Opinion
No. 07–11–00133–CV.
2012-03-27
Judith M. HENDERSON, Appellant, v. Timothy Wayne SPANN & Amanda Spann, Appellees.
Christopher B. Slayton, James L. Wharton, Jones Flygare Brown & Wharton, P.C., Lubbock, TX, for appellant. Mike Millsap, Law Offices of Mike Millsap, Travis S. Ware, Suzie D. Shay, Law offices of Travis S. Ware, Lubbock, TX, for appellees.
Christopher B. Slayton, James L. Wharton, Jones Flygare Brown & Wharton, P.C., Lubbock, TX, for appellant. Mike Millsap, Law Offices of Mike Millsap, Travis S. Ware, Suzie D. Shay, Law offices of Travis S. Ware, Lubbock, TX, for appellees.
Before QUINN, C.J., and HANCOCK and PIRTLE, JJ.
OPINION
MACKEY K. HANCOCK, Justice.
Judith M. Henderson appeals the trial court's judgment awarding Timothy Wayne Spann and Amanda Spann damages in connection with a motor vehicle accident. Among her other contentions, Henderson argues that the trial court erroneously admitted evidence of unadjusted medical bills. In light of recent controlling authority, we reverse and remand for a new trial.
Factual and Procedural History
In September 2009, the vehicle Henderson was driving collided with a motorcycle driven by Mr. Spann, an off-duty police officer. Mr. Spann suffered significant injuries to his groin and lower back. The Spanns brought suit, and a Lubbock County jury found that Henderson's negligence was the proximate cause of Mr. Spann's injuries.
The jury awarded $267,542.42 to Mr. Spann to compensate him for past and future physical pain and mental anguish, lost wages, past and future physical impairment, and past and future medical expenses. The jury also awarded $60,000 to Mrs. Spann to compensate her for loss of consortium and loss of household services of Mr. Spann. Included in the jury's verdict were damages in the amount of $69,583.20 to compensate Mr. Spann for past medical expenses. This figure represents the amount reflected by unadjusted medical bills introduced into evidence over Henderson's objection.
The propriety of the admission of evidence of these unadjusted medical bills remains an issue on appeal. The admitted medical bills did not reflect $54,379.56 in adjustments and write-offs associated with worker's compensation, evidence of which Henderson unsuccessfully offered. Acknowledging, post-verdict, that the law only allowed the Spanns to recover the amount of past medical expenses that were “actually paid or incurred,” the trial court adjusted the award of past medical expenses to reflect only the portion of the medical bills that were recoverable: $15,203.64. SeeTex. Civ. Prac. & Rem.Code Ann. § 41.0105 (West 2008).
.Section 41.0105, in its entirety, provides as follows:
In addition to any other limitation under law, recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.
Id. Hereinafter, we will refer to this provision simply as section 41.0105.
Despite the trial court's post-verdict reduction of damages for past medical expenses, on appeal, Henderson challenges the trial court's instructions to the jury regarding the proper measure of damages. She also challenges the trial court's admission of unadjusted medical bills, its exclusion of adjusted medical expenses, and the sufficiency of the evidence to support the jury's awards of future medical expenses and of losses of services and consortium. Because we will sustain Henderson's second and third issues, we will reverse and remand the matter to the trial court for new trial.
Admission of Unadjusted Medical Bills
We first address Henderson's second and third issues, both of which relate to the trial court's evidentiary rulings. Henderson argues the trial court abused its discretion by admitting evidence of the unadjusted medical bills and, likewise, abused its discretion by excluding evidence of the adjusted medical expenses. Resolution of this evidentiary issue turns on the interpretation and application of section 41.0105 and the Texas Supreme Court's opinion in Haygood, issued after Henderson and Spann filed their initial briefs. See Haygood v. De Escabedo, 356 S.W.3d 390 (2011).
To most accurately apply Haygood, we must first visit the Tyler Court's opinion in De Escabedo v. Haygood, 283 S.W.3d 3 (Tex.App.-Tyler 2009), aff'd, 356 S.W.3d 390. In de Escabedo, the Tyler Court was asked to review a similar evidentiary dispute relating to evidence of unadjusted medical bills. See id. at 5–6. De Escabedo argued that the unadjusted medical bills were irrelevant to and, therefore, no evidence of damages. Id. Ultimately, the Tyler Court agreed, concluding that, per section 41.0105, evidence of unadjusted medical bills was inadmissible evidence and, therefore, there was no evidence to support the jury's award of past medical expenses. See id. at 7. The Tyler Court sustained De Escabedo's legal sufficiency challenge, and Haygood sought review from the Texas Supreme Court.
The Texas Supreme Court pointed out that intermediate appellate courts had agreed that section 41.0105 limits recovery of past medical expenses to those expenses actually paid or incurred.
See Haygood, 356 S.W.3d at 397–98. What had remained unclear, until Haygood, was the effect of section 41.0105 on the admissibility of evidence at trial. The Haygood court held that section 41.0105 “limits recovery, and consequently the evidence at trial, to expenses that the provider has a legal right to be paid.”
The Texas Supreme Court explains that it, too, had previously held as such in Daughters of Charity Health Servs. of Waco v. Linnstaedter, 226 S.W.3d 409, 412 (Tex.2007). See Haygood, 356 S.W.3d at 397. The Haygood court defined “actually paid or incurred” as “expenses that have been or will be paid, and excludes the difference between such amount and charges the service provider bills but has no right to be paid.” See id. at 397.
Id. at 391. So, contrary to the Spanns' position, section 41.0105 does have evidentiary impact: “Since a claimant is not entitled to recover medical charges that a provider is not entitled to be paid, evidence of such charges is irrelevant to the issue of damages.” Id. at 398 (citing Tex.R. Evid. 402). Further, “any relevance of such evidence is substantially outweighed by the confusion it is likely to generate, and therefore the evidence [of unadjusted medical bills] must be excluded.” Id. at 398 (citing Tex.R. Evid. 403).
The jury is still precluded from hearing evidence regarding who ultimately pays to the provider these recoverable expenses. Traditionally, the common law collateral source rule “precludes any reduction in a tortfeasor's liability because of benefits received by the plaintiff from someone else.” Id. at 394.Haygood's holding that only the adjusted medical expenses are admissible on the issue of damages does not run afoul of the collateral source rule: “Consistent with our views in Daughters of Charity, we hold that the common-law collateral source rule does not allow recovery as damages of medical expenses a health care provider is not entitled to charge.” Id. at 396. Instead, the collateral source rule still applies to the adjusted medical expenses; the jury cannot know if plaintiff or another entity paid the adjusted, recoverable amounts. See id. at 399–400 (concluding that the jury should not be told that the adjusted recoverable amounts will be covered in whole or in part by insurance).
Based on Haygood's holdings, we conclude that the evidence at issue here—Mr. Spann's unadjusted medical bills—was irrelevant and inadmissible. See id. at 398. Admitting such evidence and excluding evidence of the adjusted medical expenses was an abuse of discretion. See id. We must now determine whether the error associated with the trial court's evidentiary rulings is reversible error.
See Interstate Northborough P'ship v. State, 66 S.W.3d 213, 220 (Tex.2001); Good v. Baker, 339 S.W.3d 260, 273 (Tex.App.-Texarkana 2011, pet. denied).
We pause to note the distinction between the issue presented to the Tyler Court in De Escabedo and the issue presented in the case to this Court. In De Escabedo and, subsequently, in Haygood, the ultimate issue was legal sufficiency of the evidence whereas, in the instant case, the issue is presented to us as an evidentiary issue. Prior to affirming the Tyler Court's determination of legal sufficiency, however, Haygood does directly address the same evidentiary issue as is before us. That said, we follow Haygood's guidance in determining the propriety of the trial court's evidentiary rulings, but we must go on to examine any error in those rulings for harm. Because the issues presented to the Tyler Court and this Court are slightly different, we note this distinction only to illuminate the reason we, unlike the De Escabedo and the Haygood courts, must analyze the particular error raised here for harm.
Harm Analysis and Post–Verdict Adjustment
A successful challenge to a trial court's evidentiary rulings generally requires the complaining party to demonstrate that the judgment turns on the particular evidence excluded or admitted. Tex. Dep't of Transp. v. Able, 35 S.W.3d 608, 617 (Tex.2000). From Haygood, we learn that only evidence of “recoverable” medical expenses—those “actually paid or incurred”—was relevant to damages. See Haygood, 356 S.W.3d at 399. Here, such evidence would have been the adjusted medical expenses that were ultimately excluded from evidence in favor of the admitted unadjusted medical bills, evidence of which should have been excluded as irrelevant to damages for past medical expenses. See id. at 398. The admission of irrelevant evidence and exclusion of relevant evidence, then, meant that the jury's verdict was based on insufficient evidence of damages for past medical expenses. See id. at 398.
Moreover, without evidentiary support in the record, the trial court's judgment based on that verdict, even though modified post-verdict, remains erroneous. “Irrelevant evidence, even when admitted without objection, will not support a judgment.” Porras v. Craig, 675 S.W.2d 503, 505 (Tex.1984). It follows, then, that when, as a consequence of the trial court's evidentiary rulings, there is no evidence of past medical expenses, a judgment awarding past medical damages is improper. SeeTex.R.App. P. 44.1(a).
The Spanns contend that, even if section 41.0105 does have any evidentiary impact and even if admission of the unadjusted medical bills was error, Henderson cannot show harm because the trial court ultimately reduced the jury's award of past medical expenses to reflect the adjustments and write-offs. Based on principles in Haygood, we disagree with their position that post-verdict adjustment can cure the harm in admitting irrelevant evidence, excluding relevant evidence, and, ultimately, permitting the jury's verdict to be based on insufficient evidence of medical expenses “actually paid or incurred.” We understand the Haygood court to reject the post-verdict adjustment procedure used in the instant case.
See Haygood, 356 S.W.3d at 399 (citing Texarkana Mem. Hosp. v. Murdock, 946 S.W.2d 836, 838 (Tex.1997), for proposition that issues of medical expenses as related to plaintiff's injuries must be determined by jury). The Haygood court added that permitting the trial court to resolve disputed fact issues relating to damages violates the constitutional right to trial by jury. Id. at 399. Further, we note that the post-verdict adjustment method is inadequate to account for or remedy any effect the inadmissible evidence of unadjusted past medical expenses may have had on the jury's assessment of non-economic damages. See id. at 398.
Justice Lehrmann's dissenting opinion, joined by Justice Medina, proposed that the post-verdict adjustment procedure is an adequate mechanism to implement section 41.0105's limitation. See Haygood, 356 S.W.3d at 405–406 (Lehrmann, J., dissenting).
With that, the trial court's erroneous evidentiary rulings in conjunction with its post-verdict adjustment of the amount of past medical expenses probably caused the rendition of an improper judgment. SeeTex.R.App. P. 44.1(a). As a result of the trial court's evidentiary rulings, the judgment, even as adjusted, is based on what amounts to no evidence, and the post-verdict adjustment itself serves as a deprivation of the constitutional right to trial by jury. We conclude that the error in the trial court's evidentiary rulings was reversible error.
Based on Haygood's principles, we conclude that the trial court abused its discretion by admitting irrelevant evidence in the form of unadjusted medical expenses and excluding relevant evidence in the form of adjusted medical bills demonstrating the amounts “actually paid or incurred” by or on behalf of the Spanns. We conclude that the erroneous admission of irrelevant evidence and the concurrent exclusion of relevant evidence probably caused the rendition of an improper judgment. The effect of the trial court's evidentiary rulings was to leave before it only legally insufficient evidence to support its judgment, and Haygood reaffirms the principle that it is the jury, not the trial court, who should make the factual determinations relating to damages, a conclusion which represents the Texas Supreme Court's rejection of the post-verdict adjustment method of implementing section 41.0105. Based on these conclusions, we sustain Henderson's second and third issues relating to the trial court's evidentiary rulings. See Haygood, 356 S.W.3d at 399–400.
Conclusion
Having sustained Henderson's second and third issues, we reverse the trial court's judgment and remand the cause to the trial court for new trial. SeeTex.R.App. P. 43.2(d); 43.3. QUINN, C.J., concurring in part and dissenting in part.
PIRTLE, J., concurring.
PATRICK A. PIRTLE, Justice, concurring.
Based upon the Texas Supreme Court's interpretation of section 41.0105 of the Texas Civil Practices and Remedies Code, as found in Haygood v. DeEscabedo,
I agree with Justice Hancock's conclusion that this case should be reversed and remanded for a new trial due to the trial court's erroneous exclusion of relevant evidence. I write separately, however, to encourage the Texas Supreme Court to re-examine this issue, and to opine that, but for the application of this binding precedent,
Haygood v. DeEscabedo, 356 S.W.3d 390 (2011).
the trial court did not err in admittingevidence of unadjusted medical bills, nor did it err in applying the statutory caps imposed by section 41.0105 of the Texas Civil Practices and Remedies Code in a post-verdict proceeding.
Although not an absolute rule of law, the doctrine of stare decisis generally dictates that once the Supreme Court announces a proposition of law, that decision is considered binding precedent on all lower courts. See Southwestern Bell Telephone Co. v. Mitchell, 276 S.W.3d 443, 447 (Tex.2008). While I recognize my duty to follow this precedent and my oath to uphold the Constitution and laws of this State, I respectfully believe further examination of this issue will advance our jurisprudence and prove beneficial to the legal practitioners of this State.
Admission of Evidence of Unadjusted Medical Bills
Section 41.0105 of the Texas Civil Practices and Remedies Code, enacted as part of the tort-reform measures passed by the 78th Legislature, provides that “[i]n addition to any other limitation under law, recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.” In Haygood, the Supreme Court proceeds from the conclusion that because this statute excludes recovery of certain medical or health care expenses, it must, ipse dixit, exclude evidence of those expenses. The Court concludes that because a claimant is entitled to recover only medical expenses that have either been paid or for which a medical provider is entitled to be paid, only evidence of adjusted or discounted charges is relevant to the issue of economic damages.
However, as to economic damages, the question still remains as to whether there is an absolute correlation between the monetary amount of adjusted medical bills and “reasonable and necessary” expenses. Because medical bills can be adjusted, discounted, written-off, reduced, or gratuitously forgiven for any reason, it would be impossible to say that evidence of reasonable and necessary medical bills, albeit discounted or written-off, is always going to be irrelevant to the question of a given claimant's economic damages. For instance, evidence of unadjusted past medical expenses may have probative value as to the extent of reasonable and necessary future medical expenses, unless there is evidence that the future medical expenses will be adjusted, discounted or written-off on the same basis as current medical expenses.
See Haygood, 356 S.W.3d at 399. A rule of law dictating that “only evidence of recoverable medical expenses is admissible at trial” is an illogical construct because the very purpose of the admission of evidence during trial is to determine what damages, if any, are in fact recoverable. Id. (emphasis added).
Without applying any balancing analysis, the Supreme Court concludes that “any relevance of [non-recoverable economic damages] is substantially outweighed by the confusion it is likely to generate, and therefore the evidence must be excluded.” I respectfully disagree. In my opinion, unadjusted medical bills have some “tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Tex.R. Evid. 401. Therefore, because evidence of unadjusted medical bills is relevant, the probative value of that evidence and the balancing of Rule 403 factors are questions best left to the trial court to decide on a case-by-case basis. Under this construct, in an appropriate case with the use of proper instructions and carefully tailored jury questions, evidence of both adjusted and unadjusted medical bills could be submitted to a jury. Furthermore, the admission of such evidence would provide the trial court with an evidentiary basis of limiting a plaintiff's recovery of medical or health care expenses to those amounts actually “paid or incurred.” While I agree with Haygood that adjusted medical bills are relevant, I disagree with the premise that unadjusted medical bills are per se irrelevant and, therefore, inadmissible.
Post-verdict Application of Section 41.0105 Caps
Call it an evidentiary rule if you must,
in the final analysis, section 41.0105 is a statutory cap on recoverable damages. A cap on damages is not something new to the Texas Legislature. As Justice Lehrmann points out in her dissent in Haygood, the Texas Civil Practices and Remedies Code contains many examples of legislative limitations being placed on the amount of recoverable damages. SeeTex. Civ. Prac. & Rem.Code Ann. § 41.008(b) (limiting recovery of exemplary damages); § 74.303 (limiting total recovery in a wrongful death or survival action based upon a health care liability claim); § 75.004 (limiting liability in certain premises liability suits); § 108.002 (limiting personal liability in suits against public servants). In each of these instances, courts of this State have chosen not to apply those caps as a restriction on admissible evidence or the amount of damages that a jury could award. Instead, they have been handled as post-verdict adjustments made by the trial court. There is no logical reason why we should carve out a special exception for the recovery of medical or health care expenses which have been “paid or incurred.” Instead, as I propose here, with appropriate instructions and carefully tailored jury questions, a jury should be able to hear all relevant evidence, including both adjusted and unadjusted medical bills, when determining the amount of appropriate damages in a given case. Once a jury has fulfilled its responsibility of returning a verdict based upon the law and the evidence, the trial court could then insure the enforcement of legislative caps by making post-verdict adjustments when it renders judgment on that verdict.
See Haygood v. DeEscabedo, 356 S.W.3d 390, 400 (2011) (Justice Lehrmann dissenting) (finding that the majority's opinion regarding the evidentiary nature of section 41.0105 “finds scant support in the statute's language, is contradicted by the statute's legislative history, and runs counter to long-standing common law.)
Conclusion
Because I believe the trial court in this case (reasonably relying upon applicable case law at the time) erred by excluding evidence of adjusted medical bills, I concur with the majority decision to reverse and remand this cause for a new trial.
BRIAN QUINN, Chief Justice, concurring and dissenting.
I join in that portion of the majority's opinion concluding that error occurred. I dissent from that portion finding the error harmful. What the Spanns ultimately received as past medical expenses, once the trial court performed its post-judgment reduction, was no more than the award that Henderson contended they were limited to. This result leads me to wonder how the error could potentially affect the outcome, when nothing of record suggests that the outcome would have differed had the trial court done what Henderson wanted.
Finally, the situation reminds me of the old adage about being careful for what you ask for because you just might get it. By winning a new trial, Henderson can take heart in knowing that the law pronounced in Haygood was upheld. She got what she asked for. But in winning, Henderson also has afforded the Spanns the chance to receive from a second jury an overall recovery308greater than that awarded by the first.