In Re XLS, Inc. D/B/A XXCell Freight Systems ("XLS"),Ramon Arquimides and Geovanis Pupo-Martinez v. the State of Texas ( 2023 )

Opinion issued October 26, 2023
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-23-00372-CV
———————————
IN RE XLS, INC. D/B/A XXCELL FREIGHT SYSTEMS, RAMON
ARQUIMIDES FLORES, AND GEOVANIS PUPO-MARTINEZ, Relators
Original Proceeding on Petition for Writ of Mandamus
MEMORANDUM OPINION
Relators, XLS, Inc., doing business as XXCell Freight Systems (“XLS”),
Ramon Arquimides Flores (“Flores”), and Geovanis Pupo-Martinez (“Martinez”)
(collectively, “relators”), filed a petition for a writ of mandamus, challenging the
trial court’s April 14, 2023 rulings striking XLS’s pleadings and the
counter-affidavits filed by relators. In two issues, relators contend that the trial court
erred in striking XLS’s pleadings and relators’ counter-affidavits.
We conditionally grant the petition.1
Background
The underlying proceeding arises out of a traffic collision in San Patricio
County, Texas, on April 30, 2019. In his second amended petition, real party in
interest, Thuan Nguyen (“Nguyen”), alleged that he was driving on State Highway
35 when an 18-wheel tractor-trailer, driven by Martinez, “attempted to make a left
turn from the right shoulder [of the highway] in front of [Nguyen].” According to
Nguyen, Martinez “block[ed] the entire highway” and caused Nguyen’s car “to
collide with the rear driver’s side” of the tractor-trailer. Nguyen sustained injuries
to his head, neck, back, and other parts of his body.
Nguyen further alleged that Flores owned the tractor-trailer that was driven
by Martinez on April 30, 2019 and Martinez was acting in the course and scope of
his employment with XLS at the time of the collision. Nguyen brought claims
against relators for negligence and gross negligence. Nguyen sought damages for
past and future medical expenses, asserting that because of his injuries he had
incurred reasonable and necessary expenses.
1
The underlying case is Thuan Nguyen v. XLS, Inc. d/b/a XXCell Freight Systems,
Ramon Arquimides Flores, and Geovanis Pupo-Martinez, Cause No. 2019-40355,
in the 80th District Court of Harris County, Texas, the Honorable Jeralynn Manor
presiding.
2
Relators answered, generally denying the allegations in Nguyen’s petition and
asserting various defenses.
On October 24, 2019, XLS served its Answers and Objections to Nguyen’s
First Set of Interrogatories, its Responses and Objections to Nguyen’s Request for
Admission, and its Responses and Objections to Nguyen’s Request for Production.
On November 26, 2019, Nguyen filed a Motion to Compel Answers and Responses
to Discovery Requests, asserting that although XLS had served a response to
Nguyen’s discovery requests, XLS also asserted “numerous improper objections.”
Nguyen requested that the trial court compel XLS to withdraw its improper
objections, provide documents responsive to Nguyen’s Request for Production, and
fully answer Nguyen’s First Set of Interrogatories. The record does not reflect that
the trial court ruled on Nguyen’s motion to compel or that it entered any discovery
orders as to XLS. On December 24, 2019, XLS served its Supplemental Responses
and Objections to Nguyen’s Request for Production and its Supplemental Answers
and Objections to Nguyen’s First Set of Interrogatories.
On March 8, 2023, Nguyen filed a Motion to Compel Discovery/Depositions
or Alternatively, Motion for Texas Rule of Civil Procedure 215 Discovery Sanctions
(the “March 8 motion”), asserting that “XLS [was] no longer in business and ha[d]
ceased all communication, cooperation and/or assistance in the defense of
[Nguyen’s] claims” and thus Nguyen was “being denied discovery and critical
3
evidence necessary to prepare for trial.” According to Nguyen, two XLS employees
had failed to appear for their depositions and XLS had “failed to adequately and
timely respond to [certain] written discovery.” Nguyen requested that XLS be
ordered to provide full and complete discovery responses and present relevant
witnesses for depositions. Alternatively, Nguyen requested Texas Rule of Civil
Procedure 215 sanctions for discovery abuse, including “an order striking all [of]
XLS’s pleadings/defenses” and “enter[ing] a default judgment in favor of [Nguyen
on his] claims relating to” XLS.
In its response to the March 8 motion, XLS asserted that after it served its
Supplemental Responses and Objections to Nguyen’s Request for Production and its
Supplemental Answers and Objections to Nguyen’s First Set of Interrogatories in
December 2019, “XLS ha[d] . . . forfeited its existence and [wa]s no longer an
operating entity. . . . XLS ha[d] no employees and ha[d] no control over any of its
former employees—including John Cruise [(‘Cruise’)],” the individual who had
initially responded to Nguyen’s First Set of Interrogatories on XLS’s behalf. XLS
noted that it had made efforts “to contact Cruise and present him for deposition,” but
it was unable to do so. XLS had informed Nguyen’s attorney “several times of this
fact.”2 XLS also asserted that it had not “abandoned” the litigation, and it listed
2
XLS noted that Nguyen, on July 13, 2022, unilaterally noticed the deposition of
Cruise and a “corporate representative” of XLS, and XLS filed a motion to quash.
Further, according to XLS, although it provided Nguyen with alternative dates that
4
various ways in which it had “actively litigated [the] matter and participated in
discovery to the extent th[at] [it had] documents and witnesses that [were under its]
control.”3 (Internal quotations omitted.)
On April 12, 2023, Nguyen filed a Motion to Strike Relators’ Plea of
Payment,4 Untimely and Improperly Obtained Affidavits, All Counter-Affidavits,
Expert Testimony of Sandip Gupta, and Motion for Texas Rule of Civil Procedure
215 Discovery Sanctions and Texas Rule of Civil Procedure 503.1 Post-Answer
Default Judgment (the “April 12 motion”). In the April 12 motion, Nguyen
requested that the trial court strike XLS’s pleadings because (1) XLS and Flores
might not appear at trial; (2) XLS had refused to produce documents or appear for
depositions; and (3) XLS had failed “to defend in any way against” Nguyen’s claims.
Nguyen also requested that the trial court strike the counter-affidavits of Gupta,5
it was available for deposition, it explained that it was not in control or contact with
Cruise or any other former employees of XLS. In response, Nguyen filed a Motion
to Compel Answers and Responses to his Discovery Requests to XLS and to
Compel Depositions of Corporate Representative and Cruise. That motion was not
ruled on by the trial court. On October 11, 2022, Nguyen again unilaterally noticed
the deposition of Cruise and a “corporate representative” of XLS. XLS was present
at the deposition, but Cruise did not appear.
3
Nguyen filed a reply to XLS’s response to the March 8 motion. The trial court did
not issue an order or ruling on the March 8 motion.
4
Relators filed a Texas Rule of Civil Procedure 95 Plea of Payment on April 6, 2023.
See TEX. R. CIV. P. 95.
5
See TEX. CIV. PRAC. & REM. CODE ANN. § 18.001(f). Gupta, in his
counter-affidavits, states that he is the Director of Data Services and Market Pricing
Intelligence of Compass Professional Health Services, a healthcare cost
5
which relators had filed in response to the affidavits Nguyen produced from various
medical providers concerning the reasonableness and necessity of the medical
treatment Nguyen received after the collision.6
In their response to the April 12 motion, relators explained that during the
litigation, Nguyen had served medical billing records with attached affidavits on
relators “in an attempt to establish [Nguyen’s] medical care cost claim” and relators,
pursuant to Texas Civil Practice and Remedies Code section 18.001, had “responded
by producing, and timely filing, several counter-affidavits contesting the
reasonableness of the [medical] expenses” sought by Nguyen. Relators also
explained why their counter-affidavits were proper.
As to Nguyen’s request for “death penalty” sanctions against relators for
discovery abuse, relators explained that XLS was “no longer an operating entity and
ha[d] forfeited its existence.” As such, XLS no longer had control over Cruise or
any of its former employees, and XLS had “not designated anyone to testify on its
behalf.” XLS did not have “contact [with] or control [over] any individual with
knowledge of the topics outlined in [Nguyen’s] notice[] of deposition for a
containment company with expertise in the reasonableness and necessity of medical
care charges.
6
See id. § 18.001(b).
6
‘corporate representative’ of XLS and d[id] not have the ability . . . to supplement
o[r] amend its responses to discovery.”
Further, relators argued that Nguyen had not been denied critical evidence to
prepare for trial because relators had provided him with documents available to them
related to the collision. And according to relators, they had “actively litigated th[e]
matter and participated in discovery to the extent of the documents and witnesses
that [were] in their control.”
On April 14, 2023, the trial court held a hearing on the April 12 motion.
During the hearing, Nguyen did not introduce any exhibits into evidence or present
witnesses. Related to Nguyen’s request to strike the counter-affidavits of Gupta,
relators informed the trial court that Gupta was not going to testify at trial. But
Nguyen challenged Gupta’s qualifications, asserting that “many judges ha[d] found
that he[] [was] not qualified to testify on the[] issues.” Further, Nguyen asserted that
Gupta’s counter-affidavits “[we]re inconsistent with what actually took place in this
case” and that Gupta was “not a doctor . . . and [his] opinions . . . would be
misleading to the jury because they[] [were] just not true.” Later during the hearing,
Nguyen stated that he was only challenging Gupta’s methodology and not his
qualifications.7
7
At his deposition, on June 11, 2021, Gupta testified as to the methodology used in
his counter-affidavits.
7
As to his request for sanctions, Nguyen argued that the trial court should order
sanctions against relators because of “the long-standing discovery abuse that
[Nguyen] had to deal with” during the litigation and because XLS and Flores were
not going to appear for trial. Nguyen also asserted that relators had failed to produce
certain documents and “failed to participate in any way whatsoever in the discovery
process.” Nguyen asked that relators’ counsel be “barred and banned” from
presenting any evidence on behalf of XLS and Flores at trial.
Relators responded by asserting that there was not sufficient evidence of any
wrongful conduct on their part to justify “death penalty” sanctions. Relators
explained that Cruise was a former employee of XLS and not XLS’s corporate
representative, and thus as a result, sanctions under Texas Rule of Civil Procedure
215.2(b), which applies only to a witness designated by a party, could not be imposed
against XLS.8 Relators also noted that Martinez and Flores would be present for
trial, and relators’ counsel explained that he was still representing XLS, but he did
not “have a human being” to be present at trial because XLS no longer existed.
At the conclusion of the hearing, the trial court announced that it was “going
to strike the counter-affidavits of . . . Gupta[] and [it was] also striking the pleadings
8
Texas Rule of Civil Procedure 215.2(b) provides that “[i]f a party or an officer,
director, or managing agent of a party or a person designed under [Texas] Rules [of
Civil Procedure] 199.2(b)(1) or 200.1(b) to testify on behalf of a party fails to
comply with proper discovery requests or to obey an order to permit discovery” the
trial court may order sanctions. See TEX. R. CIV. P. 215.2(b).
8
of XLS.” The trial court further stated that it was “not finding that [Gupta was] not
qualified.” The trial court then declined to give relators a reason for striking Gupta’s
counter-affidavits. As to XLS, the trial court stated that it struck XLS’s pleadings
for “[n]ot appearing in the case[] [and] not participating in discovery.”
Standard of Review
We may issue a writ of mandamus to correct a trial court’s clear abuse of
discretion or violation of a duty imposed by law when no adequate remedy by appeal
exists. See Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992). A trial court abuses
its discretion when its decision is arbitrary, unreasonable, and without reference to
guiding principles. See In re A.L.M.-F., 593 S.W.3d 271, 282 (Tex. 2019). Further,
“[t]rial courts have no discretion in determining what the law is or applying the law
to the facts.” In re Fox River Real Est. Holdings, Inc., 596 S.W.3d 759, 763 (Tex.
2020).
“Death Penalty” Sanction
In their first issue, relators argue that the trial court erred in striking the
pleadings of XLS because there was no evidence showing that XLS had violated any
discovery order, failed to comply with any discovery obligation, or committed any
other act that would justify the imposition of sanctions. Further, relators argue that
they lack an adequate remedy by appeal because the imposition of a “death penalty”
9
sanction “precludes a decision on the merits of a case” and “has the effect of
adjudicating all or part of the dispute.”
A. Trial Court Abused its Discretion by Imposing “Death Penalty” Sanction
Discovery sanctions, such as the striking of pleadings, serve to secure
compliance with the discovery rules, deter other litigants from violating the
discovery rules, and punish those who violate the rules. Tex. Integrated Conveyor
Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 384 (Tex. App.—
Dallas 2009, pet. denied); see also TEX. R. CIV. P. 215.2. A trial court has discretion,
pursuant to Texas Rule of Civil Procedure 215.2, to determine an appropriate
sanction for a party’s failure to comply with discovery requests. See TEX. R. CIV. P.
215.2; Glash v. Glash, No. 14-05-00846-CV, 2006 WL 2862217, at *3 (Tex. App.—
Houston [14th Dist.] Oct. 10, 2006, no pet.) (mem. op.); see also TransAm. Nat’l
Gas Corp. v. Powell, 811 S.W.2d 913, 917 (Tex. 1991). But any sanction imposed
by the trial court must be “just.” See Spohn Hosp. v. Mayer, 104 S.W.3d 878, 882
(Tex. 2003) (internal quotations omitted); see also TransAm., 811 S.W.2d at 917;
Glash, 2006 WL 2862217, at *3. The imposition of a sanction that is not “just” is
an abuse of discretion. See TransAm., 811 S.W.2d at 917; In re C.G.C., No.
12-08-00253-CV, 2010 WL 338062, at *5 (Tex. App.—Tyler Jan. 29, 2010, no pet.)
(mem. op.).
10
When a trial court imposes a discovery sanction by striking a party’s
pleadings, four factors determine whether the sanction is just:
(1) the sanction must bear a direct relationship to the offensive conduct;
(2) the sanction must not be excessive; (3) the trial court must first
impose a less stringent sanction; and (4) the trial court should not deny
a trial on the merits, unless it finds that the sanctioned party’s conduct
justifies a presumption that its claims or defenses lack merit and that it
would be unjust to permit the party to present the substance of that
position which is the subject of the withheld discovery before the court.
Warwick Oil & Gas, Inc. v. FBS Props., Inc., No. 01-14-00290-CV, 2015 WL
3637988, at *4 (Tex. App.—Houston [1st Dist.] June 11, 2015, no pet.) (mem. op.).
At the conclusion of the hearing on the April 12 motion, the trial court struck
XLS’s pleadings for “[n]ot appearing in the case[] [and] not participating in
discovery.” See In re Bledsoe, 41 S.W.3d 807, 813 (Tex. App.—Fort Worth 2001,
orig. proceeding) (striking of pleadings constitutes “death penalty” sanction). But
nothing in the record demonstrates that this type of sanction was “just.”
First, the striking of XLS’s pleadings did not bear a direct relationship to any
offensive conduct purportedly committed by XLS. Although the trial court stated at
the hearing that XLS had not appeared in the case and had not participated in
discovery, counsel for XLS appeared in the case on multiple occasions via motion,
and in person at the hearing on the April 12 motion, and counsel explained to the
trial court that XLS was no longer an operating entity, but that counsel still
represented XLS “because of insurance issues.”
11
Further, the record reflects that XLS did in fact participate in discovery. On
October 24, 2019, XLS served its Answers and Objections to Nguyen’s First Set of
Interrogatories, its Responses and Objections to Nguyen’s Request for Admission,
and its Responses and Objections to Nguyen’s Request for Production. And in
response to Nguyen’s November 26, 2019 Motion to Compel Answers and
Responses to Discovery Requests, on December 24, 2019, XLS served its
Supplemental Responses and Objections to Nguyen’s Request for Production and its
Supplemental Answers and Objections to Nguyen’s First Set of Interrogatories.
Additionally, after Nguyen unilaterally noticed the deposition of Cruise and a XLS
“corporate representative” on July 13, 2022, XLS filed a motion to quash, explaining
that it had provided Nguyen with alternative dates that it was available for
deposition, but it had no control or contact with Cruise or any other former
employees of XLS. When Nguyen again unilaterally noticed the deposition of
Cruise and a XLS “corporate representative” on October 11, 2022, XLS was present
for the deposition, although Cruise did not appear. Still yet, XLS filed responses to
the March 8 and the April 12 motions related to discovery issues and sanctions, and
at the hearing on the April 12 motion, counsel put forth a vigorous defense on XLS’s
behalf.
Second, the trial court’s striking of XLS’s pleadings was an excessive
sanction. A sanction imposed for discovery abuse “should be no more severe than
12
necessary to satisfy [its] legitimate purposes.” TransAm., 811 S.W.2d at 917; see
also Mayer, 104 S.W.3d at 882; In re Hood, 113 S.W.3d 525, 529 (Tex. App.—
Houston [1st Dist.] 2003, orig. proceeding). Here, the record is void of a legitimate
purpose for the imposition of a “death penalty” sanction. See In re Bledsoe, 41
S.W.3d at 813. When taking into consideration that XLS had dissolved as a
corporation, and no longer had control over Cruise, a former employee of XLS, or
any other former XLS employee, the trial court should not have imposed a “death
penalty” sanction against XLS due to Cruise’s failure to appear for a deposition.
Notably, the record reflects that while three motions to compel discovery against
XLS were filed by Nguyen, it does not appear that the trial court ruled on such
motions. Under these circumstances, the sanction of striking the pleadings of XLS
is more severe than necessary to satisfy the legitimate purposes of a discovery
sanction. See Mayer, 104 S.W.3d at 883 (“Discovery sanctions that are so severe as
to inhibit the presentation of the merits of a case should be reserved to address a
party’s flagrant bad faith or counsel’s callous disregard for the responsibilities of
discovery under the rules.”).
Third, the record reflects that the trial court failed to first impose a less
stringent sanction. Courts must consider the availability of less stringent sanctions,
and whether such lesser sanctions would fully promote compliance. TransAm., 811
S.W.2d at 917; In re C.G.C., 2010 WL 338062, at *5 (“Lesser sanctions must first
13
be tested to determine whether they are adequate before a sanction that prevents a
decision on the merits of a case can be justified.”). Striking a party’s pleadings for
discovery abuse is “the most devastating” sanction a trial court may impose.
TransAm., 811 S.W.2d at 917–18. A trial court may strike a party’s pleadings only
after a lesser sanction has been imposed against the party, and the party still refuses
to produce the requested discovery despite the lesser sanction. See Braden v.
Downey, 811 S.W.2d 922, 929 (Tex. 1991); TransAm., 811 S.W.2d at 918; see also
Brooks v. Schwartz, No. 01-91-00499-CV, 1992 WL 205821, at *1 (Tex. App.—
Houston [1st Dist.] Aug. 26, 1992, no pet.) (not designated for publication). Here,
the trial court imposed no such lesser sanction before striking XLS’s pleadings. See,
e.g., Brooks v. Schwartz, 1992 WL 205821, at *1 (trial court abused its discretion in
dismissing relator’s lawsuit before imposing less harsh sanction). Thus, the trial
court erred by not first imposing a sanction of a less stringent nature against XLS.
Cf. Pryor v. State, No. 14-05-00411-CV, 2006 WL 1528963, at *2 (Tex. App.—
Houston [14th Dist.] June 6, 2006, no pet.) (mem. op.) (trial court did not abuse its
discretion in striking party’s pleadings because it “instituted two lesser sanctions
before striking [party’s] pleadings”); see also Approximately $5,602.00 v. State, No.
14-08-00359-CV, 2009 WL 1886127, at *2 (Tex. App.—Houston [14th Dist.] 2009,
no pet.) (mem. op.) (trial court did not abuse its discretion in striking party’s
14
pleadings and entering default judgment against him where trial court first imposed
lesser sanction that party ignored).
Fourth, there is nothing in the record to suggest that XLS’s conduct justified
a presumption that its claims or defenses lack merit and that it would have been
unjust to permit XLS to present its case at trial by putting forth evidence that is the
subject of the withheld discovery before the court. Notably, prior to striking XLS’s
pleadings in this case, the trial court did not issue a single order compelling XLS to
provide Nguyen with any discovery.
Because the record does not establish that the sanction imposed by the trial
court was “just,” we hold that the trial court’s “death penalty” sanction of striking
XLS’s pleadings was excessive and constituted an abuse of discretion.
B. XLS Has No Adequate Remedy by Way of Appeal
“When a [trial] court imposes discovery sanctions that have the effect of
precluding a decision on the merits of a party’s claim—such as striking pleadings—
a party’s eventual remedy by appeal is inadequate, unless the sanctions are imposed
simultaneously with the rendition of a final, appealable judgment.” In re Hood, 113
S.W.3d at 528–29 (concluding relator had no adequate remedy by appeal for “death
penalty” sanctions imposed against him).
Here, the trial court’s striking of XLS’s pleadings constituted a “death
penalty” sanction. See In re Bledsoe, 41 S.W.3d at 813; see also TransAm., 811
15
S.W.2d at 917–19. As such, we hold that XLS lacks an adequate remedy by way of
appeal and mandamus relief is appropriate. See In re Hood, 113 S.W.3d at 528.
We sustain relators’ first issue.
Counter-Affidavits
In their second issue, relators argue that the trial court erred in striking
relators’ counter-affidavits because Gupta was qualified to execute the
counter-affidavits and the trial court “did not identify any other deficiency” in the
counter-affidavits. Relators also argue that they lack an adequate remedy by way of
appeal because the striking of Texas Civil Practice and Remedies Code chapter 18
counter-affidavits “can turn a purely procedural statute into a death penalty on the
issue of past medical expenses.” (Internal quotations omitted.)
A. The Trial Court Abused its Discretion by Striking Relators’
Counter-Affidavits
Generally, a plaintiff seeking to recover past medical expenses must prove
that the amounts he paid or incurred were reasonable. See In re Chefs’ Produce of
Houston, Inc., 667 S.W.3d 297, 301 (Tex. 2023). Unless a plaintiff avails himself
of the procedures outlined in Texas Civil Practice and Remedies Code section
18.001, he must present expert testimony at trial to establish that his medical
expenses are reasonable and necessary. Id.Texas Civil Practice and Remedies Code section 18.001 allows a plaintiff to
present evidence that his medical expenses were reasonable and necessary through
16
an uncontroverted affidavit that complies with the statute. See TEX. CIV. PRAC. &
REM. CODE ANN. § 18.001(b); In re Chefs’ Produce, 667 S.W.3d at 301. To qualify,
the affidavit must be prepared by the person who provided the medical services or
the person in charge of the records showing that the plaintiff received and incurred
the charges. See TEX. CIV. PRAC. & REM. CODE ANN. § 18.001(c); In re Chefs’
Produce, 667 S.W.3d at 301. An uncontroverted affidavit that complies with section
18.001 is sufficient evidence—but not conclusive evidence—that the plaintiff’s
medical expenses were reasonable and necessary. Id. At trial, the defendants may
still challenge—through evidence and argument—a plaintiff’s assertion that his
medical expenses were reasonable and necessary. Id.
Notably, Texas Civil Practice and Remedies Code section 18.001 also
provides the defendants a means to controvert the plaintiff’s affidavit. See TEX. CIV.
PRAC. & REM. CODE ANN. § 18.001(f); In re Chefs’ Produce, 667 S.W.3d at 301.
Specifically, the defendants can serve the plaintiff with a counter-affidavit that
provides reasonable notice of the basis on which the defendants intend to controvert
the reasonableness and necessity of the proffered medical expenses at trial. See TEX.
CIV. PRAC. & REM. CODE ANN. § 18.001(f); In re Chefs’ Produce, 667 S.W.3d at
301.
“A [defendant] intending to controvert a claim reflected by [an] affidavit
must” timely serve a counter-affidavit on each party or the party’s attorney. TEX.
17
CIV. PRAC. & REM. CODE ANN. § 18.001(e). The counter-affidavit must provide
“reasonable notice of the basis on which the [defendant] intends at trial to controvert
the claim reflected by the initial affidavit” and must be made by a person “who is
qualified, by knowledge, skill, experience, training, education, or other expertise, to
testify in contravention of all or part of any of the matters contained in the initial
affidavit.” Id. § 18.001(f); see also In re Chefs’ Produce, 667 S.W.3d at 301. In the
face of a compliant counter-affidavit, the plaintiff may not reach the jury on the
reasonableness and necessity of his medical expenses without expert testimony. Id.
In effect, the plaintiff’s evidentiary burden on that issue is the same as if the initial
affidavit had never been served. Id.
Here, at the conclusion of the trial court’s hearing on the April 12 motion, the
trial court gave no basis for its decision to strike the counter-affidavits of Gupta.
Although the trial court stated that it was “not finding that [Gupta was] not
qualified,” we note that we have previously addressed whether Gupta is qualified
under Texas Civil Practice and Remedies Code section 18.001(f) to offer an opinion
on the reasonableness and necessity of medical expenses. See In re Houston
Distributing Co., No. 01-21-00319-CV, 2021 WL 4313118, at *3–4 (Tex. App.—
Houston Sept. 23, 2021, no pet.) (mem. op.).
In In re Houston Distributing, the plaintiff asserted that Gupta was not
qualified to render “a section 18.001(f) opinion about the reasonableness and
18
necessity of [the plaintiff’s] medical treatment and costs.” Id. at *3. We disagreed,
concluding that Gupta, based on his knowledge, experience, and training as reflected
in his counter-affidavits, had satisfied the qualification requirements to submit
counter-affidavits. Id. at *4. And we noted that that “[a]lthough Gupta [wa]s not a
nurse or medical practitioner, such a requirement [wa]s not necessary to be qualified
to submit a counter-affidavit.”9 Id. at *4.
Here, as in In re Houston Distributing, Gupta stated in his counter-affidavits:
I am the Director of Data Services and Market Pricing Intelligence of
Compass Professional Health Services, a healthcare cost containment
company with expertise in the reasonableness and necessity of medical
care charges. As Director of Data Services and Market Pricing
Intelligence of Compass Professional Health Services, my services
have included creation of a database of comparative pricing for health
care services for individuals and companies to use in comparing costs
of medical services and savings opportunities. I have led the Compass
Reporting team who is responsible for providing cost-related reporting
back to all of our Compass clients. My background and experience in
management and processing of healthcare claims for payment includes
those covered and not covered by insurance and has qualified me in the
navigation and assessment of what medical charges are reasonable, as
well as, what medical charges are paid by various insurance companies.
Based upon my experiences, education, and work, I have knowledge
regarding the charges, costs, expenses, billing, and payment of medical
bills for services rendered and the reasonable amounts charged and paid
by medical providers, patients, and third parties, and I am familiar with
reasonable medical charges or costs for medical services rendered in
Texas, including Bexar County, Harris County, and surrounding
counties. Attached to this [a]ffidavit as Exhibit A is a copy of my
9
Relators informed the trial court of this Court’s decision in In re Houston
Distributing Co., No. 01-21-00319-CV, 2021 WL 4313118 (Tex. App.—Houston
Sept. 23, 2021, no pet.) (mem. op.), in arguing in support of Gupta’s qualifications
during the trial court’s hearing on the April 12 motion.
19
resume, which is incorporated into this [a]ffidavit by reference, and I
attest that every statement in the attached resume is true and correct.
See id. at *3 (quoting Gupta’s qualifications as listed in his counter-affidavit). Gupta
has provided that he works for a healthcare cost containment company with expertise
in the reasonableness and necessity of medical care charges, he has created a
database of comparative pricing for health care services, and his background and
experience qualifies him in the assessment of what medical charges are reasonable.
See id. at *4. And we conclude, as we did in In re Houston Distributing, that based
on Gupta’s “knowledge, experience, and training as reflected in his
counter-affidavit,” Gupta “satisfied the qualification requirements to submit a
counter-affidavit” concerning the reasonableness and necessity of medical expenses.
Id.
Although Nguyen did not argue otherwise at the hearing on the April 12
motion, we also conclude that relators’ counter-affidavits provided Nguyen with
“reasonable notice” as to the basis on which relators intend to controvert Nguyen’s
initial affidavits regarding the reasonableness and necessity of the medical expenses
claimed by Nguyen. See TEX. CIV. PRAC. & REM. CODE ANN. § 18.001(f). Texas
Civil Practice and Remedies Code “[s]ection 18.001 does not define ‘reasonable
notice,’ but its meaning is similar to the familiar ‘fair notice’ requirement for
pleadings under Texas Rule of Civil Procedure 47.” In re Allstate Indem. Co., 622
S.W.3d 870, 879 (Tex. 2021) (“[A] pleading sufficiently provides ‘fair notice of the
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claim involved’ if the opposing party can ascertain from the pleading the nature and
basis issues in controversy and what testimony will be relevant.”); see also TEX. R.
CIV. P. 47(a). This standard can be applied to the instant case to measure whether
the counter-affidavits “provided [Nguyen with] sufficient information to enable
[him] to prepare a defense or a response.” In re Allstate Indem. Co., 622 S.W.3d at
879.
Here, Gupta’s counter-affidavits itemized each provider whose services are
being controverted as unreasonable. And Gupta explained that the charges from
various medical providers for services provided to Nguyen were “not reasonable
because [such] charges or costs exceed[ed] the customary and reasonable costs in
Bexar County, Harris County, and surrounding counties for the same or similar
services.” Indeed, Nguyen’s ability to attack the reliability of Gupta’s methodology
at the hearing on the April 12 motion is ample evidence that the counter-affidavits
provided “reasonable notice” of the bases for relators’ challenges.10 See In re
Allstate Indem. Co., 622 S.W.3d at 880. Thus, we conclude that relators’
10
In challenging Gupta’s methodology, Nguyen asserted at the hearing that
Gupta’s “opinions [indicated that the average reimbursement rates were]
twice as low as the Medicare reimbursement rates.” Although “[t]h[is] may
be [a] potential bas[is] on which to challenge the admissibility and weight to
be ascribed to [Gupta’s] opinions at trial,” Texas Civil Practice and Remedies
Code “section 18.001 does not charge trial courts with determining the
admissibility of an affiant’s opinions, and a trial court’s doubts about
admissibility are not a proper basis for striking a section 18.001 counter[-]
affidavit.” In re Allstate Indem. Co., 622 S.W.3d 870, 879 (Tex. 2021).
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counter-affidavits met Texas Civil Practice and Remedies Code section 18.001(f)’s
reasonable-notice standard.
Based on the foregoing, we hold that the trial court abused its discretion in
striking relators’ counter-affidavits, which complied with Texas Civil Practice and
Remedies Code section 18.001.
B. Relators Have No Adequate Remedy by Way of Appeal
A party lacks an adequate remedy by appeal when a trial court wrongfully
strikes counter-affidavits submitted pursuant to Texas Civil Practice and Remedies
Code section 18.001(f). See In re Chefs’ Produce, 667 S.W.3d at 303; In re Allstate
Indem. Co., 622 S.W.3d at 883 (concluding relator lacked adequate remedy because
trial court order “would preclude [relator] from engaging in meaningful adversarial
adjudication of [real party in interest’s] claim for payment of medical expenses,
vitiating or severely compromising [relator’s] defense”). Here, because we have
held that the trial court wrongfully struck relators’ counter-affidavits, we hold that
relators lack an adequate remedy by way of appeal and mandamus relief is
appropriate.
We sustain relators’ second issue.
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Conclusion
We conditionally grant relators’ petition for writ of mandamus and direct the
trial court to vacate its April 14, 2023 rulings striking the pleadings of XLS and
relators’ counter-affidavits. Our writ will issue only if the trial court fails to act. We
dismiss any pending motions as moot. We withdraw our June 5, 2023 order staying
the trial setting of June 12, 2023.
Julie Countiss
Justice
Panel consists of Chief Justice Adams, and Justices Hightower and Countiss.
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