TCJL has filed an amicus curiae brief in Jesus Vilar, M.D. and GMG Health Systems Associates, P.A. a/ka and d/b/a Gonzaba Medical Group v. Jo Ann Puente (No. 20-093), which is currently pending on petition for review before the Texas Supreme Court. The case raises a number of issues, but TCJL’s brief concentrates on a single issue of overriding concern to the Texas business and health care community: the application of the settlement credit when the “claimant” includes both the injured party and another person seeking recovery based on the harm to the injured party (i.e., a derivative claim) (see § 33.011(1), CPRC).
The issue arose out of a medical malpractice case involving a patient who suffered complications from gastric bypass surgery that left her with serious brain dysfunction requiring 24-hour long term care. The plaintiff and her mother (as guardian for the plaintiff’s minor daughter) sued the physicians (Virlar, Patel, and Martinez), their employer (Gonzaba), and other providers for negligence seeking damages for physical pain, mental anguish, loss of earnings, loss of future earning capacity, and past and future medical expenses. The plaintiff’s minor daughter alleged past and future damages for loss of parental consortium, emotional trauma, and loss of care, maintenance, companionship and other damages. The plaintiff’s mother alleged separate damages for loss of services resulting from her daughter’s injury.
Prior to trial, the plaintiff’s mother settled and nonsuited both her own and the minor child’s claims with all defendants, including those against the doctors and the employer. The plaintiff settled with or nonsuited her claims against all defendants except the doctors and the employer. The jury assigned responsibility to Virlar (60%) and Patel (40%) and awarded the plaintiff $133,202 for past loss of earnings, $888,429 for future loss of earning capacity, and $13,263,874.86 for future medical expenses. The defendants filed a motion to apply a settlement credit for the plaintiff’s, plaintiff’s mother, and minor child’s settlements with the other defendants, as well as for an order for periodic payments of the future medical expenses. The trial court denied both motions and entered judgment against Virlar and Gonzaba for $14,109.349.02.
The defendants appealed to the San Antonio Court of Appeals. In a split decision, with Chief Justice Marion and Justice Alvarez filing separate concurring and dissenting opinions, the court of appeals upheld the judgment, subject to ordering a remittitur of $8,000 on the future loss of earning capacity award. The court of appeals rejected the plaintiff’s motion to remit the total award by $434,000 to cure potential error from the trial court’s denial of the defendants’ motion for settlement credit. The defendants appealed to the Texas Supreme Court, where the case is now in the merits briefing stage.
The court of appeals’ majority opinion has several aspects, some more troubling than others. First, the court upheld the trial court’s exclusion of expert testimony that the defendants argued was relevant to responsible third parties. The defendants sought to designate 26 different providers as RTPs based on the expert’s testimony that every provider who had a share in the plaintiff’s care failed to properly diagnose the plaintiff’s acute thiamine deficiency, which eventually caused her brain damage. The court of appeals concluded that the trial court correctly excluded the testimony because it did not constitute legally sufficient evidence that each of the 26 defendants’ negligence proximately caused the plaintiff’s injury to the level of “reasonable medical probability.” That ruling left the defendants as the only parties on the jury submission form. Second, the court of appeals held that the trial court did not abuse its discretion when it permitted the plaintiff’s attorney to question Virlar about his loss of admitting privileges at the hospital and a prior lawsuit in which he had admitted not reviewing the medical records, and even if there was error, it was harmless (hard to see how that kind of testimony is not incredibly prejudicial). The third issue—the legal and factual sufficiency to support the jury’s award for loss of future earning capacity—turned on validity the model used by the plaintiff’s expert, an economist, to calculate that loss. Here the court found the evidence legally and factually sufficient but ordered an $8,000 remittitur because the jury’s award exceeded the economist’s projection by that amount.
The fourth issue—and the one we take up in our brief—asked whether the trial court abused its discretion by refusing to apply the settlement credit on the basis that “her daughter’s settlement for her daughter’s independent damages should not reduce her award for injuries she suffered as a result of Dr. Virlar and Gonzaba’s negligence.” The court of appeals acknowledged that under §33.012(c), CPRC, the defendants were entitled to a settlement credit. The court likewise agreed that the definition of “claimant” in §33.011(1) includes a derivative claimant, as the plaintiff’s mother and daughter are here. But rather than simply applying the plain language of the statute (as the dissenters Chief Justice Marion and Justice Alvarez would have done), the majority held that to the extent these sections reduced the plaintiff’s award of economic damages (noneconomic damages are of course capped in health care liability actions), they violate the Open Courts provision of the Texas Constitution (Art. 1, §13). The majority relies heavily, indeed almost exclusively, on SCOTX’s holding in Lucas v. United States, 757 S.W.2d 687 (Tex. 1988), which struck down Texas’ then-statutory cap on damages in health care liability cases as violating open courts. Setting aside whether this decision, handed down by a notoriously activist court dominated by the plaintiff’s bar, is still good law in Texas, we believe that the court of appeals’ reliance on this case is misplaced and inapposite. As our brief argues:
TCJL only adds its voice to question the court of appeals’ premise that the definition of “claimant” in § 33.011(1), Tex. Civ. Prac. & Rem. Code, “restricts a common law cause of action” and thus triggers an Open Courts analysis to begin with. Virlar, 613 S.W.3d at 694. How does defining a “claimant” to include derivative claims arising from the underlying plaintiff’s injury “restrict a common law cause of action”? The statute does not limit causes of action in any way. The entirety of the court of appeals’ analysis of the question appropriates this Court’s reasoning in Lucas v. United States, 757 S.W.2d 687 (Tex. 1988) without the slightest attempt to examine whether Lucas is even apposite in this case (assuming that Lucas remains good law).
Specifically, Chapter 33 has nothing to do, as the court of appeals seems to think, with “impos[ing] the burden of supporting the medical care industry solely upon those persons who are the most severely injured and therefore most in need of compensation.” Vilar, 613 S.W.3d at 690. Chapter 33 establishes a comprehensive scheme for implementing the Legislature’s policy decision, first taken in 1987 and extended in 1995, to adopt a proportionate liability system and to limit a defendant’s joint and several liability. See § 33.013(b)(1), Tex. Civ. Prac. & Rem. Code. In 2003 the Legislature took the additional step of allowing a defendant to designate any responsible third party, including the claimant’s employer in a worker’s compensation and a debtor in bankruptcy. See Acts 2003, 78th Leg., ch. 204, Sec. 4.10(2). These legislative policy decisions, along with others (including the settlement credit and, for example, the paid or incurred rule) could all in some way effect the amount of economic damages recoverable by a claimant when compared to prior law. If the court of appeals’ analysis is permitted to stand, we can expect to see similar Open Courts attacks all up and down the line.
The purpose of the Chapter 33 reforms was simply to bring all potentially responsible parties into the lawsuit so that the finder of fact could assess each party’s percentage of fault and require a liable defendant to pay only for the portion of damages attributed to that defendant. The court of appeals’ commentary on the “one-satisfaction rule” entirely misses the point. The ultimate test has to do with the fairness of the system as a whole, not its effect on individual parties in individual lawsuits. Therein lies the problem with the court of appeals’ whole premise.
The Texas Association of Defense Counsel, Texas Alliance for Patient Access, Texas Medical Association, Texas Osteopathic Medical Association, and Texas Hospital Association have also filed a joint amicus brief that argues the settlement credit and periodic payment issues. Given the magnitude of the constitutional issue, its importance to the statutory proportionate responsibility system established by the Legislature, and the fact of two dissenting opinions specifically addressing the settlement credit, we are very hopeful that SCOTX will grant review and correct this disastrous decision.