Rahul K. Nath, M.D. v. Texas Children's Hospital & Baylor College of Medicine, 576 S.W.3d 728

Background

Dr. Rahul Nath, a former Baylor/Texas Children’s Hospital (TCH) surgeon, sued TCH, Baylor, and others for defamation and related claims beginning in 2006; the case involved multiple amended petitions and long-term litigation.
After jurisdictional disputes and multiple amendments, TCH and Baylor moved for traditional and no-evidence summary judgment; the trial court granted summary judgment in their favor in 2010.
The trial court awarded sanctions against Nath (approx. $726,000 to TCH and $644,500.16 to Baylor) based on findings of bad faith, improper purpose, and lack of factual predicate; those findings were upheld in part by this court but the Texas Supreme Court remanded to consider Low factor (n) (the degree to which the defendant’s own conduct caused its fees).
On remand TCH and Baylor filed motions to reassess with supplemental affidavits from lead counsel; Nath sought additional discovery and continuance but did not formally move to compel; the trial court conducted a hearing (denied continuance), entered supplemental findings rejecting any defendant-caused fee responsibility, and reimposed the same sanction amounts.
Nath appealed, arguing the remand hearing/procedure and evidence were inadequate, he was denied discovery and cross-examination regarding new affidavits, the hearing was summary-judgment like, and the trial court erred in refusing to disqualify opposing counsel; the court affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether trial court conducted required evidentiary inquiry on remand to address Low factor (n)	Nath: remand required factual hearing; trial court failed to perform adequate inquiry	TCH/Baylor: remand permitted resolution on existing record or by affidavits; they submitted affidavits and briefing	Court: remand scope allowed use of existing record and affidavits; trial court conducted adequate inquiry; no abuse of discretion
Adequacy of hearing and notice; whether oral evidentiary hearing required	Nath: needed full oral evidentiary hearing to probe motives and credibility; denial of continuance and limited notice was error	TCH/Baylor: Supreme Court permitted determination on existing record or limited hearing; notice provided was reasonable	Court: oral hearing not required under remand; 14 days’ notice sufficient; no flawed summary-judgment procedure
Sufficiency and admissibility of evidence to assess Low factor (n)	Nath: supplemental affidavits were hearsay/conclusory and he was denied chance to controvert them; thus no evidence supports finding that defendants didn’t cause fees	TCH/Baylor: existing record plus affidavits and prior findings supplied some evidence that defendants did not cause the fees	Court: even assuming affidavits incompetent, the existing record and prior findings provided some evidence supporting the trial court’s conclusion under Low factor (n); sanctions affirmed
Motion to disqualify opposing counsel	Nath: opposing counsel served as both counsel and (de facto) witness; disqualification required	TCH/Baylor: no ruling because motion not set/ruled on; procedural default	Court: Nath failed to obtain an express or implied ruling or set motion for hearing; issue not preserved for appeal

Key Cases Cited

Low v. Henry, 221 S.W.3d 609 (Tex. 2007) (lists factors for sanctions including the degree to which the offended party’s behavior caused fees)
Nath v. Texas Children’s Hosp., 446 S.W.3d 355 (Tex. 2014) (supreme court affirmed bad-faith basis for sanctions but remanded to consider Low factor (n))
Cire v. Cummings, 134 S.W.3d 835 (Tex. 2004) ("notice and hearing" for sanctions does not always require oral hearing)
Unifund CCR Partners v. Villa, 299 S.W.3d 92 (Tex. 2009) (sanctions reviewed for abuse of discretion; some evidence suffices)
Huie v. DeShazo, 922 S.W.2d 920 (Tex. 1996) (appellate courts review legal conclusions de novo but factual determinations for abuse of discretion)