluded the hospital exercised
sufficient control to establish an employer-employee relationship. Id. at
170–71.

¶15 Applying Beeck, a different result should occur here. Unlike
the radiologist in Beeck, Dr. Aister had no contractual relationship with
Banner. He held no leadership position at Banner. And he did not provide
medical services exclusively at Banner; instead, he operated his own
medical practice beyond providing services at Banner. Banner further did
not pay Dr. Aister, set his schedule, or handle billing. Banner also did not
control the way Dr. Aister rendered medical care. And the admission form
shows Banner “generally” did not consider emergency room physicians,
like Dr. Aister, “employees or agents of the hospital.”

¶16 That said, this case and Beeck are similar in two respects: (1)
Banner furnished Dr. Aister with facilities, equipment, and support staff,
and (2) Dr. Aister was required to comply with Banner’s rules and
regulations. But unlike Beeck, when the medical professional had to comply
because of a direct contractual relationship with the hospital, Dr. Aister’s

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required compliance with Banner’s rules and regulations stemmed from his
contract with EPS, not with Banner. Further, those rules and regulations are
not in the record, and nothing in the record suggests they allowed Banner
to exercise enough control over Dr. Aister’s conduct to make him Banner’s
actual agent. See Gregg, 145 Ariz. at 55.

¶17 Plaintiffs unavailingly rely on Barrett v. Samaritan Health
Servs., 153 Ariz. 138 (App. 1987). Barrett bears some factual similarities to
the facts here. In Barrett, a medical group contracted to provide emergency
medical care to a hospital, and one of the medical group’s physicians acted
negligently. Id. at 141. The hospital also provided nurses and support staff.
Id. at 146. And the medical group’s physicians had to follow the hospital’s
rules and procedures. Id.

¶18 Even so, Barrett is unpersuasive. Barrett concluded the
medical group’s liability for the physician’s negligence extended to the
hospital through apparent agency, not actual agency. Id. at 145–46. But
Barrett did not articulate or use the test for apparent agency. Instead, it used
the test for actual agency. Id. And in so doing, Barrett did not address the
key factor for actual agency: the degree of control the hospital exercised
over the physician. Id. And Barrett addressed none of the elements of
apparent agency. Compare Fadely v. Encompass Health Valley of Sun Rehab.
Hosp., 253 Ariz. 515, 520 ¶ 15 (App. 2022) (recognizing apparent agency
requires proof the principal intentionally or inadvertently led another “to
believe an agency exists,” and the party “justifiably relie[d] on the
principal’s representations”) (internal quotations omitted) with Barrett, 153
Ariz. at 145–46 (finding apparent agency relationship by relying on Beeck’s
actual agency analysis).

¶19 On this record, the undisputed material facts do not establish
an employer-employee relationship between Banner and Dr. Aister. See
Gregg, 145 Ariz. at 55; Beeck, 18 Ariz. App. at 169–71. The evidence simply
does not show Banner controlled Dr. Aister’s rendering of medical care
despite those limited similarities. Id.

II. Dr. Aister was not Banner’s apparent agent.

¶20 Plaintiffs also argue the superior court erred when it found
Dr. Aister was not Banner’s apparent agent. As noted above, apparent
agency exists “only when (1) a principal intentionally or inadvertently leads
one party to believe an agency exists, and (2) the party justifiably relies on
the principal’s representations.” Fadely, 253 Ariz. at 520 ¶ 15 (internal
quotations omitted).

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¶21 Plaintiffs argue Banner led K.G. to believe Dr. Aister was its
agent because it publicly advertised its services as a hospital and emergency
room but these advertisements did not say Banner had independent
contractors providing those services. Because the record includes no
evidence of Banner’s advertising, the court cannot consider it. See Ness v.
Western Sec. Life Ins. Co., 174 Ariz. 487, 500 (App. 1992) (“We cannot consider
any evidence not contained in the record” in reviewing a grant of summary
judgment.). That said, no evidence in the record suggests K.G. relied on
Banner’s advertisements in deciding to seek care in its emergency room.
Indeed, the advertisements are not in the record. In fact, undisputed
evidence shows K.G. went to Banner because the urgent care referred her
there.

¶22 Plaintiffs next argue K.G. believed Dr. Aister was Banner’s
agent because, allegedly, “Banner directly assigned Dr. Aister . . . to provide
[] medical care to [K.G.]” Similarly, no evidence in the record shows Banner
assigned Dr. Aister to treat K.G. And nothing in the record suggests K.G.
believed Banner had done so. Plaintiffs thus did not show the
representation or justifiable reliance required for apparent agency.

¶23 Because no evidence in the record supports finding apparent
agency, we need not address whether the admission form would preclude
apparent agency. Still, Plaintiffs argue the admission form itself manifested
an agency relationship because it implicitly told K.G. some physicians were
agents. Plaintiffs waived this argument because they raised it for the first
time in their reply brief. See in re Marriage of Pownall, 197 Ariz. 577, 583 ¶ 25
n.5 (App. 2000). Waiver aside, common sense undermines the argument.
Nothing about that warning would lead patients to believe physicians are
agents and any alleged reliance would be unreasonable and unjustifiable.

¶24 Finally, Plaintiffs ask the court to adopt a new test for
apparent agency in the hospital-physician context. Plaintiffs argue apparent
agency should exist if the hospital (1) “holds itself out as a provider of
emergency room care” and (2) “the plaintiff relies upon the hospital to
provide complete emergency room care.” Gilbert v. Sycamore Mun. Hosp.,
622 N.E.2d 788, 796 (Ill. 1993). This court cannot adopt such a test. See Queen
Creek Summit, LLC v. Davis, 219 Ariz. 576, 580 ¶ 18 (App. 2008) (“[W]e are
bound to follow supreme court precedent.”). The proposed test contravenes
longstanding Arizona Supreme Court precedent, which places the burden
of proving agency on plaintiffs and says apparent agency requires a third
party to rely reasonably on the principal’s conduct in forming a belief about
agency. Reed v. Hinderland, 135 Ariz. 213, 217 (1983) (“A party asserting the
existence of an agency relationship bears the burden of proving it.”); Miller

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v. Mason-McDuffie Co. of S. Cal., 153 Ariz. 585, 589 (1987) (holding apparent
agency requires “conduct of a principal that allows a third party reasonably
to conclude that an agent is authorized to make certain representations or
act in a particular way”); Canyon State Canners v. Hooks, 74 Ariz. 70, 73 (1952)
(holding apparent agency exists when the principal has “induced third
persons to believe that such a person was its agent”). The court cannot
adopt plaintiffs’ proposed test because it is bound by Arizona Supreme
Court precedent. See Davis, 219 Ariz. at 580 ¶ 18 (App. 2008).

CONCLUSION

¶25 The superior court’s ruling, granting summary judgment for
Banner, is affirmed.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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