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Texas Supreme Court Weekly Update May 4, 2018

On Behalf of | May 4, 2018 | Texas Supreme Court Weekly Update

Over the last two weeks, the Texas Supreme Court has released 10 opinions and 1 corrected opinions. For the world of personal injury, three of these opinions are of particular interest:

(1) In Fort Worth Transportation Authority, et al. v. Michelle Rodriguez and New Hampshire Insurance Co., the Texas Supreme Court addressed (1) whether the Texas Tort Claims Act’s damages applies individually or cumulatively for government contractors and (2) whether a bus driver employed by an independent contractor is a government employee under the Texas Tort Claims Act (TTCA), subject to the act’s election-of-remedies provision.

In this case, a woman was struck and killed by a public bus while crossing the street in Fort Worth. The bus driver was an employee of McDonald Transit, Inc., an independent contractor that operates Fort Worth’s bus transportation system. The woman’s daughter, Rodriguez, brought a wrongful death suit against the bus driver, Fort Worth Transit Association (FWTA), and other entities. Under the TTCA, “liability of a unit of local government . . . is limited to . . . $100,000 for each person.” Rodriguez claimed that the damages cap does not apply cumulatively but should be assed individually to each defendant in the suit. The Court disagreed and found that under the plain language of the statute the $100,000-dollar damage cap applies cumulatively when an independent contractor performs the essential governmental functions of a transportation authority.

Additionally, the Court concluded that the bus driver was protected by the TTCA’s election-of-remedies provision as an employee of an independent contractor hired to perform essential governmental functions. To hold otherwise would allow claimants to circumvent the damages cap under the TTCA.

(2) In Albert Lujan v. Navistar Inc. et al., the Texas Supreme Court recognized that the sham affidavit rule is “a legitimate component of a trial judge’s authority under Rule 166a to grant summary judgment when no genuine issue as to any material fact exists.”

Under the sham affidavit rule, which has long been applied under Federal Rule 56 and by many Texas trial courts, if a party submits an affidavit that conflicts with the affiant’s prior sworn testimony and does not provide a sufficient explanation for the conflict, a trial court may disregard the affidavit when deciding whether the party has raised a genuine fact issue to avoid summary judgment.

In this case, the trial court struck the Plaintiff’s affidavit as a sham and granted a partial summary judgment. The court of appeals affirmed and adopted the sham affidavit rule. Concluding that “a trial court’s authority to distinguish between genuine and non-genuine fact issues includes the authority to apply the sham affidavit rule when confronted with evidence that appears to be a sham designed to avoid summary judgment,” the Texas Supreme Court affirmed that the trial court did not abuse its discretion in deciding that the Plaintiff’s affidavit did not raise a genuine issue of fact in order to survive the partial summary judgment.

(3) In Re North Cypress Medical Center Operating Co., Ltd., a hospital lien dispute, presented the Texas Supreme Court with the question of whether payment agreements between the hospital and insurers or federal health-care providers are discoverable when a dispute as to the reasonableness of charges to an uninsured patient arises.

In this case, an uninsured patient was charged $11,037.35 by North Cypress Medical Center (NCMC) for medical services arising from a motor vehicle accident. NCMC obtained a hospital lien for the emergency-room treatment under Section 55.002(a) of the Texas Proper Code.

After receiving a settlement offer from the liability insurer of the at-fault driver, the patient sought a reduction of the hospital lien; however, the parties could not come to an agreement. Subsequently, the patient sought a declaratory judgment that the charges were unreasonable and therefore the lien was invalid. During discovery, the patient requested information on (1) all contract regarding negotiated rates or reduced rates for the same types of services, (2) 5 years of annual cost reports required by Medicare, (3) the Medicare and Medicaid reimbursement rates for specific services received by the patient. NCMC objected to these requests and moved for a protective order. However, the trial court ordered NCMC to produce the information for the time period at issue. The court of appeals rejected NCMC’s petition for writ of mandamus, and NCMC appealed to the Texas Supreme Court.

In a 6-3 opinion, the Texas Supreme Court held that, “The reimbursement rates sought, taken together, reflect the amounts the hospital is willing to accept from the vast majority of its patients as payment in full for such services. While not dispositive, such amounts are at least relevant to what constitutes a reasonable charge.” The Court denied NCMC’s petition for writ of mandamus.

Please check back with us on Tuesday, May 8, 2018, for a more in-depth look at the Texas Supreme Court’s opinion on the relevance of negotiated rates and reimbursement rates and the potential impact this opinion may have on the landscape of discovery in personal injury cases.


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