California court rules on case regarding Rosenthal Fair Debt Collection Practices Act

Generally, a hirer wouldn’t be vicariously liable for the conduct of an independent contractor that it employed, even when the independent contractor was acting within the scope of its employment, a recent ruling noted.

The distinction between independent contractors and employees arose to limit the hirer’s vicarious liability for the misconduct of a person rendering service to him, the decision added.

In the case of Olson v. La Jolla Neurological Associates et al., the California Court of Appeal said that the Rosenthal Fair Debt Collection Practices Act didn’t impose vicarious liability on a creditor for the actions of an independent contractor who wasn’t the creditor’s agent.

The case arose after a doctor provided emergency neurosurgical services to a patient for a hemorrhagic stroke in 2017. La Jolla Neurological Associates (LJNA), the doctor’s solely owned professional corporation, was using McKesson as its third-party billing service at the time. It later retained WRS, another billing service, to take over.

In March 2018, WRS generated an invoice seeking payment of $1,713.54 for the medical services that the patient received and sent it to his home address. The next month, LJNA received from “The Olson Family” unsigned correspondence calling the invoice “harassment” and stating that payment inquiries should be submitted through Medicare and the VA Medical Center.

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