Corpus Christi Day Cruise, LLC v. Christus Spohn Health Sys. Corp.

• Decision Date: 05 July 2012
• Docket Number: No. 13–11–00117–CV.,13–11–00117–CV.
• Citation: 398 S.W.3d 303
• Parties: CORPUS CHRISTI DAY CRUISE, LLC and Day Cruises Maritime, LLC, Appellants, v. CHRISTUS SPOHN HEALTH SYSTEM CORPORATION d/b/a Christus Spohn Hospital Corpus Christi–Memorial, Appellee.
• Court: Texas Court of Appeals

398 S.W.3d 303

CORPUS CHRISTI DAY CRUISE, LLC and Day Cruises Maritime, LLC, Appellants,

v.CHRISTUS SPOHN HEALTH SYSTEM CORPORATION d/b/a Christus Spohn Hospital Corpus Christi–Memorial, Appellee.

No. 13–11–00117–CV.

Court of Appeals of Texas,

Corpus Christi–Edinburg.

July 5, 2012.

Frank E. Weathered, Dunn, Weathered, Coffey, Rivera & Kasperitis, P.C., Corpus Christi, for Appellants.

Robert J. Swift, John F. Kapacinskas, Jessica P. Sykora, Warren Szutse Huang, Fulbright & Jaworski, Houston, for Appellee.

Before Chief Justice VALDEZ and Justices GARZA and VELA.

OPINION

Opinion by Justice GARZA.

This case involves the medical treatment of an employee working on the M/V Texas Treasure, a gaming vessel. The owners and operators of the vessel, appellants Corpus Christi Day Cruise, LLC and Day Cruises Maritime, LLC (collectively referred to as “Texas Treasure”), were found liable for the employee's hospital expenses at trial. Texas Treasure now appeals the judgment, contending that: (1) appellee Christus Spohn Health System Corp. d/b/a Christus Spohn Hospital Corpus Christi–Memorial (“Christus”) could not recover maintenance and cure benefits as the employee's assignee under maritime law; (2) Christus should not have been permitted to amend its pleadings because this Court, in remanding the case after a previous appeal, limited the scope of remand; (3) the evidence was legally and factually insufficient to support Christus's promissory estoppel, breach of oral contract, and fraud claims; (4) the trial court erred in rendering judgment on the jury's breach of written contract verdict and abused its discretion in sanctioning Texas Treasure's trial counsel; and (5) attorney's fees are not recoverable under a promissory estoppel theory. We affirm.

I. Background

Judy Ann Lanado, a Filipino national, became ill in August 2002 while working on board the Texas Treasure as a card dealer. Lanado, who was pregnant at the time she fell ill, was first taken to a hospital in Aransas Pass, Texas, and was later transferred to Christus on August 21, 2002. She was diagnosed with cholelithiasis, or gallstones, and underwent surgery for that condition on August 22, 2002. Unfortunately, Lanado developed internal bleeding after the surgery, causing her to suffer severe brain damage and leading to the death of the fetus. On or about September 27, 2002, Lanado lapsed into a cerebral coma, leaving her in a permanent vegetative state. From the time she was admitted to Christus to the time she was transferred to a nursing home on October 1, 2003—a period of over thirteen months—Lanado incurred hospital expenses of $1,089,959.82.

Lanado's brother sued Christus on behalf of Lanado and her minor daughters, claiming that Lanado “was ignored by physicians and staff to a degree falling below the standard of care necessary as required by Texas law.” Christus denied the allegations. Subsequently, Texas Treasure intervened in the suit, claiming that it is potentially responsible as Lanado's employer for paying her medical expenses under the admiralty doctrine of maintenance and cure, but that it was entitled to damages on the theory that it was equitably subrogated to Lanado for those expenses. Texas Treasure also sought a declaratory judgment that it is not obligated to pay Christus for Lanado's medical care. Christus filed a counterclaim against Texas Treasure, arguing that Texas Treasure was responsible for the entirety of Lanado's hospital bill as a matter of law.

In the meantime, the Lanados settled their medical malpractice suit against Christus for an undisclosed amount. The settlement agreement provided for Christus to make a lump sum payment to the Lanados and fund an annuity for their benefit. In exchange, the Lanados released their pending claims against Christus and assigned to Christus the right to seek recovery of medical benefits from Texas Treasure. The settlement agreement further stated:

The parties agree that this acknowledgment, satisfaction and assignment as full satisfaction of the outstanding medical and hospital expenses Judy Ann Lanado incurred while a patient at [Christus] is not [to] be construed as forgiveness of the said hospital bill or that any amount paid to Judy Ann Lanado includes the payment of the said hospital bill. [Christus] is agreeing to stand in the place of Judy Ann Lanado by way of assignment and look to her Employer(s) for satisfaction of the hospital bill.

The trial court approved the settlement agreement and rendered an agreed judgment dismissing the Lanados' claims. Christus and Texas Treasure remained as parties to the underlying suit. Texas Treasure then amended its plea in intervention to seek a declaratory judgment that it was not responsible for the hospital bill because Lanado was no longer indebted to the hospital.

Both parties subsequently then moved for summary judgment on Texas Treasure's amended plea in intervention, and Christus moved for summary judgment on its counterclaim. After a hearing, the trial court denied Texas Treasure's summary judgment motion and granted Christus's motions. On appeal, we affirmed the trial court's denial of Texas Treasure's motion, but reversed the summary judgment granted in favor of Christus. Day Cruises Mar., L.L.C. v. Christus Spohn Health Sys., 267 S.W.3d 42, 63 (Tex.App.-Corpus Christi 2008, pet. denied) (“Day Cruises I ”). With respect to the issues raised in Christus's counterclaim, we found that the trial court erred by: (1) denying Texas Treasure's motion for leave to amend its pleadings to include a properly verified denial of Christus's sworn account claim; (2) granting summary judgment for Christus on its contractual claim based on a “Guarantee of Payment” form executed by a Texas Treasure representative, because Christus did not have standing as a third-party beneficiary; and (3) granting Christus summary judgment based on the admiralty doctrine of maintenance and cure, in conjunction with an “Assignment of Benefits” form executed by Lanado upon her admission to Christus, because disputed issues of material fact remained as to that claim. Id. at 53–60;seeTex.R. Civ. P. 166a(c). We stated specifically that the unresolved issues included whether Christus was negligent in its care of Lanado, and how much, if any, of the hospital charges were attributable to such negligence. Day Cruises I, 267 S.W.3d at 63. With respect to the claims made in Texas Treasure's plea in intervention, we concluded that: (1) Texas Treasure was not equitably subrogated to the Lanados' rights because there was no risk that, absent action by the trial court, the Lanados would recover twice; and (2) summary judgment was improper as to Texas Treasure's request for declaratory relief, because “a shipowner required to pay maintenance and cure may recover those payments from a third party who caused the injury, even when the employee has already settled with that third party,” and because disputed material fact issues remained regarding Texas Treasure's liability. Id. at 61–63.

After remand, Christus amended its counterclaim to include claims that Texas Treasure was liable under theories other than maintenance and cure. Specifically, Christus added allegations that Texas Treasure breached Lanado's written employment agreement with the Philippines Overseas Employment Administration (“POEA”) and that Texas Treasure breached an oral agreement arising out a telephone call made by its representative to Christus's business office. Christus also added claims of promissory estoppel and fraud.

After the trial court denied a motion for directed verdict filed by Texas Treasure, the case proceeded to trial. The jury found that: (1) Texas Treasure breached the POEA agreement; (2) Texas Treasure orally promised to pay Christus for Lanado's treatment but failed to do so, and Christus substantially relied to its detriment on Texas Treasure's promise; (3) Texas Treasure committed fraud against Christus; (4) Christus's negligence, if any, did not proximately cause any of Lanado's injuries; (5) Lanado's reasonable and necessary hospital expenses were $762,948.63 ¹; and (6) Christus was entitled to trial attorney's fees of $557,384.63 as well as conditional appellate fees.

The trial court rendered judgment on the verdict and denied motions filed by Texas Treasure to disregard the verdict, for judgment notwithstanding the verdict, and for a new trial. This appeal followed.

II. Discussion

A. Assignment of Maintenance and Cure Benefits

By its first issue, Texas Treasure contends that Lanado's assignment of maintenance and cure benefits to Christus was invalid as a matter of law. The doctrine of maintenance and cure, applicable in admiralty cases, provides that a seaman who is injured or becomes ill while in the service of a ship is entitled to food and lodging (“maintenance”) and medical services (“cure”) from the shipowner. Vaughan v. Atkinson, 369 U.S. 527, 531, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962); Mar. Overseas Corp. v. Waiters, 923 S.W.2d 36, 40 (Tex.App.-Houston [1st Dist.] 1995), modified on other grounds and aff'd,917 S.W.2d 17 (Tex.1996). A shipowner must pay an injured or ill seaman maintenance and cure regardless of whether the shipowner was at fault or whether the ship was unseaworthy. Guevara v. Mar. Overseas Corp., 59 F.3d 1496, 1499 (5th Cir.1995).

Texas Treasure argues specifically that: (1) “[a] person who furnishes maintenance and cure to a seaman may not proceed directly against the seaman's employer for seaman's benefits, regardless of the creditor's theory of recovery”; (2) “an injured seaman who has not paid his own expenses cannot recover for maintenance and cure”; (3) the failure to pay maintenance and cure is a tort under general maritime law, and the assignment of tort claims is forbidden under that body of law; and (4) the assignment is invalid under Texas law because “[a] settling defendant who is jointly responsible for personal injuries to a common plaintiff may...