Parker v. City of Highland Park

Plaintiff Vincent Parker fell through a glass storm door on September 12, 1970. He was treated for serious lacerations on the back and neck at the emergency room of Highland Park General Hospital, a municipal hospital operated by the City of Highland Park. In 1972, Vincent Parker and his father, Casey Parker, filed a malpractice suit against the hospital; Physicians Emergency Service, the corporation which operated the emergency room; and the doctor who had treated Vincent Parker.

In their complaint plaintiffs alleged that the treating physician had failed to take X-rays, that Vincent Parker had continued to feel pain in his back after treatment at Highland Park General Hospital, and that in 1972 treatment at another hospital revealed that a large piece of glass had remained lodged underneath the skin of Vincent Parker’s back since his accident.

The city moved for summary judgment, contending that plaintiffs had failed to state a claim upon which relief could be granted, because the city, as a governmental agency engaged in the exercise or discharge of a governmental function, was immune from tort liability under MCL 691.1407; MSA 3.996(107). The Court of Appeals denied leave to appeal. We granted leave to consider whether the day-to-day operation of a hospital is a "governmental function” as that phrase is used in the statute.

In the past this Court did hold that the operation of a hospital was a governmental function. Nicholson v Detroit, 129 Mich 246; 88 NW 695 (1902), Martinson v Alpena, 328 Mich 595; 44 NW2d 148 (1950).

We do not believe that because we once held the operation of a hospital to be a governmental function we must do so today. A comparison of the reasoning employed by this Court in Nicholson with that of Martinson shows that the meaning of the term "governmental function” has varied as the judiciary’s thinking on the nature of government has evolved.

Nor do we believe that the Legislature intended that we must today hold the operation of a hospital to be a governmental function because we did so in 1902 and 1950. As was stated in the Kavanagh-Fitzgerald dissenting opinion in Thomas v Dep’t of State Highways, 398 Mich 1, 17, fn 4; 247 NW2d 530 (1976), to read the second sentence of MCL 691.1407; MSA 3.996(107) as "preserving for all time state governmental immunity heretofore recognized by case law” would be to "assume that the Legislature failed to recognize that the evolution of case-law precedent is exclusively committed to the judicial branch of government”.

Determining whether or not a certain activity is or is not a "governmental function” is a matter of statutory interpretation. In the absence of a legislative definition of the term, statutory interpretation is a function committed to the judiciary. The term "governmental function” is particularly subject to judicial interpretation because the phrase is of judicial origin.

It is time we recognize that our case-law precedent, as it attempts to distinguish between a governmental and a proprietary function, is "inherently unsound”. In abrogating common-law judge-made immunity (Pittman v Taylor, 398 Mich 41, 49; 247 NW2d 512 [1976]), we recognized the appropriateness of the analysis used to overrule a hospital’s charitable immunity to the governmental immunity area of the law. By substituting "definition of governmental function” and "governmental function” for "charitable” and "charities” in Parker v Port Huron Hospital, 361 Mich 1, 25; 105 NW2d 1 (1960), we said about charitable immunity then what we wish to say about governmental immunity today:

"The old rule of charitable immunity [definition of governmental function] was justified in its time, on its own facts. Today we have a new set of facts. It is true that the new facts are still described by the same word in our English language — "charities” [governmental function] — but that is because our language has not changed as the facts of our life have changed. We have new facts described by old nomenclature. To say that the old rule of law still applies is to reach a result on the basis of nomenclature, not of facts; it is to apply a rule, proper in its time, to completely new facts, and to justify doing so by reference to language merely without regard to the facts.” (Emphasis supplied.)

Again, we reject the rigid dichotomy of the past. Because an activity is not proprietary, it does not necessarily follow that the activity is governmental. We would limit the term "governmental function” to those activities sui generis governmental —of essence to governing. This principle was recognized in Lykins v Peoples Community Hospital, 355 F Supp 52, 53 (ED Mich, 1973):

"This court does not believe the statutory scheme contemplates immunity for the day-to-day operations of a hospital. The statute speaks of immunity for 'governmental functions,’ and this court is of the opinion that while it may be an appropriate goal or objective of government to establish a hospital authority, it does not follow that the daily operations of such a hospital authority constitute a governmental function. Governmental functions more properly refer to the tasks of governing. There is, for example, a governmental character to activities such as the collection of taxes or the operation of a court system. But the services of healing offered by a public hospital are not governmental functions.”

The operation of a hospital is not an activity of a peculiar nature such that the activity can only be done by government. Rather, government participates alongside private enterprise, charitable and religious organizations in operating hospitals.

In adopting the "of essence to government” test for defining the term "governmental function”, we reject the "common good of all” test applied in Martinson v Alpena, supra. The operation of a hospital is a noble undertaking on the part of a unit of government. But, the fact that the government-operated hospital contributes to the "common good” does not distinguish the government-operated hospital from the non-government-operated hospital. We feel safe in assuming that hospitals operated by non-government entities, who do not enjoy immunity from tort liability, also contribute to the "common good”.

The modern hospital, whether operated by a city, a church, or a group of private investors, is essentially a business.* As such, there is no rational ground upon which immunity for the government-operated hospital can rest.

Reversed and remanded. No costs, a public question.

Kavanagh, C.J., and Levin, J., concurred with Fitzgerald, J.

"Except as in this act otherwise provided, all governmental agencies shall be immune from tort liability in all cases wherein the government agency is engaged in the exercise or discharge of a governmental function. Except as otherwise provided herein, this act shall not be construed as modifying or restricting the immunity of the state from tort liability as it existed heretofore, which immunity is affirmed.”

Because the case was disposed of below on the governmental immunity issue, the facts on the relationship among the defendants in this case have not been developed. Therefore, we offer no opinion on whether or not the hospital may escape liability because the emergency room was operated by a corporation of which the treating physician was a member, as Highland Park Hospital suggests. Nor do we decide the effect of Dr. Sokolowski’s alleged settlement with plaintiffs.

Nicholson involved a hospital for contagious disease. Plaintiffs decedent was a carpenter who contracted smallpox when employed by the City of Detroit in the construction of a new hospital on the site of an existing hospital. Plaintiff alleged that the old building and the grounds were infected with smallpox germs and the city was negligent in exposing the carpenter to the germs. Nonliability was based on the city’s performing a "governmental function”. To the Nicholson Court, performing a governmental function meant that the city was acting as an agent of the state rather than for its own private purposes. See Cooperrider, The Court, the Legislature, and Governmental Tort Liability in Michigan, 72 Mich L Rev 187, 222-224 (1973).

Martinson involved a general hospital operated by the City of Alpena. Nurse Madeleine Martinson fell into the elevator shaft. She sued the city, alleging negligence because of a faulty safety catch which allowed the guard door to open when the elevator was at another floor. The Court relied on Nicholson, finding a general hospital "within the same category” as a contagious hospital. The Court also applied the "common good of all” test for distinguishing between a governmental and a proprietary function.

" 'The underlying test is whether the act is for the common good of all without the element of special corporate benefit or pecuniary profit. If it is, there is no liability; if it is not, there may be liability. That it may be undertaken voluntarily and not under compulsion of statute is not of consequence.’ Gunther v Cheboygan County Road Commissioners, 225 Mich 619 [196 NW 386 (1923)]; Johnson v Ontonagon County Road Commissioners, 253 Mich 465 [235 NW 221 (1931)]; Daszkiewicz v Detroit Board of Education, 301 Mich 212 [3 NW2d 71 (1942)].” Martinson v Alpena, 328 Mich 595, 598; 44 NW2d 148 (1950).

"It is revolting to have no better reason for a rule of law than that so it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past.” Oliver Wendell Holmes, Jr., Collected Legal Papers (New York: Harcourt, Brace & Howe, 1920), p 187.

For a complete exposition on the evolution of the governmental/ proprietary distinction, see Cooperrider, The Court, the Legislature, and Governmental Tort Liability in Michigan, 72 Mich L Rev 187, 219-237 (1973).

"Except as otherwise provided herein, this act shall not be construed as modifying or restricting the immunity of the state from tort liability as it existed heretofore, which immunity is affirmed.”

Compare the interesting California case Li v Yellow Cab Co of California, 13 Cal 3d 804; 532 P2d 1226; 119 Cal Rptr 858 (1975). The California Court adopted a comparative negligence rule in the face of a contributory negligence statute. The Court believed the Legislature’s intent in enacting the 1872 statute was to "state the basic rule of negligence together with the defense of contributory negligence modified by the emerging doctrine of last clear chance”. Even so, the Court believed the Legislature did not intend to "restrict the courts from further development of these concepts according to evolving standards of duty, causation, and liability”.

The effect of the California Court’s decision, of course, was to totally nullify the statute. We do not go so far. In defining "governmental function” more narrowly than in the past, we do limit the operation of the statute, yet preserve the doctrine of governmental immunity.

The United States Supreme Court has noted that in the governmental/proprietary "quagmire” "the decisions in each of the states are disharmonious and disclose the inevitable chaos when courts try to apply a rule of law that is inherently unsound”. Indian Towing Co v United States, 350 US 61, 65; 76 S Ct 122; 100 L Ed 48 (1955).

Professor Davis has criticized the distinction as "probably one of the most unsatisfactory known to the law”. 3 Davis, Administrative Law Treatise, § 25.07, p 460.

The analysis of ownership of hospitals located in Michigan which have registered with thé American Hospital Association is as follows:

State and local government 70

Federal government 9

Non-government, not for profit 167

Investor owned, for profit 6

Osteopathic (non-government, not for profit) 2

American Hospital Association, Guide to the Health Care Field, 1977 Edition, pp 108-116.

Nor do we accept the contention that what distinguishes the government-operated hospital from others, hence entitling it to immunity, is that the government-operated hospital must accept all comers, regardless of ability to pay. In the usual case, it is not the hospital itself that extends "charity”, but another arm of government, often a county welfare agency or the Medicare system. In Martinson, supra, p 597, although the city hospital apparently accepted indigent patients, the county welfare board paid the bill of those patients. Although government often pays for the health care services extended to indigents, many times the care is provided in non-government operated hospitals.

"Hospitals today are growing into mighty edifices in brick, stone, glass and marble. Many of them maintain large staffs, they use the best equipment that science can devise, they utilize the most modern methods in devoting themselves to the noblest purpose of man, that of helping one’s stricken brother. But they do all this on a business basis, submitting invoices for services rendered — and properly so.

"And if a hospital functions as a business institution, by charging and receiving money for what it offers, it must be a business establishment also in meeting obligations it incurs in running that establishment. One of those inescapable obligations is that it must exercise a proper degree of care for its patients, and, to the extent that it fails in that care, it should be liable in damages as any other commercial firm would be liable.”

Flagiello v Pennsylvania Hospital, 417 Pa 486, 493-494; 208 A2d 193,196-197 (1965) (overruling charitable immunity).

As noted in Thomas, supra, to recognize governmental immunity for the day-to-day operation of a hospital would equate "governmental function” with "governmental participation”. If the Legislature had intended that result, surely the first sentence of MCL 691.1407; MSA 3.996(107) would read, "Except as in this act otherwise provided, all governmental agencies shall be immune from tort liability.” We do not today decide whether or not such a statute would pass constitutional muster.