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Waldron v. Aetna Casualty & Surety Co.

February 14, 1944


Appeal from the District Court of the United States for the Eastern District of Pennsylvania; Kennedy, Judge.

Author: Jones

Before BIGGS, MARIS, and JONES, Circuit Judges.

JONES, Circuit Judge.

James J. Waldron, the plaintiff, brought an action in the District Court against the defendant, sounding in tort, for damages for breach of an alleged contract providing for an operation to be performed upon him for the relief of a disability caused him by a serious injury which he suffered in the course of his employment. The defendant was the insurer of the plaintiff's employer (Mitchell & Pierson, Inc., leather manufacturers, of Philadelphia) against liability for compensation to employees under the Pennsylvania Workmen's Compensation Acts of 1915, P.L. 736, as amended, 77 P.S. § 1 et seq. Federal jurisdiction of the case rests upon the diversity of the citizenship of the parties.

The plaintiff suffered an admittedly compensable injury on October 27, 1941, when his left hand was severely burned upon being caught between two rollers used in the process of tanning leather. Immediately after the accident he was given first aid treatment in the Graduate Hospital of Philadelphia and then sent home. About a month later, to wit, on November 26, 1941, a hemorrhage in the injured hand necessitated the plaintiff's removal to the hospital where he remained until December 3, 1941. While in the hospital, he was under the care of one Dr. John C. Howell, who was also in charge of the clinic of Mitchell & Pierson, Inc., at their factory. After leaving the hospital, the plaintiff was treated by Dr. Howell at his private office in Philadelphia.

The plaintiff received compensation under the Pennsylvania Act from the date of his injury and was still receiving it at the time of the trial of the suit here involved. Under that Act, as amended (Act of 1939, P.L. 520, 77 P.S. § 531), an employer is also liable for reasonable surgical and medical services to a compensably injured employee for the first sixty days after the disability begins, at a cost not to exceed $150.00.

It is events subsequent to the sixty day period following the plaintiff's injury and their legal effect which give rise to the present controversy. Thus, the plaintiff alleges that, more than sixty days after his injury, a duly authorized representative of the defendant company persuaded and induced him to submit to further operations on his injured hand for the purpose of alleviating or at least minimizing the disability incident to the injury; and that, after certain preliminary operations had been performed for the purpose of the corrective treatment, the defendant summarily and unjustifiably abandoned the course of treatment entered upon, thus leaving the plaintiff with a wholly disabled and unusable hand and otherwise physically impaired to his great pecuniary loss and damage.

The defendant denies liability to the plaintiff on the ground that the representative said to have acted for it in respect of the agreement, which the plaintiff alleges, was without authority to bind the defendant; that no such arrangement was in fact made by the defendant's representative; and that the defendant's liability, which is that of an insurer of the employer, is limited under the Pennsylvania Workmen's Compensation Act, with respect to surgical and medical services, to the period of sixty days following the plaintiff's disability.

At the conclusion of the trial, the court granted a motion by the defendant for a directed verdict on the ground that the plaintiff had failed to prove that Dr. Howell, in undertaking the skin grafting operation, was acting for the defendant rather than Mitchell & Pierson, Inc. (the plaintiff's employer) and also had failed to prove that the representative who acted in the matter for the defendant company had authority to bind his company in such regard. From the judgment entered on the directed verdict the plaintiff took this appeal.

From the evidence offered in behalf of the plaintiff the following either directly appears or is reasonably inferable.

On January 21, 1942 (approximately three months after the date of the plaintiff's injury), Dr. Howell wrote the defendant company as to the plaintiff's condition and the treatment which he proposed for the future. This letter was written in response to a request by the defendant for a report. In his letter, Dr. Howell described in complete technical detail the condition of the plaintiff's injured hand and proposed that skin grafting operations be performed which, in his opinion, would heal the hand to such an extent that the plaintiff's disability would completely disappear by April following. In response to Dr. Howell's report, one James J. MacDonnell, supervisor of workmen's compensation claims for the defendant company, at its Philadelphia office, had a telephone conversation with Dr. Howell in the course of which the proposed skin grafting treatment was further discussed. MacDonnell was told by Dr. Howell that he (and Mitchell & Pierson, Inc., the plaintiff's employer)*fn1 had arranged to have the plaintiff admitted to the Graduate Hospital for the proposed skin grafting operation and that the extent of the necessary hospitalization would likely be from seventeen to nineteen days. To this information MacDonnell replied, "All right, go ahead." The defendant insurer stood to benefit pecuniarily if the plaintiff's disability could be terminated as Dr. Howell prognosed. The plaintiff's employer had no such material interest. Its liability was fixed by the State Compensation Act against which it was fully insured by the defendant.

Shortly thereafter, to wit, on February 2, 1942, the plaintiff (without knowledge of the plans or arrangements for his hospitalization) called at the offices of the defendant company in Philadelphia pursuant to a summons by a representative of the defendant. There, he was interviewed by MacDonnell and one Dr. Coppedge, a medical adviser to the defendant company. MacDonnell told the plaintiff that "We have arranged for you to go to the Graduate Hospital tomorrow to have a skin graft done to bring back the use of your hand." The plaintiff was reluctant to go to the hospital and, at first, demurred. But, upon being urged by MacDonnell, and assurances from Dr. Coppedge that Dr. Howell was a good surgeon and that the operation was the thing for the plaintiff if he hoped to recover the use of his hand, the plaintiff assented and entered the hospital on February 3, 1942.

That same day (February 3, 1942) Dr. Howell performed the first of the skin grafting operations upon the plaintiff and made a report thereof to the defendant company by letter of February 5, 1942. The plaintiff remained in the hospital until April 2, 1942, and thereafter continued to receive treatment by Dr. Howell at the latter's office. As a result of the operation and treatments, the plaintiff had scars on his hips and thighs from which skin had been lifted for transplantation to his abdomen, where it formed a roll or protuberance resembling a sausage, which has caused him discomfort. Had the skin grafting operation been completed, the roll of skin on the plaintiff's abdomen would have been transplanted to his injured hand.

On March 24, 1942 (nine days before the plaintiff was discharged from the hospital) Dr. Howell had sent the defendant company a report on the plaintiff's condition in which he stated that the plaintiff would need further operations and that, after they were performed, the plaintiff would have a possibly fifty per cent use of the injured hand. The next day (March 25 1942) Dr. Howell also sent to the defendant company his bill for all treatments rendered the plaintiff including the operations subsequent to the sixty day period following the injury. The bill contained a notation that Mitchell & Pierson, Inc., was the plaintiff's employer. The defendant retained this bill and report, without comment for a matter of two months. During that time it caused the case to be given further study and then finally decided not to carry on with the operation. Accordingly, on May 28, 1942, the defendant paid Dr. Howell for his services to the plaintiff during the sixty day period immediately following the injury and denied liability for any services rendered the plaintiff beyond that time. Although Dr. Howell was on an annual retainer from Mitchell & ...

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