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Think Twice About Filing A Borderline Frivolous Lawsuit

Money Worried.JPGThe Case:

Raul K. Nath, M.D. v. Texas Children's Hospital and Baylor College of Medicine, 375 S.W.3d 403 (Tex.App.-Houston [14th Dist.] 2012, pet. filed).

The Facts:

Nath is a board-certified plastic surgeon who specializes in surgical treatment of injuries to the nerves of children occurring during birth. In February 2006, Nath filed suit against Texas Children's Hospital ("TCH") and Baylor College of Medicine (under various liability theories) and Dr. Saleh Shenaq for tortuous interference with prospective business relations and defamation based on statements allegedly made by Shenaq. By December 2009, Nath had amended his petition five times, adding and removing parties and adding or changing his causes of action. TCH and Baylor then filed summary judgment motions to dispose of Nath's claims. Before the summary judgment motions were argued, Nath filed his sixth amended petition to abandon all of his previous claims and substitute a claim for intentional infliction of emotional distress.

TCH and Baylor supplemented their summary judgment motions to address the new claim, and the court granted both motions. TCH and Baylor then each filed motions to modify the judgment, requesting the court to award attorneys' fees as a sanction to Nath under Chapter 10 of the Texas Civil Practice and Remedies Code and Rule 13 of the Texas Rules Civil of Procedure. These motions were granted, and Nath was individually ordered to pay attorneys' fees as sanctions for his conduct, amounting to $726,000 to TCH and $644,500.16 to Baylor.

The Court's Analysis:

The 14th Court of Appeals determined that the trial court did not abuse its discretion in sanctioning Nath individually for the defendants' attorneys' fees amounting to $1.36 million. The Court determined that the facts supported the trial court's analysis that Nath was actively involved in the litigation, so as to support sanctions against Nath individually rather than against his attorneys who filed and signed the pleadings. The Court also determined that Chapter 41 TCPRC (allowing for punitive damages in certain situations) did not apply because TCH and Baylor were not "claimants...seeking recovery of damages."

Proceedings in the Supreme Court:

The Supreme Court is being asked to decide whether a litigant can be sanctioned for 4 years' worth of conduct when that conduct is not claimed to be frivolous by the court or the opposing parties at any time before a final judgment. If the Court agrees with TCH and Baylor, this case could be used as support by Defendants who win a summary judgment motion to seek a sanctions award of otherwise unrecoverable attorneys' fees.

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