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An expert’s report must inform a defendant in a medical-malpractice suit of the conduct called into question by the plaintiff or the trial court has no discretion but to conclude that the report does not meet statutory requirements, the Texas Supreme Court held on May 10. The court’s unanimous ruling in American Transitional Care Centers of Texas Inc. v. Teofilo Palacios, et al. sets the standard for what constitutes a “good-faith effort” to provide a fair summary of an expert’s opinions under Section 13.01 of the Medical Liability and Insurance Improvement Act. The court also held that a trial court’s decision to dismiss a case under that provision is reviewed for abuse of discretion. “The plain language of Section 13.01 leads to the conclusion that abuse of discretion is the proper standard,” Justice Deborah Hankinson, author of the supreme court’s opinion, wrote. “The question of the adequacy of an expert report is now more in the hands of the trial court,” says Matt McCracken, a partner in Houston’s Marshall & McCracken and lead attorney for American Transitional. Dallas lawyer Robert Greening, who represents plaintiffs in medical-malpractice cases, says the abuse of discretion standard will increase the difficulty for plaintiffs on appeal. “It will be difficult for plaintiffs when they go into the appellate courts to try to overturn a trial court’s decision,” says Greening, a partner in Penick & Greening in Dallas. Levon Hovnatanian, attorney for the Palacios family, says he’s disappointed about losing the case but that the supreme court settled a controversy in the intermediate appeals courts over the standard for judging the sufficiency of an expert’s report in medical-malpractice cases. “They did everybody a favor in that — plaintiffs and defendants alike,” says Hovnatanian, a partner in Houston’s Martin, Disiere & Jefferson. PROVIDING GUIDANCE “It does provide the trial courts a heck of a lot of guidance,” James C. Marrow, another American Transitional lawyer, says of the ruling. “It lays out how trial courts are supposed to deal with these expert reports.” McCracken says the supreme court “covered the waterfront” on Section 13.01 dismissals and did it in a way that’s consistent with the statute. Marrow describes the expert’s report as “a procedural hurdle” that plaintiffs in a medical-malpractice case must clear to continue their suits. The plaintiff must show that his suit isn’t frivolous, he says. The law requires a plaintiff, within 180 days after filing a suit, to submit a report summarizing the expert’s opinion of the standard of care — what a reasonably prudent hospital would have done under the same circumstances. The report also must include the expert’s opinion on the defendant’s breach of the standard and how the defendant’s action caused the plaintiff’s injury. If a report isn’t submitted, the suit can be dismissed and the trial court can order the forfeiture of any applicable cost bond necessary to pay legal fees incurred by the defendant. Marrow says the report filed in Palacios did not specify what the hospital should have done for the patient. In a 2-1 ruling, Houston’s 1st Court of Appeals held that even if the report was not a fair summary of the expert’s opinion, it represented a good-faith effort to comply with the statutory definition of an expert’s report. Justice Murry Cohen wrote the majority opinion in which he was joined by Justice Adele Hedges. Justice Tim Taft wrote a dissenting opinion. When the 1st Court denied the hospital’s motion for a rehearing by the full court, Chief Justice Mike Schneider, who wasn’t on the panel that heard the case, also dissented. According to the 1st Court’s opinion, Palacios suffered brain damage and other severe injuries in a two-story fall on Feb. 14, 1992. After a year of rehabilitation, Palacios was transferred to American Transitional Hospital to continue rehabilitating, the opinion said. The appeals court’s opinion said Palacios’ doctors prescribed bed restraints for him, but he fell from his hospital bed on May 14, 1994. Palacios and his family sued the hospital, alleging that the fall from the bed caused further brain injury and the need for surgery. Sentry Insurance, which paid for Palacios’ care, also is a plaintiff in the suit. Athens, Texas, sole practitioner Mickey Shyrock, the insurer’s attorney, says he is disappointed by the ruling. Shyrock and Hovnatanian say they will file motions for rehearings. After being granted an extension on the 180-day filing deadline, the Palacioses submitted a report prepared by Dr. Catherine Bontke, a physician who treated Palacios at the first rehabilitation hospital. American Transitional moved to dismiss the suit, claiming that the report did not meet the statutory requirements. Judge Tony Lindsay of the 280th District Court in Houston granted the motion and dismissed the claims against American Transitional, but the 1st Court reversed and remanded the case after using summary-judgment review standards to evaluate the sufficiency of the expert report. The supreme court said that sanctions generally are reviewed under an abuse-of-discretion standard. “And we presume the Legislature was aware of the standard of review ordinarily applied in sanction cases when it explicitly identified a court’s dismissal under Section 13.01 (e) as a sanction,” Hankinson said in the opinion. Hovnatanian says he argued that the report summarized the breach of the standard. “You can infer the standard of care from that,” he says. Bontke’s report stated: “Mr. Palacios had a habit of trying to undo his restraints, and precautions to prevent his fall were not properly utilized.” The report also said that it “is unclear how he [Palacios] could untie all four of the restraints from the bed frame in under 10 minutes.” The Palacioses argued that it can be inferred from those statements that Bontke believes that American Transitional’s staff should have tied the restraints to the bed more securely. But the supreme court said those statements do not state the expert’s opinion of the standard of care. The court said a report must inform the defendant of the specific conduct that the plaintiff has questioned and also must provide a basis for the trial court to conclude that the plaintiff’s claims have merit. Each of the elements identified in the statute — standard of care, breach of the standard and causation — must be included in the report, the opinion said. Because the 180-day period had passed when the trial court determined that the report did not represent a good-faith effort to provide a fair summary of the standard of care and how it was breached, the court was required to dismiss the Palacioses’ claims, Hankinson wrote. The supreme court reversed the 1st Court’s judgment and dismissed with prejudice the family’s claims.

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