S058445, Opinion — Eads v. Borman

729
* Appeal from Marion County Circuit Court, Don A. Dickey, Judge. 234 Or
App 324, 227 P3d 826 (2010).
Argued and submitted March 1, 2011, decision of Court of Appeals and judgment
of trial court affirmed April 26, reconsideration denied June 28, 2012
David EADS
and Diane Eads,
individually and as husband and wife,
Petitioners on Review,
v.
Timothy R. BORMAN, D.O.;
Salem Hospital,
a registered Oregon non-profit corporation;
Michael J. George, M.D.;
and Salem Radiology Consultants, P.C.,
an Oregon Professional Corporation,
Defendants,
and
WILLAMETTE SPINE CENTER, LLC,
an Oregon corporation,
Respondent on Review.
(CC 05C18610; CA A137410; SC S058445)
277 P3d 503
Plaintiff brought a medical malpractice action against his negligent surgeon’s
landlord on a theory of apparent agency. Defendant moved for summary judgment.
The trial court granted defendant’s motion and, on appeal, the Court of Appeals
affirmed. Plaintiff sought review. Held: (1) An entity may be vicariously liable for a
physician’s negligence on an apparent authority theory if the entity held itself out
as a direct provider of medical care so as to lead a reasonable person to conclude
that the negligent physician was the principal’s employee or agent in doing so, and
if the plaintiff relied on those representations by looking to the putative principle,
rather than to a specific physician, as the provider of the care; and (2) the trial court
correctly granted defendant’s motion for summary judgment because the record
did not provide a sufficient basis for a jury to conclude that the defendant held itself
out as a medical entity that was itself a provider of medical services that it deliv-
ered through agents, who were subject to the defendant’s control; and (3) the trial
court correctly granted defendant’s motion for summary judgment because the rec-
ord did not provide a sufficient basis to conclude that plaintiff actually and reason-
ably relied on the defendant’s representations by looking to defendant as an entity,
rather than to a specific professional, for his care.
The decision of the Court of Appeals and the judgment of the circuit court are
affirmed.
En Banc
On review from the Court of Appeals.*

730 	Eads v. Borman
Maureen Leonard, Portland, argued the cause for peti-
tioners on review. With her on the brief was David K. Miller.
Richard A. Lee, Bodyfelt Mount LLP, Portland, argued
the cause for respondent on review. On the brief was Pamela
A. Stendahl.
Thomas M. Christ, Cosgrave Vergeer Kester LLP, argued
the cause and filed a brief on behalf of amicus curiae Oregon
Association of Defense Counsel.
Kathryn H. Clarke, Portland, filed a brief on behalf of
amicus curiae Oregon Trial Lawyers Association.
LINDER, J.
The decision of the Court of Appeals and the judgment of
the trial court are affirmed.
De Muniz, C. J., specially concurred and filed an opinion
in which Durham and Walters, JJ., joined.

Cite as 351 Or 729 (2012) 	731
1 There are two named plaintiffs in this case—David Eads, who was injured,
and his wife. For ease of reference, we refer to Eads and his wife in the singular.
LINDER, J.
Plaintiff underwent surgery performed by a physi-
cian whose office was in a building that defendant, a limited
liability company (LLC), leased to medical providers.1 The
surgeon performed the surgery negligently, causing plaintiff
permanent and disabling injuries. Plaintiff brought this mal-
practice action against the LLC landlord, as well as against
the surgeon and others involved in his medical treatment.
Plaintiff pursued the action against the LLC on a theory of
apparent agency. Specifically, plaintiff’s theory was that,
through the signage on the building and other representa-
tions, the LLC created the appearance that the building
housed a group medical entity of which plaintiff’s surgeon
was an agent. The trial court granted summary judgment for
the LLC, concluding that the evidence was legally insuffi-
cient to hold the LLC vicariously liable for the surgeon’s neg-
ligence on an apparent agency theory. The Court of Appeals
agreed, and affirmed. Eads v. Borman, 234 Or App 324, 227
P3d 826 (2010).
We granted plaintiff’s petition for review to resolve
when a nonnegligent person or entity may be held vicariously
liable on an apparent agency theory for physical injuries neg-
ligently inflicted by a medical professional. We conclude that,
for such liability to arise, the injured party must have dealt
with the negligent medical professional based on a reason-
able belief, traceable to the putative principal’s conduct or
representations, that the medical professional was the prin-
cipal’s employee or was otherwise subject to the principal’s
right of control in providing the medical services that caused
the injured party’s injury. As we will explain, the record in
this case was insufficient to permit a jury to find the LLC
vicariously liable for the surgeon’s negligence on that basis.
We therefore affirm the judgment of the trial court and the
decision of the Court of Appeals.
BACKGROUND
We review the record in the light most favorable to
plaintiff, as the party opposing the motion for summary

732 	Eads v. Borman
judgment. Bergmann v. Hutton, 337 Or 596, 599, 101 P3d 353
(2004). The LLC involved in this case—Willamette Spine
Center, LLC—is in the business of commercially leasing real
property. In furtherance of its business, the LLC leased two
buildings under terms that permitted it to sublease offices in
the buildings to medical professionals. The LLC denomi-
nated one of those buildings—the building involved in this
case—as ‘‘Willamette Spine Center’’ and leased offices in it to
medical professionals with specialties related to spinal care
and treatment. The LLC placed a sign on the building’s exte-
rior identifying it as ‘‘Willamette Spine Center.’’ A second
sign in front of the building similarly read ‘‘Willamette Spine
Center’’ and also displayed a logo consisting of the stylized
initials ‘‘WSC.’’
The names of the various medical provider tenants
were listed near the door into the office building. Some of the
providers 	were 	themselves 	limited 	liability 	companies,
held themselves out as such, and incorporated the words
‘‘Willamette Spine Center’’ into their professional names
(i.e., ‘‘Willamette Spine Center Ambulatory Surgery, LLC’’
and 	‘‘Willamette 	Spine 	Center 	Physical 	Therapy 	and
Rehabilitation, LLC’’). Other medical providers used their
individual names only, without any reference to Willamette
Spine Center. Although the LLC landlord did not require it,
all or many of the tenants used business cards that included
‘‘Willamette Spine Center’’ and the WSC logo on them, either
at the top of the card or as part of their office address. Their
business cards then listed their names, professional creden-
tials and specialty areas, and contact information. The
contact information, such as phone numbers and e-mail
addresses, differed among the various providers in the
building.
One of the professionals who leased office space in
the building was Dr. Freeman, a chiropractor who was also
one of three members (i.e., owners) of the LLC landlord.
Plaintiff had become acquainted with Freeman through
plaintiff’s work as a manager at a Starbucks coffee shop.
From their conversations at the coffee shop, plaintiff knew
that Freeman was a chiropractor and knew that he was ‘‘affil-
iated’’ with the Willamette Spine Center. Freeman, in turn,

Cite as 351 Or 729 (2012) 	733
knew that plaintiff suffered from back pain. Freeman sug-
gested that plaintiff, to address his back pain, seek care ‘‘from
practitioners at his clinic, the Willamette Spine Center.’’
Based on his acquaintance with Freeman, plaintiff relied on
Freeman’s recommendation and treated with Freeman at his
office in the Willamette Spine Center building. At some point,
Freeman referred plaintiff to a physical therapist in that
building, and plaintiff consulted with and received treatment
from that physical therapist. Eventually, Freeman deter-
mined that plaintiff should be evaluated for possible surgery.
Telling plaintiff that he ‘‘would set [plaintiff] up with ‘one of
the Willamette Spine Center surgeons,’ ’’ Freeman referred
plaintiff to Dr. Borman, a physician and surgeon who spe-
cialized in spinal surgery.
Borman was a tenant in the Willamette Spine
Center building pursuant to an ‘‘association agreement’’ with
Dr. Tiley, a physician who leased office space directly from
the LLC. Through that association agreement, and with the
LLC’s knowledge and approval, Borman subleased space
from Tiley. The two shared common areas (e.g., exam rooms,
patient waiting rooms), while maintaining separate staff and
separate professional offices. Borman’s business cards had
‘‘Willamette Spine Center’’ and the WSC logo printed at the
top. Printed below those words and logo was Borman’s name,
his credentials and specialty, and his individual e-mail and
phone contact information. Borman’s letterhead did not have
‘‘Willamette Spine Center’’ or the WSC logo printed on it.
All charges to Borman’s patients were billed to Borman’s
individual professional accounts and processed through
Borman’s own office staff.
Plaintiff saw Borman at his office in the Willamette
Spine Center building in August 2003. As part of his consul-
tation with Borman, plaintiff filled out an ‘‘Initial Patient
Health History’’ on a form that had only Borman’s name
printed on it, without any reference to Willamette Spine
Center. Plaintiff, however, thought that all the tenants in the
building where Freeman and Borman had their offices were
‘‘affiliated’’ with ‘‘the Willamette Spine Center.’’ In par-
ticular, based on the fact that Borman’s office was in the
Willamette Spine Center building, plaintiff thought that

734 	Eads v. Borman
2 Plaintiff originally brought a malpractice action against Borman and the
LLC, in addition to other defendants, including the local hospital. At this juncture
in the case, all other defendants have been dismissed from the action and the LLC
is the only remaining defendant.
Borman was ‘‘a Willamette Spine Center surgeon.’’ Plaintiff
was not aware of anything that suggested to him that
Borman was ‘‘independent of the Willamette Spine Center.’’
Borman determined that surgery was appropriate
for plaintiff, and plaintiff decided to have that surgery. In
September 2003, Borman performed two surgeries on plain-
tiff that caused him permanent and disabling injuries. Both
surgeries were performed in a local hospital, not in the
Willamette Spine Center building.
Plaintiff brought this malpractice action against the
LLC,2 alleging that the LLC did business as Willamette
Spine Center, or held itself out to the public as doing so.
Plaintiff further alleged that Borman ‘‘practiced at and did
business under the name of Willamette Spine Center,’’ and
was therefore an apparent agent of the LLC. Plaintiff’s the-
ory, in essence, was that the LLC was vicariously liable for
Borman’s negligence because the LLC held itself out as a
medical entity called Willamette Spine Center and held
Borman out—or permitted Borman to hold himself out—as
acting on behalf of and for the benefit of that entity.
The LLC moved for summary judgment, arguing
that its activities and representations provided no basis for it
to be held vicariously liable for Borman’s negligence. In par-
ticular, the LLC urged that the evidence did not permit a jury
to find that the LLC had promoted itself as some form of
group medical entity or held out Willamette Spine Center to
be such an entity, as opposed to a professional office building
for which the LLC was the landlord. The LLC also urged that
no evidence established that the LLC had held Borman out
as its agent. According to the LLC, to whatever extent plain-
tiff had relied on representations made by anyone other than
the LLC that Borman was an agent of the LLC, those repre-
sentations could not serve as a basis on which the LLC could
be vicariously liable for Borman’s negligence.

Cite as 351 Or 729 (2012) 	735
In response, plaintiff argued that a jury could con-
clude that the LLC, through its direct representations as well
as acquiescence in representations made by the building ten-
ants, held out Willamette Spine Center as a group medical
entity and Borman as its authorized surgeon. Among other
facts, plaintiff relied on the signage on the building, the ten-
ants’ (including Borman’s) use of the building name and logo
on their business cards, and Freeman’s representations that
he was affiliated with Willamette Spine Center as creating
the appearance that Borman was the LLC’s authorized
agent. As noted earlier, the trial court granted the LLC’s
motion for summary judgment, agreeing that the evidence
was insufficient for a jury to find that the LLC had held itself
out as a group medical entity and had held Borman out as a
surgeon for that entity. On appeal, the Court of Appeals
agreed, and affirmed. Eads, 234 Or App 324.
On review, although their arguments have become
more refined, the parties largely renew the positions that
they advanced to the trial court and to the Court of Appeals.
They focus their arguments less on the applicable legal prin-
ciples and more on how those legal principles apply in this
specific context—viz., a malpractice action seeking to hold
another person or entity (here, the LLC) vicariously liable for
injuries caused by a physician’s negligence. We begin by out-
lining the principles that control the legal analysis. We then
turn to the record in this case and whether the evidence cre-
ated a jury question on the LLC’s liability.
APPLICABLE LEGAL PRINCIPLES
The LLC’s potential vicarious liability for Borman’s
negligent surgery requires consideration of two lines of set-
tled agency law. The first identifies when a putative principal
can be held responsible for the acts of another on an apparent
agency theory. The second identifies when a principal can be
held liable for the physical torts of an agent, actual or
apparent.
Classically, an agency relationship ‘‘ ‘results from
the manifestation of consent by one person to another that
the other shall act on behalf and subject to his control, and
consent by the other so to act.’ ’’ Vaughn v. First Transit, Inc.,
346 Or 128, 135, 206 P3d 181 (2009) (emphasis in Vaughn

736 	Eads v. Borman
3 Both at trial and in the Court of Appeals, plaintiff also sought to hold the LLC
liable on a theory that Borman was its actual agent. Plaintiff no longer pursues
that theory.
4 This court has used the common-law test for ‘‘apparent authority’’ to deter-
mine a principal’s responsibility both for actual agents and apparent agents. See,
e.g., Badger v. Paulson Investment Co., Inc., 311 Or 14, 23-27, 803 P2d 1178 (1991)
(using apparent authority analysis to resolve whether one was apparent agent with
authority to take particular action); Aerne v. Gostlow, 60 Or 113, 121, 118 P 277
(1911) (similar). But see Eads v. Borman, 234 Or App 324, 332 n 5, 227 P3d 826
(2010) (citing Court of Appeals cases for proposition that apparent authority
analysis applies only to actual agents). That approach makes sense. Under general
agency principles, establishing an agency (apparent or actual) is not enough to hold
a principal responsible for an agent’s conduct; rather, the action taken by the agent
also must be one that was within the scope of the agent’s actual or apparent author-
ity. See Beeson, 199 Or at 330 (one cannot hold principal liable for an act that does
not fall within the scope of agent’s real or apparent authority). Thus, the apparent
authority analysis often subsumes both issues. See, e.g., Jones, 274 Or at 595-96
(lack of apparent authority resolved issue of principal’s potential vicarious liability;
unnecessary to resolve whether putative agent was actual or apparent agent). As
we later observe, 351 Or at 737-38 n 5, the Restatement (Third) of Agency (2005)
takes the same approach.
omitted) (quoting Hampton Tree Farms, Inc. v. Jewett, 320
Or 599, 617, 892 P2d 683 (1995)). The agency relationship
can arise either from actual consent (express or implied) or
from the appearance of such consent. See generally Taylor v.
Ramsey-Gerding Construction Co., 345 Or 403, 410, 196 P3d
532 (2008) (so discussing). In either circumstance, the prin-
cipal is bound by or otherwise responsible for the actual or
apparent agent’s acts only if the acts are within the scope of
what the agent is actually or apparently authorized to do. Id.;
see also Beeson v. Hegsted, 199 Or 325, 330, 261 P2d 381
(1953) (one cannot hold principal liable for an act that does
not fall within the scope of agent’s real or apparent authority).
In this case, plaintiff proceeds on a theory that
Borman appeared to have authority to act as the LLC’s agent,
not that Borman had actual authority to do so.3 Under this
court’s settled cases, ‘‘[a]pparent authority to do any particu-
lar act can be created only by some conduct of the principal
which, when reasonably interpreted, causes a third party to
believe that the principal consents to have the apparent
agent act for him on that matter.’’ Jones v. Nunley, 274 Or
591, 595, 547 P2d 616 (1976). There accordingly are two keys
to the analysis: (1) the principal’s representations; and (2) a
third party’s reasonable reliance on those representations.4

Cite as 351 Or 729 (2012) 	737
5 The test that this court has followed for many years is consistent with the test
that the Restatement (Third) of Agency now proposes, which uses an apparent
authority analysis both for agents and apparent agents:
‘‘Apparent authority is the power held by an agent or other actor to affect a
principal’s legal relations with third parties when a third party reasonably
believes the actor has authority to act on behalf of the principal and that belief
is traceable to the principal’s manifestations.’’
Restatement (Third) of Agency § 2.03 (2005).
As the comments to that section explain, courts over the years have frequently
used the terms ‘‘apparent agency’’ and ‘‘apparent authority’’ interchangeably. Id. at
comment b. The Third Restatement therefore now uses the doctrine of apparent
authority to determine when a principal is bound by actors who appear to be agents
but are not, as well as agents who act beyond the scope of their actual authority. Id.
at comment a. The test under the Third Restatement has the same key features as
As to the first requirement—the representation by a
putative principal—an agent’s actions, standing alone and
without some action by the principal, will not give rise to
apparent authority. Taylor, 345 Or at 410. Rather, the prin-
cipal must take some affirmative step in creating the appear-
ance of authority, one that the principal either intended to
cause or ‘‘should realize’’ likely would cause a third party to
believe that the putative agent has authority to act on the
principal’s behalf. Badger v. Paulson Investment Co., Inc.,
311 Or 14, 24-25 n 9, 803 P2d 1178 (1991) (quoting with
approval Restatement (Second) of Agency § 27, comment a at
104 (1958)); accord Taylor, 345 Or at 410-11. The principal’s
words, conduct, or other representation need not be wit-
nessed directly by or made directly to the third party, but the
representation of authority must be traceable to the principal
for the principal to be liable on a theory of apparent author-
ity. Id.
As to the second key element—reliance—the third
party, in deciding to deal with the apparent agent, must in
fact rely on the principal’s representation, and that reliance
must be objectively reasonable. Jones, 274 Or at 595-96; see
also Badger, 311 Or at 26 (describing reasonable reliance by
plaintiff). In assessing the reasonableness of the reliance, the
analysis is influenced by what is customary and usual for cer-
tain positions or within certain professions. See id. at 24 n 9
(generally recognized duties of a position can influence
appearance of authority to act as agent (quoting with
approval Restatement (Second) of Agency § 27, comment a at
104 (1958))).5

738 	Eads v. Borman
the test that this court has adopted: the third party must ‘‘reasonably believe the
agent to be authorized,’’ and that belief must be ‘‘traceable’’ to a manifestation by
the principal that the person with whom the third party dealt is the principal’s
agent. Id. at comment b. Apparent authority also includes concepts of ‘‘usual
authority’’ and ‘‘customary authority’’ in determining whether ‘‘a substantial basis
for a third party’s belief’’ exists that the person with whom the third party dealt
was acting as an agent for a principal in a particular circumstance. Id.
In this case, because plaintiff seeks to hold the LLC
liable for Borman’s physically injurious conduct, a second set
of legal principles also comes into play.The sine qua non of a
principal’s vicarious tort liability is the principal’s control of,
or right to control, the agent’s conduct. Significantly, vicari-
ous liability for an agent’s physical torts arises only if the
principal has the right to control the agent’s specific injury-
causing conduct in particular. Jensen v. Medley, 336 Or 222,
237-38, 82 P3d 149 (2003). The principal’s abstract right of
control or right to control an agent in other respects is not
enough. Id. The law therefore differentiates between employ-
ees and other agents for purposes of a principal’s tort liabil-
ity, with the result that, ordinarily, a principal is not liable
for the negligence of a nonemployee, because a principal gen-
erally does not have the requisite right of control over those
nonemployee agents. As this court explained in Vaughn:
‘‘Distinguishing between employees and agents who are
not employees is important for vicarious liability purposes,
because a principal’s liability for the torts of its agents var-
ies based upon the type of agent. In general, a principal is
liable for all torts committed by its employees while acting
within the scope of their employment. Minnis [v. Oregon
Mutual Ins. Co., 334 Or 191, 201, 48 P3d 137 (2002)]. But a
principal ordinarily is not liable in tort for physical injuries
caused by the actions of its agents who are not employees.
Jensen v. Medley, 336 Or 222, 230, 82 P3d 149 (2003).
Rather, a principal is vicariously liable for an act of its
nonemployee agent only if the principal ‘intended’ or
‘authorized the result [ ]or the manner of performance of
that act.’ Restatement (Second) § 250; see also Jensen, 336
Or at 231 (principal liable for acts of nonservant agents only
if those acts ‘within the actual or apparent authorization of
the principal’). In other words, for a principal to be vicari-
ously liable for the negligence of its nonemployee agents,
there ordinarily must be a connection between the princi-
pal’s ‘right to control’ the agent’s actions and the specific
conduct giving rise to the tort claim.’’

Cite as 351 Or 729 (2012) 	739
6 Plaintiff’s claim here against the LLC is based solely on a vicarious liability
theory. As noted in Vaughn, a principal also can be liable for physical torts com-
mitted by an agent if the principal had a nondelegable duty of care or was negligent
in hiring, instructing, or supervising the agent. In that circumstance, the princi-
pal’s liability is direct, not vicarious, however. Vaughn, 346 Or at 138 n 7. Other
theories, also not involved in this case, can likewise result in another entity or indi-
vidual being directly or jointly liable for a treating physician’s negligence. See, e.g.,
Sprinkle v. Lemley, 243 Or 521, 528-31, 414 P2d 797 (1966) (physicians who diag-
nose and treat patient in concert can be liable for each other’s negligence); Moulton
v. Huckleberry, 150 Or 538, 549, 46 P2d 589 (1935) (physician who refers patient to
another can be liable for negligence of other physician if that physician is an
employee, partner, or agent of the referring physician, or if the referral was itself
negligent); Wemett v. Mount, 134 Or 305, 315, 292 P 93 (1930) (physician partners
in the practice of medicine are liable for each other’s negligence); see also Huffaker
v. Bailey, 273 Or 273, 282, 540 P2d 1398 (hospital has potential independent tort
liability for negligent acts of physicians based on hospital’s own negligence in hir-
ing and supervising staff).
7 Vaughn and our other cases relying on the same principal are illustrative of
the kind of control required. See Vaughn, 346 Or at 141-42 (although port authority
had right to control some activities of shuttle company, port lacked control over
day-to-day driving; port therefore not vicariously liable for shuttle driver’s negli-
gence); Jensen, 336 Or at 237-39 (international union not vicariously liable for
wrongful employment actions of affiliated local union based only on local union’s
abstract authority to act for international union subject to its right of control; jury
required to find international union had right to control specific conduct—i.e., hir-
ing and firing employees—on which claim was based); Peeples v. Kawasaki Heavy
Indust., Ltd., 288 Or 143, 149-50, 603 P2d 765 (1979) (motorcycle manufacturer not
vicariously liable for negligent warranty service work performed by authorized
local dealer where evidence did not establish manufacturer had right to control
‘‘the manner in which the dealer performed warranty service,’’ even though local
dealer was manufacturer’s authorized agent for that purpose).
346 Or at 137-38 (emphasis and second brackets in original;
footnote omitted).6
Consequently, although a principal can be vicari-
ously liable for the negligence of an agent who is not an
employee, such liability arises only if the principal actually
or apparently had a right of control over the agent’s injury-
causing actions ‘‘similar to the control that an employer exer-
cises over an employee[.]’’ Vaughn, 346 Or at 139.7 The fact
that a nonemployee is actually or apparently authorized in
some general way to act on a principal’s behalf is not a suffi-
cient basis to impose vicarious liability on the principal for
the actual or apparent agent’s tortious conduct. Id. (quoting
with approval Restatement (Second) of Agency § 250 comment
b). Rather, to impose vicarious liability for a nonemployee
agent’s physical conduct, the principal must have—or appear
to have—a right to control how the act is performed—that is,

740 	Eads v. Borman
8 The concurrence disagrees that the common law agency principles embraced
by this court’s settled cases apply in an action seeking to impose vicarious liability
for tortious conduct on a theory of apparent rather than actual agency. 351 Or at
758-59 (De Muniz, C. J., specially concurring). Under the concurrence’s approach,
an apparent principal would be liable in tort in situations in which an actual prin-
cipal would have no liability. But apparent agency, as explained, derives from the
appearance of authority created by the principal and reasonably relied on by a
third party. If the apparent relationship between the putative principal and the
apparent agent is something other than what would be required to hold an actual
principal vicariously liable for the agent’s acts (i.e., other than employment or other
relationship in which the putative principal would exercise similar control), there
is no legal basis for vicarious liability on an agency theory. In other words, appar-
ent agency does not broaden the basis on which vicarious liability attaches; it
instead exposes one to vicarious liability on established rules of agency law in cir-
cumstances in which the relationship necessary for such liability reasonably
appears to exist but in fact does not.
‘‘the physical details of the manner of performance”—that is
characteristic of an employee-employer relationship. Id. at
139 (citing Restatement (Second) of Agency § 250 comment
a).8
VICARIOUS LIABILITY—MEDICAL MALPRACTICE
This court has not previously addressed whether
and under what circumstances vicarious liability for a phy-
sician’s malpractice can be imputed to a putative principal on
an apparent agency theory. Where the agency principles that
we have outlined are satisfied, however, there is no reason
why vicarious liability should not attach. The more signifi-
cant question is how those tests should apply in the context of
professional malpractice and, in particular, what must be
shown to satisfy the requirement that a putative principal
have a right—or an apparent right—of control over the tor-
tious conduct of a medical professional. Because other courts
have grappled extensively with vicarious liability in this con-
text, we turn to the developed body of case law in other juris-
dictions, which we consider helpful to our analysis.
Until recent decades, the requirement that the prin-
cipal have a right (or apparent right) of control over an
agent’s injury-causing conduct has precluded vicarious liabil-
ity for the malpractice of physicians and similar profession-
als. Traditionally, courts reasoned that medical profession-
als, because of the skill and judgment they exercised, were
not subject either legally or practically to sufficient control by
other persons or entities to expose those persons or entities to

Cite as 351 Or 729 (2012) 	741
9 Harris involved the different, but related issue, of whether a hospital could be
held vicariously liable for the negligence of a nurse surgical assistant as an
employee of the hospital, or whether only the surgeon conducting the surgery
(under the borrowed servant doctrine) could be so liable. Our court has addressed
the same question and, in concluding that hospitals can be held liable in those cir-
cumstances, has similarly stressed the reality of modern-day hospitals and the con-
trol they can and do exercise over the delivery of medical services by their employ-
ees. See May v. Broun, 261 Or 28, 38, 492 P2d 776 (1972) (hospitals increasingly
provide highly technical equipment operated by skilled professionals that the hos-
pital hires and trains); see also Holger v. Irish, 316 Or 402, 410-13, 851 P2d 1122
(1993) (declining to adopt ‘‘captain of the ship’’ doctrine to impose vicarious liability
on nonnegligent surgeon for negligence of nurse assistant; vicarious liability
available only against hospital, which hired and trained nursing staff and billed for
nursing services).
vicarious liability for a medical professional’s negligence. See
Bing v. Thunig, 2 NY2d 656, 661-63, 143 NE2d 3 (1957)
(describing historical view of courts that physicians, due to
the nature of their professional expertise, were not subject to
hospital’s right of control). That was true even when a phy-
sician was an employee of a hospital or other entity. See, e.g.,
Iterman v. Baker, 214 Ind 308, 316-18, 15 NE2d 365 (1938)
(so holding); see generally Bing, 2 NY2d at 661-63 (describing
traditional view).
That thinking has given way, almost universally, to
the recognition that entities that employ physicians both can,
and in fact do, significantly control the overall delivery of
medical services by such professionals, even if the entity does
not direct a professional’s discrete actions in treating individ-
ual patients. Hospitals are prime examples. Modern-day hos-
pitals no longer are mere situses for medical services, as they
once were, but instead are direct providers of medical care.
Sword v. NKC Hosp., Inc., 714 NE2d 142, 151 (Ind 1999) (so
observing; citing other authorities). In that changed role, hos-
pitals regularly employ ‘‘a large staff of physicians, nurses
and interns, as well as administrative and manual workers,
and they charge patients for medical care and treatment[.]’’
Bing, 2 NY2d at 666. To ensure the quality of the medical
services that they offer and provide, hospitals supervise and
direct the general manner in which their employees deliver
medical services on their behalf through such means as ‘‘hir-
ing criteria, training, formal practice guidelines, hierarchical
supervision structures, peer review groups and disciplinary
measures.’’ Harris v. Miller, 335 NC 379, 390, 438 SE2d 731
(1994) (footnote omitted; citing authorities).9 As a result,

742 	Eads v. Borman
10 This court’s case law is in accord. Giusti v. Weston Co., 165 Or 525, 529-31,
108 P2d 1010 (1941) (corporation authorized to do business as hospital association,
which contractually agreed to provide medical services to high school football play-
ers, vicariously liable for negligence of physicians that corporation employed to
provide those services). Only a few jurisdictions appear to be to the contrary. See,
e.g., Hall v. Frankel, 190 P3d 852, 861 (Colo 2008) (citing line of Colorado cases
holding that hospitals and other corporations are not liable for employee-
physicians because physicians are not subject to principal’s right of control);
Tolman v. IHC Hosp., Inc., 637 F Supp 682, 684 (D Utah 1986) (following Colorado
authority).
most jurisdictions now hold that an entity that employs a
physician is subject to vicarious liability for that physician-
employee’s malpractice if the negligent act was committed in
the course and scope of the employment. See, e.g, Dias v.
Brigham Med. Assoc., Inc., 438 Mass 317, 322-23, 780 NE2d
447 (2002) (applying traditional respondeat superior liability
to employer of a physician; citing cases).10
A question left unanswered by those holdings has
been whether a hospital or other entity can be held vicari-
ously liable for a physician’s malpractice on an apparent
agency theory. The issue has arisen most commonly in cir-
cumstances where a hospital or other entity retains physi-
cians as independent contractors, rather than as employees,
and then offers and delivers medical services on its own
behalf through those independent contractors. Most jurisdic-
tions considering vicarious liability in that context have con-
cluded that ‘‘liability for a doctor’s negligence should be
imputed to a [putative principal] when apparent authority,
as defined in that jurisdiction, is established.’’ Estate of
Cordero v. Christ Hosp., 403 NJ Super 306, 313, 958 A2d 101
(2008) (so observing in hospital context; citing representative
cases); see generally Kashishian v. Port, 167 Wis 2d 24, 42-44,
481 NW2d 277 (1992) (characterizing vicarious liability for
hospitals on apparent agency theory as a ‘‘growing trend’’; cit-
ing cases). Drawing from familiar agency principles, courts
typically have focused on two requirements as keys to impos-
ing vicarious tort liability for a physician’s malpractice on an
apparent agency theory: first, whether the putative principal
(such as a hospital) ‘‘held out’’ the physician as an employee
or other agent to deliver medical services on the principal’s
behalf and subject to the principal’s oversight or other
control; second, whether the injured plaintiff reasonably

Cite as 351 Or 729 (2012) 	743
relied on that holding out by looking to the principal as the
provider of the care, and dealing with the physician as the
principal’s agent for that purpose. See Sword, 714 NE2d at
150-51 (synthesizing hospital cases); Petrovich v. Share
Health Plan, 296 Ill App 3d 849, 855-61, 696 NE2d 356 (1998)
(using same two key considerations to determine vicarious
liability of health maintenance organization for physician
malpractice).
Cases involving hospitals have presented circum-
stances that most commonly have given rise to a basis for a
finding of vicarious liability on an apparent agency theory.
For the ‘‘holding out’’ element, the cases have ‘‘almost invar-
iably’’ looked to the fact that modern-day hospitals are
engaged in directly providing medical care and services,
rather than merely providing a situs where medical profes-
sionals do so in furtherance of their individual medical prac-
tices. As part of their changed role as direct health care pro-
viders, hospitals are now run like businesses and promote
themselves based on the superior quality of the health care
they offer. See, e.g., Kashishian, 167 Wis 2d at 41-44 (so
observing; citing cases and authorities). To that end, hospi-
tals pervasively engage in sophisticated advertising and pub-
lic relations campaigns designed to compete with other facil-
ities and providers, and to attract the patronage of the public
in the communities that they serve. Id. at 38 (describing hos-
pitals as spending ‘‘billions’’ to nurture their images as full
care health facilities). Even without commercial advertising,
hospitals cultivate ‘‘high visibility’’ in their communities to
present themselves as ‘‘vital to community health’’ rather
than as mere facilities in which private physicians practice
their professions. See Hannola v. City of Lakewood, 68 Ohio
App 2d 61, 66, 426 NE2d 1187 (1980) (describing how hospi-
tals promote themselves as direct medical providers of qual-
ity care through fund-raising campaigns, community rela-
tions programs, public service programs, press releases, and
the like). In effect, hospitals invite the public to rely on their
competence in the delivery of at least certain kinds of health
care services. Through that ‘‘holding out,’’ a hospital culti-
vates an image that causes the public to assume, ‘‘correctly or
not, that the hospital exerts some measure of control over the
medical activities’’ integral to the hospital setting. Id. at 66

744 	Eads v. Borman
11 See also Kashishian, 167 Wis 2d at 42-45 (extending principle to cardiology
services; discussing applicability of principle outside emergency room context; cit-
ing cases); Estate of Cordero, 403 NJ Super at 316-17 (sufficient manifestation of
control ‘‘when a hospital has established and staffed facilities or departments
through which patients receive specialized care from medical professionals with
whom they do not have a prior or ongoing relationship—emergency rooms, oper-
ating rooms and anesthesiology and radiology departments’’).
12 Our own case law in that regard is in accord. See Holland v. Eugene Hosp.,
127 Or 256, 261-62, 270 P 784 (1928) (hospital not liable for physician’s negligence
where patient sought services directly from physician, paid physician, and physi-
cian had no relationship with hospital other than that of physician with staff
privileges).
(internal quotation marks omitted) (discussing emergency
room services).11
With regard to the second element—reasonable
reliance—the cases have focused on whether the plaintiff
looked to and relied on the hospital as the direct provider of
the medical services rendered. The fact that the patient relies
on the reputation of the hospital itself as a care provider, and
does not make an ‘‘independent selection as to which physi-
cians’’ the patient will obtain care from, provides the factual
basis for the reliance needed for the apparent authority anal-
ysis. Pamperin, 144 Wis 2d at 205-12 (internal quotation
marks omitted) (discussing cases and so holding); see also
Estate of Cordero, 403 NJ Super at 318-19 (canvassing cases
and holding that reliance could be found based on fact that
patient looked to hospital for care and physician was chosen
by hospital). Conversely, the mere fact that medical services
are provided on a hospital’s premises is not enough to create
vicarious liability. For example, if a patient seeks medical
services from a physician who has staff privileges at a hospi-
tal and who uses the hospital merely as the situs for the phy-
sician’s own medical practice, the necessary reliance on the
hospital as a direct provider of care is lacking. See Houghland
v. Grant, 119 NM 422, 428-29, 891 P2d 563 (1995) (compar-
ing physicians who contract to provide services on behalf of
hospital to physicians with staff privileges engaged in inde-
pendent medical practices; citing cases).12
To be sure, vicarious liability for physician malprac-
tice has not been limited to the hospital context; at least some
courts have extended it to other entities as well, such as
health maintenance organizations (HMO) and nonhospital

Cite as 351 Or 729 (2012) 	745
13 See generally John D. Hodson, Annotation, Liability of Hospital or
Sanitarium for Negligence of Physician or Surgeon, 51 ALR4th 235 § 7 at 270-71,
§ 20 at 344-52 (1987) (collecting cases in which hospitals have been held vicariously
liable for malpractice of physicians who were independent contractors and other
nonagents on theory that hospitals contracted to provide medical services and had
those services performed by physicians who had apparent authority to do so on the
patient treatment facilities. See, e.g., Boyd v. Albert Einstein
Med. Ctr., 377 Pa Super 609, 616, 547 A2d 1229 (1988)
(HMO); Petrovich, 296 Ill App 3d at 855 (HMO); Malanowski
v. Jabamoni, 293 Ill App 3d 720, 727, 688 NE2d 732 (1997)
(university outpatient center). The factual circumstances of
those cases, however, have brought them well within the rea-
soning of the hospital line of authority.
Boyd is illustrative. There, the HMO had contractu-
ally committed to provide health care services and benefits to
subscribers. It provided those services through a limited
selection of primary physicians who were screened by the
HMO and who had to comply with the HMO’s rules; the
HMO gave subscribers no choice of with whom to consult for
specialist care. All fees for services were paid directly to the
HMO, not to the physicians. The court in Boyd concluded
that there was a factual question as to whether the physi-
cians, although independent contractors, were apparent
agents of the HMO because the patient in that case had sub-
mitted herself to the care of the physicians at the HMO’s invi-
tation and subject to significant apparent control on the
HMO’s part. Boyd, 377 Pa Super at 621. Other cases extend-
ing vicarious liability to entities other than hospitals have
required similar representations by the entity, similar indi-
cia of control by the entity, and similar reliance by the patient
on the entity as the provider of medical care. See, e.g., George
v. Fadiani, 772 A2d 1065 (RI 2001) (factual question on
apparent agency for dental services clinic where incorporated
entity held itself out as a provider of dental services; selection
of an appointment with specialist was done by clinic staff;
billings were made on clinic stationary and through clinic
staff; and clinic controlled compensation of dental providers).
In sum, the weight of authority in other jurisdictions
is that, in a proper case, a hospital or other entity can be held
vicariously liable for a physician’s negligence on an apparent
authority theory. We agree with those authorities.13 We also

746 	Eads v. Borman
hospital’s behalf). For many years, the Court of Appeals has effectively so held.
E.g., Jennison v. Providence St. Vincent Medical Center, 174 Or App 219, 25 P3d
358 (2001); Jones v. Salem Hosp., 93 Or App 252, 762 P2d 303 (1988); Shepard v.
Sisters of Providence, 89 Or App 579, 750 P2d 500 (1988); Themins v. Emanuel
Lutheran, 54 Or App 901, 637 P2d 155, rev den, 292 Or 568 (1981). We have no occasion
in this case to pass on the particular conclusions that the Court of Appeals reached on
the records that those cases presented. But we do agree with the general proposition
that liability for physician negligence can, in the appropriate set of circumstances, be
imputed to hospitals and other entities on an apparent authority theory.
14 The Restatement (Second) of Agency § 267 states a test for a principal’s vicar-
ious liability for an apparent agent’s negligent conduct. It provides:
‘‘One who represents that another is his servant or other agent and thereby
causes a third person justifiably to rely upon the care or skill of such apparent
agent is subject to liability to the third person for harm caused by the lack of
care or skill of the one appearing to be a servant or other agent as if he were
such.’’
The reference to ‘‘other agent’’ leaves unclear whether, consistently with section
250 of the Restatement (Second) of Agency (cited earlier), the principal must appear
to have a right to control the manner in which the harm-causing act is performed,
even if the apparent relationship is not that of master-servant. As explained, under
this court’s decisions, vicarious liability for physical torts may be imputed to a prin-
cipal outside the master-servant relationship only when that principal has an
employer-like right to control the agent’s (the nonservant agent’s) injury-causing
conduct. Section 267 is not specifically directed to the physical tort context. But it
is in general accord with the test that we announce in this case if, in the context of
vicarious liability for tortious conduct, it extends only to apparent agents who
either are apparent employees or over whom the principal, through representa-
tions traceable to the principal, appears to exercise control or oversight over the
injury-causing conduct. See 351Or at 740 n 8.
agree on the essential touchstones for the imposition of vicar-
ious 	liability 	in 	this 	context. 	The 	key 	questions 	are:
(1) whether the putative principal held itself out, expressly or
implicitly, as a direct provider of medical care so as to lead a
reasonable person to conclude that the negligent actor who
delivered the care was the principal’s employee or agent in
doing so; and (2) whether the plaintiff relied on those repre-
sentations by looking to the putative principal, rather than to
a specific physician, as the provider of the care, and not just
as a situs in which a physician of the plaintiff’s choosing pro-
vided the care. See, e.g., Kashishian, 167 Wis 2d at 44 (outlin-
ing elements); Sword, 714 NE2d at 150-51 (same).14
ANALYSIS IN THIS CASE
With that legal backdrop, we turn to the record in
this case to assess whether, based on it, a jury could find the
LLC vicariously liable for Borman’s negligence. In arguing
that a jury could do so, plaintiff’s central thesis is that the

Cite as 351 Or 729 (2012) 	747
15 Plaintiff relies on other representations as well, but they are ones that plain-
tiff did not show that he ever saw or relied on, or did not show to be traceable to the
LLC, or both. For example, plaintiff points to an Internet advertisement by two
chiropractors who had offices in the Willamette Spine Center building, which is
undated, which plaintiff never claimed to have seen, and which the LLC was not
shown to have had any involvement in posting. Plaintiff also relies on an Internet
homepage with the heading ‘‘Willamette Spine Center’’ and the ‘‘WSC’’ logo that
was dated May 2006 (two-and-a-half years after Borman negligently performed
surgery on plaintiff), which plaintiff also did not claim to have seen or relied on,
and which the LLC was not shown to have known about or have created. We agree
with the Court of Appeals that any representations not traceable to the LLC and
not relied on by plaintiff cannot be a basis for holding the LLC liable for Borman’s
negligence. See Eads, 234 Or App at 334 (disregarding that evidence because it did
not relate to ‘‘conduct by defendant holding Borman out as its agent’’ where no evi-
dence indicated that defendant authorized those representations or had knowledge
that they were made).
LLC, through various actions and inactions, promoted itself
as a group medical entity and thereby assumed responsibility
for the negligence of the medical providers that appeared to
be a part of that entity. Plaintiff relies on the fact that the
LLC placed signage on the building, designating it the
Willamette Spine Center and using the WSC logo. Plaintiff
likewise relies on the fact the individual medical practition-
ers in the building used business cards that included, either
at the top of the cards or as part of the address for their
offices, the words Willamette Spine Center and the WSC
logo. In that regard, plaintiff acknowledges that the LLC did
not require the tenants to use the building name or logo.
But plaintiff contends that the LLC acquiesced in their use of
the name and logo and, by doing so, contributed to the per-
ception that Willamette Spine Center was an entity in the
business of delivering medical services, and not just a build-
ing that housed medical providers engaged in independent
practices.
Finally, plaintiff relies on the fact that Freeman
referred to Willamette Spine Center as ‘‘his clinic’’ and to
Borman as a ‘‘Willamette Spine Center surgeon.’’ Plaintiff
contends that, because Freeman was an owner/member of
the LLC landlord of the building, Freeman’s representations
were those of the LLC itself, not of Freeman as a chiroprac-
tor, or at least a jury could so conclude. Taken together, plain-
tiff argues, the circumstances reasonably led plaintiff to
believe that he was seeking treatment from an entity—“the’’
Willamette Spine Center—rather than from independent
medical providers whose practices were in that building.15

748 	Eads v. Borman
We disagree that the record in this case provides a
sufficient basis to conclude that the LLC held itself out as a
medical entity that was itself a provider of medical services
that it delivered through agents, such as Borman, who were
subject to the LLC’s control. On the record before us, the
LLC’s role was typical of a landlord of a professional office
building. As a landlord, the LLC developed the building for
use as medical office space and leased the offices inside spe-
cifically to medical providers with specialties related to
spinal 	care. 	The 	LLC 	then 	denominated 	the 	building
‘‘Willamette Spine Center’’ with signage and a logo. In doing
so, the LLC did what is customary and usual for a landlord of
a professional office building—it leased space to professionals
with the same or related specialties (doctors, dentists, law-
yers, engineers, architects, among others) in a single office
building and gave the structure a ‘‘trade’’ name, one that is
descriptive and memorable for purposes of marketing and
promoting the practices of the professionals who have offices
there. See, e.g., Slavik v. Parkway Hosp., 661 NYS2d 274, 275
(1997) (leasing corporation used trade name ‘‘Corona Medical
& Dental Center’’ for office building housing independent
medical and other health professionals); Hylton v. Flushing
Hosp. and Med. Ctr., 630 NYS2d 748, 749 (1995) (owner of
building leased to individual medical and dental practition-
ers used signage ‘‘Medical and Dental Services’’ on awning of
building). At best for plaintiff, so denominating the building
reasonably could convey to a third party that the practition-
ers in the building were associated in some way with one
another. It could not reasonably convey that the building
housed an entity that directly provided medical services and
that the practitioners in the building were the entity’s
employees or subject to the entity’s oversight, direction, or
control. As the court observed in Hylton, to conclude that use
of professional building trade names can create an apparent
agency relationship between professional providers and the
landlords of such buildings ‘‘would expose to liability for med-
ical malpractice every landlord with the word ‘medical’
appearing on its premises.’’ 630 NYS2d at 750. The legal
principles that apply here are not so lax.
The other LLC representations on which plaintiff
relies, both alone and in combination, similarly conveyed at

Cite as 351 Or 729 (2012) 	749
16 When a landlord gives a building a distinctive trade name to communicate
something about the businesses of the tenants, a landlord reasonably should
expect the tenants to make some use of that trade name on business cards or other
marketing materials. For that reason, we conclude, contrary to the LLC’s position,
that a jury would be entitled to find that the use of the building name and logo on
tenant business cards was traceable to the LLC.
17 The parties provide no developed legal analysis as to whether Freeman’s
status as an LLC member means that his statements to a patient in a social setting
or in his chiropractic practice are attributable to the LLC. In terms of Freeman’s
most some form of association or affiliation among the ten-
ants, not a principal-agency relationship with the requisite
right of control on the part of the LLC. As plaintiff argues, the
tenants used the building name and logo on their business
cards, and the LLC reasonably should have expected that
they would do so.16 But such use by the tenants suggested no
particular 	relationship 	between 	the 	building 	occupants
beyond an affiliation or association of some kind. That is par-
ticularly so given that, here, each provider had his or her own
individual contact information on the card as well, such as
telephone numbers and e-mail addresses. Also, the LLC
listed each provider’s individual name on the door into the
building; several of the providers were LLCs themselves and
included that designation in their names, necessarily indicat-
ing their separate legal and business existence. The business
cards, in combination with the individual names listed at the
entrance to the building, reasonably communicated the inde-
pendence of the individual providers, not that they were
agents of some other entity subject to that entity’s right of
control.
Plaintiff nevertheless urges that he reasonably per-
ceived that he was dealing with a single entity (i.e., a single
‘‘group medical practice’’) because Freeman once referred to
‘‘his clinic, the Willamette Spine Center’’ and also referred to
Borman as a ‘‘Willamette Spine Center surgeon.’’ The parties
disagree whether those two statements by Freeman are
attributable to the LLC given, on the one hand, Freeman’s
status as one of the LLC members and, on the other, the fact
that plaintiff knew nothing about the existence of the LLC or
Freeman’s role in it, and Freeman made the statements in
the only capacity that plaintiff knew Freeman to have—as a
chiropractor. We need not, however, resolve that disagree-
ment.17 At best for plaintiff, Freeman’s isolated oral state-
ments reasonably might create or reinforce a perception that

750 	Eads v. Borman
actual authority to bind the LLC by his statements, the record is not sufficiently
developed for us to determine the issue, one way or the other (a deficiency that
hurts plaintiff). The full operating agreement is not in evidence, and we do not
know how the LLC was structured or what limitations may have been placed on the
authority of its members or manager. See ORS 63.140(1)(a) (member of member-
managed LLC is agent of LLC for purposes of LLC’s business unless authority to
act for LLC in a particular matter is limited); ORS 63.140(2)(a) (member of
manager-managed LLC is not agent of LLC for purpose of its business solely by
reason of being LLC member).
To the extent plaintiff’s theory is that Freeman had apparent authority to bind
the LLC, that proposition poses a host of potential issues. Plaintiff dealt with
Freeman only as a chiropractor. Nothing in the record suggests that plaintiff knew
that the LLC existed or that Freeman was a member of it. Given that context, a key
statement on which plaintiff relies (Freeman’s one reference to Willamette Spine
Center as ‘‘his’’ clinic) reasonably conveyed at most an individual and personal-to-
Freeman interest or role in the association of practitioners in the building. The par-
ties do not adequately explore whether such a statement by an LLC member can be
attributed to the LLC, and we decline to resolve that question. See generally So.
Seattle Auto Auction, Inc. v. Ladd, 230 Or 350, 361-62, 370 P2d 630 (1962) (one who
deals with agent as principal can look only to agent for relief; no apparent authority
can arise to bind principal); Water, Waste & Land, Inc. v. Lanham, 955 P2d 997
(Colo 1998) (agency principles pertaining to undisclosed and partially disclosed
principals apply to LLC; party who deals with LLC member without knowing LLC
exists or knowing LLC’s identity can look to only individual member, not LLC).
18 We have identified no case—and plaintiff cites none—with facts analogous
to these in which a court has found a basis for vicarious liability. The few disclosed
by our research are, instead, uniformly to the contrary. See, e.g., Vanstelle v.
Macaskill, 255 Mich App 1, 662 NW2d 41 (2003) (insufficient representation by
hospital of control over physician’s practice to hold hospital landlord vicariously
liable for physician who practiced in leased space in office building owned by hos-
pital and who had staff privileges at hospital); Slavik, 661 NYS2d at 275 (no liabil-
ity for leasing corporation based on use of trade name ‘‘Corona Medical & Dental
Center’’ for office building); Hylton, 630 NYS2d at 749-50 (similar).
the medical practitioners in the building were affiliated with
each other. His statements bear no comparison, however, to
the kind of representations that have led to entity liability for
medical malpractice on an apparent agency theory for hospi-
tals or other medical providers.18 That is, Freeman’s state-
ments reasonably could not have been understood, either
explicitly or implicitly, to hold out Willamette Spine Center
as an entity that was a direct provider of health care, the
quality of which Willamette Spine Center as a discrete entity
oversaw and controlled.
Plaintiff’s case also fails on the second key element
for 	vicarious liability 	on 	an apparent agency theory—
whether the plaintiff actually and reasonably relied on the
LLC’s representations by looking to Willamette Spine Center
as an entity (real or reasonably perceived), rather than to a

Cite as 351 Or 729 (2012) 	751
specific professional, for his care. By plaintiff’s own account,
he began treatment with Freeman because he and Freeman
had met in the coffee shop in which plaintiff worked. Plaintiff
knew that Freeman was a chiropractor and was ‘‘affiliated’’
with Willamette Spine Center. He chose to treat with Freeman
‘‘based on [their] acquaintance.’’ Plaintiff did not describe
having otherwise heard of or known anything about Willamette
Spine Center. He did not describe wanting to obtain treat-
ment through that perceived entity, regardless of the individ-
ual who delivered that care. The only conclusion that plain-
tiff’s testimony supports is that Freeman’s association with
Willamette Spine Center was happenstance in terms of
plaintiff’s reliance; it was plaintiff’s personal relationship
with Freeman that led him to be treated by practitioners in
that building.
No evidence thus supports a conclusion that, subjec-
tively, plaintiff relied on the signage or any other represen-
tation by the LLC to believe that the LLC was itself a medical
provider. Even if plaintiff had done so, however, that reliance
would not have been reasonable. A key distinction between
this case and other cases in which courts have found a basis
for vicarious liability is that here, unlike in those cases, there
was no actual entity (e.g., a hospital, an outpatient clinic)
with which plaintiff dealt, or could have dealt. Inside the
building denominated ‘‘Willamette Spine Center,’’ all appear-
ances were that the practitioners were independent medical
providers. There was no common staff or even a common
receptionist. Each medical provider in the building had his or
her own office, own professional staff, and own exam and
waiting rooms (although some, such as Borman and Tiley,
shared certain limited spaces). Each medical provider used
his or her own forms and billed to his or her own accounts for
his or her services. Each had unique contact information,
including phone numbers and e-mail addresses. The record
suggests no means for plaintiff, or any other third party, to
have contacted ‘‘Willamette Spine Center’’ as an entity or to
deal with it as an entity, had plaintiff or anyone else tried.
There was no phone number to call, no address or e-mail for
correspondence, no receptionist to talk to, and no one in
charge who oversaw the delivery of medical services and
whom a patient could approach with question or complaints.

752 	Eads v. Borman
In consulting with Borman, plaintiff dealt with
Borman as the independent provider that he was. By plain-
tiff’s own description, Freeman ‘‘referred’’ him to Borman.
Borman’s name, along with those of all the other building
tenants, was listed on the outside of the building, near the
door. Borman had his own office, his own phone number and
e-mail address, and his own staff. He shared common areas
(exam rooms, waiting rooms) with only one other physician.
Billings for his services were payable to his own accounts. His
letterhead and patient forms had only his own name on
them. To be seen by Borman, plaintiff had to fill out a new
patient medical history. Borman performed surgery at a local
hospital, not in the building where he had his office.
In short, plaintiff was led to Borman because of his
personal relationship with Freeman, who had referred plain-
tiff to Borman in the same way that any medical professional
customarily refers patients to a specialist. He was not seek-
ing treatment by a nonexistent entity (‘‘Willamette Spine
Center’’), which in turn assigned him to or otherwise con-
trolled his selection of surgeons. Indeed, no reasonable per-
son in plaintiff’s position could conclude that Willamette
Spine Center, as an entity, was in the business of surgery or
of overseeing the performance of any surgeon housed in the
building, given that plaintiff’s surgery was not performed in
that building, but was instead performed at a local hospital.
Plaintiff’s belief that Borman was a ‘‘Willamette Spine
Center surgeon’’ was objectively reasonable only to the extent
that plaintiff understood Borman to be an independent med-
ical professional who associated with related specialists by
having his practice in a common office building and by refer-
ring patients, as appropriate, to other practitioners in the
building. To whatever extent plaintiff subjectively believed
Borman to be an employee or other agent under the control of
an entity (Willamette Spine Center) that was a direct pro-
vider of medical services—something plaintiff did not say he
believed—that belief was unreasonable in these circum-
stances.
For those reasons, we conclude that the record is
inadequate to permit a jury to hold the LLC liable for
Borman’s negligent surgery on the theory that Borman was

Cite as 351 Or 729 (2012) 	753
the apparent agent of the LLC. Contrary to plaintiff’s posi-
tion, to impose liability on the LLC in this circumstance, it is
not enough that the LLC contributed to the appearance that
the medical practitioners in its building were affiliated in
some way with each other and made beneficial referrals to
each other. Rather, for the LLC to be liable for the medical
malpractice of the professionals in the building, plaintiff had
to look to the LLC, not individual medical providers, for his
treatment, including the surgery that Borman performed.
Plaintiff would have had to have dealt with Borman based on
a reasonable belief, traceable to the LLC, that Borman was
the LLC’s employee or was otherwise subject to the LLC’s
right of control in performing that surgery. The facts and cir-
cumstances presented on this record would not permit a jury
to so conclude. Consequently, the trial court correctly granted
the LLC’s motion for summary judgment.
The decision of the Court of Appeals and the judg-
ment of the trial court are affirmed.
DE MUNIZ, C. J., specially concurring.
I concur in the majority’s evaluation that the record
in this case is inadequate to permit a reasonable jury to con-
clude that defendant Willamette Spine Center, LLC held out
Dr. Borman to plaintiff as its agent for the delivery of medical
services. I do so because plaintiff has failed to present suffi-
cient evidence that it was defendant—and not some other
party—that was responsible for misleading plaintiff as to the
affiliations of the providers at the ‘‘Willamette Spine Center.’’
However, the majority also concludes that, even if plaintiff
had 	established 	defendant’s 	responsibility 	for 	the 	con-
duct alleged, no reasonable jury could find that plaintiff actu-
ally or reasonably relied on that conduct to infer that the
Willamette Spine Center was a group medical clinic. In my
view, that second holding is both incorrect and unnecessary
to decide in this case. I write separately to express my view
that the record in this case is sufficient for a reasonable jury
to find that someone is holding out the individual providers in
the Willamette Spine Center building as agents of a unified
group medical clinic providing an array of medical services,
in a manner that, upon proper proof of the identity of the

754 	Eads v. Borman
1 The record reflects that Freeman was both a member of the defendant LLC
and a chiropractor who practiced in the Willamette Spine Center building. On at
least one occasion (in a biographical paragraph of an academic article he authored),
Freeman also identified himself as the ‘‘co-medical director of Willamette Spine
Center.’’
2 The record shows that Freeman not only recommended that plaintiff see
Borman, but personally arranged the details of plaintiff’s appointment and then
called plaintiff and told him when to come in.
principal, is sufficient to create a factual question about the
principal’s vicarious liability for Borman’s malpractice.
In this case, the record shows that Dr. Freeman1
invited plaintiff to seek care at ‘‘his clinic, the Willamette
Spine Center,’’ both from Freeman himself and from another
provider at the clinic. When that initial care proved ineffec-
tive, Freeman sent plaintiff to a third provider practicing on
the premises, Borman, who Freeman referred to as ‘‘one of
the Willamette Spine Center surgeons.’’2 The building in
which those providers worked was prominently labeled as
the ‘‘Willamette Spine Center’’ on the faade of the building
itself, as well as on a sign in front of the building, which also
featured a distinctive logo comprised of the letters ‘‘WSC,’’
with the letter ‘‘S’’ slightly enlarged and stylized to suggest a
spine. A list of all of the tenants in the building, which
included the names of both individual providers and provid-
ers operating as LLCs, was inscribed on the glass next to the
front entrance to the building. Inside the building, although
there was no centralized receptionist, staff, or waiting room,
some of the providers, including Borman, shared space and
staff with other providers at the facility. All of the providers
in the building used business cards with the same stylized
logo that appeared on the sign in front of the building, with
the words ‘‘Willamette Spine Center’’ prominently displayed
above (and in a larger font than) the provider’s own name.
The record also reflects that the Willamette Spine
Center name and logo were used in public advertisements in
a manner that strongly suggested the existence of a single,
unified entity providing a broad range of medical services. A
web page, once located at www.willamettespinecenter.com,
prominently featured the name and logo described above and
proclaimed that:

Cite as 351 Or 729 (2012) 	755
3 The majority disregards those advertisements on the grounds that plaintiff
failed to establish that defendant authored the ads, that the ads existed at or before
the time plaintiff was injured, or that plaintiff saw the ads prior to his operations.
Although I agree that there is insufficient evidence for a reasonable jury to attrib-
ute the ads to defendant or find that plaintiff relied on the ads, I find the evidence
relevant to show that whoever authored the ads intended for potential patients to
view the Willamette Spine Center as a unified group medical practice, both at the
time that plaintiff’s attorneys accessed the web page for the purposes of this liti-
gation, and, according to the web page, at the time that entity ‘‘was developed.’’
Even if plaintiff did not personally witness every indication of the principal’s
intent, that intent is relevant to the question of whether it was objectively reason-
able for plaintiff to rely on other evidence of which he did have knowledge.
‘‘Willamette Spine Center was developed from a desire to
provide comprehensive spinal care and pain manage-
ment services, equipped with state of the art equipment,
dedicated physicians who are expert in the practice, and
knowledgeable staff committed to serving the needs of the
patients. The patients served by the Willamette Spine
Center are individuals with both spinal and pain disorders.
The center utilizes all of its medical providers as a multi-
disciplinary team to assure patients receive the services
they need from the onset of the disease process to the com-
pletion of a rehabilitative program. We have contracts with
most major insurance carriers and work regularly with
attorneys to meet the financial needs of our patients.’’
In addition, an internet telephone directory advertisement,
also using the Willamette Spine Center name and stylized
logo, described the center as a ‘‘Comprehensive Diagnostic
Facility offering: Chiropractic[,] X-Ray, MRI & CT Scans[,]
Precision Spine Injection, Diagnostic & Treatment[,] Spine
Surgery[, and] Physical Therapy,’’ and set out a list of medi-
cal practitioners under the heading ‘‘WSC Providers.’’3
I agree with the majority to the extent that it holds
that no reasonable jury could find, on the basis of that evi-
dence, that defendant Willamette Spine Center, LLC held
out Borman as its agent for the delivery of medical services.
The only evidence in the record with regard to the actions of
the LLC itself shows that the LLC leased the Willamette
Spine Center building from another entity, subleased por-
tions of that building to the various providers who practiced
there, and collected rent from those tenants. Although the
LLC controlled the building’s signage under the leases, there
is no evidence that the LLC designed or erected the signs on

756 	Eads v. Borman
its own account or for its own benefit rather than at the
behest of its tenants. Likewise, there is no evidence that the
LLC issued or approved of the providers’ business cards or
placed the advertisements described above. As to Freeman’s
statements and conduct, although plaintiff presented evi-
dence that Freeman was a member of the LLC, that evidence
alone is insufficient to attribute his actions to the LLC. See
351 Or at 749-50 n 17 (discussing the lack of evidence estab-
lishing Freeman’s authority to bind the LLC). For those rea-
sons, I agree with the majority in affirming the trial court’s
order granting summary judgment to defendant in this case.
I part ways with the majority, however, to the extent
that it holds that, even if plaintiff had established that the
LLC had engaged in those acts, that evidence nonetheless
would have been insufficient to permit a reasonable jury to
hold the LLC vicariously liable for Borman’s malpractice
under the doctrine of apparent authority. Drawing all
reasonable inferences in favor of plaintiff, as we must, I
would hold that a reasonable jury could conclude from the
above facts that someone was holding out Borman as an
agent of the Willamette Spine Center in a manner that could
subject the person or persons responsible for creating that
impression to vicarious liability for his malpractice. In strain-
ing to find otherwise, the majority improperly fails to con-
sider the evidence in the light most favorable to plaintiff. See
ORCP 47 C (permitting the court to grant summary judg-
ment only if, ‘‘based upon the record before the court viewed
in a manner most favorable to the adverse party, no objec-
tively reasonable juror could return a verdict for the adverse
party’’). For instance, the majority holds that a jury could not
reasonably find that the use of the Willamette Spine Center
name and logo on the providers’ business cards implied a
group medical practice, reasoning that the business cards
‘‘reasonably communicated the independence of the individ-
ual providers’’ because ‘‘each provider had his or her own
individual contact information on the card as well, such as
telephone numbers and e-mail addresses.’’ 351 Or at 749.
However, while a reasonable jury could find that the lack of a
central e-mail address or telephone number implied the pro-
viders’ independence, that is by no means the only reasonable
inference a jury could draw from that evidence. A competing

Cite as 351 Or 729 (2012) 	757
inference—and one more favorable to plaintiff—is that those
providers carried on a group practice in the form of an entity
represented by that name and logo, and perhaps simply
chose not to share a central phone line or e-mail address or
include that information on their individual cards. Business
cards routinely include individual contact information, even
when an individual is employed by or affiliated with a larger
entity. The inclusion of that information on Borman’s card
does not, in my view, render unreasonable any other infer-
ence more favorable to plaintiff that the providers’ use of the
Willamette Spine Center name and logo might suggest.
Similarly, the majority holds that the list of provider
names next to the front door of the building could not reason-
ably be interpreted to suggest a group practice, because the
providers were listed individually and, in some cases, desig-
nated as LLCs. Again, however, while a jury could interpret
that evidence to indicate that the providers were independ-
ent, an equally plausible interpretation—and one more
favorable to plaintiff—is that the names were listed together
in that central location because the providers were affiliated
with one another in a group medical practice. The designa-
tion of some of the providers as LLCs does not entirely dis-
credit that inference: LLCs can affiliate with other entities in
corporate forms just as natural persons can. See ORS
63.077(2)(g) (permitting an LLC to ‘‘[b]e a promoter, incorpo-
rator, general partner, limited partner, member, associate or
manager of any partnership, joint venture, trust or other
entity’’). Indeed, the fact that some of those LLCs actually
incorporated the designation ‘‘Willamette Spine Center’’ into
their names could imply to a reasonable person a legally sig-
nificant affiliation with the clinic.
But for the lack of nexus between those culpable
actions and the actions shown to be attributable to defendant
here, I would hold that the issue of whether apparent author-
ity existed in this case should be submitted to a jury for
resolution under appropriate instructions. In my view, the
majority’s unnecessary commentary on that issue improperly
fails to draw all reasonable inferences in favor of plaintiff and
sets an ill-advised precedent for future courts faced with sim-
ilar cases.

758 	Eads v. Borman
To compound the problems created by the majority’s
erroneous treatment of the facts, the majority also errs in
stating that, to establish vicarious liability for a nonemployee
agent’s physical conduct, the principal must appear to have a
right to control the physical details of the manner of perform-
ance that is characteristic of an employee-employer relation-
ship. 351 Or at 738-39. That statement is incorrect. Oregon
law does not require a principal to appear to have a right to
control the details of the manner of performance by an appar-
ent agent.
The Restatement (Third) of Agency § 2.03 (2006),
provides:
‘‘Apparent authority is the power held by an agent or
other actor to affect a principal’s legal relations with third
parties when a third party reasonably believes the actor
has authority to act on behalf of the principal and that
belief is traceable to the principal’s manifestations.’’
The Restatement (Second) of Agency § 267 (1958), provides:
‘‘One who represents that another is his servant or other
agent and thereby causes a third person justifiably to rely
upon the care or skill of such apparent agent is subject to
liability to the third person for harm caused by the lack of
care or skill of the one appearing to be a servant or other
agent as if he were such.’’
The majority quotes those sources but does not apply the test
that they describe. 351 Or at 737-38 n 5, 738-39, 745-46 n 13).
Instead the majority declares the latter provision imposes
specific right-to-control requirements that the provision does
not contain. That is a mistake. The majority should not bury
its statement in a footnote or claim that this court’s case law
agrees with the majority’s mistaken view.
There is no unclarity in the above-quoted Restatement
provisions, and no Oregon case adopts the majority’s con-
struction. The Restatement provisions correctly address the
legal standard for determining the liability of a principal for
the lack of due care of an apparent agent without any refer-
ence to a proof requirement concerning the principal’s right
to control the details of the tortious conduct of the apparent
agent. That is so because apparent authority requires a

Cite as 351 Or 729 (2012) 	759
4 351 Or at 739-42. The point of that standard is that the patient looks to the
entity as the provider of healthcare, and not only to the doctor who performs the
medical services.
showing, consistent with section 2.03, of a reasonable belief,
traceable to the principal’s own conduct, that the apparent
agent has authority to act in the matter in question on behalf
of the principal, thus leading the tort victim to rely justifia-
bly, as section 267 provides, on the care or skill of the appar-
ent agent as if that person were expressly authorized to act
by the principal.
Later in its opinion, the majority sets out the legal
standard for determining the vicarious liability of a principal
in medical malpractice cases against healthcare entities.4
The holding in this case turns on that standard and on the
Restatement provisions quoted above, not on the majority’s
erroneous statements, already discussed, concerning a prin-
cipal’s vicarious liability for an apparent agent’s tortious con-
duct. The majority errs in failing to give effect to the full
scope of the rules of apparent authority that the Restatement
provisions quoted above express.
The medical care industry has undergone vast struc-
tural changes in the last few decades. The independent phy-
sician who contracts for privileges at the local hospital or
makes house calls to provide care for his roster of loyal
patients is largely a relic of a bygone era. Modern medical
care 	increasingly 	is being 	provided 	instead by doctors
employed by or affiliated with HMOs, insurance companies,
and hospitals, as a manifestation of the increasing depend-
ence of the medical practice on institutional resources
and expertise. See generally William M. Sage, Enterprise
Liability and the Emerging Managed Health Care System, 60
Law & Contemp Probs 159 (1997). The dwindling number of
doctors not beholden to those entities is increasingly turning
to alternative arrangements like group practices, clinics, and
professional corporations—in part for the purpose of manag-
ing the ever-increasing costs of malpractice liability to per-
sons like plaintiff here. Id. In turn, it is unsurprising that
patients would look to those entities to provide medically
appropriate services. In my view, the changing nature and
prevalence of those relationships is highly relevant to the

760 	Eads v. Borman
issue of what plaintiff could and could not reasonably have
assumed about the structure of the particular relationships
at issue in this case. It is imperative that the law recognize
and accommodate the changing nature of the delivery of
medical services in this state.
For the reasons I have set out, I specially concur in
the decision of the court.
Durham and Walters, JJ., join this opinion.