Cardiovascular Provider Resources Inc. v. Charles Gottlich M.D. ( 2015 )

Affirm in part; Reverse and Render in part; Opinion Filed August 18, 2015.
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-01763-CV
CARDIOVASCULAR PROVIDER RESOURCES INC., Appellant
V.
CHARLES GOTTLICH M.D., Appellee
On Appeal from the 162nd Judicial District Court
Dallas County, Texas
Trial Court Cause No. 11-08894
MEMORANDUM OPINION
Before Justices Fillmore, Myers, and Evans
Opinion by Justice Evans
Cardiovascular Provider Resources Inc. appeals a jury verdict in favor of Charles
Gottlich, M.D. on his claim for misappropriation of his name. Bringing four issues, CPR
contends the evidence is legally insufficient to support the jury’s findings on liability and
damages. CPR further contends the trial court erred in failing to award it attorney’s fees under
the Texas Theft Liability Act. After reviewing the record on appeal, we agree that Gottlich
presented no evidence that his name was misappropriated. We further conclude CPR was not
entitled to an award of attorney’s fees. Accordingly we reverse the trial court’s judgment in part
and render judgment that Gottlich take nothing by his claim for misappropriation. We affirm the
remainder of the judgment.
BACKGROUND FACTS
Gottlich is a retired cardiologist who practiced as a physician with Dallas Cardiology
Associates doing business as “HeartPlace.” The HeartPlace physicians formed Cardiovascular
Provider Resources, Inc. to handle the group’s administrative tasks and make investments for the
benefit of participating physicians.
While Gottlich was practicing at HeartPlace and an owner/shareholder of CPR, CPR
invested in Baylor Heart and Vascular Hospital, a facility at which the HeartPlace physicians
would be working. BHVH is a limited liability partnership that offers partnership interests or
“units” for purchase by individual physicians practicing at BHVH and entities like CPR that
manage physicians practicing at BHVH. As part of making this investment, CPR signed a
partnership agreement with BHVH requiring the physicians it represented to sign a non-
competition agreement. The non-competition agreement stated that the signing physician was a
“Qualified Physician Investor” who had not purchased BHVH partnership units individually and
was choosing to allow CPR to purchase units on his behalf. Gottlich signed the non-competition
agreement in November 1999.
BHVH made cash distributions to its investors on a quarterly basis based on the number
of partnership units owned. Once CPR received the distribution, it would retain a certain amount
to pay expenses and distribute the remainder as dividends to its shareholders. The number of
BHVH units that CPR was allowed to own was determined annually and was calculated based on
the number of Qualified Physician Investors it represented. The partnership agreement generally
defined a “Qualified Physician” as a physician (a) licensed to practice medicine in Texas, (b) on
staff at Baylor, (c) with privileges to conduct cardiology and vascular surgery procedures, that
(d) has not violated federal or state health laws or been excluded from participation in Medicare
or any state health care program. Every year CPR would provide BHVH with a list of its
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Qualified Physician Investors. BHVH would then verify that the listed physicians met the
contract requirements. Gottlich’s name was included on this list from its inception.
In June 2009, Gottlich chose to redeem his shares and ownership position in CPR and
HeartPlace. Although Gottlich was no longer an owner and shareholder, he continued to be
employed by and work at HeartPlace. CPR continued to manage the administrative tasks
associated with Gottlich’s practice. Gottlich did not, however, receive any dividend income
from CPR’s investments. Despite this, Gottlich’s name remained on the list of CPR’s Qualified
Physician Investors. According to CPR, it routinely listed the names of physicians who were not
shareholders of CPR because its position was that a physician’s association with HeartPlace was
sufficient to make him a Qualified Physician Investor.
In early 2010, Gottlich began inquiring about purchasing BHVH units personally.
Gottlich contacted BHVH and was told he was not eligible to purchase units individually
because his name was still on the list of Qualified Physician Investors represented by CPR.
Gottlich thereafter sought to have his name removed from CPR’s list. CPR responded that
Gottlich’s name would remain on the Qualified Physician Investors list as long as he was
employed by HeartPlace. Gottlich sent numerous follow-up communications to CPR seeking
justification for the entity’s continued use of his name. On August 27, 2010, a representative of
CPR sent Gottlich an email stating that the board had unanimously decided that his name should
remain on the list based on “historical precedence, continued employment at HeartPlace, and
concerns regarding maintaining the collective investment mentality of HP physicians.” It is
undisputed that there were no BHVH units available for purchase by Gottlich during the time
period that Gottlich sought to remove his name from CPR’s list.
On September 3, 2010, Gottlich sent CPR a letter of resignation stating that he was
resigning his position as a HeartPlace physician effective September 30, 2010. HeartPlace
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responded stating that, pursuant to his employment agreement, Gottlich was required to give six
months’ notice. Accordingly, HeartPlace stated it would consider Gottlich’s employment
terminated on March 3, 2011.
On January 18, 2011, Gottlich sent a letter to HeartPlace complaining about the
continued use of his name on the Qualified Physician Investors list. Gottlich noted, among other
things, that although HeartPlace claimed his termination was not effective until March 3, it had
already terminated his benefits, taken him off of the work schedule, and removed him from the
computers. Because HeartPlace was treating him as if his employment was effectively over, he
contended CPR was not entitled to continue using his name for the purposes of receiving
distributions from BHVH. Gottlich then demanded to be given “an accounting and payment of
all funds received from Baylor based on the use of [his] identity to justify the distributions from
the Hospital to CPR.”
On February 9, 2011 HeartPlace sent Gottlich a letter informing him that “in
contemplation of the formal termination of [his] association with HeartPlace,” it would “start the
process” of removing him from the list of qualified physicians. Gottlich’s name was eventually
removed from the list and replaced with the name of another HeartPlace physician.
Gottlich filed this suit alleging claims against HeartPlace and CPR for conversion,
violations of the Texas Theft Liability Act (TTLA), unjust enrichment, money had and received,
breach of contract, and declaratory judgment. In his second amended petition, Gottlich added a
claim for misappropriation of his name. Four months later, Gottlich filed a notice of non-suit
without prejudice to refiling as to his claims for conversion, violations of the TTLA, and
declaratory relief.
The case was called to trial before a jury on August 19, 2013. After Gottlich rested his
case, CPR and HeartPlace moved for a directed verdict. At that point, Gottlich announced he
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was non-suiting his claims against HeartPlace with prejudice. The trial court denied the motion
for directed verdict and signed a separate order granting the non-suit. After hearing the
evidence, the jury was asked whether CPR misappropriated Gottlich’s name for its own use or
benefit. The jury responded “yes” and awarded Gottlich $306,435.12 in damages. The jury was
also asked whether CPR was unjustly enriched through the receipt of BHVH distributions.
Although the jury answered “yes” to this question, it did not award Gottlich any damages for this
claim. Finally, the jury was asked whether CPR received BHVH distributions that, “in equity
and good conscience, belong to Dr. Gottlich.” The jury responded “no.” No question was
submitted to the jury on Gottlich’s claim for breach of contract.
CPR filed a motion for judgment notwithstanding the verdict arguing that Gottlich failed
to establish a claim for misappropriation of his name and failed to prove he was entitled to
damages. The trial court signed a final judgment in favor of Gottlich effectively denying CPR’s
motion. CPR then filed a second motion for judgment notwithstanding the verdict and,
alternatively, for new trial arguing, again, that Gottlich failed to establish the elements of his
claim for misappropriation of his name. In addition, CPR filed a motion to correct the final
judgment to eliminate recitals it claimed contradicted the record, modify the award of
prejudgment interest, and award CPR attorney’s fees pursuant to the TTLA and Uniform
Declaratory Judgments Act. On November 27, 2013, the trial court signed an amended final
judgment removing the recitals and amending the award of prejudgment interest. The court
denied CPR’s request for attorney’s fees. CPR then brought this appeal.
ANALYSIS
I. Misappropriation of Name
In its first issue, CPR contends the evidence is legally insufficient to support a finding
that it misappropriated Gottlich’s name. In reviewing the legal sufficiency of the evidence, we
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credit evidence favoring the jury verdict if reasonable jurors could and disregard contrary
evidence unless reasonable jurors could not. Del Lago Partners, Inc. v. Smith, 307 S.W.3d 762,
770 (Tex. 2010) (citing City of Keller v. Wilson, 168 S.W.3d 802, 822, 827 (Tex. 2005)). We
will uphold the jury’s finding if more than a scintilla of competent evidence supports it. Haggar
Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex. 2005) (per curiam); see also City of
Keller, 168 S.W.3d at 810. The final test for legal sufficiency is “whether the evidence at trial
would enable reasonable and fair-minded people to reach the verdict under review.” City of
Keller, 168 S.W.3d at 827.
The three elements of a misappropriation claim under Texas law are (1) the defendant
appropriated the plaintiff’s name or likeness for the value associated with it, and not in an
incidental manner or for a newsworthy purpose; (2) the plaintiff can be identified from the
publication; and (3) there was some advantage or benefit to the defendant. See Matthews v.
Wozencraft, 15 F.3d 432, 437 (5th Cir. 1994). Name misappropriation is a species of invasion of
privacy, and Texas law applies a very restrictive interpretation of the tort. See Meadows v.
Hartford Life Ins. Co., 492 F.3d 634, 639 (5th Cir. 2007). For liability to arise, “the defendant
must have appropriated to his own use or benefit the reputation, prestige, social or commercial
standing, public interest or other values of the plaintiff’s name or likeness.” See Moore v. Big
Picture Co., 828 F.2d 270, 275 (5th Cir. 1987) (citing RESTATEMENT (SECOND) OF TORTS
§ 652C, cmt. c (1977)). There must be something “unique” about the plaintiff’s name or likeness
that creates value which may be appropriated. See Matthews, 15 F.3d at 437. Tort liability is
intended to protect the value of the individual’s notoriety or skill and not the just name per se.
Id. This value is protected by limiting the things with which the plaintiff’s reputation, goodwill,
commercial standing, and the like are associated, thereby preventing excessive exploitation. Id.
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at 437–38. Excessive exploitation is use which reduces the value of the plaintiff’s property
rights in his name. See Meadows, 492 F.3d at 639.
CPR contends there is no evidence to show that its use of Gottlich’s name on its investor
list had anything to do with seeking or deriving a benefit from Gottlich’s reputation, prestige,
notoriety or skill and, therefore, there is no evidence to support a claim for name
misappropriation. We agree. Nothing about Gottlich’s inclusion on the list had anything to do
with his unique skills or reputation as a physician. Gottlich argues that CPR used his name
because he had the necessary credentials to be a “Qualified Physician Investor” under the BHVH
partnership agreement including a license to practice medicine in Texas and privileges to
perform cardiac and vascular surgery at Baylor Hospital. Gottlich attempts to equate these
credentials with his skills, reputation, and commercial standing in the medical field. Gottlich’s
credentials for purposes of the list were not unique to him, however, and were not used by CPR
in a way that implicated his individual abilities. As Gottlich concedes, he was merely a member
of a pool of physicians with identical qualifications. Indeed, when Gottlich’s name was removed
from the investor list, it was replaced with that of another physician with no impact on CPR’s
investment. Gottlich failed to provide any evidence that his name specifically had a unique value
that was misappropriated and diluted by CPR.
Gottlich relies heavily on the case of Moore v. Big Picture Co. 828 F.2d 270 (5th Cir.
1987) to support his position that CPR’s actions constituted misappropriation. But the evidence
presented in Moore is exactly the type of evidence necessary to show misappropriation that is
absent in this case. In Moore, the defendant, Big Picture, put together a presentation and bid
package in an effort to be awarded a government audio-visual contract. Id. at 271. As part of the
bid package, Big Picture included a proposed staffing chart which named the plaintiff as the
media coordinator. Id. The plaintiff, who was not an employee of Big Picture, contended his
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name was placed on the staffing chart without his permission. Id. In challenging the jury’s
finding that it misappropriated the plaintiff’s name, Big Picture contended that “[the plaintiff’s]
name was only included on the proposed staffing chart as a symbol for someone with the same or
similar qualifications” and that the name’s inclusion had no effect on Big Picture’s ability to
procure the contract. Id. at 275–76. But in reviewing the record, the court determined there was
sufficient evidence to support the jury’s finding that the plaintiff’s name in particular had value
and was not a mere “place holder” on the staffing chart. Id. at 276. The trial court specifically
noted when it denied Big Picture’s motion for judgment notwithstanding the verdict that the
evidence showed the plaintiff was “an especially desirable individual to fill the position in
question.” Id. Furthermore, there was testimony to show the plaintiff was known to be a good
worker and the audio-visual manager with the governmental entity receiving the bids stated he
was familiar with the plaintiff’s work and the plaintiff’s name had value to him.” Id.
In contrast, Gottlich points to no evidence that his name had any unique value or was
used as anything more than “a symbol for someone with the same or similar qualifications.”
This is demonstrated by the fact that his name was eventually replaced with that of another
doctor with no effect on CPR’s investment in BHVH. Gottlich conceded at trial that CPR did
not try to exploit any notoriety or “fame” associated with his name.
The damages sought by Gottlich and awarded by the jury further show that Gottlich did
not claim, let alone prove, that CPR appropriated for its own benefit anything that was unique to
his name. The list of Qualified Physician Investors included twenty-two physician names.
Gottlich calculated his damages as 1/22 of the total amount of distributions CPR received during
the time it allegedly made unauthorized use of his name. Accordingly, Gottlich’s name
possessed no unique value for purposes of the list; it was fungible with every other name on it.
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Gottlich presented no evidence of any diminution or dilution in the property value of his name
caused by CPR’s use nor did he make any showing that his privacy was violated.
Gottlich discusses at length his position that CPR’s use of his name after he was no
longer a shareholder was a violation of the terms of the partnership agreement with BHVH.
Even assuming CPR did not comply with the partnership agreement – a contract to which
Gottlich was not a party – this has no bearing on whether his name was used for the unique value
associated with it, a necessary element to recover for misappropriation of one’s name.
Based on the foregoing, we conclude Gottlich presented no evidence that CPR
misappropriated Gottlich’s name for the value associated with it. The trial court erred, therefore,
in denying CPR’s motion for judgment notwithstanding the verdict. We resolve CPR’s first
issue in its favor.
II. Attorney’s Fees
In its second and third issues, CPR contends the trial court erred in failing to award it
reasonable and necessary attorney’s fees as the prevailing party under the TTLA.1 CPR contends
the trial court’s final judgment denying all relief not otherwise determined amounted to a take-
nothing judgment against Gottlich on the TTLA claim entitling CPR to an award of fees and
costs limited to those incurred in defending against that claim. CPR acknowledges that Gottlich
filed a notice of nonsuit without prejudice on his claim under the TTLA. CPR contends,
however, that because the trial court did not sign an order granting the nonsuit, it was not until
the final judgment was signed that the TTLA claim was disposed of on the merits and CPR
became the prevailing party as to that claim.
1
CPR does not challenge the trial court’s failure to award it attorney’s fees under the Uniform Declaratory
Judgments Act.
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CPR’s argument is without merit. In Texas, a plaintiff may nonsuit at any time before
introducing all of his evidence other than rebuttal evidence. See Epps v. Fowler, 351 S.W.3d
862, 868 (Tex. 2011). No court order is required for the nonsuit to be effective. Id.
A defendant may still be entitled to receive attorney’s fees as a “person who prevails”
under the TTLA following voluntarily nonsuit of the claim against him without prejudice if the
trial court determines, upon motion of the defendant, that the nonsuit was taken to avoid an
unfavorable ruling on the merits. See BBP SubI LP v. Di Tucci, No. 05-12-01523-CV, 2014 WL
3743669, at *4 (Tex. App.—Dallas July 29, 2014, no pet.) (mem. op.). CPR requested attorney’s
fees under the TTLA in its live pleading and the trial court’s judgment denied this request. CPR
did not file its motion seeking to recover its fees under the TTLA until after the judgment
denying it an award of fees was rendered. Accordingly, we construe CPR’s motion seeking an
award of attorney’s fees as a motion to modify the judgment or, alternatively, as a motion for
new trial. See Surgitek, Bristol-Myers Corp. v. Abel, 997 S.W.2d 598, 601 (Tex. 1999) (we look
to substance of motion to determine relief sought not merely its title). Both the denial of a
motion to modify and the denial of a motion for new trial are reviewed for an abuse of discretion.
See Wagner v. Edlund, 229 S.W.3d 870, 879 (Tex. App.—Dallas 2007, pet. denied). A trial
court abuses its discretion if it acts in an arbitrary or unreasonable manner or if it acts without
reference to any guiding rules or principles. See Downer v. Aquamarine Operators, Inc., 701
S.W.2d 238, 241–42 (Tex. 1985).
To be entitled to attorney’s fees, CPR was required to file a motion demonstrating that
Gottlich nonsuited his TTLA claim to avoid an unfavorable ruling on the merits. See Epps, 351
S.W.3d at 870. Because no such motion was filed before the initial judgment was rendered, the
trial court did not err in denying CPR’s request for fees in its initial judgment. CPR contends,
and Gottlich does not dispute, that the parties agreed to submit the issue of attorney’s fees to the
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trial court post-verdict. This agreement cannot be read, however, to permit CPR to file its
motion post-judgment. CPR contends it could not file its motion until after judgment was
rendered because it was not until the first judgment was signed that the TTLA claim was finally
disposed of. As discussed above, however, this is not the case. Gottlich’s TTLA claim was
disposed of for purposes of this suit when his notice of nonsuit was filed. Id. at 868.
Gottlich’s notice of nonsuit of his claim under the TTLA was filed nine months before
trial began in this case. CPR makes no showing as to why it could not file the required motion
seeking its attorney’s fees before judgment was rendered. Because there was no motion prior to
the initial judgment, the trial court’s denial of CPR’s request for fees in the initial judgment was
not error requiring correction. Accordingly, we conclude the trial court did not abuse its
discretion in denying CPR’s motion to modify the initial judgment and motion for new trial on
the attorney’s fees issue. We resolve CPR’s second and third issues against it.
Because of our resolution of CPR’s first, second and third issues, it is unnecessary for us
to address CPR’s remaining issue and arguments. We reverse the trial court’s judgment in part
and render judgment that Gottlich take nothing by his claim for misappropriation. We affirm the
remainder of the judgment.
/David W. Evans/
DAVID EVANS
JUSTICE
131763F.P05
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
CARDIOVASCULAR PROVIDER On Appeal from the 162nd Judicial District
RESOURCES INC., Appellant Court, Dallas County, Texas
Trial Court Cause No. 11-08894.
No. 05-13-01763-CV V. Opinion delivered by Justice Evans. Justices
Fillmore and Myers participating.
CHARLES GOTTLICH M.D., Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED in part and REVERSED in part. We REVERSE that portion of the trial court's
judgment awarding Charles Gottlich M.D. damages for his claim for misappropriation and
RENDER judgment that he take nothing by that claim. In all other respects, the trial court's
judgment is AFFIRMED.
It is ORDERED that each party bear its own costs of this appeal.
Judgment entered this 18th day of August, 2015.
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