American Transitional Care Ctr v. Palacios

• Decision Date: 28 June 2001
• Docket Number: No. 99-1311,99-1311
• Citation: 44 Tex. Sup.Ct. J. 720,46 S.W.3d 873
• Parties: (Tex. 2001) American Transitional Care Centers of Texas, Inc. d/b/a American Transitional Hospital, Petitioner v. Teofilo Palacios and Maria Palacios, individually and a/n/f of Gloria Janeth Palacios and Rocio Daniela Palacios, minors, Maria Angelica Palacios, and Sentry Insurance, a mutual company, Respondents
• Court: Texas Supreme Court

Page 873

46 S.W.3d 873 (Tex. 2001)

American Transitional Care Centers of Texas, Inc. d/b/a American Transitional Hospital, Petitioner v. Teofilo Palacios and Maria Palacios, individually and a/n/f of Gloria Janeth Palacios and Rocio Daniela Palacios, minors, Maria Angelica Palacios, and Sentry Insurance, a mutual company, Respondents

No. 99-1311

Supreme Court of Texas

Argued December 6, 2001

Decided May 10, 2001

Rehearing Overruled June 28, 2001.

On Petition for Review from the Court of Appeals for the First District of Texas

[Copyrighted Material Omitted] Justice Hankinson delivered the opinion of the Court.

In this medical-malpractice case we determine the standards for reviewing an expert report under section 13.01 of the Medical Liability and Insurance Improvement Act. Tex. Rev. Civ. Stat. Ann. art. 4590i, § 13.01. The trial court dismissed the Palacioses' medical-malpractice claims against American Transitional Care Centers, Inc., d/b/a American Transitional Hospital, because it determined that the Palacioses' expert report did not show a good-faith effort to provide a fair summary of the expert's opinions about the standard of care, breach, and causation, as required by section 13.01. See id. § 13.01(d), (e), (l), (r)(6). The court of appeals, after evaluating the trial court's decision as it would a summary-judgment decision, reversed, holding that the report did meet the statutory requirements. 4 S.W.3d 857, 860.

We hold that a trial court's decision to dismiss a case under section 13.01(e) is reviewed for abuse of discretion. We further hold that to constitute a good-faith effort to provide a fair summary of an expert's opinions under section 13.01(l), an expert report must discuss the standard of care, breach, and causation with sufficient specificity to inform the defendant of the conduct the plaintiff has called into question and to provide a basis for the trial court to conclude that the claims have merit. In this case, the trial court did not abuse its discretion in concluding that the challenged report does not meet the statutory requirements and in dismissing with prejudice the claims against American Transitional. Accordingly, we reverse the court of appeals' judgment and dismiss with prejudice the Palacioses' claims.

Teofilo Palacios suffered brain damage and other severe injuries following a two-story fall at work. After almost a year in an intensive rehabilitation program, he was transferred to American Transitional Hospital for further rehabilitation. Although Palacios at that time was able to communicate with others and respond to simple commands, he required assistance with most daily tasks. In addition, due to the severity of his brain damage, Palacios' physicians prescribed bed restraints for him. Nevertheless, while a patient at American Transitional, Palacios fell from his bed and required additional medical care for his injuries. His family claims that this fall caused him to sustain further brain injury, which impaired his ability to communicate with others and to assist them in his care.

Palacios and his family sued American Transitional and the treating doctors, respectively, for negligently failing to prevent the fall and negligently treating him after the fall. After ninety days passed from the date the Palacioses filed suit, American Transitional, along with the other defendants, moved to require the Palacioses to file a $7,500 cost bond, as required by section 13.01(b) of the Medical Liability and Insurance Improvement Act. See Tex. Rev. Civ. Stat. Ann. art. 4590i, § 13.01(b) (authorizing a trial court to order a plaintiff to file a $7,500 cost bond for each defendant physician or health-care provider if the plaintiff has not complied with the expert-report or $5,000 cost-bond requirement in section 13.01(a)); id. § 13.01(a) (requiring the plaintiff to file either an expert report or a $5,000 cost bond for each defendant physician or health-care provider within ninety days of filing suit). The trial court granted the motion, and the Palacioses filed a cost bond for each defendant.

After 180 days passed from the date the Palacioses filed suit, American Transitional moved to dismiss the case against it because the Palacioses did not file an expert report and curriculum vitae, or nonsuit the claims against American Transitional, as section 13.01(d) of the Act requires. Id. § 13.01(d), (e). The Palacioses moved for an extension of time to file the report, which the trial court granted. See id. § 13.01(f), (g). The Palacioses then filed a report prepared by Dr. Catherine F. Brontke, who treated Palacios at the first rehabilitation hospital. American Transitional again moved to dismiss under section 13.01(e), claiming that the report did not satisfy the statutory requirements. See id. § 13.01(l), (r)(6). The trial court granted the motion, dismissed with prejudice the claims against American Transitional, and severed those claims to make the judgment against American Transitional final. See id. § 13.01(e).

The Palacioses appealed, and with one justice dissenting, the court of appeals reversed and remanded after using summary-judgment review standards to evaluate the sufficiency of the expert report. 4 S.W.3d at 860. After indulging every reasonable inference in the Palacioses' favor and eliminating any deference to the trial court's decision, the court of appeals concluded that the trial court erred in dismissing the case because the Palacioses made a good-faith effort to provide a report that met the requirements of section 13.01(r)(6). Id. at 862-63. American Transitional petitioned for review challenging both the standard of review applied by the court of appeals and the sufficiency of the Palacioses' report.

Texas courts have long recognized the necessity of expert testimony in medical-malpractice cases. E.g., Hart v. Van Zandt, 399 S.W.2d 791, 792 (Tex. 1966); Bowles v. Bourdon, 219 S.W.2d 779, 782 (Tex. 1949). "There can be no other guide [than expert testimony], and where want of skill and attention is not thus shown by expert evidence applied to the facts, there is no evidence of it proper to be submitted to the jury." Hart, 399 S.W.2d at 792. Because expert testimony is crucial to a medical-malpractice case knowing what specific conduct the plaintiff's experts have called into question is critical to both the defendant's ability to prepare for trial and the trial court's ability to evaluate the viability of the plaintiff's claims. This makes eliciting an expert's opinions early in the litigation an obvious place to start in attempting to reduce frivolous lawsuits. See House Comm. on Civ. Prac., Bill Analysis, Tex. H.B. 971, 74th Leg., R.S. (1995).

Accordingly, in section 13.01, the Legislature requires medical-malpractice plaintiffs, within 180 days of filing suit, either to provide each defendant physician and health-care provider with an expert report and the expert's curriculum vitae, or to nonsuit the claims. Tex. Rev. Civ. Stat. Ann. art. 4590i, § 13.01(d). If the plaintiff fails within the time allowed either to provide the expert reports and curriculum vitae, or to nonsuit the case, the trial court must sanction the plaintiff by dismissing the case with prejudice, awarding costs and attorney's fees to the defendant, and ordering the forfeiture of any applicable cost bond necessary to pay that award. Id. § 13.01(e). If the plaintiff does timely file a report, the defendant may move to challenge the adequacy of the report, and the trial court must grant the motion if "it appears to the court . . . that the report does not represent a good faith effort to comply with the definition of an expert report." Id. § 13.01(l). The statute defines an expert report as "a written report by an expert that provides a fair summary of the expert's opinions . . . regarding applicable standards of care, the manner in which the care rendered . . . failed to meet the standards, and the causal relationship between that failure and the injury, harm, or damages claimed." Id. § 13.01(r)(6). If a trial court determines that an expert report does not meet these statutory requirements and the time for filing a report has passed, it must then dismiss with prejudice the claims against the defendant who has challenged the report. Id. § 13.01(e).

American Transitional contends that a trial court's determination about the adequacy of an expert report should be reviewed under an abuse-of-discretion standard. The Palacioses respond that whether a report meets the requirements of subsections 13.01(l) and (r)(6) is a question of law. They suggest that a trial court's decision on the adequacy of a report should be reviewed as a court would review a summary-judgment decision: that is, by indulging every reasonable inference and resolving any doubts in the nonmovant's favor, and eliminating any deference to the trial court's decision. We agree with American Transitional.

The plain language of section 13.01 leads to the conclusion that abuse of discretion is the proper standard. First, the statute directs the trial court to grant a motion challenging the adequacy of an expert report if it "appears to the court" that the plaintiffs did not make a good-faith effort to meet the statutory requirements. Id. § 13.01(l). This language plainly vests the trial court with discretion. See Tex. Gov't Code § 312.002. ("[W]ords shall be given their ordinary meaning."). Second, the statute states that dismissal under section 13.01(e) is a sanction: If the requirements of section 13.01(d) are not met, the court must "enter an order as sanctions" dismissing the case and granting the defendant its costs and attorneys' fees. Tex. Rev. Civ. Stat. Ann. art. 4590i, § 13.01(e). Sanctions are generally reviewed under an abuse-of-discretion standard. Koslow's v. Mackie, 796 S.W.2d 700, 704 (Tex. 1990). And we presume the Legislature was aware of the standard of review ordinarily applied in sanctions cases...