The Texas Supreme Court was on vacation for most of August; however, the Court issued five opinions on August 24, 2000, all dealing with issues of interest to those in the insurance industry.
The most significant opinion issued by the Court this past month is of interest to those handling medical malpractice cases. In Horizon/CMS Health Care Corporation v. Auld, 43 S.Ct.J. 1151, the Court held that the maximum amount of punitive damages that can be awarded in a medical malpractice case is governed by the limitation of punitive damages set out in Chapter 41 of the Texas Civil Practice and Remedies Code. The Court also held in Auld that pre-judgment interest is subject to the cap on damages as provided in '11.02(a) of Article 4590i.
The court continued its conservative trend in refusing to find that racial discrimination was the basis for terminating an employee, M.D. Anderson Hospital v. Willrich, 43 S.Ct.J. 1175, in refusing to hold the Plaintiff's employer, a hospital, liable for an injury sustained by the employee as a result of a reaction to a prescription drug, Payne v. Galen Hospital Corporation, 43 S.Ct.J. 1167, and in upholding a verdict against a worker in a workers' compensation case, Texas Workers Compensation Insurance Fund v. Mandlbauer 43 S.Ct.J. 1178.
- ARTICLE 4590i PROVIDES A CAP FOR ACTUAL DAMAGES BUT NOT FOR PUNITIVE DAMAGES IN A MEDICAL MALPRACTICE CASE
FACTS OF CASE
Horizon/CMS Health Care Corporation v. Auld, 43 S.Ct.J. 1151 is a nursing home case brought under the Texas Survival Statute. The suit was originally filed by the next friend for Martha Hary against Horizon/CMS Health Corporation, the owner of Heritage Western Hills Nursing Home, alleging that Ms. Hary received medical care and treatment that was both negligent and grossly negligent. Ms. Hary died of a heart attack before the case was tried. As a result, her administratrix, Lexa Auld, continued to prosecute the case through a survival action.
The case was tried to a jury which awarded a verdict of $2.371 million in actual damages. This included $1.75 million for physical pain and mental anguish, $150,000.00 for disfigurement, $250,000.00 for impairment, and $220,941.73 for past medical expenses. The jury also found that the nursing home was grossly negligent and awarded $90 million in punitive damages.
The court entered judgment by applying the cap to actual damages required by Article 4590i which then reduced the actual damages to $1,320,261.40. Judgment for actual damages together with medical expenses was rendered for $1,541,203.13.
The court furthermore reduced the punitive damage award from $90 million to $9,483,766.92 based upon the cap on punitive damages as required by '41.007 of the Texas Civil Practice and Remedies Code. Punitive damages were calculated by multiplying the total damages awarded by four (4). The Supreme Court noted in a footnote that neither party contested whether the punitive damages should be multiplied by the capped or uncapped damage awards. The Supreme Court simply accepted the trial court's finding that the punitive damage award was determined by multiplying the total damages, regardless of the Article 4590i cap.
Judgment was also entered for prejudgement interest at the rate of 10% per annum on all actual damages.- APPLICATION OF ARTICLE 4590i TO AWARD OF PUNITIVE DAMAGES
Section 11.02 of Article 4590i, which is more popularly known as the Texas Medical Liability and Insurance Improvement Act (hereinafter referred to as Athe Act) provides:
- in an action on a health care liability claim where final judgment is rendered against a physician or health care provider, the limit of civil liability for damages of the physician or health care provider will be limited to an amount not to exceed $500,000.
- Subsection (a) of this section does not apply to the amount of damages awarded on a health care liability claim for the expenses of necessary medical, hospital, and custodial care received before judgment or required in the future for treatment of the injury.
Article 4590i, '11.04 provides that the $500,000.00 limit on damages is to be adjusted yearly according to the Consumer Price Index. As a result, the Court noted in footnote 2, Aat the time of judgment in this case, the adjusted cap was $1,320,261.40." 43 S.Ct.J. at 1152
Horizon argued that the cap on damages required by '11.02 should also cap the punitive damages. More specifically, Horizon argued that any damage award in this case could not exceed the adjusted cap of $1,320,261.40 together with any award for past medical expenses.
The Court held that punitive damages in a medical malpractice case are not limited by the provisions of 4590i. The Court was impressed with the fact that the Texas Medical Association, which lobbied for passage of the Act, has repeatedly stated that the cap in Article 4590i, '11.02 (a) does not include punitive damages. The Court held that punitive damages were limited by the provisions of Texas Civil Practice and Remedies Code, '41.007 which limited punitive damages to four (4) times the amount of actual damages. (Please note that '41.007 has been amended to '41.008 which has further limited punitive damages) As a result, the Supreme Court upheld the actions of the trial court in reducing the punitive damages from $90 million to $9,483,766.92.
- PRE-JUDGMENT INTEREST
The Court pointed out that while '11.02(a) of Article 4590i limits the amount of actual damages, '11.02 (b) states that this limit of damages does not apply to expenses for medical care in the past or in the future. The issue before the Court was whether prejudgement interest is also subject to the cap of '11.02 (a). The Court found that with the exception of medical care expenses in the past or in the future, prejudgement interest and all other damages are subject to the cap of '11.02 (a). Therefore, any judgment for actual damages including prejudgement interest is limited by the provisions of '11.02(a)
- APPLICABILITY OF ARTICLE 4590i TO A SURVIVAL CLAIM
The Plaintiff argued that application of the damage cap of Article 4590i violated the open-courts provisions of the Texas Constitution. The Court again restated its position that both wrongful death claims and survival claims are statutory claims and as such are not subject to challenges under the open-court provisions of the Texas Constitution. As a result, even though the Court held in Lucas v. United States, 757 SW2d 687 (Tex. 1988) that the cap on damages of Article 4590i was unconstitutional as applied to a common law injury claim, the cap on damages has been held to be constitutional as it applies to a survival claim or wrongful death claim. See Bala v. Maxwell, 909 SW2d 889 (Tex. 1995)
- ADMISSIBILITY OF SURVEY REPORTS
The Supreme Court also dealt with an issue that is a thorn in the side of any nursing home in defending a nursing home case. Texas Human Resources Code '32.021 (i), (j), as amended in 1997 provides that survey reports are admissible A . . . if offered to establish warning or notice to the institution of a relevant finding. The Supreme Court acknowledged the possible prejudicial effect of introduction of the survey reports into evidence. While the Court realized that the survey reports may not be admissible for some purposes, such survey reports are admissible for other purposes. Therefore, a defendant must request a limiting instruction to the jury as to the general admission of the survey reports. The Court furthermore held that a witness for Horizon had opened the door to the admission of such survey reports by incorrectly testifying that Horizon would have been cited by the Texas Department of Human Services if any deficiencies had been found in any inspections by the Texas Department of Human Services.
- ANALYSIS OF CASE
The limitation of actual damages of '11.02 (a) of Article 4590i applies to both common law damages and prejudgement interest. However, punitive damages are limited by the provisions of Chapter 41 of the Civil Practice and Remedies Code.
- OCCASIONAL RACIAL REMARKS DURING A 14-YEAR PERIOD OF EMPLOYMENT ARE INSUFFICIENT TO CREATE A FACT ISSUE AS TO WHETHER OR NOT TERMINATION OF AN EMPLOYEE WAS RACIALLY MOTIVATED AND/OR DISCRIMINATORY
The Supreme Court found in a per curium decision that four racial or derogatory remarks made over a 14-year period were insufficient to raise a fact issue regarding whether or not an employee=s termination was based upon a discriminatory purpose and, therefore, summary judgment was proper against the Plaintiff. M.D. Anderson Hospital and Tumor Institute, The University of Texas System Cancer Center vs. Harold Gene Willrich, 43 S.Ct.J. 1175.
FACTS OF CASE
Harold Gene Willrich was a utility station operator for the University of Texas M.D. Anderson Cancer Center (UTMDA) from June 1981 until August 1995. In 1982, Mr. Willrich was selected against his wishes to replace a retiring maintenance worker for the night shift. He had the highest job classification and was the only African-American eligible for the night shift job. Through the years, Mr. Willrich filed several complaints to management about racial incidents. In June of 1995, UTMDA downsized and instituted a reduction in force policy. UTMDA eliminated existing positions and created new positions within their new organization. UTMDA basically contacted all employees and asked them to express their preferences for three positions. Mr. Willrich requested only a night shift job - which were the least available positions. UTMDA did not select Mr. Willrich for a job in the organization and terminated him in August of 1995 along with 34 other employees of various races.
Mr. Willrich sued UTMDA alleging that his termination was racially discriminatory. UTMDA moved for summary judgment stating among other things that Mr. Willrich was terminated because his position had been eliminated due to the reorganization, he was not the most qualified candidate for jobs he specified on his preference form, and he requested only night shift positions. Mr. Willrich did not respond to the summary judgment. At the time of the hearing, he requested a continuance which was denied. The trial court granted the summary judgment which was later overturned by the Court of Appeals citing that there were some fact issues about the reasons Mr. Willrich was terminated. UTMDA appealed the ruling of the appellate court to the Texas Supreme Court.
SUMMARY JUDGMENT EVIDENCE
The Texas Supreme Court outlined the basis of review for summary judgments and, basically, reiterated long-standing case law. Further, the court noted that despite the fact that Mr. Willrich did not respond to the Motion for Summary Judgment, he could rely upon the evidence attached to UTMDA's Motion for Summary Judgment in order to prevent the granting of the Motion for Summary Judgment. However, the Texas Supreme Court found that the evidence Mr. Willrich relied upon did not raise a fact issue as to whether or not the reasons cited by UTMDA for his termination were pre-textual and, therefore, whether his termination was based upon racial discrimination.
In particular, Mr. Willrich pointed to his deposition testimony which was part of UTMDA's Motion for Summary Judgment where he outlined that there were at least four occasions in which racial and/or derogatory remarks were made to him during his 14 years at UTMDA. The court noted that stray remarks, remote in time from Willrich's termination and not made by anyone directly connected with the reduction in force decisions, are not enough to raise a fact question about whether UTMDA's reason for terminating Willrich was pre-textual. The court concluded that the evidence submitted by UTMDA was sufficient for the granting of the summary judgment. Furthermore, Mr. Willrich had stated that it was his belief that he was terminated based upon his race. The court countered that subjective beliefs are insufficient to overcome summary judgment evidence. The court overturned the Court of Appeals judgment and rendered judgment in favor of UTMDA without oral argument.
ANALYSIS OF OPINION
The court established that in Motions for Summary Judgment a party can rely upon evidence attached to the movant's Motion for Summary Judgment in order to combat or prevent the granting of the summary judgment. Furthermore, the court concluded that stray remarks, derogatory in nature, made over a long period of time were not enough to show that any action taken by a company is discriminatory and/or the basis of a wrongful discriminatory termination case.
- SUFFICIENCY OF EVIDENCE TO ESTABLISH A CLAIM FOR SEVERE EMOTIONAL DISTRESS
In a per curiam decision, the Texas Supreme Court found that there was more than a scintilla of evidence regarding the severe emotional distress sustained as a result of the intention infliction of emotional distress in Deborah Morgan v. Mack Anthony, 43 S.Ct.J. 1172.
FACTS OF CASE
Deborah Morgan was traveling on U.S. Hwy 190 outside of Jasper, Texas, when she encountered car problems. Her car died on the side of the road. Eventually, she was able to restart the car but could not drive more than 5 mph. As she was traveling along the shoulder, Mack Anthony stopped to see if she needed any help with her vehicle. Mack Anthony was unknown to Ms. Morgan. Mr. Anthony came up to Ms. Morgan's vehicle on the passenger side and opened the door and asked Ms. Morgan if she needed any help. Ms. Morgan replied that she didn't need any help and that her husband was coming for her. She thanked Mr. Anthony and then tried to shut her car door but he continued to hold it open.
Mr. Anthony then made statements to Ms. Morgan to the effect that her husband probably wasn't helping her in the car department and might not be taking care of her in other departments as well. Mr. Anthony asked if he could help her in another area. Ms. Morgan stated Ano, that she was happily married and asked Anthony to please shut the door. During the exchange between Ms. Morgan and Mr. Anthony, Mr. Anthony was leaning into the car with one hand on the dashboard and stared at Ms. Morgan's legs and breasts. At one point, Mr. Anthony stepped back and Ms. Morgan was able to shut the door and lock it.
Ms. Morgan continued to have problems starting her car and when she eventually started her car again, her car would not go more than 5 mph. Mr. Anthony continued to follow Ms. Morgan, pass her and get in front of her preventing her from moving very far. When Ms. Morgan's vehicle died again, he stopped and knocked on the window and asked her if she needed him. Ms. Morgan told him to go away because he was scaring her. Mr. Anthony continued to harass Ms. Morgan by preventing her from driving or getting away. Eventually, Ms. Morgan was able to pull into a diner parking lot and go inside and tell a waitress what happened. Ms. Morgan's father came to the diner and picked her up.
Ms. Morgan reported this incident with Mr. Anthony to the police but the police declined to charge Mr. Anthony because it would just be her word against his word. Ms. Morgan then sued Mr. Anthony after the incident alleging intentional infliction of emotional distress and seeking damages not to exceed $75,000.
Mr. Anthony moved for summary judgment on the basis that there was no evidence that he acted intentionally, that his conduct was extreme or outrageous or that Ms. Morgan suffered emotional distress. Mr. Anthony's motion was granted and Ms. Morgan appealed the action to the Court of Appeals which affirmed the trial court's granting the Motion for Summary Judgment. Ms. Morgan appealed to the Supreme Court.
SUMMARY JUDGMENT EVIDENCE
In reaching its decision, the court noted that in responding to the motion for summary judgment, Ms. Morgan relied upon depositions and her answer to an interrogatory. The court held that, generally, a party cannot rely on its own answer to an interrogatory as summary judgment evidence. However, in this case, the court found that Ms. Morgan had attached her answers to interrogatories as exhibits to her deposition and, therefore, the interrogatory answer became competent summary judgment evidence when it became a deposition exhibit. Ms. Morgan had testified during her deposition that the answer to the interrogatory was correct and she was subject to cross examination about her interrogatory answer.
The court concluded that summary judgment in favor of Mr. Anthony was improper. The Court had no difficulty in concluding that there was evidence that the conduct of Mr. Anthony was Aso outrageous in character and so extreme in degree as to be beyond all possible bounds of decency and to be regarded as atrocious and utterly intolerable in a civilized community. 435 S.Ct.J. at 1174-1175 Further, the court noted that there was evidence that Morgan's emotional distress was severe given the fact that she testified that during the pursuit by Anthony that he instilled a great fear and distress on her. She was also afraid that he was going to physically grab her. She testified that at the time that he was making sexual advances to her and refusing to allow her to shut her car door, she was suffering great fear, distress and emotional injury. She later sought treatment from a psychiatrist, a psychologist, a family doctor and a physician=s assistant. She also testified that she suffered depression, had problems with her family, experienced nightmares and was afraid to leave home. The court concluded that there was more than a scintilla of evidence that Ms. Morgan suffered severe emotional distress. The court reversed the judgment of the Court of Appeals and remanded the case to trial court for further proceedings.
ANALYSIS OF OPINION
Essentially, the court gave a general outline of what would be sufficient evidence to show severe emotional distress. Further, the court concluded that interrogatory answers, while otherwise incompetent summary judgment evidence, can be made into competent summary judgment evidence when attached as exhibits to a deposition.
- AN EMPLOYEE CANNOT SUE AN EMPLOYER FOR PROVIDING A PRESCRIPTION DRUG THAT CAUSED AN ADVERSE REACTION TO THE EMPLOYEE
The Court in Payne v. Galen Hospital Corporation d/b/a Clear Lake Medical Center, 43 S.Ct.J. 1167, held that an employee cannot sue an employer covered by workers compensation insurance for providing a prescription drug to which the employee had an adverse reaction.
FACTS OF CASE
The Plaintiff, Janis Payne, was a registered nurse employed by Galen Hospital. She sustained an on-the-job injury to her back. A doctor not associated with the hospital treated her and diagnosed her with a lumbar strain. He prescribed medication to the Plaintiff. The hospital had a program whereby employees requiring medication for on-the-job injuries received the medication free from the hospital pharmacy. The Plaintiff took the medication for four and a half months and then suffered a severe reaction. As a result of the severe reaction, she is totally and permanently disabled and will be confined to a wheelchair for the rest of her life.
The Plaintiff made a claim for worker's compensation benefits for her back injury and also for her reaction to the medication. The worker's compensation carrier paid for all the Plaintiff's treatments for her back injury and for her reaction to the medication. She had also received payments for lost wages since the day of her back injury. As of September, 1996, the Plaintiff had received $87,783.00 in indemnity payments and $534,802.00 had been paid on the Plaintiff's behalf to her various health care providers.
The Plaintiff sued the hospital, her treating physician, and the manufacturer of the medication. The hospital moved for summary judgment on the basis that the Texas Workers' Compensation Act's exclusive-remedy provision barred the Plaintiff's suit against the hospital. The Plaintiff argued that her reaction to the medication was not work related and did not result from her employer-employee relationship with the hospital. The supreme court held that the Plaintiff's reaction to the medication was a work related injury and that her cause of action against the hospital was barred by the Texas Workers= Compensation Act's exclusive-remedy provision.
EXCLUSIVE REMEDY PROVISION
In finding that the Plaintiff's claim against the hospital was barred by the Texas Workers' Compensation Act's exclusive-remedy provision the court noted that the Act has previously been held to cover on-the-job injuries, as well as any effects of the treatment for the on-the-job injury. The supreme court also stated that drugs prescribed for on-the-job injuries are considered part of an employee's treatment under the Texas Workers' Compensation Act.
The Plaintiff attempted to argue that, though her reaction to the medication was a compensable injury, the reaction was an independent injury which did not occur in the course and scope of her employment. The supreme court found that since the reaction to the medication was a compensable injury under the Worker's Compensation Act that the Workers' Compensation Act was the exclusive remedy for an employee against his or her employer.
The Plaintiff also argued that the exclusivity provision of the Texas Workers' Compensation Act should not apply in her case because she stood in a consumer-retailer relationship with the hospital as opposed to an employee-employer, despite the fact her prescriptions were filled for free. In doing so, the Plaintiff raised the dual capacity doctrine.
The court, noting that the hospital only filled the Plaintiff's prescription because it was her employer as a result of an on-the-job injury, found that the dual capacity doctrine did not apply to the instant case.
ANALYSIS OF OPINION
In holding that the Plaintiff could not sue her employer, the Court held it will rarely allow an employer who provides workers' compensation coverage to be sued by an employee on any Aalternate theory of liability.
- JURY ISSUES IN WORKERS= COMPENSATION CASES
Texas Workers Compensation Insurance Fund v. Mandlbauer, 43 S.Ct.J. 1139, involved a second appeal from a trial court take-nothing judgment against the worker. In order to put the case to rest, once and for all, the Supreme Court rendered judgment for the Texas Workers Compensation Insurance Fund and in the process reiterated the standard for submission of a jury instruction as part of the trial court's charge.
FACTS OF CASE
This case involves a worker's compensation claim filed by Mike Mandlbauer arising from his employment with Apache Products Company. Mandlbauer sustained an on-the-job injury while working for Apache Products Company in September 1992. In November 1992 he underwent an MRI scan of his lower back which showed no bulging or herniated discs. Mandlbauer left his employment with Apache in February 1993 and went into a new line of employment. In November 1993, Mandlbauer was diagnosed with a herniated disc in his lower back in the same area where the MRI scan had been performed a year before.
The Texas Workers' Compensation Insurance Fund denied any future medical treatment, arguing that the 1993 treatment was not related to the September 1992, injury. As we are sure you are aware, under the current Worker's Compensation Act, an injured worker is entitled to lifetime medical care that is reasonably related to an on-the-job injury. The Fund has the burden of showing that any subsequent treatment is not related to the on-the-job injury. In the current case the Texas Workers' Compensation Commission agreed with the Fund that the 1993 treatment was not related to the September 1992, injury. Mandlbauer appealed to a district court and received a jury trial. The jury found in favor of the Texas Workers' Compensation Insurance Fund. Judgment was entered in accordance with the verdict.
JURY INSTRUCTIONS
On appeal Mandlbauer complained that the trial court erred in refusing to submit a requested instruction on Aproducing cause@.
Noting that the trial court has considerable discretion to determine necessary and proper jury instructions 43 S.Ct. J. at 1178, the supreme court held that the trial court was within its discretion in refusing to include the requested instruction.
The supreme court found that the question on appeal, when the trial court refuses to submit a requested instruction, is whether the request was reasonably necessary to enable the jury to render a proper verdict 43 S.Ct.J. at 1179. Tex. R. Civ. P. 277.
The court also noted that in order for an instruction to be proper it must:
I. Assist the jury;
II. accurately state the law;
III. find support in the pleadings and the evidence.
43 S.Ct.J. at 1179
The court noted that in the instant case Mandlbauer did not file pleadings that he was relying upon a theory of producing cause. He did not produce evidence to support his producing cause theory. The charge submitted to the jury did not mention producing cause, but submitted the question concerning injury using the term Aresulting from. Mandlbauer failed to object to the charge. The court also noted that the TWCC Appeals Panel, Mandlbauer's pleadings, the statute upon which he was suing, and the charge all used the language Aresulting from, not producing cause. As a result of the lack of pleadings, lack of proof, and the language of the statute, the supreme court found that the trial court was within its discretion in refusing to include the instruction on producing cause.
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