Martha Arango and Americare Nursing Services, Inc. v. Andrea Davila ( 2011 )

NUMBERS
13-09-00470-CV
13-09-00627-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
MARTHA ARANGO AND AMERICARE
NURSING SERVICES, INC., Appellants,
v.
ANDREA DAVILA, Appellee.
On appeal from the 139th District Court
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Justices Yañez,1 Garza, and Benavides
Memorandum Opinion by Justice Garza
1
The Honorable Linda Reyna Yañez, former Justice of this Court, was a member of the panel at
the time this case was argued and submitted for decision, but did not participate in deciding the case
because her term of office expired on December 31, 2010. See TEX. R. APP. P. 41.1.
In these two consolidated appeals, we are asked whether an employer‘s duty to
provide a safe workplace may extend to publicly accessible roadways. The trial court
ruled in this case that it does, in part due to deemed admissions resulting from the
failure of appellants, Martha Arango and Americare Nursing Services, Inc.
(―Americare‖), to timely respond to a request for admissions. See TEX. R. CIV. P.
198.2(c). A jury then awarded over $1.8 million dollars in damages to appellee, Andrea
Davila. By seven issues on appeal, Americare and Arango contend that: (1) employers
have no duty to make public roadways safe for employees; (2) if an employer does have
such a duty, that duty is non-delegable and does not apply to Arango individually; (3)
the deemed admissions should have been set aside; (4) the trial court erred by denying
their request to designate a responsible third party; (5) evidence of contributory
negligence should have been admitted; (6) medical expenses written off by health care
providers should not have been included in the damages award; and (7) the trial court
erred by assessing post-judgment discovery sanctions against Arango. We reverse and
remand.
I. BACKGROUND
Davila, an in-home nurse employed by Americare, suffered multiple severe
injuries on April 13, 2005 when the vehicle she was driving collided head-on with
another vehicle on a public road in Palmview, Texas. At the time, Davila was traveling
from the home of one patient to the home of another patient. It is undisputed that she
was in the course of her employment at the time of the collision and that Americare was
a non-subscriber under the Texas Workers‘ Compensation Act. See TEX. LABOR CODE
ANN. § 406.033 (West 2006). Davila sued Americare and its president and director,
2
Arango, asserting claims of negligence, gross negligence, breach of an implied contract,
and fraud, and requesting actual and exemplary damages.
Davila later propounded a request for admissions on Americare and Arango.
The request asked for, among other things, the following admissions: (1) that
Americare failed to provide Davila a safe place to work by ―sending [Davila] in[to] an
area which Americare and [Arango] knew or in the exercise of reasonable care should
have known was an area having a high incidence of motor vehicle accidents and
criminal activity‖; (2) that Americare ―failed to maintain a ‗time management and travel
scheduling system‘ which would have prevented [Davila] from being forced to work in an
unsafe environment‖; (3) that Americare and Arango ―negligently and with reckless
disregard for the rights of [Davila] scheduled critical home health care visits in a
dangerous and unsafe area and in such a manner as to create an unreasonable risk of
harm, injury or death to [Davila]‖; (4) that, ―as a direct and proximate cause [sic] of the
negligent and reckless scheduling of critical home health care visits on or about April
13, 2005, [Davila] was seriously injured by a hit and run driver‖; (5) that Americare and
Arango ―scheduled an excessive amount of time critical home health care visits for the
sole purpose of maximizing profits for themselves with wanton and reckless disregard
for the safety and welfare of their employees‖; (6) that Americare and Arango ―knew or
should have known‖ that such ―excessive‖ scheduling ―created an unreasonable risk of
harm, injury or death‖ to Davila; and (7) that the ―excessive‖ scheduling of visits ―in a
dangerous area‖ caused the damages sustained by Davila.2 According to Davila, the
requests for admissions were served on appellants‘ counsel on November 2, 2007;
2
The requested admissions largely tracked the allegations made in Davila‘s fifth amended
petition.
3
Americare and Arango claim that they were not served with the requests until ―late
December 2007.‖
Americare and Arango filed responses to the requests on January 8, 2008,
denying or objecting to the majority of the requests. They then moved the trial court to
―clarify the status‖ of the admissions by ruling whether the admissions had been
deemed due to the alleged untimeliness of their responses. Americare and Arango also
asked the trial court, if it found the admissions deemed, to strike the admissions,
arguing that: (1) if the responses were untimely served, it was not intentional but rather
―due to an old address being used to serve the request for admissions‖; (2) as soon as
counsel for Americare and Arango became aware that responses were due, he
promptly filed responses; (3) Davila ―will not be unduly prejudiced‖ if the admissions are
struck; and (4) ―there is good cause for the court to strike the admissions.‖ See TEX. R.
CIV. P. 198.2(c). The trial court denied both the motion to clarify and the motion to
strike.
A partial instructed verdict was subsequently entered against Americare and
Arango on the issue of negligence and causation, and only a damages question was
submitted to the jury. The jury awarded $1,818,606.20 to Davila, including pre-
judgment interest, assessed jointly and severally against Americare and Arango.
Americare and Arango filed a motion for judgment notwithstanding the verdict
contending that they owed no duty to Davila as a matter of law. On August 3, 2009, the
trial court entered judgment on the verdict, thereby implicitly denying the motion for
judgment notwithstanding the verdict. These appeals followed.3
3
In appellate cause number 13-09-00627-CV, Americare and Arango challenge the trial court‘s
August 3, 2009 judgment awarding damages to Davila. In appellate cause number 13-09-00470-CV, they
4
II. DISCUSSION
A. Request to Set Aside Deemed Admissions
We first consider Americare and Arango‘s third issue, by which they argue that
the trial court erred in denying their request to set aside the deemed admissions.
Appellants do not dispute that Roberto Puente, their attorney at the time Davila‘s
requests for admissions were propounded, failed to timely respond to the requests. The
trial court was therefore correct in considering the admissions deemed. See TEX. R.
CIV. P. 198.2. Americare and Arango argue, however, that the trial court abused its
discretion in declining to permit the withdrawal of the admissions because there was no
evidence that Puente acted with ―callous disregard or bad faith‖ in failing to timely
respond to the requests.
Once an action is filed, a party can serve written requests for admissions on an
adverse party. TEX. R. CIV. P. 198.1. When a party does not serve responses to
requests for admissions within thirty days, the matters in the requests will be deemed
admitted against that party. TEX. R. CIV. P. 198.2; Wal-Mart Stores, Inc., v. Deggs, 968
S.W.2d 354, 355 (Tex. 1998). Any matter deemed admitted is conclusively established
unless the court, on motion, permits withdrawal or amendment of the admission. TEX.
R. CIV. P. 198.3; Marshall v. Vise, 767 S.W.2d 699, 700 (Tex. 1989).
Withdrawal or amendment of an admission is permitted on a showing of good
cause and a finding by the trial court that (1) the party relying on the deemed admission
will not be unduly prejudiced, and (2) presentation of the merits of the action will be
served thereby. TEX. R. CIV. P. 198.3; Deggs, 968 S.W.2d at 356. ―Good cause is
seek to reverse the trial court‘s subsequent judgment, dated November 6, 2009, awarding discovery
sanctions to Davila. The post-judgment discovery sanctions order is fully addressed below. See infra
section II.C.
5
established by showing that the failure involved was an accident or mistake, not
intentional or the result of conscious indifference.‖ Wheeler v. Green, 157 S.W.3d 439,
442 (Tex. 2005). ―Even a slight excuse will suffice, especially when delay or prejudice
to the opposing party will not result.‖ Boulet v. State, 189 S.W.3d 833, 836 (Tex. App.–
Houston [1st Dist.] 2006, no pet.); Spiecker v. Petroff, 971 S.W.2d 536, 538 (Tex. App.–
Dallas 1997, no writ). The party seeking withdrawal of deemed admissions has the
burden to establish good cause. Id. (citing Webb v. Ray, 944 S.W.2d 458, 461 (Tex.
App.–Dallas 1997, no writ)). ―Undue prejudice depends on whether withdrawing an
admission or filing a late response will delay trial or significantly hamper the opposing
party‘s ability to prepare for it.‖ Id. at 836-37 (citing Wheeler, 157 S.W.3d at 443).
We will not set aside a trial court‘s ruling to permit or deny the withdrawal of
deemed admissions unless we find an abuse of discretion. Stelly v. Papania, 927
S.W.2d 620, 622 (Tex. 1996); Boulet, 189 S.W.3d at 837. Although a trial court has
broad discretion to permit or deny the withdrawal of deemed admissions, it cannot do so
arbitrarily, unreasonably, or without reference to guiding rules or principles. Boulet, 189
S.W.3d at 837 (citing Wheeler, 157 S.W.3d at 444). Among those ―guiding rules and
principles‖ is the notion that, ―absent flagrant bad faith or callous disregard for the rules,
due process bars merits-preclusive sanctions.‖ Wheeler, 157 S.W.3d at 443.
Moreover, ―[d]iscovery sanctions cannot be used to adjudicate the merits of a party‘s
claims or defenses unless a party‘s hindrance of the discovery process justifies a
presumption that its claims or defenses lack merit.‖ TransAmerican Natural Gas Corp.
v. Powell, 811 S.W.2d 913, 918 (Tex. 1991).
6
According to Davila, the requests at issue were sent to Puente by certified mail,
return receipt requested, on November 2, 2007. The requests were sent to Puente‘s
address as contained in the court‘s file; however, Puente had since moved from that
address and did not file a notice of address change. The return receipt was signed by
Emilia Puente, Roberto Puente‘s mother, and indicated that the item was delivered on
December 10, 2007.4 The responses were therefore due on January 10, 2008. See
TEX. R. CIV. P. 198.2(a). No responses were served on Davila‘s counsel by that date.
Later in 2008, Puente withdrew as counsel for Americare and Arango.
Appellants‘ substitute counsel, Peter Ferraro, then filed the above-referenced motion to
clarify or strike the deemed admissions. At a hearing on September 18, 2008, Ferraro
stated that, when he took over the case file, he noticed a copy of what appeared to be
responses to Davila‘s requests for admissions dated January 8, 2008. He then
prepared an affidavit, which was signed by Puente, stating that the responses had in
fact been sent to Davila‘s counsel on January 8. Subsequently, after realizing that
Davila‘s counsel had not in fact received any response to the requests, Ferraro moved
to withdraw Puente‘s original affidavit and submitted a revised affidavit stating that
Puente was unsure whether the responses had in fact been sent to Davila‘s counsel.
Davila contends on appeal that the conduct of attorneys Puente and Ferraro
evinces both ―flagrant bad faith‖ and ―callous disregard for the rules,‖ thereby
authorizing merits-preclusive sanctions. We disagree. There is no evidence in the
record establishing that Puente knew of the due date for responding to the requests for
admission, nor is there any indication that Puente intentionally signed the original
4
The parties do not explain, and the record does not reveal, why it took over a month for the
requests for admissions to be delivered.
7
affidavit knowing it was false, or that Ferraro prepared the affidavit knowing it was false.
Moreover, there is no evidence that Puente‘s failure to timely respond to the requests
for admission—which resulted in predictably severe deleterious effects to his client‘s
defense—was in any way intentional or the result of conscious indifference. See
Wheeler, 157 S.W.3d at 442. Davila emphasizes the fact that, in his two affidavits,
Puente gave two contradictory explanations for why no timely responses were filed.
However, without any plausible explanation for why Puente would have intentionally or
consciously refused to respond to the requests for admissions, we must consider
Puente‘s contradictory affidavits to be merely the product of mistake or negligence, not
intent. Under these circumstances, Americare and Arango should not be punished for
their counsel‘s mistakes. See TransAmerican Natural Gas Corp., 811 S.W.2d at 917
(―[A] party must bear some responsibility for its counsel‘s discovery abuses when it is or
should be aware of counsel‘s conduct and the violation of discovery rules. On the other
hand, a party should not be punished for counsel‘s conduct in which it is not implicated
apart from having entrusted to counsel its legal representation.‖).
We find that Americare and Arango met their burden to show good cause for
setting aside the deemed admissions, and that there is no evidence of flagrant bad faith
or callous disregard for the rules. See Wheeler, 157 S.W.3d at 443. Additionally,
merits-preclusive sanctions are inappropriate in this case because there is nothing in
the record that would ―justif[y] a presumption that [Americare and Arango‘s] defenses
lack merit.‖ See TransAmerican Natural Gas Corp., 811 S.W.2d at 918. The trial court
8
therefore abused its discretion by denying appellants‘ request to set aside the deemed
admissions.5 We sustain appellants‘ third issue.
B. Duty as a Matter of Law
By their first issue, Americare and Arango argue that, as a matter of law,
employers have ―no duty to their employees to make public roadways safe or to warn of
dangerous neighborhoods surrounding those roadways.‖ They further contend that,
―because the existence of a duty is a legal question for the court, the deemed
admissions in this case have no effect on question of duty.‖ We construe this issue as a
challenge to the trial court‘s granting of Davila‘s motion for partial directed verdict on the
issue of liability and its denial of Americare and Arango‘s motion for judgment
notwithstanding the verdict.
In a negligence case, the existence of a duty is typically a threshold question of
law which the trial court decides based on the particular facts surrounding the
occurrence in question. Van Horn v. Chambers, 970 S.W.2d 542, 544 (Tex. 1998);
Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995); Nat’l Convenience
Stores, Inc. v. Matherne, 987 S.W.2d 145, 148 (Tex. App.–Houston [14th Dist.] 1999, no
pet.). If there is no duty, liability for negligence cannot exist. Thapar v. Zezulka, 994
S.W.2d 635, 637 (Tex. 1999). ―[F]actors which should be considered in determining
whether the law should impose a duty are the risk, foreseeability, and likelihood of injury
5
Davila argues that she would be unduly prejudiced by the withdrawal of the deemed admissions
because withdrawal ―would have amounted to an almost-complete restarting of the litigation more than
four full years after the accident giving rise to the suit occurred.‖ Americare and Arango contend, to the
contrary, that requiring a party to ―actually prove its case rather than rely on deemed admissions‖ does
not constitute undue prejudice. Cudd v. Hydrostatic Transmission, Inc., 867 S.W.2d 101, 105 (Tex. App.–
Corpus Christi 1993, no writ). However, we need not determine whether the lack of undue prejudice has
been established in this case because, as noted, when deeming admissions results in precluding the
presentation of the merits of the case, as here, constitutional due process requires the admissions to be
withdrawn if there is no evidence of ―bad faith or callous disregard for the rules.‖ See Wheeler v. Green,
157 S.W.3d 439, 443 (Tex. 2005).
9
weighed against the social utility of the actor‘s conduct, the magnitude of the burden of
guarding against the injury and consequences of placing that burden on the employer.‖
Nabors Drilling, Inc. v. Escoto, 288 S.W.3d 401, 405 (Tex. 2009) (citing Otis Eng’g Corp.
v. Clark, 668 S.W.2d 307, 309 (Tex. 1983)). Foreseeability of the risk has been called
the ―foremost and dominant consideration‖ in the duty analysis. El Chico Corp. v.
Poole, 732 S.W.2d 306, 311 (Tex. 1987). The test for foreseeability is what a party
should, under the circumstances, reasonably anticipate as a consequence of its
conduct. J.P. Morgan Chase Bank, N.A. v. Tex. Contract Carpet, Inc., 302 S.W.3d 515,
533 (Tex. App.–Austin 2009, no pet.) (citing Foster v. Denton Indep. Sch. Dist., 73
S.W.3d 454, 465 (Tex. App.–Fort Worth 2002, no pet.)).
―Though the existence of duty is a question of law when all of the essential facts
are undisputed, when the evidence does not conclusively establish the pertinent facts or
the reasonable inferences to be drawn therefrom, the question becomes one of fact for
the jury.‖ Bennett v. Span Indus., Inc., 628 S.W.2d 470, 474 (Tex. App.–Texarkana
1981, writ ref‘d n.r.e.); see Mitchell v. Mo.-Kan.-Tex. R.R. Co., 786 S.W.2d 659, 662
(Tex. 1990) (―While foreseeability as an element of duty may frequently be determined
as a matter of law, in some instances it involves the resolution of disputed facts or
inferences which are inappropriate for legal resolution.‖), overruled on other grounds by
Union Pac. R.R. Co. v. Williams, 85 S.W.3d 162 (Tex. 2002).
We have already determined that the trial court erred in refusing to set aside the
deemed admissions. Barring consideration of those admissions, the ―essential facts‖ of
the case—including facts pertinent to the question of whether Americare and Arango
could have reasonably foreseen Davila‘s accident—remain disputed by the parties. See
10
Bennett, 628 S.W.2d at 474; see also Mitchell, 786 S.W.2d at 662. Because there is a
fact issue as to the existence of a duty, the trial court therefore erred in granting Davila‘s
motion for directed verdict on the issue of liability.6 See Koepke v. Martinez, 84 S.W.3d
393, 395 (Tex. App.–Corpus Christi 2002, pet. denied) (―A directed verdict is proper
when . . . the evidence conclusively proves a fact that establishes a party‘s right to
judgment as a matter of law . . . .‖). For the same reason, the trial court did not err in
denying Americare and Arango‘s motion for judgment notwithstanding the verdict. See
TEX. R. CIV. P. 301 (―[T]he court may render judgment non obstante veredicto if a
directed verdict would have been proper . . . .‖).
We note that, because the deemed admissions were considered by the trial court
to have conclusively established the issues of liability and causation, Davila was not
afforded the opportunity to present evidence at trial on those issues. Accordingly, the
appropriate disposition is to remand the case for a new trial so that Davila may have
that opportunity. See Knapp v. Wilson N. Jones Mem’l Hosp., 281 S.W.3d 163, 176
(Tex. App.–Dallas 2009, no pet.) (―Appellate courts have broad discretion to remand a
case for a new trial in the interest of justice. . . . Remand is appropriate when, for any
reason, a case has not been fully developed.‖).
Appellants‘ first issue is sustained in part.7
6
Although the issue of foreseeability is presently disputed by the parties, we do not intend to
imply that the issue must necessarily be submitted to the jury for its consideration. For example, given
our ruling that the deemed admissions must be set aside, nothing prevents Americare and Arango from
filing a motion for no-evidence summary judgment once the case is remanded to the trial court. If such a
motion is found to be meritorious, judgment must be rendered for Americare and Arango as a matter of
law, and there would be no question of fact remaining for the jury. See TEX. R. CIV. P. 166a(i).
7
Americare and Arango argue that the deemed admissions in the case cannot be used to
establish the existence of a duty, because whether a duty existed is a pure matter of law. We have
already concluded that the deemed admissions should have been set aside. Nevertheless, we recognize
that the rule regarding requests for admissions does not contemplate or authorize admissions to
11
C. Delegability of Duty
By their second issue, Americare and Arango assert that, even if Americare did
owe a duty to Davila under the circumstances of this case, that duty is non-delegable to
Arango. Arango argues that she is entitled to judgment as a matter of law because ―an
officer of the employer has no independent duty to a fellow employee to provide a safe
place to work.‖
Appellants are correct that, ―[w]hen the employer is a corporation, the law
charges the corporation itself, not the individual corporate officer, with the duty to
provide the employee a safe workplace.‖ Leitch v. Hornsby, 935 S.W.2d 114, 117 (Tex.
1996). However, individual liability may arise if the corporate officer owes an
independent duty of reasonable care to the injured party apart from the employer‘s duty.
Id. (citing Werner v. Colwell, 909 S.W.2d 866, 868 (Tex. 1995)). ―An officer or any other
agent of a corporation may be personally as responsible as the corporation itself for
tortious acts when participating in the wrongdoing.‖ Permian Petroleum Co. v. Barrow,
484 S.W.2d 631, 634 (Tex. Civ. App.–El Paso 1972, no writ). An officer or agent of a
corporation is always primarily liable for her own torts, even though the principal is also
liable, but she cannot be held liable for a wrong in which she has not participated. Id.
questions involving points of law. Boulet v. State, 189 S.W.3d 833, 838 (Tex. App.–Houston [1st Dist.]
2006, no pet.) (citing Gore v. Cunningham, 297 S.W.2d 287, 291 (Tex. Civ. App.–Beaumont 1956, writ
ref‘d n.r.e.)). Accordingly, responses to requests for admissions merely constituting admissions of law are
not binding. Id. (citing Am. Title Co. v. Smith, 445 S.W.2d 807, 809-10 (Tex. Civ. App.–Houston [1st Dist.]
1969, no writ)). Here, however, the question of whether a duty existed was a mixed question of law and
fact. See Mitchell v. Mo.-Kan.-Tex. R.R. Co., 786 S.W.2d 659, 662 (Tex. 1990) (―While foreseeability as
an element of duty may frequently be determined as a matter of law, in some instances it involves the
resolution of disputed facts or inferences which are inappropriate for legal resolution.‖). If, at a full trial on
the merits, Davila is able to prove that Americare and Arango reasonably foresaw that scheduling home
health care visits in the vicinity of the accident was likely to result in injury to Davila, then she will have
shown that Americare and Arango owed a duty to her. Similarly, if Davila can prove that appellants
reasonably foresaw that scheduling ―excessive‖ visits would likely result in injury to Davila, then she will
have met her burden.
12
Davila‘s live pleading asserted identical allegations as to both Arango and her
corporate employer, Americare. Although the general duty to provide a safe workplace
is not applicable to Arango, see Leitch, 935 S.W.2d at 117, that does not establish
conclusively that Arango owed no duty to Davila as a matter of law. Arango may have
owed a duty to Davila—independent of the employer‘s duty to provide a safe
workplace—if she could have reasonably foreseen that her actions could lead to
Davila‘s accident. The issue of whether such a duty existed—along with the issues of
whether a breach of any duty occurred and if so, whether the breach caused Davila‘s
damages—are in dispute and must be left to the jury to decide. See Bennett, 628
S.W.2d at 474; see also Mitchell, 786 S.W.2d at 662. We conclude that Arango was not
entitled to judgment as a matter of law on this basis, and we overrule appellants‘ second
issue.
D. Request to Designate Responsible Third Party
By their fourth issue, Americare and Arango argue that the trial court erred by
denying their motion for leave to designate the hit-and-run driver who collided with
Davila as a responsible third party. We review a trial court‘s denial of such a motion for
abuse of discretion. MCI Sales & Serv. v. Hinton, 272 S.W.3d 17, 36 (Tex. App.–Waco
2008), aff’d, 329 S.W.3d 475 (Tex. 2010); In re Arthur Anderson, 121 S.W.3d 471, 483-
85 (Tex. App.–Houston [14th Dist.] 2003, orig. proceeding).
Section 33.004 of the Texas Civil Practice and Remedies Code sets forth the
procedure a defendant must follow if it wishes to designate a responsible third party.
See TEX. CIV. PRAC. & REM. CODE ANN. § 33.004 (West 2008). Under the statute, a
motion to designate a responsible third party ―must be filed on or before the 60th day
13
before the trial date unless the court finds good cause to allow the motion to be filed at a
later date.‖ Id. § 33.004(a). The trial court must grant the motion unless the plaintiff
files an objection and establishes that the defendant, after being given the opportunity to
replead, ―did not plead sufficient facts concerning the alleged responsibility of the
person to satisfy the pleading requirement of the Texas Rules of Civil Procedure.‖ Id. §
33.004(g). Subsection (j) of the statute further provides:
Notwithstanding any other provision of this section, if, not later than 60
days after the filing of the defendant's original answer, the defendant
alleges in an answer filed with the court that an unknown person
committed a criminal act that was a cause of the loss or injury that is the
subject of the lawsuit, the court shall grant a motion for leave to designate
the unknown person as a responsible third party if:
(1) the court determines that the defendant has pleaded facts
sufficient for the court to determine that there is a reasonable
probability that the act of the unknown person was criminal;
(2) the defendant has stated in the answer all identifying
characteristics of the unknown person, known at the time of
the answer; and
(3) the allegation satisfies the pleading requirements of the
Texas Rules of Civil Procedure.
Id. § 33.004(j).
Americare and Arango first moved for leave to designate a responsible third party
on August 7, 2008, which was less than sixty days prior to the originally scheduled trial
date of September 15, 2008. In the motion, Americare and Arango claimed that an
―unknown hit and run driver . . . was indeed the cause of this accident‖ and asked the
trial court for leave to file the motion late ―for good cause shown as the circumstances of
the second driver [i.e., the driver that collided with Davila] were ascertained in the
responses to Defendants[‘] written discovery on or about July 21, 2008.‖ See id. §
14
33.004(a). The trial court denied the motion on September 3, 2008. Trial was
subsequently postponed and did not take place until June 9, 2009.
On September 16, 2008, Americare and Arango filed amended answers that, for
the first time, alleged that an unknown third party committed a criminal act that caused
Davila‘s injuries. See id. § 33.004(j). Also on that day, Americare and Arango urged
the trial court to reconsider their motion to designate a responsible third party; the trial
court declined that request.
Americare and Arango argue on appeal that the trial court abused its discretion in
denying their original motion because, even though it was filed within sixty days of the
trial setting, ―there is no dispute a third party was directly responsible for Ms. Davila‘s
injuries‖ and Americare and Arango ―asked for leave to designate this party several
months before the trial‖ eventually occurred. In response, Davila notes that the
amended answers—the first to allege that an unknown party‘s criminal act was the
cause of Davila‘s injuries—were not filed within sixty days of the defendants‘ original
answer. Davila also argues that, even if the original motion to designate is considered
timely because trial did not take place until ten months after the motion was filed, see id.
§ 33.004(a), the trial court did not abuse its discretion in denying the motion because
the motion did not identify the alleged responsible third party by name.
We agree with Davila on both points. First, there is no dispute that the amended
answers, filed on September 16, 2008, were filed well outside the sixty-day window
provided by subsection (j) of the statute. See id. § 33.004(j). Accordingly, the trial court
did not abuse its discretion by denying Americare and Arango‘s request pursuant to that
subsection. Second, we agree that subsection (j) is the exclusive means by which
15
defendants may designate ―unknown,‖ rather than named, responsible third parties. In
In re Unitec Elevator Services, the First Court of Appeals was similarly asked whether
defendants could, under section 33.004, designate unknown responsible third parties
even though the defendants first alleged that the criminal acts of unknown third parties
were responsible for the plaintiff‘s injuries more than sixty days after the defendants‘
original answer. 178 S.W.3d 53, 60 (Tex. App.–Houston [1st Dist.] 2005, orig.
proceeding). In construing the statute, the court found that:
the statute clearly and unambiguously requires a defendant seeking to
designate an unknown person as a responsible third party, based on the
person‘s commission of criminal acts causing the loss or injury that is the
subject of the lawsuit, to file an answer containing such allegations no
later than sixty days from filing its original answer.
Id. at 61. The court reasoned as follows:
While revised section 33.004 clearly recognizes the right of a defendant to
submit an unknown person as a responsible third party to a jury for the
jury‘s apportionment of responsibility, subsection (j) provides that as a
prerequisite to designating such an unknown person, a defendant must
comply with certain pleading requirements likely designed to furnish the
other parties with notice that the defendant intends to assert that the
claimant‘s injuries were caused by an unknown criminal. Relators‘
argument, that subsection (j) merely affords a defendant an additional and
independent means to designate unknown persons as responsible third
parties, would render the pleading deadlines imposed in subsection (j)
meaningless. A defendant would never have an incentive to comply with
the pleading requirement in subsection (j) when it could simply wait to
designate the unknown person sixty days before trial, and obtain a
strategic advantage not intended by the legislature.
Id.8 The court thus concluded that ―[t]he structure of section 33.00[4] indicates that the
legislature intended to prescribe different procedures for designating named and
8
The Unitec court explained that the statute imposes more onerous requirements when a
defendant seeks to designate an unknown, rather than a named, responsible third party:
Subsection (j) expressly applies to the designation of unknown persons as responsible
third parties, and, even absent an objection, requires a defendant seeking to designate
16
unnamed persons.‖ Id. at 61 n.8. We agree with that conclusion. Therefore, we find
that the trial court did not abuse its discretion in denying the original motion to
designate, because, even assuming the motion was timely filed, it impermissibly sought
to designate an unknown, rather than named, responsible third party. See id.
Americare and Arango‘s fourth issue is overruled.
E. Evidence of Contributory Negligence
By their fifth issue, appellants argue that Arango should have been permitted to
introduce evidence of contributory negligence ―based on Americare‘s non-subscriber
status under the Texas Workers‘ Compensation Act.‖ They argue that the trial court
erroneously denied their motion for new trial on this basis. We review a trial court‘s
denial of a motion for new trial for abuse of discretion. In re R.R., 209 S.W.3d 112, 114
(Tex. 2006).
Appellants specifically contend that Americare was Davila‘s ―employer‖ and
Arango was not Davila‘s ―employer‖; therefore, according to appellants, while Americare
was not permitted to raise the defense that Davila was guilty of contributory negligence,
Arango should have been afforded that opportunity. See TEX. LABOR CODE ANN. §
406.033(a)(1) (prohibiting an ―employer‖ who does not elect to have workers‘
compensation insurance coverage from raising a defense that the employee was guilty
of contributory negligence). However, Davila sued Arango individually and alleged that
Arango was doing business under the assumed name of Americare. Crucially, Arango
an unknown person to satisfy specific pleading requirements before a trial court may
grant a motion for leave to designate. TEX. CIV. PRAC. & REM. CODE ANN. § 33.004(j).
Subsection (f), on the other hand, expressly applies to the designation of named persons,
and compels a trial court to grant a motion to designate a named person unless an
objection is filed. [Id.] § 33.004(f).
In re Unitec Elevator Servs., 178 S.W.3d 53, 61 n.8 (Tex. App.–Houston [1st Dist.] 2005, orig.
proceeding).
17
did not file a verified denial that she was doing business under that assumed name.
See TEX. R. CIV. P. 93(2), (14) (requiring verification by affidavit of any pleading that ―the
defendant is not liable in the capacity in which [s]he is sued‖ or that ―a party plaintiff or
defendant is not doing business under an assumed name or trade name as alleged.‖).9
We accordingly conclude, based on the record before us, that the trial court did not
abuse its discretion in determining that Arango was Davila‘s ―employer‖ and therefore
could not introduce evidence of Davila‘s contributory negligence. We overrule
appellants‘ fifth issue.
F. Medical Expenses
By their sixth issue, Americare and Arango argue that certain medical expenses
were improperly included in the award of damages. Specifically, appellants contend
that the trial court, in rendering judgment on the verdict, should have excluded from the
damages award amounts that were allegedly written off by health care providers.10
Section 41.0105 of the civil practice and remedies code provides that, ―[i]n
addition to any other limitation 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.‖ TEX. CIV. PRAC. & REM. CODE ANN. § 41.0105 (West 2008). The courts of
appeal that have considered this issue have unanimously held that the phrase ―actually
paid or incurred‖ does not include expenses adjusted or ―written off‖ by health care
9
We note that there is nothing preventing Arango from filing such a verified denial on remand,
nor is there anything preventing Arango from presenting evidence at the new trial that she was not, in
fact, Davila‘s employer. In any event, it will be the responsibility of the trial court to determine whether
Arango was Davila‘s employer based upon all the evidence adduced at the new trial.
10
Americare and Arango also appear to complain by their sixth issue that the damages award
improperly included ―expenses that were paid on Ms. Davila‘s behalf by Americare‘s insurance.‖
However, Americare and Arango do not provide any argument or authority with respect to this complaint.
Therefore, it has been waived. See TEX. R. APP. P. 38.1(i).
18
providers because neither the claimant nor anyone acting on the claimant‘s behalf will
ultimately be liable for paying those amounts. See Matbon, Inc. v. Gries, 288 S.W.3d
471, 480 (Tex. App.–Eastland 2009, no pet.); De Escabedo v. Haygood, 283 S.W.3d 3,
7 (Tex. App.–Tyler 2009, no pet.); Tate v. Hernandez, 280 S.W.3d 534, 541 (Tex. App.–
Amarillo 2009, no pet.); Mills v. Fletcher, 229 S.W.3d 765, 769 (Tex. App.–San Antonio
2008, no pet.). We agree with our sister courts and hold that charges written off by
health care providers are not recoverable under section 41.0105. Appellants‘ sixth
issue is sustained. On remand, the trial court is instructed either: (1) to instruct the jury
that amounts written off by health care providers may not be included in the damages
award; or (2) if such damages are eventually included in the damages award, to reduce
the damages award by such amounts.
G. Post-Judgment Discovery Sanctions
By their seventh issue on appeal, Americare and Arango contend that the trial
court erred in assessing post-judgment discovery sanctions against them. We review a
post-judgment sanctions order, as well as a ruling regarding the sufficiency of a
supersedeas bond, for abuse of discretion. See Darya, Inc. v. Christian, 251 S.W.3d
227, 332 (Tex. App.–Dallas 2008, no pet.) (sanctions); In re Kajima Int’l, Inc., 139
S.W.3d 107, 112 (Tex. App.–Corpus Christi 2004, orig. proceeding) (sufficiency of
bond).
On October 2, 2009, after the trial court rendered its judgment, Americare and
Arango posted a supersedeas bond in the amount of $2,000,467, representing the
damages awarded and anticipated interest pending appeal. See TEX. R. APP. P.
24.1(a)(2) (permitting a judgment debtor to supersede the judgment pending appeal by
19
filing a good and sufficient bond with the trial court clerk). The trial court found the bond
to be insufficient.11 See TEX. R. APP. P. 24.2 (stating that the amount of the bond must
equal the sum of compensatory damages, interest during the appeal, and costs, but
must not exceed the lesser of (A) fifty percent of the judgment debtor‘s net worth or (B)
twenty-five million dollars). The trial court further ordered Americare and Arango to
respond to outstanding discovery requests regarding Arango‘s net worth, and ordered
Arango to appear for deposition.12 Americare and Arango then filed a second bond on
October 20, 2009, which the trial court also found to be insufficient. 13 The trial court
again ordered Americare and Arango to respond to discovery requests, appear for
deposition, and pay fines of $1,000 per day. Arango‘s deposition was scheduled to be
taken on November 4, 2009, but she did not appear. That same day, Americare and
Arango filed a third supersedeas bond and sought protection from the pending
discovery order.14 The trial court again found the bond insufficient and ordered Arango
to pay $19,000 in sanctions, representing $4,000 in per diem fines and $15,000 in
attorney‘s fees. The trial court finally approved a supersedeas bond on November 12,
2009.
11
The trial court specifically found that the surety on the original bond, Insurors Indemnity
Company (―IIC‖), was only authorized to write bonds up to a maximum of $831,000. Further, though IIC
was re-insured by General Reinsurance Company (―GRC‖) for the balance of the bond, nothing on the
face of the bond obligated GRC to pay any part of the judgment.
12
On October 30, 2009, Americare and Arango filed an emergency motion with this Court to
vacate the trial court‘s October 26, 2009 order determining that the first supersedeas bond was
insufficient and ordering discovery. On November 3, 2009, we denied appellants‘ request to vacate the
trial court‘s finding and discovery order, but we granted appellants‘ request to stay execution on the
judgment for twenty days ―to allow appellants time to file a good and sufficient bond, the sufficiency of
which shall be determined by the trial court.‖
13
Unlike the original bond, the October 20, 2009 bond explicitly stated that both IIC and GRC are
co-sureties.
14
IIC and GRC were also co-sureties on the third bond.
20
Americare and Arango contend that the award of sanctions was an abuse of
discretion by the trial court because the second and third bonds were in fact sufficient,
and therefore, Arango‘s net worth was irrelevant. We agree. A sufficient surety is an
entity or individual that is a legal entity, separate from the judgment debtor and not a
party to the suit, whose solvency and ability to pay the judgment are established.
TransAmerican Natural Gas Corp. v. Finkelstein, 905 S.W.2d 412, 414 (Tex. App.–San
Antonio 1995, writ dism‘d). The trial court found that the second and third bonds were
insufficient because they did not state on their face which portion of the judgment each
co-surety would pay in the event the appeal failed, and because one of the sureties was
limited to paying only $831,000, which is far less than the total required amount of the
bond. However, nothing in the applicable rules requires that a specific apportionment
between co-sureties appear on the face of the bond, and, in fact, the law implies a
particular apportionment that is adequate to protect Davila. Cf. TEX. R. APP. P. 24.1(e)
(authorizing the trial court to ―make any order necessary to adequately protect the
judgment creditor against loss or damage that the appeal might cause‖). Under the
general rule set forth in the Restatement (Third) of Suretyship and Guaranty, ―a
cosurety‘s contributive share is the aggregate liability of the cosureties to the obligee
divided by the number of cosureties.‖ RESTATEMENT (THIRD) OF SURETYSHIP AND
GUARANTY § 57(1) (1996). In other words, if the bond does not provide contrary terms,
a court will assume that each of two co-sureties is liable for half of the bond amount.
However, if, as here, a co-surety‘s liability is limited to less than its contributive share,
―[t]he contributive shares of the other cosureties are recalculated by subtracting from the
aggregate liability of the cosureties the contributive share of the secondary obligor
21
whose obligation is so limited, and dividing by the number of cosureties whose
obligations are not so limited.‖ Id. § 57(2)(a). Here, although one of the co-sureties was
limited in its liability to $831,000, the other co-surety was not so limited, and the total
amount payable by both co-sureties exceeded the amount of the bonds. Therefore, the
October 20, 2009 bond was adequate to protect Davila, and the trial court abused its
discretion in determining that it was insufficient. See Walker v. Packer, 827 S.W.2d
833, 840 (Tex. 1992) (―A trial court has no ‗discretion‘ in determining what the law is or
applying the law to the facts. Thus, a clear failure by the trial court to analyze or apply
the law correctly will constitute an abuse of discretion . . . .‖).
Because the October 20, 2009 bond should have been ruled sufficient, the
discovery order was therefore unwarranted, and the trial court‘s award of sanctions for
violating that discovery order also constituted an abuse of discretion. We sustain
appellants‘ seventh issue.
III. CONCLUSION
We reverse the judgments of the trial court, including its order of post-judgment
discovery sanctions, and we remand for a new trial consistent with this opinion.
________________________
DORI CONTRERAS GARZA
Justice
Delivered and filed the
19th day of May, 2011.
22