Gardner v. U.S. Imaging, Inc.

• Decision Date: 19 December 2008
• Docket Number: No. 08-0268.,08-0268.
• Parties: Craig GARDNER and Thelma Gardner, Petitioners, v. U.S. IMAGING, INC. d/b/a Sadi Pain Management and Berney Keszler, M.D., Respondents.
• Court: Texas Supreme Court

274 S.W.3d 669

Craig GARDNER and Thelma Gardner, Petitioners, v. U.S. IMAGING, INC. d/b/a Sadi Pain Management and Berney Keszler, M.D., Respondents.

No. 08-0268.

Supreme Court of Texas.

December 19, 2008.

Elizabeth Leslie Higginbotham, Higginbotham & Associates, Austin, and William M. Nichols, William M. Nichols, P.C., San Antonio, TX, for Petitioner.

Lynn Cullen Moore, Debra Ibarra Mayfield, Nathan Montgomery Rymer, Rymer Moore Jackson & Echols, P.c., Houston,

Michael J. Morris, Morris & Allen, and Stephanie S. Bascon, Law Office of Stephanie S. Bascon PLLC, New Braunfels, TX, Respondent.

PER CURIAM.

Craig Gardner and Thelma Gardner brought this health care liability suit against Dr. Berney Keszler, who performed a lumbar epidural procedure on Craig, and U.S. Imaging, Inc. d/b/a SADI Pain Management ("SADI"), the owner and operator of the facility where the procedure was performed. The Gardners served an expert report on Dr. Keszler and SADI, who both contested the report as untimely and deficient. See TEX. CIV. PRAC. & REM.CODE § 74.351(a). The trial court denied the defendants' motion to dismiss the suit, but the court of appeals determined the report was deficient and ordered the case dismissed. 274 S.W.3d 693, 694, 2007 WL 4547506. Although we do not disturb the court of appeals' determination that the report was deficient, in light of our decision in Leland v. Brandal, 257 S.W.3d 204 (Tex.2008), we vacate the court of appeals' judgment and remand the case to the trial court to consider granting the Gardners an extension to cure under section 74.351(c) of the Texas Civil Practice and Remedies Code.

On August 24, 2006, the Gardners filed this suit alleging that Dr. Keszler was negligent in choosing to perform a lumbar epidural procedure, that he did not conform to the standard of care while performing the procedure, and that he failed to obtain Craig Gardner's informed consent. The Gardners contend Dr. Keszler's actions led to Craig's contracting spinal meningitis, which caused his hearing loss. Dr. Keszler timely answered the suit, and pursuant to section 74.351(a), the Gardners served Dr. Keszler with an expert report from Dr. Edson O. Parker (the "Parker report") within 120 days of filing suit. TEX. CIV. PRAC. & REM.CODE § 74.351(a).

Unlike Dr. Keszler, SADI failed to timely answer the suit and, before the 120-day period for filing an expert report expired on December 22, 2006, the Gardners moved for default judgment against SADI. The trial court rendered a default judgment on December 14, 2006, and severed the suit against SADI. Upon learning of the default judgment, SADI filed an answer in the severed suit, along with a motion for new trial and a motion to set aside the default judgment. Pursuant to the parties' agreement, the court, on February 8, 2007, granted a new trial and set aside the default judgment. In accordance with the agreed order, the Gardners nonsuited the severed suit, SADI filed an answer in the original suit on February 12, and the Gardners filed an amended petition in the original suit on February 16. On March 20, the Gardners served SADI with the expert report they had served on Dr. Keszler.

Dr. Keszler and SADI objected to the report and moved for dismissal under section 74.351(b), which provides that a health care liability suit must be dismissed if a non-compliant report is served, subject to the availability of one thirty-day extension to cure under section 74.351(c). TEX. CIV. PRAC. & REM.CODE § 74.351(b), (c); see Lewis v. Funderburk, 253 S.W.3d 204, 207 (Tex.2008). The trial court, presumably finding that the report complied with the statute, denied the defendants' motions to dismiss. The court of appeals reversed, however, reasoning that the report was deficient because the discussion of causation was conclusory. 274 S.W.3d at 693. The court remanded the case to the trial court to award the defendants reasonable attorneys' fees and costs pursuant to section 74.351(b). Id. at 696. In their motion for rehearing before the court of appeals the Gardners argued that, in light of our decision in Leland, 257 S.W.3d 204, the court of appeals should have also remanded the suit to the trial court to consider granting a thirty-day extension to cure.¹ We agree, and reject the defendants' contention that the Parker report is so deficient as to constitute no report at all. See Ogletree v. Matthews, 262 S.W.3d 316, 323 (Tex.2007) (WILLETT, J., concurring); Funderburk, 253 S.W.3d at 211 (WILLETT, J., concurring).²

SADI asserts an additional challenge, contending it was not served with an expert report within the statutory deadline. Section 74.351(a) states that, within 120 days of filing an original petition, a claimant must "serve on each party or the party's attorney one or more expert reports." TEX. CIV. PRAC. & REM.CODE § 74.351(a). Because SADI was named in the original petition as a party to this suit, the Gardners were required to serve it with a report before the statutory period expired on December 22, 2006, and it is undisputed they failed to do so. However, before the 120-day period expired, SADI defaulted and judgment was taken against it. The statute does not specify the effect of a default judgment on the 120-day period. But the effect of default on a plaintiff's claim for unliquidated damages is clear: once a default judgment is taken, all factual allegations contained in the petition, except the amount of damages, are deemed admitted. See Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex.1992). In light of the expert-report requirement's dual...