A Downstate appeals panel has reversed a Peoria judge's dismissal of a malpractice suit against Children's Hospital of Illinois, the suit alleging the facility was at fault for the loss of a baby's vision, saying the hospital could be liable for actions by doctors, even though the doctors were contractors to the hospital, because the hospital presented them as employees.

The Jan. 4 decision was delivered by Justice Tom Lytton, with concurrence from Presiding Justice Robert Carter and Justice Vicki Wright, of Illinois Third District Appellate Court in Ottawa. The ruling favored married couple Heather and Justin Terry in their litigation against Children's Hospital of Illinois, which is in Peoria and is run by OSF Healthcare Systems.

The decision was filed under Supreme Court Rule 23, which means it may not be cited as precedent except in the circumstances allowed by the Rule.

In August 2005, Heather gave birth to a girl at OSF. Her daughter was premature and OSF is a facility specializing in premature deliveries and neonatal problems. The baby was immediately placed in the neonatal intensive care unit.

The baby remained in the unit four months, during which time doctors James Hocker, Kamlesh Macwan and Chittaranjah Reddy treated her for, among other things, underdeveloped retinas. A few weeks after the baby’s discharge, another doctor found the baby had detached retinas, which made one eye blind and the other almost so.

In 2011 in Peoria County Circuit Court, the parents sued OSF, the three doctors at OSF and others, alleging their negligence caused the girl to lose her vision.

OSF argued it was not liable for the doctors' actions, because the doctors were contractors providing services at OSF through an agreement between OSF and their employer, Neonatology Associates. OSF did not control how the doctors treated patients, OSF said.

Circuit Judge Stephen Kouri agreed with OSF, dropping the hospital from the suit.

The Terry couple took the matter to appellate court, arguing OSF was responsible for the doctors on multiple grounds.

The Terrys contended the doctors had “leadership roles” in the neonatal intensive care unit – Hocker was director and Macwan was associate director – and developed the protocol used to treat children with such medical problems.

However, Justice Lytton was not persuaded. He reasoned, although OSF presumably appointed the doctors' to those positions, those titles do not prove OSF exercised control over their duties. Lytton further pointed out OSF pays Neonatology Associates for “administrative and teaching services,” but the medical group bills patients.

Lytton was persuaded by the Terrys' contention that whether or not the doctors were independent of OSF, the hospital presented the doctors as OSF employees. Lytton noted Heather Terry understood the doctors to be working for OSF, because they wore lab coats with the OSF logo and name tags identifying them as OSF staff. In addition, the doctors had offices in the hospital near the intensive care unit.

Reinforcing Heather's belief the doctors worked for OSF, was that she did not arrange with the doctors for her baby's care, but rather relied on OSF to furnish the needed medical services, Lytton observed.

OSF advertising also claims the hospital focuses on neonatal and eye treatment, having top physicians, which implies the physicians are OSF employees, in Lytton's view.

OSF maintained Heather signed a consent form before delivery, which stated “certain physicians” were contractors. However, Lytton found the form to be “ambiguous in that the patient may assume some, all, or none” of the physicians were contractors.

“The record contains support for plaintiffs’ allegations that OSF held out Dr. Reddy and Drs. Hocker and Macwan as its employees,” Lytton concluded.

As a result, Lytton overturned the lower court ruling and reinstated the case against OSF.

The Terrys have been represented by the Chicago firm of Power, Rogers & Smith.

The hospital has been defended by the Peoria office of the Chicago-based Hinshaw & Culbertson firm.

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Hinshaw & Culbertson LLP Illinois Third Appellate District Court

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