Battaglia v. Alexander

Click here for the full text of this decision FACTS:Mark Alexander’s widow and his parents brought this wrongful death suit against Carl J. Battaglia, M.D. and Tommy A. Polk, M.D. in their individual capacities and against their respective professional associations. The Alexanders also sued Dr. LaVerta Jane Crowder, the nurse anesthetist Constance Cernosek, the hospital, and a joint venture between Battaglia and Polk, or between their professional associations, known as Red Oak Anesthesia Associates. The hospital and Cernosek settled before trial for $1,875,000 plus $33,266.21 designated as costs. The case proceeded to a jury trial. Before submission, the trial court directed a verdict for Polk in his individual capacity and for Red Oak Anesthesia Associates. The jury failed to find either “Battaglia, M.D.” or the hospital negligent but found others had been negligent and apportioned responsibility as follows: Cernosek, 30 percent; Crowder, 30 percent; Battaglia P.A., 20 percent; and Polk P.A., 20 percent. The jury further found that Cernosek was an employee of “Carl Battaglia, M.D., P.A./Tommy A. Polk, M.D., P.A.” in providing anesthesia to Mark Alexander, in her efforts to resuscitate him, or both. The jury failed to find that Dr. Crowder was an employee of either professional association but found there was an agency relationship between Dr. Crowder and the professional associations. It also found that the Battaglia and Polk professional associations were engaged in a joint venture on the date of Mark Alexander’s surgery. The jury awarded Lisa Alexander (Mark Alexander’s widow) $1,080,000 in past damages and $1,800,000 in future damages, and awarded each of Mark Alexander’s parents $180,000 in past damages and $180,000 in future damages, for a total of $360,000 to each parent. The parties stipulated prior to trial that Mark Alexander’s medical and funeral expenses were $57,113.05, and accordingly, the total amount of damages was $3,657,113.05. The trial court applied $1,875,000 as a dollar-for-dollar settlement credit, resulting in a damage award in the judgment of $1,782,113.05 plus prejudgment interest. The trial court calculated prejudgment interest on the past losses found by the jury and the $57,113.05 stipulated by the parties (totaling $1,497,113.05 in past damages), resulting in $367,498.05 in prejudgment interest (for a total award of $2,149,611.10), without considering any part of the settlement credit in the calculation. Finally, the trial court held the professional associations jointly and severally liable for one another’s share of the judgment as well as jointly and severally liable for the entire amount of the judgment. Battaglia P.A., Polk P.A., and Crowder appealed, but Crowder paid her share of the judgment and was released by the Alexanders before the court of appeals issued its decision. The court of appeals affirmed the trial court’s judgment. HOLDING:The court reverses the court of appeals’ judgment in part and remands to the trial court for recalculation of prejudgment interest. The court holds that 1.�liability against the professional associations was not foreclosed by a directed verdict in favor of one physician in his individual capacity and the jury’s failure to find the other physician negligent in his individual capacity; 2.�there is legally sufficient evidence that the professional associations were negligent; 3.�there is legally sufficient evidence that the professional associations engaged in a joint venture separate from the joint venture to which the trial court granted a directed verdict; and 4.�the trial court did not properly calculate prejudgment interest under 16.02 of former article 4590i. The jury’s failure to find Battaglia negligent was not an affirmative finding that Battaglia was not negligent. The non-finding does not establish that Battaglia P.A. was not negligent. The trial court’s directed verdict for Polk was a determination that there was no evidence he was negligent, but the rendition of judgment against Polk P.A. simply amounts to a reconsideration of the directed verdict. Polk P.A. does not assert that it was prejudiced by the post-trial withdrawal of the directed verdict; it argues only that the directed verdict for Polk determined the issue of its own negligence. The directed verdict did not have that effect. In the end, the professional associations’ liability turns on whether there was probative evidence to support the jury’s findings that the professional associations, acting through their respective physician-principals, were negligent. There was evidence that as the employers of Cernosek, the professional associations were negligent in failing to train or evaluate her adequately or to recognize her incompetence. But in this case, as in most such cases, the jury should have been asked only whether the physicians were negligent; the consequences to the professional associations follow as a matter of law. The jury failed to find both Battaglia and Battaglia P.A. negligent. Thus, there was no double recovery for the same acts or omissions. The court agrees with the court of appeals that the professional associations’ objections to the jury charge did not apprise the trial court of their contention that acts or omissions of Battaglia were being submitted twice. The objections only asserted that there was no evidence of any direct negligence on the part of the professional associations, as distinguished from evidence of vicarious liability for the actions of Cernosek or Crowder. In moving for a directed verdict for Red Oak Anesthesia Associates, counsel for the professional associations represented to the trial court that Red Oak was not the name of any joint venture between the associations and that a Red Oak joint venture had never been formed. The record further reflects that the jury’s finding could only have been referable to evidence that the professional associations jointly agreed to provide anesthesia services to the hospital. The jury was instructed that “[a]“joint venture’ exists if the persons concerned have (1)�a community of interest in the venture; (2)�an agreement to share profits; (3)�an agreement to share losses; and (4)�a mutual right of control or management of the venture.” All the evidence that pertained to these elements concerned the relationship between the professional associations in providing anesthesia services at the hospital. The professional associations do not challenge the legal sufficiency of the evidence supporting the jury’s finding that, on the day of Mark Alexander’s surgery, Battaglia P.A. and Polk P.A. were engaged in a joint venture. Nor do the professional associations challenge the jury’s finding that their employee, Cernosek, was negligent in providing medical services to Mark Alexander. Accordingly, the trial court did not err in holding the professional associations jointly and severally liable for Cernosek’s and their own negligence based on the jury charge and the finding of a joint venture. In calculating the cap imposed by former Texas Civil Practice & Remedies Code 33.012, prejudgment interest is considered. Although past damages may have been incurred over time before the entry of judgment, they should be treated as a lump sum incurred as of the date on which prejudgment interest begins to accrue in accordance with Texas Civil Practice & Remedies Code Article 4590i 16.02. A settlement payment should be credited first to accrued prejudgment interest as of the date the settlement payment was made, then to principal, thereby reducing or perhaps eliminating prejudgment interest from that point in time forward. The 180 day provisions in the Finance Code and 16.02 of former Article 4590i have nothing to do with how to determine the principal amount on which prejudgment interest accrues. Settlements should not be allocated. Since past damages were incurred first, settlement credits should be applied to past damages first, then to future damages. To the extent the holdings in Samples v. Graham, 76 S.W.3d 615 (Tex. App. Corpus Christi 2002, no pet.), regarding prejudgment interest conflict with this opinion, the court expressly disapproves of that decision. OPINION:Owen, J.; Hecht, Wainwright, Medina, Green and Johnson, JJ., joined. Jefferson, C.J., O’Neill and Brister, JJ., joined parts II and III. CONCURRENCE AND DISSENT:Brister, J.; Jefferson, C.J., and O’Neill, J., joined. “I join fully in the Court’s opinion except that relating to part IV. The question there is whether to calculate prejudgment interest under former article 4590i, section 16.02, before or after applying settlement credits. Because the statute unambiguously requires the former, we should affirm; because the Court construes the statute otherwise, I respectfully dissent.”