ER Admission Creates Reliance for Ostensible Agency Unless Effectively Disclaimed: The Michigan Supreme Court’s Clarification in Markel v. William Beaumont Hospital

Introduction

This commentary analyzes the Michigan Supreme Court’s July 9, 2025 order in Mary Anne Markel v. William Beaumont Hospital (No. 166702), which reverses the Court of Appeals and remands to the Oakland Circuit Court. The ruling crystalizes two important points in Michigan’s hospital vicarious liability jurisprudence:

• Under Grewe v Mt Clemens General Hospital, “ostensible agency” and “agency by estoppel” are interchangeable terms in Michigan law.
• In the emergency-room context, a patient’s reliance—an element of ostensible agency—is established when the patient presents to the hospital for treatment and is assigned an attending physician by the hospital, unless the hospital effectively advises the patient and the patient understands that the physician is not the hospital’s agent.

The plaintiff, Mary Anne Markel, sought to hold William Beaumont Hospital vicariously liable for alleged malpractice by an attending physician, Dr. Linet Lonappan, who was employed by Hospital Consultants, PC. After a prior Supreme Court remand in 2022 (Markel II) directing the Court of Appeals to apply the correct Grewe test, the Court of Appeals on remand required the plaintiff to prove reliance on a specific representation by the hospital regarding agency. The Supreme Court now clarifies that no additional act of reliance is necessary beyond presenting to the ER for hospital-provided care, unless the hospital dispels that belief with effective notice understood by the patient.

Summary of the Opinion

• The Court reversed the Court of Appeals and remanded to the trial court, holding the plaintiff created a genuine issue of material fact on ostensible agency.
• Michigan law does not distinguish between “ostensible agency” and “agency by estoppel”; courts may use the terms interchangeably (as Grewe, Chapa, and Wilson did).
• Reliance is an element of ostensible agency, but:
  • It is satisfied where the patient presents to the hospital and looks to the hospital for treatment, particularly when the hospital assigns the attending physician.
  • No additional act of reliance is required unless the hospital shows the patient was advised and understood that the physician was not the hospital’s agent.
• An undisclosed agreement between a patient’s primary care physician and a physician group (the doctor’s employer) does not defeat the patient’s reasonable belief or reliance absent patient knowledge at admission; at most, such agreements may go to whether there was a preexisting relationship.
• Because the plaintiff entered through the ER and had no prior relationship with the treating physician, and because Beaumont did not show it dispelled the agency belief as a matter of law, summary disposition for Beaumont was improper.
• Justice Zahra dissented, warning the majority’s approach makes hospital liability the default rule unless the hospital dispels the belief, in tension with Grewe’s “act or neglect” requirement as historically understood; Justice Hood did not participate.

Analysis

Precedents Cited and Their Role

• Grewe v Mt Clemens Gen Hosp, 404 Mich 240 (1978):
  • The foundational Michigan case on hospital vicarious liability via ostensible agency/agency by estoppel.
  • Grewe’s “critical question” asks whether the patient looked to the hospital for treatment or merely saw the hospital as the location where their own physician would treat them.
  • Grewe also speaks of liability arising from the “act or neglect” of the principal (hospital), and a “representation by the hospital that medical treatment would be afforded by physicians working therein.”
• Markel II, 510 Mich 1071 (2022):
  • Rejected the notion that a plaintiff’s inability to recall the treating physician defeats reasonable belief or reliance under Grewe.
  • Clarified that, when a patient presents at a hospital ER and is treated by a doctor with whom they had no prior relationship, the belief that the doctor is the hospital’s agent is reasonable unless the hospital dispels that belief.
  • Framed the “act or neglect” as the hospital operating an ER staffed with doctors unfamiliar to the patient.
• Chapa v St Mary’s Hosp of Saginaw, 192 Mich App 29 (1991) and Wilson v Stilwill, 411 Mich 587 (1981):
  • Reinforce that “ostensible agency” and “agency by estoppel” have been used interchangeably in Michigan.
• Out-of-state authorities applying a similar framework:
  • Clark v Southview Hosp & Family Health Ctr (Ohio), Pamperin v Trinity Memorial Hosp (Wisconsin), and Gilbert v Sycamore Municipal Hosp (Illinois) are cited as in accord with the approach that ER presentation and hospital assignment of physicians can establish reliance absent effective notice.
• Secondary sources:
  • The Court notes the Restatement (Third) of Agency suggests distinctions between ostensible agency and agency by estoppel, but emphasizes Michigan courts do not draw that distinction; Black’s Law Dictionary acknowledges the terms are used synonymously.
• Rott v Rott, 508 Mich 274 (2021):
  • Cited for “law of the case”: Markel II’s clarifications control the subsequent proceedings.

Legal Reasoning

1) Ostensible Agency and Agency by Estoppel Are Interchangeable in Michigan

The Court of Appeals attempted to impose a distinct “agency by estoppel” reliance requirement beyond Grewe’s framework. The Supreme Court rejects this as a false dichotomy in Michigan jurisprudence. Grewe itself and subsequent cases (Wilson, Chapa) used the terms interchangeably. Thus, the Court of Appeals’ reliance analysis was built on an illusory distinction.

2) What Counts as Reliance Under Grewe

The Court reiterates that reliance is indeed an element: the third person (patient) must rely on the agent’s apparent authority and must not be negligent in doing so. But the relevant reliance is whether the patient looked to the hospital for treatment. In the ER setting, when the hospital assigns the attending physician to a patient who has no prior relationship with that physician, those facts alone are sufficient to create reliance and a question of fact on ostensible agency—unless the hospital shows the patient was advised and understood that the physician is not the hospital’s agent.

In adopting this rule, the Supreme Court expressly agrees with Judge Shapiro’s dissent in the Court of Appeals and aligns with the reasoning of several other jurisdictions. The Court emphasizes that no additional patient action—no separate “reliance” event beyond seeking ER treatment and receiving a hospital-assigned physician—is required in this context.

3) The Hospital’s Burden to Dispel the Belief

The Grewe test is not a strict-liability regime. The hospital can avoid ostensible agency by showing it dispelled the reasonable belief that the physician was its agent. Critically, the Court adds texture to this requirement: dispelling requires both advising the patient and the patient’s understanding. In practice, this underscores the importance of effective, comprehensible notice (not merely boilerplate or obscure paperwork) and the factual nature of whether a particular patient understood it.

4) The “Unknown Agreement” Does Not Defeat Reliance or Reasonableness

The Court rejects the argument that a behind-the-scenes agreement between a patient’s primary care physician and the physician group employing the attending ER doctor establishes lack of reliance as a matter of law. Such an agreement might bear on whether there was a preexisting physician–patient relationship, which goes to the “reasonable belief” prong—but only if the patient knew or actually had such a relationship. Without patient knowledge at admission, the agreement neither defeats reliance nor renders the patient’s belief unreasonable as a matter of law.

5) Application and Procedural Posture

Because Ms. Markel entered through the ER, had no prior relationship with Dr. Lonappan, and Beaumont did not show it dispelled the agency belief with advice understood by the patient, a genuine issue of material fact exists on ostensible agency. Consequently, summary disposition for the hospital was improper and the case returns to the trial court.

The Dissent

Justice Zahra dissents, arguing that the majority assumes reliance from the mere fact of ER arrival and hospital assignment of a physician, thereby converting hospital liability into the default position unless the hospital affirmatively dispels it. He stresses that Grewe contemplated an “act or neglect” by the principal beyond the mere operation of an ER and that, historically, courts demanded more than automatic reliance. Echoing Justice Viviano’s prior dissent in Markel II, Justice Zahra characterizes the majority’s approach as a significant departure from prior jurisprudence and cautions against shifting the focus from the principal’s conduct to the patient’s beliefs.

The majority, for its part, underscores that Markel II is settled law and the law of the case; the present order implements that law rather than re-litigating it.

Impact

• Hospitals and Health Systems:
  • Default expectation: If a patient presents to an ER and is treated by a hospital-assigned physician, ostensible agency will typically be a jury question unless the hospital can prove effective, understood notice that the physician is not the hospital’s agent.
  • Risk management imperatives: Develop robust, comprehensible disclosure protocols; ensure timing and circumstances permit actual understanding (language access, capacity, acuity, sedation); train staff to deliver and document communications; use clear identifiers/badges for independent physicians; review signage and consent forms for clarity and prominence.
  • Contracting practices: Back-end agreements with physician groups or PCP affiliations will not, standing alone, defeat patient reliance; front-end patient-facing communications matter far more.
• Plaintiffs and Patient Advocates:
  • Lower proof barrier on reliance in ER cases: Testimony that the patient sought treatment from the hospital suffices; inability to recall the specific physician is not fatal.
  • Focus discovery on whether the hospital provided effective notice and whether the patient actually understood it under the circumstances.
• Trial Courts:
  • Summary disposition on ostensible agency will be harder to grant where ER admission and hospital assignment are established. The sufficiency and effectiveness of notice are fact-intensive and likely for the jury unless the record is one-sided.
• Insurers and Physician Groups:
  • Expect heightened vicarious liability exposure for hospitals; anticipate greater emphasis on indemnity provisions and coordinated patient-facing disclosures. Coverage and defense strategies should align with the Court’s understanding of reliance and notice.
• Doctrinal Clarification:
  • Michigan courts should no longer parse differences between “ostensible agency” and “agency by estoppel”; reliance exists if the patient looked to the hospital for care and was assigned a physician, barring effective notice understood by the patient.

Complex Concepts Simplified

• Ostensible Agency / Agency by Estoppel: A way to hold a principal (here, the hospital) liable for an agent’s acts even if there is no actual employment relationship, when the principal’s conduct reasonably leads a third person (the patient) to believe the agent acts for the principal and the third person relies on that belief.
• Reliance: The patient sought care from the hospital (not a specific physician) and accepted treatment from the hospital-assigned doctor based on the reasonable belief that the doctor was acting for the hospital.
• “Act or Neglect” of the Hospital: Conduct by the hospital that creates the appearance of agency. In this context, running an ER staffed by doctors with whom the patient has no prior relationship creates that appearance unless it is dispelled.
• Dispelled Belief: The hospital advised the patient and the patient understood that the treating physician is not the hospital’s agent. Effective notice depends on clarity, timing, delivery, language, capacity, and documentation.
• Preexisting Relationship: If the patient had an existing relationship with the physician and went to the hospital as the place for that physician’s care, ostensible agency may not apply because the patient was not looking to the hospital for treatment.
• Genuine Issue of Material Fact: A contested factual point that could affect the outcome and thus must be decided by a jury rather than on summary disposition.

Practice Pointers

• For Hospitals:
  • Deliver conspicuous, plain-language disclosures about independent-contractor physicians before or at the time of treatment whenever feasible; confirm understanding (e.g., teach-back, initials/checkboxes with context).
  • Ensure disclosures are accessible (translations, interpreters, accommodation for impaired capacity, attention to emergency acuity).
  • Align badges, signage, intake scripts, and consent forms so they convey a consistent message; train clinical and registration staff.
  • Document the notice and the patient’s understanding in the medical record contemporaneously.
• For Plaintiffs:
  • Establish ER presentation, lack of prior relationship with the treating physician, and that the hospital assigned the physician.
  • Probe the hospital’s notice practices and whether the patient was in a condition to understand any purported disclaimer.

Conclusion

The Michigan Supreme Court’s order in Markel v. William Beaumont Hospital cements two clarifications with far-reaching practical effects: (1) “ostensible agency” and “agency by estoppel” are interchangeable under Michigan law; and (2) in the ER context, a patient’s reliance is established when the patient seeks care from the hospital and is assigned an attending physician, unless it is shown that the patient was advised and understood that the physician was not the hospital’s agent. Agreements unknown to the patient do not negate reliance or reasonable belief. The decision reaffirms and operationalizes Markel II’s reading of Grewe, tilting the analysis toward patient expectations and hospital-facing notice obligations while leaving hospitals a clear path to avoid ostensible agency through effective, understood disclaimers. Going forward, summary disposition will be uncommon where ER admission and hospital physician assignment are shown; the central factual battleground will be whether the hospital’s notice was both given and understood.