A SURVEY OF SIGNIFICANT APPELLATE COURT DECISIONS IN THE AREA OF MEDICAL MALPRACTICE IN TEXAS: 2008 – 2009
As most Texans are aware, in 2003, the Texas state legislature and the citizens of Texas passed House Bill 4 and approval of a constitutional amendment, Proposition 12, also known as “tort reform,” which, among other things, provides certain procedural and substantive protections to physicians who are the subject of a health care liability claim.
Over the past two years, several favorable opinions have been issued by the Texas Courts of Appeals, which clarify and uphold the protections afforded to health care providers under tort reform. The purpose of this Update is to educate physicians and other interested individuals as to these important appellate decisions.
Deposition Discovery Prior to Service of an Expert Report is Limited
Chapter 74 of the Texas Civil Practice & Remedies Code limits discovery in all health care lawsuits until the plaintiff serves an expert report as required by the statute. Specifically, § 74.351(s) states that “until a claimant has served the expert report and curriculum vitae as required by Subsection (a), all discovery in a health care liability claim is stayed except for the acquisition by the claimant of information, including medical or hospital records or other documents or tangible things, related to the patient’s health care through [written discovery and discovery from non-parties].
The issue becomes whether a defendant can cite to § 74.351(s) as a basis to refuse to give deposition testimony until after an expert report is served. The two cases discussed below answer that question in the affirmative.
In Re Jack Jorden, M.D. et. al., Realtors – Texas Supreme Court, March 28, 2008
The Supreme Court of Texas ruled that Texas Civil Practice & Remedies Code § 74.351(s) limits all discovery in health care suits filed pursuant to Chapter 74, including all pre-suitdepositions pursuant to Texas Rule Of Civil Procedure 202. In this case the plaintiff, Nancy Allen, was taken to Mother Frances Hospital by ambulance complaining of chest pain, where she was examined by Dr. Jack Jorden. Dr. Jorden prescribed her medicine for gastric reflux and referred her for an outpatient stress test. Three days later, Ms. Allen saw Dr. Donald Knarr with Tyler Cardiovascular Consultants, who prescribed her a diuretic and scheduled her for a chest x-ray in a month. Nine days later, Ms. Allen suffered a heart attack and died.
Pursuant to Texas Rule of Civil Procedure 202, the decedent’s son listed Dr. Jorden, Dr. Knarr, Tyler Cardiovascular, and Mother Frances Hospital as potentially adverse parties “in any future action,” and requested leave of court to depose themties prior to filing his lawsuit. The trial court denied leave, ruling that Rule 202 depositions are not allowed in health care claims. The Twelfth Court of Appeals reversed the trial court’s decision and ordered the trial court to change its order within ten days. The trial court complied, but the parties to this matter agreed to suspend all depositions until the outcome of the mandamus proceeding with the Texas Supreme Court.
Upon review, the Texas Supreme Court noted that its appellate courts are diametrically opposed as to whether pre-suit depositions may be taken in health care claims. While the Second and Twelfth Court of Appeals allowed them, the Fifth, Eleventh, and Fourteenth Courts of Appeal did not. In the middle, the Sixth Court of Appeals allowed pre-suit depositions as long as the questions were not targeted at a health care provider. As a result of these conflicting decisions, the Supreme Court determined that mandamus relief was appropriate.
To begin, the Supreme Court reviewed the precise language of the Texas Civil Practice & Remedies Code § 74.351(s). Specifically, Chapter 74 clearly places stays on discovery in health care liability claims until the necessary expert report and curriculum vitae is received, except via the following methods: (1) written discovery as defined in Rule 192.7; (2) depositions on written questions under Rule 200; and (3) discovery from nonparties. Accordingly, the plain terms of the statute stay “all discovery” but for the three exceptions listed above.
Moreover, the Court concluded that the Texas Legislature explicitly provided that Chapter 74 overrides any conflicting laws or rules of procedure. Particularly, the Court noted that the legislative history for Chapter 74 demonstrated that drafts initially prohibited Rule 202 depositions, then partially allowed them, and finally removed any reference to them altogether. Consequently, the Court reasoned that because the statute specifically applies to “a cause of action against a health care provider,” it applies both before and after such a cause of action is filed. To the extent that a pre-suit deposition is intended to investigate a potential claim against a health-care provider, it is necessarily a “health care liability claim” and thus falls into the coverage of section 74.351(s). In conclusion, the Court ruled that the statute’s plain language prohibits pre-suit depositions.
In Re Alan B. Lumsden, M.D., Relator – Houston Court of Appeals, May 21, 2009
While the Jorden case was certainly helpful to health care defendants in that it prevented plaintiffs from “claim-shopping” by preventing them from taking potential defendants’ depositions prior to filing their health care liability claim and providing a Chapter 74 report, this case took the protection to the next level. In Lumsden, the Houston Court of Appeals held that a plaintiff cannot take a defendant’s deposition afterthe lawsuit has been filed and after a plaintiff has served his Chapter 74 expert report, but before a court of appeals has ruled upon the sufficiency of the expert report under Chapter 74.
In this matter, the plaintiff, Beverly Shepherd-Sherman, filed her lawsuit against several health care providers, alleging medical negligence. She subsequently timely filed her expert report, to which the defendants objected as insufficient under Chapter 74’s expert report requirements. She was granted a 30-day extension to supplement her report; defendants subsequently objected to her supplemental report as well. Upon hearing on the defendants objections to plaintiff’s supplemental expert report and motion to dismiss, the trial court overruled the objections and denied the motion. Thus, as provided by Chapter 74, one of the defendant hospitals, Methodist Hospital, filed an interlocutory appeal of the trial court’s ruling.
While the appeal was pending, the plaintiff served upon the defendants deposition notices, including employees of Methodist. Methodist moved the trial court to stay the entire case pending a ruling on its interlocutory appeal. The trial court denied the motion to stay and Methodist filed a petition for writ of mandamus of the trial court’s ruling.
The first issue the Court of Appeals considered was whether an inadequate report is considered “no report” for purposes of § 74.351(s). Citing to Texas Supreme Court caseLewis v. Funderburk, the Houston Court of Appeals answered that issue in the affirmative, holding that the filing of an inadequate report under the statute is tantamount to filing no report at all.
Based upon that analysis, the Court went on to hold that when the adequacy of an expert report is being considered on appeal, § 74.351(s) comes into play and all discovery is stayed except for the specific enumerated exceptions noted in the statute. Specifically, the Court held that “when a health care defendant challenges the adequacy of an expert report in the appellate court, the report is not adequate and, therefore, not served, until the court of appeals determines that it is adequate.”
The Court then took its ruling one step further by citing § 74.351(s) in conjunction with sub-section (u) and held that those sub-sections “bar oral depositions of parties and allow only two oral depositions of nonparties before the expert report is served.” The Court clarified that not only are depositions of the appealing defendant stayed, but depositions of all parties – including all defendants – are stayed. The Court’s rationale for such a holding was based upon judicial efficiency and the spirit of tort reform, generally.
The Two-Year Statute of Limitations for a Health Care Liability Claim Cannot be Circumvented
There has been some discord between Chapter 74’s two year statute of limitations and Chapter 33’s allowance of a plaintiff to join a defendant who has been designated as a responsible third party after the expiration of the statute of limitations. The Kimbrellcase resolves this issue in favor of Chapter 74’s two year statute of limitations, holding that Texas Civil Practice & Remedies Code § 33.004(e), which permits a plaintiff to join a person designated as a responsible third party as a defendant within sixty days of the designation, cannot be used to circumvent the two-year limitations bar contained within § 74.251.
Kimbrell v. Molinet – San Antonio Court of Appeals, December 31, 2008
In Kimbrell, the plaintiff sued several parties, including his podiatrist, Dr. Marque Allen, asserting medical malpractice claims relating to an injury he sustained to his Achilles tendon and the subsequent treatment of the injury. On August 24, 2007, Dr. Allen designated Kimbrell and Horan as responsible third parties, on that same date, plaintiff amended his petition to join Kimbrell and Horan as additional defendantss. Kimbrell and Horan each moved for summary judgment, arguing that plaintiff’s claims against them were barred by the two-year limitations period contained in Texas Civil Practice & Remedies Code § 74.251. Plaintiff countered, arguing that his claims were timely pursuant to Texas Civil Practice & Remedies Code § 33.004(e). The trial court denied the motions, and Kimbrell and Horan filed an interlocutory appeal. On appeal, the Court of Appeals held that “notwithstanding any other law” the language of § 74.251 imposes an absolute two-year limitations period on health care liability claims. Consequently, the Court determined that the trial court erred in denying the motions for summary judgment, and therefore, the Court reversed the trial court’s order and rendered judgment dismissing plaintiff’s claims against Kimbrell and Horan.
Furthermore, the Court focused on § 74.251’s initial language which states “notwithstanding any other law,” and reasoned that this unequivocally expresses the legislature’s intent to allow § 74.251 to govern when its limitations period conflicts with other laws. Specifically, in support of its holding, the Kimbrell Court cited two Texas Supreme Court cases discussing the legislature’s express intent for Chapter 74 to govern when the limitations period conflicts with other laws.
A Plaintiff Can Only Recover for Those Medical Expenses Which Have Been Paid or Incurred
Several opinions have been issued over the past two years related to the issue that a plaintiff should only be allowed to recover for those medical expenses actually paid or incurred by the plaintiff. Said differently, a plaintiff should not be able to recover for those amounts which have been written-off or adjusted by health care providers, as neither the patient nor his insurer are responsible for payment of such amounts and recovery of same would be a windfall to the plaintiff. Many of the cases interpreting this issue happen to be general personal injury cases, but the courts’ interpretation of the “paid or incurred” issue in those cases are equally applicable to the defense of health care liability claims.
The statute, codified as Texas Civil Practice & Remedies Code § 41.0105, states that “in addition to any other limitations under law, recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.”
Matbon, Inc. v. Gries – Eastland Court of Appeals, January 15, 2009
The Eastland Court of Appeals held that the trial court erred in allowing the plaintiff to recover the gross amount of medical bills originally charged to the patient without discounting the recovery by that amount written-off by the providers. Their ruling was based upon the “paid or incurred” language of § 41.0105.
This lawsuit involved a personal injury claim by the plaintiffs, Debra and Dennis Gries, for damages sustained in a head-on automobile collision. As a result of the collision plaintiffs suffered severe fractures of their arms, legs, and back. The Court of Appeals evaluated several issues on appeal, which included an analysis of the paid or incurred issue. More specifically, appellants contended that the plaintiffs could not recover the amount of those medical bills which had been written-off, which the trial court took under consideration following a jury verdict in favor of the plaintiffs. The trial court ultimately rejected appellants’ contentions under § 41.0105 by ruling that the plaintiffs were entitled to recover the gross amounts of their medical bills.
In considering the trial court’s ruling, the Court of Appeals acknowledged that a debate has emerged regarding the effect of the statute, citing a Texas Business Journal article appraising the issue. In assessing the issue, it quoted a Texas Supreme Court case,Linnstaedter, which states that “few patients today ever pay a hospital’s full charges, due to the prevalence of Medicare, Medicaid, HMOs, and private insurers who pay discounted rates.”
The Appellate Court’s holding in favor of the appellants is based upon the plain language of § 41.0105, which states that recovery is limited to the amount actually paid or incurred. The Court’s ruling rests on the use of the adjective “actually,” which it determined clearly delineates a limitation on recovery to that amount – after all adjustments to the bill have been made – which a patient is ultimately responsible to pay. In coming to this determination, the Court notes that the Supreme Court of Texas made a passing reference in Linnstaedter that since a health care provider has no claim for the amount of a bill that has been written-off, by recovering that amount nevertheless, the patient would obtain a windfall.
A Claim for Loss of Household Services Falls Within Chapter 74’s Noneconomic Damages Cap
One of the most significant aspects of tort reform for health care liability claims is the noneconomic damages cap. As to individual health care providers, § 74.301(a) states that “the limit of civil liability for noneconomic damages of the physician or health care provider…shall be limited to an amount not to exceed $250,000…regardless of the number of defendant physicians or health care providers…”
Section 41.001(12) of the Texas Civil Practice & Remedies Code defines noneconomic damages as those “awarded for the purpose of compensating a claimant for physical pain and suffering, mental or emotional pain or anguish, loss of consortium, disfigurement, physical impairment, loss of companionship and society, inconvenience, loss of enjoyment of life, injury to reputation, and all other nonpecuniary losses of any kind other than exemplary damages.”
It is undisputed that this cap includes claims for intangible damages such as pain and suffering, mental anguish, physical disfigurement, loss of consortium, etc., as described above. However, an issue that has arisen in numerous health care liability claims is whether other, more questionably tangible claims for damages are subject to the cap or recoverable as economic damages. One such common claim for damages is “loss of household services.” This type of claim often arises in wrongful death claims or lawsuits involving allegations of disability, where the plaintiff claims that his loved one can no longer provide typical household services such as cleaning, cooking, laundry, yard work, child care, etc.
Plaintiffs make the argument that the loss of such services is calculable – for example, one can produce evidence of the cost of paying someone to clean your house – and thus, should be deemed an “economic” loss and outside the limitation of the damages cap. Defendants, on the other hand, argue that because the plaintiff or his loved one was never actually paid for the services provided, they are more akin to the intangible losses, such as loss of consortium, which are subject to the cap.
What makes this particular issue so significant is that plaintiffs will often attempt to use an economist to testify as to the value of the loss of household services, which many times equals tens, if not hundreds, of thousands of dollars. Thus, the Court’s holding in the Tello case discussed below is incredibly helpful to defendants’ arguments that loss of household services are not a separate recoverable economic loss, but instead should be included with the noneconomic losses subject to Chapter 74 damages cap.
Tello v. USA – San Antonio, U.S. District Court, March 19, 2009
Tello is actually not a Texas State Court of Appeals case, but instead is a U.S. District Court case, heard in the Western District of Texas, San Antonio Division. This lawsuit involved a Federal Tort Claims Act medical malpractice claim in which the plaintiffs, a husband and son, sought recovery for the alleged wrongful death of their wife/mother. The bench trial resulted in a verdict for the plaintiffs. However, the trial judge included plaintiffs’ damages claim for the loss of household services provided by the decedent as part of the noneconomic damages subject to the damages cap.
Plaintiffs argued that this was error in that such damages–loss of cooking, cleaning, laundering, and child care–were pecuniary in nature, and thus, not akin to typical noneconomic damages, such as loss of love and companionship.
In analyzing the issue, U.S. District Judge Fred Biery noted that tort reform included a change limiting recovery of economic/pecuniary damages to “actual” losses. Although Texas law has not defined an “actual economic/pecuniary loss,” Judge Biery sought guidance from Mississippi law, which defines such a loss as “objectively verifiable pecuniary damages.” Judge Biery went on to discuss the “paid or incurred” language of Chapter 41 and reasoned that “under the current Texas statutory scheme there must be evidence of actual payment for the replaced household services for the recovery to be pecuniary or economic in nature.”
Judge Biery acknowledged that the loss to plaintiffs of their loved one’s household contributions was no doubt significant and recoverable, but reiterated that there was no evidence that the loss of such services necessarily resulted in “direct financial loss to the survivors.” Therefore, such a loss could not be considered pecuniary in nature, and thus, was appropriately included within the capped noneconomic damages recovered by plaintiffs as a loss of companionship and society.
While this ruling does not have the force of a Texas Court of Appeals ruling, the analysis and rationale utilized by Judge Biery in making his determination is instructive to defense counsel when making this argument to the trial court judges and beyond.