Museum of South Texas History

June 2015 – Luis was Selected to serve as Trustee on the Board of Trustees for Museum of South Texas History

Hidalgo County Bar Association and Hidalgo County Bar Foundation

June 2015 – Luis was Elected Secretary of the Hidalgo County Bar Association (HCBA) and the Hidalgo County Bar Foundation (HCBF)

RGV American Board of Trial Advocates

June 2015 – Luis was Elected treasurer of the RGV American Board of Trial Advocates (ABOTA) chapter

City of La Joya

2014 – Luis was Retained by the City of La Joya  to settle its city limits and annexation boundary dispute with the City of Penitas

State Bar of Texas

July 2015 – Luis was Appointed to the Committee on Pattern Jury Charges of the State Bar of Texas – Business, Consumer, Insurance and Employment

Accident investigation and evidence preservation in trucking cases

ACCIDENT INVESTIGATION AND EVIDENCE PRESERVATION IN  TRUCKING CASES

THE PLAINTIFF’S PERSPECTIVE

JOE ESCOBEDO

Escobedo, Tippit & Cardenas, L.L.P

3900 N. 10th St., Suite 950

McAllen, Texas 78501

State Bar of Texas

Prosecuting or Defending a Trucking or Auto Accident Case

September 27-28, 2007 – San Antonio

ACCIDENT INVESTIGATION AND EVIDENCE PRESERVATION IN AUTO AND TRUCKING CASES

PLAINTIFFS’ PERSPECTIVE

I. INTRODUCTION

Here’s the situation – you’ve either signed up or have been referred a serious trucking case.  WHAT NOW?  This paper is designed to answer some of those vital questions.  While I do not mean to sound presumptuous in saying that this paper will answer all your questions, it should provide the necessary information to assure that you do what is necessary to preserve your new client’s rights in this action.  One thing you can be certain, the trucking company will hire the best counsel they can find to defend its interests.

II. ACCIDENT INVESTIGATION

Once the case has been opened, you must actively investigate the claim and put into motion all that  is required to preserve all relevant evidence.

A. The Defense’s Rapid Response Team

With sophisticated trucking companies, it will be difficult to beat the defense to the scene.  These trucking companies typically have in-house risk management personnel and the truck driver will have been trained on what to do in case of an accident.  I have encountered cases where we have proven that the trucker’s second phone call went to the police; his first phone call was placed to his employer’s risk management personnel.  Once the employer is notified about the incident, the defense’s rapid response is put into motion.  Risk management personnel and/or defense attorneys are whisked to the scene to assure that their side of the story is reported to the investigating officers.  A retained accident reconstruction expert is called in as soon as possible to start their reconstruction of the incident.    Within a matter of a few days, the evidence is taken under their control, all witnesses have been spoken to and the investigating officers have been properly lobbied.

Getting to the scene a few days before plaintiffs counsel are even hired is a huge advantage which should not be underestimated.  This advantage can be overcome only by taking  an active and aggressive role toward investigating the incident and preserving the evidence.

B. Notice Letter and Temporary Restraining Order (TRO)

Immediately upon retaining the clients, an investigation must be undertaken to determine the potentially responsible parties.  The investigating officers must be contacted to determine the identity of the trucking company and the driver.  Once the trucking company is identified, contact information must be ascertained.  This can now be easily accomplished via the Internet.  Once the trucking company’s address is ascertained, there are numerous sources to ascertain service and citation information.  First and foremost, search for a company website; a lot of trucking companies have them and they usually provide a plethora of information.  Further, a quick search of the secretary of state’s website for the company’s home state will reveal the information required for service of citation.

Once the contact information is known,  a notice or spoliation letter should be sent out immediately.[Examples of notice letters are attached hereto in Appendix A]  The notice letter should advise the trucking company whom you represent and that all further contact with your clients should be directed to your office. You do not want to give the trucking company’s adjusters any excuse to try to contact your clients directly.  The notice letter should also request that all relevant evidence be preserved.  Specific examples of evidence and documents should be listed in the notice letter.  While these items will be different from case to case, the following items should be considered in any trucking case:

First, and foremost, the tractor-trailer and all of its component parts

Everything that was in the vehicle at the time of the incident

Driver’s logbooks required pursuant to 49 C.F.R. 395

Documents relating to the subject trip including the driver’s daily log, fuel receipts, dispatch records, trip sheets, bills of lading, pay checks

Post-trip inspection reports

Maintenance and repair records for the subject tractor-trailer

Electronic Control Module (ECM), black box and related data [NOTE:  Some of this information will be lost if the ignition is activated after the incident.  All information will be lost after tractor is put back in service.  ECMs should be removed and retained by qualified experts]

Satellite communication, GPS tracking devices and related data

Radar systems and related data (Eaton VORAD® system)

Onboard communication systems and related data

Truck driver’s driving record and personnel file, including the driver qualification file (49 C.F.R.391), physical examinations, and drug tests

49 C.F.R 390.15 “accident register” for the truck driver and the company

Company training and safety manuals

Post-accident alcohol and drug tests on driver

Once the notice letter is sent out, plaintiffs’ counsel should seek a Temporary Restraining Order (TRO) seeking the preservation of all the items listed in your notice letter.  Whether to rely solely on the notice letter to ensure the preservation of the evidence can only be made on a case by case basis.  However, deciding that the notice letter is sufficient to preserve relevant evidence can be a dangerous proposition.  See Ordonez v. M.W. McCurdy & Co., infra. Numerous factors will affect your decision.  A notice letter requesting that all relevant evidence be preserved may be sufficient in a situation where the investigating officers have control over the evidence, as is often the case where criminal charges may be brought against the truck driver.  Also, if your notice letter gets a quick response from defense counsel which results in a Rule 11 agreement on the evidence preservation issue, a TRO might not be required.  Regardless of the situation, the decision to pursue or not to pursue a TRO to preserve the evidence is one that should not be made lightly.

C. Other Documents Related to the Incident

In addition to the evidence and documents that should be requested be preserved by the trucking company, Plaintiffs’ counsel should begin gathering other relevant documents relating to the incident.  These documents generally include the following:

Investigative reports from law enforcement, including photographs, measurements, witness statements

Documents relating to the investigation by other insurance companies

Medical records relating to your clients

Autopsy report(s)

Death certificate(s)

EMS records

Wrecker records

Emergency or 911 call data

Criminal and civil case history for all drivers

Weather reports

Media reports including print, television and radio

D. Documentation of the Scene and the Vehicles

As I mentioned earlier, it will be a rare occurrence indeed where the plaintiffs will beat the trucking company’s representatives to the scene.  That being said, it is imperative that the scene and subject vehicles be inspected immediately.

1. Investigators

In-house investigators or retained private investigators should be sent to the scene immediately.  These investigators can assist plaintiff’s counsel by ascertaining the names and contact information of all witnesses (occupants, eyewitnesses, post-collision witnesses, investigating law enforcement).  Photographs of the scene should also be taken in that it may be a few days before accident reconstruction experts may be able to go to the scene.  Photographs should also be taken of the vehicles involved.  Further, the investigators can interview witnesses.  Special caution should be exercised in the recording of witness statements, either by audio/video or written statements.   The only person that should determine whether recorded statements are taken is the Plaintiff’s attorney.

2. Plaintiff’s Counsel Should Go to the Scene

As I mentioned earlier, it is quite common that the trucking lawyer will be sent to the scene immediately after being notified of the incident.  Having a qualified trial lawyer at the scene is a considerable advantage for the defense which can be somewhat alleviated by plaintiff’s counsel going to the scene to coordinate the scene and vehicle inspections.  Plaintiff’s counsel’s presence at the scene can also assure a fair and unbiased investigation.  Further, plaintiff’s counsel would then be able to direct accident reconstruction experts upon their arrival at the scene.

3. Accident Reconstruction Experts

Ideally, the accident reconstruction expert should be retained and taken to the scene within 24-48 after counsel is retained in this case.  The sooner the accident reconstruction expert arrives at the scene the better; tire marks on the roadway can begin to fade within 1-2 days after the incident. Rain and excessive travel over the roadway will impact how long the tire marks remain on the roadway.  Just as importantly, marks unrelated to the incident may begin to appear on the roadway.  A complete discussion of what accident reconstruction experts should do at the scene is beyond the scope of this paper. Suffice it to say, that a competent accident reconstruction expert will know what must be done to completely document the scene.  It is imperative that the expert also inspect the vehicles involved in the incident before any changes or repairs are made to them.  A Rule 11 agreement via a Notice Letter or a TRO will assure that the expert has access to the tractor-trailer.  Accident reconstruction experts can also sometimes interact with the local law enforcement authorities investigating the incident.

4. Retention of Truck Safety and Other Liability Experts

Often times, in trucking litigation, other liability experts will be needed in the case. There are numerous issues that arise exclusively in trucking cases. These include applicable Federal Motor Carrier Safety Regulations found in the Code of Federal Regulations ( Title 49, Parts 383-399) and the Texas Administrative Code  found at Title 37 (Sections 4.11 and 4.12).  Often, accident reconstruction experts will not be intimately familiar with these specific trucking issues.  A trucking safety expert should be retained to ascertain the trucking company’s compliance with applicable safety regulations relating to logbook requirements, driver hour requirements  and the like. 

In other cases, maintenance issues relating to the tractor or the trailer may require the retention of an trucking maintenance expert.  The discovery of faulty maintenance on behalf of the trucking company amounts to an independent negligence claim in addition to the respondeat superior claim relating to the truck driver’s negligence.  The trucking maintenance expert should be retained and be available for inspection of the tractor and the trailer before the vehicle is put back into service or is repaired.

Other experts may be required to assure the proper downloading of ECMs, black boxes, and similar electronics related to both the tractor-trailer and the other vehicles involved in the collision.  As mentioned supra, valuable data may be lost unless qualified experts are retained to preserve and download the data typically produced by these electronic items.

III. EVIDENCE PRESERVATION & SPOLIATION

A party’s duty to preserve evidence in a civil case has received a lot of attention from

Texas courts recently.  In 2003, the Texas Supreme Court addressed the issue of whether a party has a duty to preserve material evidence in Wal-Mart Stores, Inc. v. Johnston, 106 S.W3d, 718, 722 (Tex.  2003). In that case, a Wal-Mart employee accidently knocked one or more decorative reindeer from a high shelf onto Johnson’s head and arm.  Id. at 720.  During the course of the investigation of the incident by Wal-Mart, a Wal-mart supervisor took notes, photographed the reindeer and obtained a written statement from the employee who caused the accident. Id.  During the course of the litigation, Johnson asked whether Wal-Mart still possessed the reindeer that fell on him.  Wal-Mart responded that they did not have possession of that reindeer but offered to provide a reasonable facsimile. Id. At the trial, the court granted the Johnson’s request for a spoliation instruction to be given the jury based upon Wal-Mart’s failure to keep the reindeer.  The Supreme Court held that the trial court had abused its discretion in giving a spoliation instruction because Johnson failed to prove the Wal-Mart “knew, or should have known, that there was a substantial chance there would be litigation and that the reindeer would be material to it.”  Id. at 723. See also Trevino v. Ortega, 969 S.W.2d 950, 955 (Tex. 1998) (a trial judge has broad discretion in determining whether to provide a jury with a spoliation presumption instruction.) 

In addition to these cases, there have been published opinions relating to spoliation in trucking cases.  In Texas Electric Cooperative v. Dillard, 171 S.W.3d 201, 209 (Tex. App.–Tyler, 2005), the appellate court held that the trial judge did not abuse his discretion in instructing the jury on a spoliation presumption.  In the Dillard case, the truck driver hit a cow on the roadway; the cow fell dead in the eastbound lane.  Thereafter, the plaintiffs collided with the cow which caused their death. Id. at 203-204.  The trucking company “admitted that it had destroyed [the truck driver’s] logbook and all other documents regarding” the subject trip. Id. at 209.  Plaintiffs established that shortly after the incident plaintiffs’ counsel sent a letter to the defendant advising of their representation. [NOTE: The opinion is silent on whether the letter from plaintiffs’ counsel requested that all evidence be preserved.] The appellate court held that the “record before the trial judge indicated that [the defendant] had knowledge of Dillard’s claim and understood its severity before [it] destroyed [the truck driver’s] logbook and other documents.” Id.

Another case involving trucking cases and spoliation is Whiteside v. Watson, 12 S.W.3d 614 (Tex.App.–Eastland 2000) (vacated pursuant to settlement Jan. 18, 2001).  In that case, Watson sued the driver of a dump truck and his employer. Id. at 617.  The original of the  Driver’s Daily Logs and the Vehicle Inspection Reports were turned in by the driver and the driver would keep a carbon copy for his own records.  Id. at 620.  The driver’s copies were introduced into evidence and indicated problems with brakes and steering. Id. at 621.  After receiving notice of the lawsuit, the president of the trucking company “ordered the originals of these documents…burned pursuant to an unwritten document retention policy.”  Id.  Based upon this evidence, the trial court allowed an instruction to the jury on the spoliation presumption. Id.  The trucking company argued that the spoliation instruction should not have been granted given the fact that copies of the logs and reports had been admitted into evidence.  The appellate court countered that given the fact that the president of the trucking company testified at trial that the copies introduced at trial had been “doctored”, the plaintiffs were prejudiced by the destruction of the documents. Id. at 622.  See also Union Transports, Inc. V. Braun, 318 S.W.2d 927, 932 (Tex. Civ. App.–Eastland 1958) (defendant’s failure to produce a tacometer which recorded evidence of the speed of the truck was of some probative force on the question of excessive speed of the truck)

In Ordonez v. M.W. McCurdy & Co., Inc., 984 S.W.2d 264, 273-74 (Tex. App.–Houston [1st Dist.]1998), the appellate court held that the trial court did not err in refusing his instruction on spoliation of evidence.  A truck driven by an employee of M.W. McCurdy collided with the rear end of a van driven by the plaintiff. Id. at 267.  Plaintiffs “presented some evidence showing that McCurdy intentionally destroyed [the truck] driver’s log reflecting his off-duty and on-duty hours.”  Id. at 273.  McCurdy’s corporate representative testified that driver’s logs were kept for only six months and then thrown away. Id.  It should be specifically noted that McCurdy’s corporate representative was questioned at the trial relating the receipt of a notice letter sent by plaintiff’s counsel four days after the incident.  The corporate representative testified that it was “possible” that he would have received the notice letter. Id.  The court notes in a footnote that the “record does not contain a copy of this letter, and no witness testified that such a letter was actually sent to McCurdy.”  Id. at FN12.  The appellate court was persuaded by the fact that the logs were destroyed pursuant to “normal business practice” and held that there was “no evidence that the log books were destroyed for the purpose of concealing them from Ordonez.” Id. at 274.  The moral of this story is that a notice letter sent without any evidence of receipt will not suffice for spoliation grounds.  As I have mentioned earlier in this paper, plaintiff’s counsel should tread very carefully when deciding whether a notice letter will suffice relating to the preservation of evidence. 

IV. CONCLUSION

Critical evidence may be lost or destroyed unless Plaintiff’s counsel does everything within his or her power to assure that the incident is thoroughly investigated and all pertinent evidence is inspected and secured.  In a typical trucking case, as opposed to the typical auto accident case, the roles are reversed; the defense will typically arrive at the scene first and the plaintiff’s counsel will be playing catch-up.  Once again, this is a huge advantage which should not be underestimated.  Only by promptly inspecting the scene and the vehicles and assuring that the evidence is preserved can the plaintiff’s counsel assure that his clients interests will be protected. 

Parents Blame School for Son’s Death

McALLEN, Texas (CN) – A Texas drill sergeant made a middle-school student with asthma run laps until he collapsed and died, his parents claim in Federal Court.
Sonia Villarreal Rodriguez says she went to Buell Middle School with her son Abraham Luna on his first day there and begged teacher Felix Rocha not to make Abraham exercise because he has asthma.
Buell Middle School is a DAEP school in the Pharr San Juan Alamo Independent School District. DAEP stands for Disciplinary Alternative Education Program.
Defendant Sgt. Rocha is a drill instructor at the school in Pharr, attended by sixth to twelfth graders.
The school has 97 students. All of them are Hispanic and 78 percent of them are male, according to Homefacts.com.
Pharr is just across the border from Reynosa, Mexico.
Abraham’s parents sued the school district, Rocha and school nurse Sonia Salinas on Tuesday, seeking punitive damages and funeral expenses.
Abraham’s mother says Rocha dismissed her warning about her son and ordered the 14-year-old to run laps on Feb. 17, 2014.
“Shortly after beginning the run, Abraham complained to Sgt. Rocha that he was not feeling well and could no longer run,” the complaint states.
“Sgt. Rocha dismissed Abraham’s complaints, ignored Mrs. Villarreal’s previous warnings regarding her son’s health and ordered Abraham to keep running. After a short while longer, Abraham collapsed and fell unconscious.”
Rocha did not seem concerned, the parents say, because he didn’t help Abraham.
“Rocha instead chose to intervene in a separate incident between students that was occurring at the same time,” according to the complaint.
The parents say school nurse Sonia Salinas took her time getting to Abraham and “failed to render appropriate aid” before an “ambulance finally took Abraham to the hospital.”
He died shortly after he was admitted to Rio Grande Regional Hospital, according to a statement from the school district.
District Superintendent Daniel King told CBS affiliate KGBT-TV that the staff “intervened appropriately” when Abraham passed out.
Abraham’s parents disagree. They seek damages for civil rights violations and wrongful death.
They are represented by Luis Cardenas with Escobedo & Cardenas of McAllen.
Cardenas told Courthouse News that Abraham shouldn’t have been enrolled in the school.
“He was accused of hanging around kids that were doing drugs and so was sent to the ‘alternative’ school. However, his autopsy showed he had absolutely no trace of any drugs in his system,” Cardenas said.

New Year, New Office

We are very excited to announce that we have moved (not too far away) to 3700 N. 10th Street, Suite 210, in McAllen, TX. Along with our new address., please note our new…

New Website Launches

Welcome to the new Escobedo & Cardenas website.  The new site was designed and developed by MPC Studios, an award-winning firm out of McAllen Texas.

Update on paid or incurred and Expedited trials

UPDATE ON PAID OR INCURRED AND

EXPEDITED TRIALS

JOE ESCOBEDO

Escobedo & Cardenas, L.L.P.

3700 N. 10th Street, Suite 210

McAllen, Texas  78501

(956) 618-2222

www.escobedocardenas.com

Updates for Solo Practitioners and Small Firms

State Bar of Texas

January 14, 2015

Table of Contents

PAID OR INCURRED

Introduction

Section 41.0105 of the Texas Civil Practice & Remedies Code became effective September 1, 2003.  As drafted, the section appears fairly innocuous but has been the subject of heated debate from the moment it was enacted.  Section 41.0105 reads as follows:

Evidence Relating to Amount of Economic Damages

In 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 SEC. 41.0105.

This paper will discuss the interpretation of § 41.0105, often referred to as the “paid or incurred” statute, by various Texas courts including the Texas Supreme Court’s decision in Haygood v. de Escabedo, 356 S.W.3d 390 (Tex. 2011). Lastly, this paper will discuss the numerous unresolved issues that have and may arise as a result of the Haygood opinion.

B. Texas Courts of Appeals’ Decisions

1. Mills v. Fletcher

In Mills v. Fletcher, 229 S.W.3d 765 (Tex. App. – San Antonio 2007, no pet.) the San Antonio Court of Appeals held that “41.0105 limits a plaintiff from recovering medical  or healthcare expenses that have been adjusted or ‘written off’”. The Court explained the rationale for its holding as follows:

Here, the statute uses the word “incurred” twice:  “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 SECTION 41.0105 (Vernon Supp. 2006) (emphasis added). In referring to “incurred” the second time, the Legislature chose to modify “incurred” with the word “actually.”  As such, “incurred” must mean something different than “actually incurred.”  And, the word “actually” modifying “incurred,” as well as the phrase “[i]n addition to any other limitation under law, “shows an intent by the

Legislature to limit expenses simply “incurred.”  Thus, in construing this statute, we believe that “medical or healthcare expenses incurred” refers to the “big circle” of medical or healthcare expenses incurred at the time of the initial visit with the healthcare provider, while, as applied to the facts presented here, “actually incurred” refers to the “smaller circle” of expenses incurred after an adjustment of the healthcare provider’s bill.

Id. at 769.

  

The San Antonio Court of Appeals recognized that its holding “clearly…violated the collateral source rule”. However, the Court concluded that the legislature had the power to abolish the common law collateral source rule and, given the plain language of the statute, concluded that the legislature had intended to abolish the rule.  Id. at 769, note 3.

2. Gore v. Faye

The Amarillo Court of Appeals dealt with the paid or incurred statute in Gore v. Faye, 253 S.W.3d 785 (Tex. App. – Amarillo 2008, no pet.).  Plaintiff Faye’s private health insurance paid for some medical bills resulting from an automobile incident. At trial, Faye introduced affidavits proving up her medical expenses which were redacted to conceal adjustments made pursuant to an agreement between the health care provider and the health insurance carrier. Defendant Gore objected to the redactions but the trial overruled Gore’s objections. Through an offer of proof, Defendant Gore introduced the unredacted affidavits.  The jury returned a verdict that awarded Plaintiff Faye a lesser amount than that presented in the redacted affidavits; therefore, the trial court decided that it was not reasonable to apply the offset that was the basis of Defendant Gore’s offer of proof. 

On appeal, Defendant Gore did not contest the trial court’s refusal to apply the offset after the verdict. Rather, Gore argued that the trial court had abused its discretion by disallowing the evidence of the adjusted medicals.  The Amarillo Court of Appeals disagreed with Gore and held that it was within the trial court’s discretion to disallow the adjusted medical bills based upon the common law collateral source rule which prohibits a party from mentioning that the other party has insurance. Id. at 790 (citing Taylor v. Am. Fabritech, Inc., 132 S.W.3d 613, 625 (Tex. App. – Houston [14th Dist.] 2004, pet. denied) ( held that trial court had not abused its discretion in applying Section 41.0105 post-verdict)

3. Irving Holdings Inc. v. Brown

The specific issue in the case of Irving Holdings Inc. v. Brown, 274 S.W.3d 926 (Tex.App. – Dallas 2009, pet. denied) was the timing of the application of the “paid or incurred” statute vs. the comparative responsibility statute (TEX CIV. PRAC. & REM. CODE section 33.012(a)). In a trial involving a motor vehicle incident, plaintiff Brown submitted affidavits to the jury showing total medical bills of $89,000.  Outside the presence of the jury, it was established that Brown’s workers compensation insurance paid $45,428.95 and the defendant argued that this was the amount “actually incurred” pursuant to section 41.0105.  The jury awarded Brown $89,000 for his past medical expenses but also found Brown was 50% comparatively responsible for the incident.  After the verdict, the trial court first applied section 33.012(a) and reduced the plaintiff’s damages by 50% which resulted in damages of $44,500. Then, the trial court determined that since this amount was less than the medical expenses actually incurred ($45,428.95), section 41.0105 did not apply and plaintiff was awarded $44,500.

On appeal, the defendant argued that the trial court had erred in failing to reduce the $89,000 to the amount actually incurred before reducing plaintiff’s recovery by the 50% comparative negligence.  The Dallas Court of Appeals rejected the defendant’s argument and held that § 41.0105 is to be applied after all other calculations limiting or reducing the amount of recoverable damages because § 41.0105 limits a plaintiff’s recovery but not damages. Id. at 933.

4. Matbon, Inc. v. Gries

The Eastland Court of Appeals was presented with the issue of a trial court allowing a plaintiff to introduce unadjusted medical bills in Matbon v. Gries, 288 S.W.3D 471 (Tex. App. – Eastland 2009, no pet.).  The Eastland Court cited the Mills opinion and concluded the trial court had erred by not reducing the plaintiff’s damage award for past medical expenses by the amount that had been adjusted and subsequently written off by the health care providers. Id. at 481-82.  Unlike the Mills decision, the Eastland Court of Appeals held that § 41.0105 did not require the admission of collateral source evidence before the jury; rather, the trial court could consider the evidence post-verdict.  Id.  See also Goryews v. Murphy Exploration & Prod. Co., 2007 WL 2274400 (S.D. Tex. 2007) (held that trial court should apply § 41.0105 post verdict).

C. Haygood v. de Escabedo

The Texas Supreme Court weighed in on the paid or incurred issue in the case of Haygood v. de Escabedo, 356 S.W.3d 390 (Tex. 2011).  Haygood and de Escabedo were involved in a motor vehicle incident and Haygood sued de Escabedo. Haygood’s medical providers accepted payment from Medicare and wrote off a substantial portion of the bills.  Haygood filed a motion to exclude evidence of the payments by Medicare and the fact that part of the bills had been written off.  The trial court granted Haygood’s motion and the jury returned a verdict awarding Haygood the full amount of his part medical expenses.

The Texas Supreme Court agreed with de Escabedo and, therefore, held that the evidence admitted by the trial court was legally insufficient to support the verdict. In essence, the Court held that recovery of past medical expenses is limited to what a health care provider has been paid or has a legal right to be paid under law or contract. Because a claimant is not entitled to recover medical expenses that a health care provider is not entitled to be paid, evidence of such charges is irrelevant to the issue of damages.  Relating to the collateral source rule, the Court held that it still applies but “that the common-law collateral source rule does not allow recovery as damages of medical expenses a health care provider is not entitled to charge.”  Id. at 396.  Since the rule still applies, the jury should not be told that the expenses are covered in whole in part by insurance.  Id. The jury should also not be told that the health care provider adjusted its charges because of insurance.  Id.

D. Unresolved Issues After the Haygood Decision

Categories of Past Medical Expenses

Given the Texas Supreme Court’s focus on what a health care provider has been paid or has a legal right to be paid under law or contract, the parties will have to determine in which category (the paid category or the legal right to be paid category) the past medical expenses in a given case fall under.  Further complicating this analysis is the fact that each case will have its own unique set of facts relating to past medical expenses.  Numerous factors will have an effect on this analysis including: whether the applicable insurance is private or governmental (Medicare, Medicaid, workers’compensation); whether balance billing is allowed (determined by the type of insurance) and whether the past medical bills have been completely or partially paid. The following are the categories:

Paid Bills – Governmental Insurance

This category does not present any problems; the bills have been paid by Medicare, Medicaid or workers’ compensation and there is no balance billing. Therefore, we know the actual amount of past medical expenses. The facts of the Haygood case fall within this category.

Unpaid Bills – Governmental Insurance

Here, the health care provider has not been paid; therefore, plaintiff may need to determine the amount that the provider has a legal right to be paid under law or contract.  Some form of discovery will be needed from the health care provider relating to any reimbursement agreement it has with the governmental insurance carrier.  See Section I(D)(4) infra for discussion of the situation where Plaintiff chooses not to submit bills to the insurance carrier.

Paid Bills – Private Insurance

Initially, it would appear that this category would not present a problem because we can easily determine the amount that the health care provider has been paid.  The problem arises due to the fact that health care providers are allowed to balance bill in the context of private insurance. If the health care provider seeks to obtain the amount which was not paid by the private insurance carrier, the amount actually incurred may be the entire amount that the provider is owed. Under these circumstances, the health care provider has a legal right to recover the entire amount. Of course, the “unpaid” portion must be proven up in some manner in order to recover that portion. See Section I(E) infra for discussion of affidavits to prove up the expenses.

Unpaid Bills – Private Insurance

Once again, the health care provider has not been paid; therefore, plaintiff may need to determine the amount that the provider has a legal right to be paid under law or contract.  Some form of discovery will be needed from the health care provider relating to any reimbursement agreement he has with the private insurance carrier and the unpaid amount must be properly proven up. See also Section I(E)(4) infra for discussion of the situation where Plaintiff chooses not to submit bills to the insurance carrier. 

Unpaid Bills – No Insurance

Every so often, plaintiff’s counsel will be presented with a case where the plaintiff has no private insurance and does not qualify for any governmental insurance. This can happen when the claimant is an illegal alien or a transient.  At first blush, it would seem that this category does not present any problems; the health care provider has not been paid and there is no insurance carrier. Therefore, there is no need to determine what agreement the provider has with the carrier.  Plaintiffs will argue the amount “actually incurred” is the full amount billed by the doctor because he has a “legal right” to be paid that amount.  See infra Big Bird Tree Serv. v. Gallegos, No. 05-10-00923-CV, 2012 WL 966063 (Tex. App. – Dallas March 22, 2012, no pet. h.) (discussion of paid or incurred where bills written off by an indigent charity program).  However, in some cases, Defendants are arguing that they should be allowed to submit evidence on the reasonable reimbursement rates as if Plaintiff was insured.  See Section I(D)(6) infra

Does paid or incurred apply to future medical expenses?

No Texas court has tackled whether the paid or incurred statute applies to future medical expenses.  However, given the wording used in the statute, it would appear that the answer is that it does not.  Section 41.0105 uses past tense language for both the words “paid” and “incurred”.  Under the Texas Supreme Court’s opinion in Haygood, it can be argued that future medical expenses have not been incurred because no healthcare provider has a legal right to recover for those services.  The reason for this is because the services have not yet been provided. 

The Defendant would need to introduce expert testimony regarding what a third-party insurance carrier would pay for future medical services.  Such testimony might be objectionable as speculative.  Furthermore, recall that Haygood left intact the collateral source rule, so the jury should not be told the expenses are covered by insurance.  See Section I(C) supra.

How do you apply Haygood to letters of protection?

Letters of protection (LOP) are sometimes used by attorneys in personal injury litigation to guarantee payment to healthcare providers from the proceeds of any future recovery. See, e.g., Sealift v. Satterly, 2003 Tex. App. LEXIS 6054, No. 14-03-00051-CV, 2003 WL 21664672, at *3 n.2 (Tex. App.–Houston [14th Dist.] July 17, 2003, no pet.) (mem. opinion).  Can plaintiff’s counsel use a letter of protection to recover the full amount of past medical expenses in light of Haygood? The honest answer is we do not know until we get some direction from the courts. However, given the fact that letters of protection are enforceable contracts, it appears that plaintiff’s counsel could argue that the full “protected” amount is incurred because the doctor has a legal right to recover it.

Obviously, this strategy will be questioned by defense counsel and the uncertainty behind this issue will only complicate cases further. If the plaintiff has health insurance but chooses to use a LOP, the plaintiff’s or his counsel’s motive may be questioned.  Defense counsel might choose to depose the doctor about the LOP and inquire about the past relationship between the lawyer and the doctor. Does the doctor have other LOPs with this attorney? Who drafted the LOP? Is a standard LOP used in each case? Has the doctor ever reduced the amount in a LOP before? If so, what was the amount of the reduction? Is there a standard reduction in each case? What would the reimbursement amount have been had the plaintiff submitted the bills to his insurance carrier? Does the non-submission of the bills violate any agreements between the medical provider and the insurance carrier? Further, if the case merits it, defense counsel might have to consider hiring an expert to testify on what the reasonable reimbursement rate would have been had the plaintiff submitted the bills to his insurance provider. Once again, given the Haygood language on the collateral source rule, this may be problematic. 

Is Plaintiff’s Failure to Submit Claims to Insurance Admissible? 

Many of the same issues discussed supra relating to LOPs will arise in cases where the plaintiff or the healthcare provider does not submit the bills to the applicable insurance. If the healthcare provider fails to timely submit bills to health insurance, the healthcare provider “may not recover from the patient any amount that the patient would have been entitled to receive as payment or reimbursement under a health benefit plan.”  TEX. CIV. PRAC. & REM. CODE SEC. 146.003(a).  It is unclear whether a defendant in a civil case can argue that a violation of Chapter 46 should benefit him. Clearly, Chapter 46 was intended to benefit patients.

Another issue is does the failure of a plaintiff to submit past medical expenses to available insurance amount to a failure to mitigate damages? Once again, there will be no definitive answer to this question until there is some case law on the issue.  When faced with this issue, Plaintiff’s counsel might argue that plaintiff does not have a contractual obligation to use his insurance. Plaintiff’s counsel should also object that it would violate the collateral source rule recognized in the Haygood decision. The failure to mitigate damages is a question for the jury. COMM. ON PATTERN JURY CHARGES, STATE BAR OF TEX., TEXAS PATTERN JURY CHARGES PJC 80.9  (2006).  As you see, these issues will not be resolved without extended litigation.

How Do You Apply Haygood to Medical Factoring Companies?

A medical factoring company will purchase a healthcare provider’s accounts receivables as a way to expedite payment of the patient’s outstanding bills.  The bills will be purchased by the medical factoring company at a discounted rate, but it will take an assignment of the bills at the full rate.  Plaintiff’s counsel will then argue that full, billed amount was “paid or incurred” and should be submitted to the jury.

Once again, if the plaintiff has health insurance, the reason for using a medical factoring company can be called to question by defense counsel. Recently, a federal district court allowed discovery into the arrangements between plaintiff’s counsel and a medical factoring company. See Galaviz v. C.R. England, infra.

Can Defendant Submit Evidence as Reasonable Reimbursement Rates When Plaintiff is Uninsured?

The Texas Supreme Court in Haygood spoke on the billing practices of healthcare providers:

Charges for health care, once based on the provider’s costs and profit margin, have more recently been driven by government regulation and negotiations with private insurers. A two-tiered structure has evolved: “list” or “full” rates sometimes charged to uninsured patients but frequently uncollected, and reimbursement rates for patients covered by government and private insurance…. Although reimbursement rates have been determined to be reasonable under Medicare or other programs, or have been reached by agreements between willing providers and willing insurers, providers nevertheless maintain that list rates are also reasonable.

Haygood, 356 S.W.3d at 393-94.

While no Texas appellate court has written on this issue, the author is aware of this defensive strategy being tested in our trial courts.  Given the Texas Supreme Court’s negative discussion of “list” rates being reasonable, it is not a stretch to argue that this argument will eventually find its way to Texas’ appellate courts.

E. CPRC 18.001/18.002 Affidavits

Section 18.001(b) of the Texas Civil Practice & Remedies Code provides that an affidavit stating that the amount a person charged was reasonable and that the service provided was necessary is sufficient evidence to support a finding of fact to that effect.  TEX CIV. PRAC. & REM. CODE § 18.001(b)  Section 18.002 sets out the specific form for said affidavit.  TEX CIV. PRAC. & REM. CODE § 18.002. 

The problem is that under Haygood, a § 18.002 affidavit may constitute no evidence relating to plaintiff’s past medical expenses because the affidavit does not address the paid or incurred issue.  Lawyers throughout the state are attempting to address this problem by adding language to the affidavit reflecting the amount which have been paid and the amounts that the health care provider is owed (ie. has a legal right to recover).  The problem with the solution to the problem is that by adding language to the affidavit it no longer complies with § 18.002. As a result, defense counsel can move to strike the affidavits and/or object on grounds of hearsay.

The Task Force for Rules in Expedited Actions recognized this problem; in its Final Report to the Supreme Court of Texas, the Task Force stated:

The affidavit currently provided for in § 18.001 is insufficient to prove up medical expenses in light of Haygood. Thus, the task force drafted an affidavit to allow medical expenses to be proven up without live testimony. The Task Force suggests that this new medical records affidavit be placed not in the Rules of Civil Procedure, but in Texas Rules of Evidence Rule 902 [Exhibit E], which sets forth the general business records affidavit.

See Task Force for Rules in Expedited Actions – Final Report to the Supreme Court of Texas.

On February 12, 2013, those rules were adopted by the Texas Supreme Court. Rather than changing TEX CIV. PRAC. & REM. CODE § 18.001(b), the Supreme Court amended TEX.R.EV. 902 and provided us with an affidavit that complies with the Haygood decision. See Medical Expenses Affidavit Attached Hereto as Exhibit “A”. Although the Supreme Court Order specifically references “expedited actions” in its title, the order’s language makes it clear that the new affidavit applies to all cases, no matter when filed. 

Also in 2013, changes to TEX CIV. PRAC. & REM. CODE §§ 18.001 and 18.002, including the form of the affidavit, were passed to address the paid or incurred issue. See amended § 18.002 attached hereto as Exhibit “B”.  Pursuant to this amendment, the affidavit and records are not filed with the court; rather the affidavits are served on opponent. 

F. Post Haygood Cases

Cavazos v. Pay and Save, Inc., 357 S.W.3d 86 (Tex.App. – Amarillo, 2011, no pet. h.)

The issue in Cavazos was the application of the percentage of fault reduction against the plaintiff in cases involving the paid or incurred statute.  In a pre-Haygood opinion, the Dallas Court of Appeals had held that §41.0105 is to be applied after all other calculations limiting or reducing the amount of recoverable damages because §41.0105 limits a plaintiff’s recovery but not damages. See Irving Holdings Inc. v. Brown, 274 S.W.3d 926, 931 (Tex. App. – Dallas 2009, pet. denied).  In Cavazos, the Amarillo Court of Appeals disagreed with Irving Holdings.  It noted that in Haygood the Texas Supreme Court had agreed that §41.0105 is a limitation on recovery but also held that only evidence of recoverable medical expenses is admissible at trial.  Therefore, the court in Cavazos held that it logically follows that any calculation of what was paid or incurred precedes any reduction for plaintiff’s percentage of responsibility.

Big Bird Tree Serv. v. Gallegos, 365 S.W.3d 173 (Tex. App. – Dallas 2012, pet. denied)

In this case, the plaintiff submitted affidavits from UT Southwestern and Parkland hospitals proving up past medical expenses.  In an offer of proof outside the presence of the jury, the defendant called record custodians for both hospitals who testified that the plaintiff had qualified for an indigent charity program and would only be required to pay small co-pays. Both custodians further testified that plaintiff would have to pay the expenses if he recovered them at trial.  The issue was whether the trial court erred in awarding medical expenses that were not actually incurred when it included the full amounts of the past medical expenses in the judgment.  In a very fact specific opinion, the Dallas Court of Appeals held that §41.0105 does not preclude recovery under the facts of this case. The Court reasoned that based upon Haygood and the collateral source rule “allowing a negligent tortfeasor to avoid liability for medical expenses born by a charity program designed to benefit indigent patients, not only results in a windfall to the tortfeasor, it rewards the tortfeasor for injuring an indigent.”

Henderson v. Spann, 367 S.W.3d 301 (Tex. App. – Amarillo March 27, 2012, pet. denied)

In yet another post-Haygood opinion, the Amarillo Court of Appeals addressed the issue whether the trial court can “fix” the admission of inadmissible unadjusted medical bills at the judgment stage. The Court of Appeals answered this question with an emphatic “no”.  First, the appellate court found that the admission of plaintiff’s unadjusted medical bills and the exclusion of defendant’s proffered adjusted medical bills was an abuse of discretion because the unadjusted bills were irrelevant and inadmissible.  The Court then held that despite the fact that the trial court reduced the jury’s award of past medical expenses to reflect the adjustments and write-offs, the trial court’s evidentiary ruling was reversible error. The court noted:

As a result of the trial court’s evidentiary rulings, the judgment, even as adjusted, is based on what amounts to no evidence, and the post-verdict adjustment itself serves as a deprivation of the constitutional right to trial by jury.

Id. at *3

Prabhakar v. Fritzgerald, 2012 Tex. App. LEXIS 7154 (Tex. App. – Dallas, Aug. 24, 2012, no writ)

In an appeal from a jury verdict in a medical malpractice lawsuit, Fritzgerald cross-appealed arguing that the trial court erred by reducing the jury’s award for past medical expenses.  At trial, the parties stipulated to the jury that the amount of Fritzgerald’s medical bills was $1,280,041.32.  The jury awarded $1,280,000 for past medical expenses but the Court reduced those damages by $347,391.  The reduction was based upon a signed Rule 11 agreement which set out that $347,391 of the past medical expenses had been written off.  Fritzgerald acknowledged that the parties signed the agreement and stipulated to the actual amount paid; however, Fritzgerald argued that the agreement was irrelevant because the stipulation was not read to the jury and the only evidence offered at trial was the larger amount ($1,280,000).  The Dallas Court of Appeals disagreed with Fritzgerald and held that under Haygood, the trial court was required to reduce Fritzgerald’s recovery pursuant to section 41.0105 if the court had the necessary information to do so and concluded that the trial court had the necessary information based upon the Rule 11 agreement.

Galaviz v. C.R. England, Inc., 2012 U.S. Dist. LEXIS 53866 (W.D. Tex. Apr. 17, 2012)

The federal district court was faced with motions to quash and for protective orders from plaintiff Galaviz and non-party movant Key Health Medical Solutions (“Key Health”).  Key Health was described as a medical factoring company, which purchased the medical accounts receivable for Galaviz from his medical providers. Plaintiff objected to providing Defendant with the amounts initially charged by the healthcare provider, the amounts paid by Key Health to the provider and the amounts not being requested by Key Health after it purchased the accounts receivable (ie. written off). Plaintiff argued that allowing Defendant to discover this information based upon TEX. CIV. PRAC. & REM. CODE ANN. § 41.0105 would be erroneous.  Defendant countered that it had not asserted that § 41.0105 was applicable; rather, Defendant argued that Plaintiff and Key Health cannot block Defendant from discovering healthcare billing information that allows defendants to explore whether the amount paid for healthcare services were reasonable and necessary.  The district court agreed with the Defendant and denied the motions to quash and for protection. 

In Re Jarvis, 2013 Tex. App. LEXIS 11281 (Tex. App. – Houston [14th Dist.] 2013, no writ)

Jarvis filed a petition for mandamus requesting that trial court be compelled to vacate his order ordering discovery of certain medical records and insurance contracts.  Relating to the insurance contracts, the trial court ordered that defendant was entitled to discovery of the managed care contracts between Blue Cross Blue Shield (“BCBS”) and the plaintiff’s medical providers to determine “the existence of any agreement or contract with BCBS relating to services provided to Plaintiff which affected the ability or right of the [medical providers] to seek payments from Plaintiff for their services.” The Houston Court of Appeals agreed with the trial court and held that defendant “is entitled to discovery of the insurance contracts between BCBS and Jarvis’ healthcare providers to aid in determining whether the providers are required to accept payments of less than the amounts billed.”

VIA Metropolitan Transit Authority v. Barraza, 2013 Tex. App., LEXIS 14609 (Tex. App. – San Antonio, 2013, pet denied). 

After a jury trial and verdict and judgment in favor of the plaintiffs, Defendant VIA Metropolitan Transit Authority (“VIA”) appealed arguing in part that the evidence was insufficient to support the award of medical expenses because plaintiffs failed to establish the amount of medical expense actually paid or incurred.  The San Antonio Court of Appeals affirmed the trial court and held that “[a]s a limitation on the admission of evidence, a trial objection based on section 41.0105 to unadjusted medical care expense evidence is required, as for all other objections to the admissibility of evidence.”  Since VIA failed to object to the unadjusted medical expense evidence at trial, the court of appeal found it had waived that argument.

Huston v. United Parcel Service, Inc., 2014 Tex. App. LEXIS 4567 (Tex. App. – Houston [1st Dist.] April 29, 2014, pet. filed)

On appeal, Huston alleged that the trial court erroneously limited the evidence of her past medical expenses to the amounts that a third-party company paid to several of Huston’s medical providers for their accounts receivables. The trial court agreed with UPS and ruled that the evidence of those bills of medical providers who had sold their accounts receivable to A/R Net should be limited to the amount that A/R Net paid those providers for the receivables and should not be the gross bill amounts. The parties then stipulated, subject to Huston’s objection, that the total amount Huston’s medical providers had been paid or were entitled to be paid was $206,146.62. The court held: “Assuming, without deciding, that the trial court erroneously limited the evidence to the amounts that the medical providers had the right to be paid instead of allowing evidence of the full amount of medical expenses billed to Huston, we agree with UPS that, in this case, such an error is harmless.” Given the fact that the jury awarded Huston only $50,000 in damages for past medical expenses, less than twenty-five percent of the stipulated amount which was presented as evidence, Huston did not demonstrate that, had she been allowed to present the full amount of the medical expenses for which she was billed, the jury would have awarded her that amount or any amount greater than the $50,000 that it did award.

Adley v. Privett, 2014 Tex. App. LEXIS 7447 (Tex. App – Dallas, July 9, 2014, no pet. h.)

Privett filed a personal injury suit against Adley after his motorcycle collided with the car driven by Adley. On appeal, Adley complained that the trial court reversibly erred in admitting certain medical bills into evidence and that the evidence was legally insufficient to support the jury’s award of past medical expenses. At trial, Privett introduced, over Adley’s objections, three bills to support his claim for past medical expenses: (1) an unadjusted bill from Parkland Hospital containing $27,454.21 in unpaid charges; (2) an invoice from PHI Air Medical  for $12,983 with “Adjustments” of $12,983 and a notation “Writeoff to Collections” that resulted in a zero balance; and (3) a “Patient Receipt” from Lake Pointe Orthopaedics Association listing $10,866.51 in charges, various adjustments for payments and writeoffs, and a balance of $991.21 “SENT TO Barlow Collections,” leaving a balance of zero. Citing Haygood, the court noted that the burden is on the claimant to produce evidence from which the jury may reasonably infer the amount of reasonable medical expenses. The court held that at least two of the medical bills submitted did not establish the amounts charged by the providers were actually paid or incurred by Privett in compliance with Haygood. The unadjusted hospital bill showed only what Privett was billed and the PHI bill provided no evidence of the amount actually paid or incurred by or on behalf of Privett. The Lake Pointe bill contained writeoffs that arguably established the amount actually incurred but the bill also contained charges for unrecoverable amounts as well as insurance payments and write-offs in violation of the collateral source rule. The admission of bills containing charges that were not recoverable probably caused the rendition of an improper judgment because, as a consequence of the trial court’s evidentiary rulings, there was no evidence of past medical expenses. The judgment of the trial court was reversed and the case was remanded for a new trial.

Metropolitan Transit Auth. v. McChristian, (Tex. App. – Houston [14th Dist.] 2014, no pet. h.)

Plaintiff was awarded $22,650 for past medical expenses. The trial court entered a judgment consistent with the jury’s verdict.  Defendant objected at trial and on appeal arguing that the trial court had erroneously admitted plaintiff’s medical bills into evidence without requiring evidence that the bills were “actually paid or incurred.”  The appellate court noted that the Supreme Court’s opinion in “Haygood does not squarely address the nature of the showing necessary to establish that particular medical expenses are among those the ‘provider has a legal right to be paid’”. The appellate court noted that “at a minimum … information necessary to establish whether adjustments or write-offs have occurred – and thus necessary to establish admissibility under section 41.0105 – can come from stipulations; the face of medical bills and records themselves; affidavits; testimony; or some combination of these sources.”  Here, medical records were admitted into evidence that stated plaintiff was “uninsured” and identified his financial status as “self pay”.  At trial, the plaintiff testified that the bills were his responsibility and had not been paid yet.  The appellate court concluded that the admission of the medical records complied with section 41.0105.  “The difficulty highlighted in Haygood does not arise in this case given the uninsured status reflected in McChristian’s medical records; bills showing no adjustments…; and McChristian’s testimony that the bills are his responsibility and remain unpaid.”

F. Conclusion

The paid or incurred statute and its interpretation by the Texas Supreme Court in Haygood will result in additional discovery and motion practice in the recovery of past medical expenses.  Numerous issues remain and, no doubt, other issues will be raised as trial courts and appellate courts attempt to apply the statute and the Texas Supreme Court’s holding.

Expedited Trials and the New Dismissal Rule

EXPEDITED TRIALS

Introduction

The Texas Supreme Court approved new and amended rules on expedited jury trials and a new rule on a motion to dismiss that is similar to a Federal Rule 12(b)(6) motion. The supreme court accomplished this by (1) creating new Texas Rule of Civil Procedure 169; (2) amending Texas Rules of Civil Procedure 47 and 190; and (3) creating new Texas Rule of Civil Procedure 91a.

T.R.C.P. 47

New Pleading Requirements

For all claims filed on or after March 1, 2013, Rule 47 requires the petition to specifically state the amount of damages that are being sought.  Rule 47 states that every original pleading which sets forth a claim for relief, whether an original petition, counterclaim, cross-claim, or third party claim, shall state that the party seeks:

Only monetary relief of $100,000 or less, including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney fees; (2) monetary relief of $100,000 or less and non-monetary relief; (3) monetary relief over $100,000 but not more than $200,000; (4) monetary relief over $200,000 but not more than $1,000,000; or (5) monetary relief over $1,000,000.

Tex.R.Civ.P. 47(c)

The new rule excludes cases governed by the Family Code. Id.  Further, failure to comply with Rule 47(c) results in the offending party being unable to conduct discovery until the pleading is amended to comply with the rule.  Tex.R.Civ.P. 47.  The information required by new Rule 47(c) is also required in Section 4 of the CIVIL CASE INFORMATION SHEET that was attached to the Texas Supreme Court’s Final Approval of Rules for Dismissals and Expedited Actions. See Misc. Docket No. 13-9022 (Appendix A). 

Cases Subject to Expedited Process & Exceptions to the Rule

The comment to the new rule states that a “suit in which the original petition contains the statement in paragraph (c)(1) is governed by the expedited actions process.”  Tex.R.Civ.P. 47 cmt.  In other words, if the original petition states that “only monetary relief of $100,000 or less, including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney fees” is being sought by all claimants, then that suit is governed by the “expedited actions program”.  Id.; See also Tex.R.Civ.P. 169(a)(1). This does not apply to suits governed by the Family Code, the Property Code, the Tax Code, or Chapter 74 of the Civil Practice & Remedies Code (healthcare liability).  Tex.R.Civ. P. 47 cmt.; See also Tex.R.Civ. P. 169(a)(2).

It should be noted that the new rules do not allow the Defendant to challenge the amount of damages pled by the Plaintiff.

T.R.C.P. 169

Rule 169(a) merely repeats Rule 47’s statements relating to cases which fall within the expedited actions process (ie. seeking only monetary relief of $100,000 or less) and which cases the expedited process does not apply to even though the appropriate monetary relief ($100,000 or less) is sought.  Comment 2 to the Rule makes it clear that the expedited actions process is mandatory for all cases which fall within the Rule 169(a)(1) definition.  Tex.R.Civ.P. 169 cmt. 2.

Limitation on Recovery

A claimant’s recovery in an expedited action is limited to $100,000, excluding post-judgment interest. Tex.R.Civ. P. 169(b).  If a jury were to award the claimant an amount in excess of $100,000, the claimant could not recover a judgment in excess of $100,000, not including post-judgment interest.  Id.; See also Tex.R.Civ.P. 169 cmt. 4.   Comment 4 to the new rule states that this limitation does not apply to a counter-claimant seeking relief other than that allowed under Rule 169(a)(1) (ie. relief in excess of $100,000).  Tex.R.Civ. P. 169 cmt. 4.  The effect of this is that the cap of $100,000 does not apply to a counter-claimant in the same suit seeking relief in excess of $100,000.

Removal from the Process

2. Removal from the Process

Rule 169(c) provides two different procedures by which a suit can be removed from the expedited actions process. First, the suit can be removed on motion and a showing of good cause by any party.  Tex.R.Civ. P. 169(c)(1)(A). Second, the suit can be removed if any claimant, other than a counter-claimant, files a pleading that seeks relief in excess of $100,000.  Tex.R.Civ. P. 169(c)(1)(B).  There are some time constraints; a pleading (original, amended or supplemental) that removes a suit from the expedited actions process may not be filed without leave of court unless it is filed before the earlier of 30 days after the discovery period is closed or 30 days before the trial date.  Tex.R.Civ. P. 169(c)(2). 

The rule provides that leave to amend “may be granted only if good cause for filing the pleading outweighs any prejudice to an opposing party.”  Id.  Comment 3 to Rule 169 sets out the factors that the trial court should consider in determining whether to remove the case from the process; these include:

Whether the damages sought by multiple claimants against the same defendant exceed in the aggregate the relief allowed under Rule 169(a)(1);

Whether a defendant has filed a compulsory counterclaim in good faith that seeks relief other than that allowed under Rule 169(a)(1);

The number of parties and witnesses;

The complexity of the legal and factual issues; and

Whether an interpreter is necessary.

Tex.R.Civ. P. 169 cmt. 3.  These factors are not exhaustive.  Id.

Once a suit is removed from the expedited actions process, the trial court must reopen discovery under Rule 190.2(c).  Tex.R.Civ. P. 169(c)(3).  New Rule 190.2(c) provides that once the discovery period reopens, the discovery must be completed within the limitations provided in Rules 190.3 (Level 2) or 190.4 (Level 3), whichever is applicable. See Tex.R.Civ. P. 190.2(c).  Further, pursuant to Rule 190.2(c), any person who was previously deposed may be redeposed and, on motion of any party, the court should continue the trial date if necessary to complete discovery.  Id.

If the motion is based on the limited discovery permitted by the process, seek to have the Court modify the discovery control plan before filing the motion to remove. 

If the motion is based on the trial limitations, be prepared to demonstrate why an extension from 8 to 12 hours per side would not resolve the “good cause” basis for the removal.   If the additional 4 hours would resolve the “good cause” basis, seek that extension before filing the motion to remove. 

It is possible that the “good cause” could arise after the filing of a Motion to Equalize Trial Time (See paragraph 4 below).  As Rule 169 does not restrict the filing of a Motion to Remove during trial, be prepared to file the motion during trial in the appropriate circumstance. 

There is no limit on the number of times a motion to remove can be filed.  As circumstances change or additional proof supporting the discharge is obtained, consider filing an amended motion as necessary.

Impact on Discovery

Discovery for expedited actions is governed by Rule 190.2.  See Tex.R.Civ. P. 169(d).   See infra Section I.D.

Impact on Trials

Not surprisingly, the largest impact of the new rules on expedited trials will be on the trial process.  First, on any party’s request, the court must set the case for a trial setting that is within 90 days after the discovery period provided for in Rule 190.2(b)(1) ends. Tex.R.Civ.P. 169(d)(2).  The court may continue the case only twice, not to exceed a total of 60 days.  Id.  The new rules do not prevent the trial judge from rescheduling the trial should her docket require it.

As for the trial itself, each “side” is allowed no more than eight hours to complete jury selection, opening statements, presentation of evidence, examination and cross examination of witnesses, and closing arguments.  Tex.R.Civ.P. 169(d)(3).  Time spent on objections, bench conferences, bills of exception, and challenges for cause to a juror are not included in the limit.  Tex.R.Civ.P. 169(d)(3)(B).  On motion and a showing of good cause by any party, the court may extend the time limit to no more than twelve hours per side.  The factors that the trial court should consider in deciding to extend the time limit are the same good cause factors used to determine whether to remove the case from the expedited process.  Tex.R.Civ.P. 169 cmt. 3; See infra I.C(2). 

The term “side” has the same definition set out in Tex.R.Civ.P 233.  Tex.R.Civ.P. 169(d)(3)(A). Rule 233 states that the term “side” is not synonymous with “party,” “litigant,” or “person”.  Tex.R.Civ.P. 233.  Pursuant to the Rule, “side” means one or more litigants who have common interests on the matters with which the jury is concerned.  Id.

Impact on ADR

New Rule 169 provides that unless the parties have agreed not to engage in alternative dispute resolution (ADR), the trial court may refer the case to an ADR procedure.  Tex.R.Civ.P. 169(d)(4)(A).   The court can only refer the case to ADR once and the procedure is subject to the following limitations:

It cannot exceed a half-day in duration, excluding scheduling time;

It cannot exceed the total cost of twice the amount of the applicable civil filing fees; and

It must be completed no later than 60 days before the initial trial setting.

Id. 

Pursuant to the Rule, the court must consider objections to the referral unless prohibited by statute.  Tex.R.Civ.P. 169(d)(4)(B).  The comments do not touch on this subsection, therefore, it is not clear which statutes the Rule is referring.  Lastly, the parties may agree to engage in ADR other than that provided for in the Rule.  Tex.R.Civ.P. 169(d)(4)(C).

Impact on Expert Testimony

Pretrial motions challenging an expert’s qualifications or reliability of his opinions are not allowed.  Tex.R.Civ.P. 169(d)(5).   This rule provides that a “party may only challenge the admissibility of expert testimony as an objection to summary judgment evidence under Rule 166a or during the trial on the merits.”  Id.  This limitation does not apply if the party sponsoring the expert witness requests a different procedure (ie. a pretrial motion and hearing).  Id.  Lastly, this limitation does not apply to a motion to strike the expert for late designation.  Id. 

T.R.C.P. 190.2 & 190.5 – Discovery Control Plans for Expedited Actions

Rules 190.2 and 190.5 were amended to specifically apply to the expedited actions process.  Amended Rule 190.2 is known as the Level 1 Discovery Control Plan and now applies to expedited actions unless the parties agree that Rules 190.3 (Level 2) should apply or the court orders a discovery control plan under 190.4 (Level 3).  Tex.R.Civ. P. 190.2(a).  Section (b) of Rule 190.2 provides the limitations that will apply.

Under the new Level 1 discovery control plan, discovery closes 180 days after the date the first request for discovery of any kind is served on a party.  Tex. R. Civ. P. 190.2(b)(1). 

The total time for depositions under the new Level 1 discovery control plan is six hours.  Tex. R. Civ. P. 190.2(b)(2).  The parties can agree to expand this limit up to 10 hours in total.  Id.

The number of Interrogatories any party may serve on any other party is 15.  Tex. R. Civ. P. 190.2(b)(3).  Under the new rules, the parties are also limited to 15 Requests for Admissions and 15 Requests for Production. Tex. R. Civ. P. 190.2(b)(4)-(5). 

Parties under a Level 1 discovery control plan can now request “disclosure of all documents, electronic information, and tangible items that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses.”  Tex. R. Civ. P. 190.2(b)(6).  This “Rule 190.2(b)(6) Request for Disclosure,” can be sent in addition to the traditional “Rule 194.2 Request for Disclosure.”  See Tex. R. Civ. P. 190.2(b)(6).

The New Dismissal Rule – T.R.C.P. 91a

Grounds for the Motion

New Rule 91a provides that “a party may move to dismiss a cause of action on the grounds that it has no basis in law or fact.”  Tex.R.Civ. P. 91a.1.  The rule provides that a “cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought.” Id.  Rule 91a.1 further provides that a “cause of action has no basis in fact if no reasonable person could believe the facts pleaded.  Id.

Exceptions to the Rule

Cases brought under the Family Code are excluded from application to the rule.  Tex.R.Civ.P. 91a.1.  Further, cases governed by Chapter 14 of the Texas Civil Practice & Remedies Code (Inmate Litigation) are also excluded.  Id.

Timing of Motion, Response and Hearing

A motion to dismiss under the Rule must be filed within 60 days after the first pleading containing the challenged cause of action is served on the movant and filed at least 21 days before the motion is heard.  Tex.R.Civ.P. 91a.3.  Any response to the motion must be filed no later than 7 days before the date of the hearing.  Tex.R.Civ.P. 91a.4.  The motion must be granted or denied within 45 days after the motion is filed.  Tex.R.Civ.P. 91a.3. 

Effect of Nonsuit or Amendment of Challenged Pleading

The rule provides that a “court may not rule on a motion to dismiss if, at least 7 days before the date of the hearing, the respondent files a nonsuit of the challenged cause of action, or the movant files a withdrawal of the motion.”  Tex.R.Civ.P. 91a.5.  If the respondent amends the challenged cause of action at least 7 days prior to the hearing date, the movant may, before the date of the hearing, file a withdrawal of the motion to dismiss or an amended motion directed to the amended cause of action.  Id. If the movant files an amended motion to dismiss pursuant to this rule, the time periods provided in this rule restart.  Id.

The court must rule on a motion to dismiss unless it has been withdrawn or the cause of action has been nonsuited.  Id.

Hearing on the Motion

Each party is entitled to at least 14 days notice of the hearing on the motion to dismiss.  Tex.R.Civ.P. 91a.6.  The court may conduct an oral hearing on the motion but is not required to do so. Id.  No evidence will be considered in ruling on the motion; the motion will be decided based solely on the pleading of the cause of action, together with any “pleading exhibits permitted by Rule 59.”  Id.

Rule 59 provides that “[n]otes, accounts, bonds, mortgages, records, and all other written instruments, constituting, in whole or in part, the claim sue on, or the matter set up in defense, may be made part of the pleadings by…being attached being attached or filed and referred to… or by copying the same in the body of the pleading…” Tex.R.Civ.P. 59. 

Award of Costs and Attorney Fees

The rule states that the trial court is required to award the prevailing party on the motion all costs and reasonable and necessary attorney fees incurred with respect to the challenged cause of action.  Tex.R.Civ.P. 91a.7.  The court must consider evidence regarding the costs and fees in determining the award.  Id.

Cases by or against a governmental entity or a public official are excluded from this section of the rule.  Id.

Effect on Venue and Personal Jurisdiction

Section 8 of the new Rule sets out that the “rule is not an exception to the pleading requirements of Rules 86 and 120a.”  Tex.R.Civ.P. 91a.8.  Rule 86 requires that an objection to venue must be made “prior to or concurrently with any other plea, pleading or motion except a special appearance motion provided for in Rule 120a.”  Tex.R.Civ.P. 86(1).  The pleading requirement of Rule 120a states that a “special appearance shall be made by sworn motion filed prior to motion to transfer venue or any other plea, pleading or motion…”  Tex.R.Civ.P. 120a(1).  New Rule 91a.8 provides that a party filing a motion to dismiss or obtaining a ruling on it, does not waive a special appearance or a motion to transfer venue.  Tex.R.Civ.P. 91a.8.  However, by filing a motion to dismiss, a party does submit to the court’s jurisdiction in proceeding on the motion and is bound by the court’s ruling, including an award of costs and attorney fees against that party.  Id.

New Dismissal Rule Cumulative

Lastly, Rule 91a.9 makes it clear that this new dismissal rule is in addition to, and does not supersede or affect other procedures that authorize dismissal.  Tex.R.Civ.P. 91a.9.

CONCLUSION

It remains to be seen whether expedited trials will promote prompt, efficient and cost-effective resolutions to civil lawsuits.  There are numerous reasons why lawyers for plaintiffs and defendants may decide to opt out of the expedited trials process.  Further, pleading out of the process is a fairly simple process for both plaintiffs and defendants.  Perhaps, the expedited trials process goes the way of the seldom used Offer of Settlement under Rule 167. 

The new dismissal rule may have the effect of requiring parties to be more careful in adding causes of action to their pleadings.  However, the true effect of the rule also remains to be seen. Potential movants may be hesitant to act given the possibility of having to pay costs and attorney fees should they lose.

EXHIBIT “A”

New Rule 902(10)(c), Texas Rules of Evidence:

Rule 902. Self-Authentication

(10)Business Records Accompanied by Affidavit

(c) Medical expenses affidavit. A party may make prima facie proof of medical expenses by

affidavit that substantially complies with the following form:

 

Affidavit of Records Custodian of

STATE OF TEXAS §

§

COUNTY OF §

Before me, the undersigned authority, personally appeared _________________, who, being by me

duly sworn, deposed as follows:

My name is _______________. I am of sound mind and capable of making this affidavit, and

personally acquainted with the facts herein stated.

I am a custodian of records for _______________. Attached to this affidavit are records that

provide an itemized statement of the service and the charge for the service that _____________ provided to _____________ on _____________. The attached records are a part of this affidavit.

The attached records are kept by ______________ in the regular course of business, and it was

the regular course of business of ______________ for an employee or representative of _____________, with knowledge of the service provided, to make the record or to transmit information to be included in the record. The records were made in the regular course of business at or near the time or reasonably

soon after the time the service was provided. The records are the original or a duplicate of the

original.

The services provided were necessary and the amount charged for the services was

reasonable at the time and place that the services were provided.

The total amount paid for the services was $____ and the amount currently unpaid but

which ______________ has a right to be paid after any adjustments or credits is $ ______ .

  __________________________

Affiant

 

SWORN TO AND SUBSCRIBED before me on the ________day of ______, _______.

                                                                                                __________________________

Notary Public, State of Texas

 

Notary’s printed name: ________________                                        My commission expires:  _____

 

Comment to 2013 Change: Rule 902(10)(c) is added to provide a form affidavit for proof

of medical expenses. The affidavit is intended to comport with Section 41.0105 of

the Civil Practice and Remedies Code, which allows evidence of only those medical

expenses that have been paid or will be paid, after any required credits or adjustments. See Haygood v. Escabedo, 356 S.W.3d 390 (Tex. 2011).

EXHIBIT “B”

Sec. 18.002. FORM OF AFFIDAVIT. (a) An affidavit concerning cost and necessity of services by the person who provided the service is sufficient if it follows the following form:

No. ___________________

AFFIDAVIT

John Doe ) IN THE _______

(Name of Plaintiff) ) COURT IN AND FOR

v. ) _________ COUNTY,

John Roe ) TEXAS

(Name of Defendant) )

Before me, the undersigned authority, personally appeared __________(NAME OF AFFIANT)__________, who, being by me duly sworn,deposed as follows:

My name is __________(NAME OF AFFIANT)__________. I am of sound mind and capable of making this affidavit.

On __________(DATE)__________, I provided a service to __________(NAME OF PERSON WHO RECEIVED SERVICE)__________. An itemized statement of the service and the charge for the service is attached to this affidavit and is a part of this affidavit.

The service I provided was necessary and the amount that I charged for the service was reasonable at the time and place that the service was provided.

________________________________

Affiant

SWORN TO AND SUBSCRIBED before me on the __________ day of __________, 19___.

My commission expires:

______________________

________________________________

Notary Public, State of Texas

Notary’s printed name:

________________________________

(b) An affidavit concerning cost and necessity of services by

the person who is in charge of records showing the service provided

and the charge made is sufficient if it follows the following form:

No. ___________________

AFFIDAVIT

John Doe ) IN THE _______

(Name of Plaintiff) ) COURT IN AND FOR

v. ) _________ COUNTY,

John Roe ) TEXAS

(Name of Defendant) )

Before me, the undersigned authority, personally appeared

______(NAME OF AFFIANT)______, who, being by me duly sworn, deposed as follows:

My name is __________(NAME OF AFFIANT)__________. I am of sound mind and capable of making this affidavit.

I am the person in charge of records of __________(PERSON WHO PROVIDED THE SERVICE)__________. Attached to this affidavit are records that provide an itemized statement of the service and the charge for the service that __________(PERSON WHO PROVIDED THE SERVICE)__________ provided to __________ (PERSON WHO RECEIVED THE SERVICE)__________ on __________(DATE)__________. The attached records are a part of this affidavit.

The attached records are kept by me in the regular course of business. The information contained in the records was transmitted to me in the regular course of business by __________(PERSON WHO PROVIDED THE SERVICE)__________ or an employee or representative of __________(PERSON WHO PROVIDED THE SERVICE)__________ who had personal knowledge of the information. The records were made at or near the time or reasonably soon after the time that the service was provided. The records are the original or an exact duplicate of the original. The service provided was necessary and the amount charged for the service was reasonable at the time and place that the service was provided.

________________________________

Affiant

SWORN TO AND SUBSCRIBED before me on the __________ day of __________, 19___.

My commission expires:

______________________

________________________________

Notary Public, State of Texas

Notary’s printed name:

________________________________

(b-1) Notwithstanding Subsection (b), an affidavit concerning

proof of medical expenses is sufficient if it substantially complies with the following form:

Affidavit of Records Custodian of

____________________________________________

STATE OF TEXAS §

§

COUNTY OF _____________________§

Before me, the undersigned authority, personally appeared

__________, who, being by me duly sworn, deposed as follows:

My name is ___________________________________. I am of sound mind and capable of making this affidavit, and personally acquainted with the facts herein stated.

I am a custodian of records for __________. Attached to this affidavit are records that provide an itemized statement of the service and the charge for the service that __________ provided to __________ on _____. The attached records are a part of this affidavit.

The attached records are kept by __________ in the regular course of business, and it was the regular course of business of __________ for an employee or representative of __________, with knowledge of the service provided, to make the record or to transmit information to be included in the record. The records were made in the regular course of business at or near the time or reasonably soon after the time the service was provided. The records are the original or a duplicate of the original.

The services provided were necessary and the amount charged for the services was reasonable at the time and place that the services were provided.

The total amount paid for the services was $_____ and the amount currently unpaid but which __________ has a right to be paid after any adjustments or credits is $_____.

________________________________

Affiant

SWORN TO AND SUBSCRIBED before me on the __________ day of _____, _____.

________________________________

Notary Public, State of Texas

Notary’s printed name:___________

My commission expires:___________

b-2) If a medical bill or other itemized statement attached to

an affidavit under Subsection (b-1) reflects a charge that is not recoverable, the reference to that charge is not admissible.

(c) The form of an affidavit provided by this section is not

exclusive and an affidavit that substantially complies with Section

18.001 is sufficient.

Added by Acts 1993, 73rd Leg., ch. 248, Sec. 1, eff. Aug. 30, 1993.

Amended by:

Acts 2013, 83rd