Thank you for sharing!

Your article was successfully shared with the contacts you provided.
A June 27 decision by a divided Texas Supreme Court limits the exposure that some health care providers will face when sued under the state’s Medical Liability and Insurance Act. Amid a hue and cry that Texas is in a medical malpractice crisis, the high court ruled 6-3 in Columbia Hospital Corp. v. Moore, et al. that prejudgment interest in health care liability claims stemming from patients’ deaths is subject to the 1977 law’s cap on damages. In 2000, the court held in Horizon/CMS Healthcare Corp. v. Auld that prejudgment interest is a form of damages that the Legislature intended to be capped under the law, Texas Revised Civil Statutes, Article 4590i, � 11.02(a) (subchapter K). But the court didn’t address whether the Legislature’s 1995 enactment of subchapter P of the law — mandating prejudgment interest on past damages but foreclosing the application on future damages in health care liability claims — negated the capping requirement because the claim in Auld predated that provision. The court held in Moore that the addition of subchapter P didn’t change the nature of prejudgment interest awarded, which, according to the Auld majority, is compensation allowed by law as additional damages. In its majority opinion, the court also said a 1995 House Civil Practices Committee report on the bill that contained the subchapter P provision described prejudgment interest as a background problem that justifies the bill, which “reforms limits on health care liability claims.” “Thus subchapter P was enacted for the same purpose as subchapter K and the act itself — to limit, not expand, a health-care provider’s liability — and both provisions should be read in a manner that will advance this overarching goal,” Texas Justice Craig Enoch wrote for the majority. “This obviously will not be a panacea to the medical malpractice crisis; it will help with some of the exposure for medical defendants, particularly in wrongful-death and survival cases,” says R. Brent Cooper, an attorney for Columbia Hospital Corp. of Houston. Cooper, a shareholder in Dallas’ Cooper & Scully, says prejudgment interest can be “huge” — substantially higher than the actual damages awarded. Plaintiffs who are awarded damages less than the cap still can receive prejudgment interest under the Moore decision, he says. But Richard Frankel, attorney for the family of Katherine Moore, says the ruling will mean that, in some cases, “if someone dies and suffers horribly before death, you cannot receive prejudgment interest, according to the [Texas Supreme Court] majority, all in the name of limiting liability for health-care providers.” Frankel, a shareholder in Houston’s Hackerman, Frankel & Manela, says the situation in Texas is “remarkable and very sad.” A brief filed in the trial court on behalf of Moore’s family said the 77-year-old Moore underwent surgery at Columbia to repair an umbilical hernia in August 1996 and was sent home a few hours after the operation. Moore was severely sick to her stomach and had to be hospitalized five days later, after it was discovered that her bowel had been injured during the surgery, the family alleged in the brief. The family further alleged that failure by Columbia’s intensive care unit staff to monitor Moore properly after she underwent surgery to repair a hole in her small intestine caused her to dehydrate. The dehydration progressed to the point that blood clots formed in both of Moore’s legs, the brief alleged. Moore’s physician ordered emergency tests to be performed to verify that clots had formed, but the testing was delayed for several hours because the hospital did not have a technician on staff and relied on a mobile technician, the family alleged in the brief. Both legs were amputated after Moore was transferred to another hospital, but she subsequently died of multi-organ failure syndrome caused by the blood clots and gangrene, the family alleged. Moore’s family sued the hospital and her two treating physicians under the wrongful-death and survival statutes, and a Houston jury awarded $3 million in actual damages, the majority opinion said. According to the opinion, the two physicians settled with the family after judgment, and Harris County Probate Court No. 3 applied the subchapter K cap to reduce Columbia’s actual damages liability to $1.3 million but excluded prejudgment interest from the damages cap. The probate court added another $300,487 in prejudgment interest to the hospital’s liability. The jury assessed the hospital’s negligence at 60 percent, Houston’s 1st Court of Appeals said in its opinion in Moore. ADJUSTED ANNUALLY Tied to the consumer price index, the cap is adjusted annually for inflation, says Mike Penick, principal shareholder in Dallas’ Penick & Greening and an adjunct professor who teaches medical malpractice law at Southern Methodist University Dedman School of Law. The cap, which started at $500,000, is between $1.4 million and $1.5 million, Penick says. In February 2001, the 1st Court of Appeals affirmed the trial court’s finding that the prejudgment interest was excluded from the damages cap. In a 2-1 decision, the appeals court held that the 1995 enactment of subchapter P that mandates prejudgment interest on past damages shows a legislative intent to exclude the interest from the cap. Justice Murry B. Cohen wrote the opinion in which he was joined by former Justice Frank C. Price. Justice Tim Taft dissented with the majority’s holding on prejudgment interest. Texas Supreme Court Chief Justice Tom Phillips concluded in a dissenting opinion in Moore that the Legislature didn’t have prejudgment interest in mind when it created the cap in 1977 because prejudgment interest wasn’t available at that time. The court overruled 85 years of precedent in 1985′s Cavnar v. Quality Control Parking Inc., holding that prejudgment interest should be paid in personal injury, wrongful-death and survival actions, he said in the opinion. “Had the Legislature intended to limit the award of prejudgment interest under subchapter K’s cap, it would have referred to that subchapter when it added subchapter P in 1995. Furthermore, had the Legislature intended for prejudgment interest to be awarded in some health-care liability cases but not others, it would not have chosen the mandatory language it did for subchapter P,” Phillips said in the opinion. Justices James Baker and Deborah Hankinson joined Phillips in the dissent. Justice Harriet O’Neill, who had been among the dissenters in the Auld decision, joined the majority in Moore. However, O’Neill joined only in the part of the opinion that says that Auld set precedent and should control. Frankel disputes the statement in the majority opinion that the overall purpose of the Medical Liability and Insurance Improvement Act is to reduce the liability of health care providers. He says the intent of the 1977 law was to assure that medical providers could get liability coverage. “I don’t think we have legislation in any field that says we’re going to limit liability,” Frankel says. P. Michael Jung, another attorney who represents Columbia, says the Legislature’s intent when it enacted subchapter P in 1995 was to eliminate prejudgment interest on future damages. Jung, a partner in Strasburger & Price in Dallas, says the Texas Medical Association sponsored and pushed H.B. 971, which contained that provision. “It would have been a great surprise to find out that the purpose of the bill was to uncap prejudgment interest,” he says. The ruling in Moore is likely to prompt plaintiffs’ lawyers to look for more defendants that can be held liable when a patient dies, says Penick, who specializes in medical malpractice. “That is what lawyers are going to do to get around these decisions — they’re going to sue more people and add more defendants,” he says. Frankel says suing more people could backfire because the more defendants, the less likely that any one of them would be held more than 50 percent negligent for the harm done to a patient. Under another provision in the 1995 law, only a defendant found to be more than 50 percent negligent can be held liable for the total damages awarded. Jung says the 1st Court of Appeals’ decision in Moore also limits the damages applicable to a single defendant. Plaintiffs’ lawyers previously multiplied the damages cap by the number of culpable defendants to calculate the total damages owed, Frankel says. The Texas Supreme Court left intact the 1st Court of Appeals’ holding that disallows that practice.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.