*1 State, Prystash v. Appeals. Criminal Moreover, policy
S.W.3d at 528.
well-settled, should affect our decision-
making processes, and should have been to the State’s trial counsel.
known
Finally, legitimate question there exists affirming
as whether invite
holding the error harmless would wrong and others. repeat
the State to
Again, despite the aforementioned and
long-established policy, it nevertheless so-
journed prohibited into the area. So too brief, strived, appellate it via its
has conduct, legitimacy of its de-
illustrate
spite the dictates our Court Criminal Prystash and Smith. Those
Appeals hardly suggest
circumstances (or
harmless error rule will not be used as become) slipping a means of
has not before jury things that should be excluded. short, interjected highly the State guilt/inno- information into the
prejudicial trial phase
cence of the trial. The court However, much. effort to amelio-
held as
rate the situation did not occur. That harmful error under the cir-
constituted Consequently,
cumstances before us. we six,
sustain issues five and reverse the court,
judgment of the trial and remand
the cause. TATE, Appellant,
Gailia
Miguel HERNANDEZ, Appellee.
No. 07-07-0351-CV. Texas, Appeals
Court of
Amarillo.
March *2 Wharton, Enigma James L. B. Christopher Slay- “An in a Puzzle”1 Shrouded ton, Wharton, Flygare Jones Brown & Legislature passed the 78th P.C., Lubbock, Appellant. House Bill 4 included an amendment *3 Medina,
Jason Glasheen Valles & DeHo- to the Texas Practice Civil and Remedies LLP, Lubbock, yos, Appellee. adding 41.0105, simply Code section which states: C.J., QUINN, Before and CAMPBELL any addition to other un- [i]n limitation PIRTLE, JJ. law, recovery der of medical or health care incurred is limited to the
OPINION amount actually paid by or incurred or on behalf of the claimant. PIRTLE, A. PATRICK Justice. be,
“To or not to be. That Tex. Civ. Prac. & RermCode Ann. (Vernon question.” 2005).
is the § 41.0105 Hamlet, William Shakespeare, Act This and similar statutes have been en- III, i scene acted part nationwide as a of the phenome- generieally na referred to as “tort reform.” perhaps While overstating signifi- genesis The type paid of this or in- case, cance of presented by issues this curred statute has been a desire among question ultimate we must answer is the to reformers limit the sums by recoverable role personal litigation in our plaintiffs personal injury in causes of ac- society. it punish Is the wrongdoer or tion to actually paid by those amounts compensate injured party? That is plaintiff or a collateral source insurance question. company, thereby eliminating recovery for Tate, Appellant, Gailia appeals from a ultimately bills that are written-off judgment jury entered after a in a verdict or part written-down as a underly- personal injury auto accident case that cre- ing insurance settlement. Stated alterna- ates a constructive trust and orders her to tively, the purpose of similar statutes has pay sums to the trust for the benefit of been to limit the certain creditors of Appellee, Miguel Her- injury cause of action to those sums neces- Raising issues, nandez. five Tate contends sary injured to make parties whole. (1) the trial court erred awarding medi- cal bills that had been discharged in bank- Although appellate there are few deci- (2) ruptcy, in not limiting re- clarifying Hernandez’s sions the meaning of the Texas covery of medical or health care statute in the context of a write-off or actually paid amounts or incurred write-down of medical bills in consider- accordance with section 41.0105 of the Tex- payments, ation of insurance there are no (3) Code, as Civil Practice & Remedies appellate reviewing paid decisions exercising jurisdiction jurisdic- where no provision incurred in the context of a debt tion existed awarding judgment in discharged favor in bankruptcy. Accordingly, (4) non-party; of a creating a squarely construc- we are unique faced with the trust, tive awarding attorney’s issue: Is a debt has been in personal injury fees lawsuit. in bankruptcy “paid pur- or incurred” for Wilson, Judge Randy Enigma surrounding "An interpretation issues of section Puzzle", Shrouded in a 71 Tex. BJ. No- 41.0105 of the Civil Texas Practice and Reme- vember for a discussion of some of the dies Code. Chapter bankruptcy proceeding. the Texas In that 41.0105 of Civil poses of section proceeding Hernandez filed a Debtors Finding Code? Practices and Remedies Compliance Statement with Rule 1019 not, it is we reverse personal injury he listed his chose judg- wherein court and render the trial below in action as an asset acquired after the trial court should have rendered.2 ment the
filing original of his Chapter petition, Background Chapter but before the 7 conversion. Hernandez’s statement further listed cer- underlying appeal facts are not tain medical bills Lakeridge owed to Pri- April On Hernandez disputed.3 Center, mary Health Covenant Medical *4 in Chapter bankruptcy petition filed Center, Lubbock, Physical Therapy of and Bankruptcy States Court for the United Pharmacy Lubbock as debts incurred after Texas, Lubbock the Northern District of confirmation but before Each conversion. later, on October Division. Six months of those debts for medical were bills aris- in an Hernandez was involved automobile ing out of the October 21st accident. accident Tate when Tate’s vehicle traffic, Although lane of bankruptcy into Hernandez’s disclosed to the drifted vehicle, trustee, personal injury collided with Hernandez’s and Hernandez’s chose multiple it to roll times. Hernan- action never became of the property Therefore, bankruptcy as a result of the estate.4 on dez incurred bills Febru- 3, 2006, injuries ary he in the accident. On Hernandez filed this suit sustained seek- bankruptcy ing damages personal injuries court en- suffered November converting Hernandez’s as a result of the automobile tered an order accident with Chapter bankruptcy proceeding Among damages, to a Tate. other Hernandez ers, lawsuit, Tex.R.App. parties were 2. P. 43.3. who not to the Defendant, had asserted no claims lawsuit, pleadings had filed in the and [no] 34.6(c) In accordance with Rule of the Tex- 3. jurisdic- over which the trial court had no tion; Procedure, Appellate request- as Rules of Tate reporter’s post-trial ed a record limited to two (3) making the trial whether court erred in hearings April held 2007 and June attorney’s Plain- de award of fees to Therefore, herein, as stated the back- facto attorneys plead- tiff's when there were no ground adopted by facts this Court are those evidence, legal ings, support or [basis] to undisputed that are in Tate’s and Her- facts award; and such Tex.R.App. nandez’s briefs. P. (4) party” whether Plaintiff is a "successful 38.2(a)(1)(b). and entitled to recover his costs of court appellant requests partial When an re- when no was made the Plain- record, porter’s points or be issues to tiff. presented appeal on are limited to those worded, Although identically we find points or issues contained in the statement of issues, presented, Tate’s as are subsumed points request. included in the or issues properly within and therefore raised Here, request partial reporter’s Tate's for a points statement of or issues contained presented record stated that the issues to be partial request reporter's for a record. Tate’s appeal were on as follows: (1) Bankruptcy pro- whether the trial court erred in award- 4.Section 348 of the Code discharged ing medical bills had been "property that vides that of the estate in the con- bankruptcy "actually paid property and were not verted shall consist of case estate, filing petition, incurred” in accordance with section the date possession Practice which remains in the of or is un- 41.0105 of the Texas Civil Code; the debtor the date of Remedies der the control of on (em- 348(f)(1)(A) 11 U.S.C. whether the trial court erred in award- conversion.” added). ing damages provid- phasis to Plaintiff's medical jury, less 30% for Hernan- sought recovery of his for his awarded treatment, past prejudg- and future medical includ- negligence, plus dez’s $692.76 ing addition, those that were listed as trial court ment interest. dischargeable bankruptcy pro- debts in his placed ordered the funds to be in a “con- ceeding. for the benefit of structive trust” two (Covenant Heath providers health care 23, 2006, bankruptcy On March Physical Therapy System $2,111.95 and — discharging court entered an order Her- $1,024.80)6 Services Lubbock— debts, including nandez’s his medical bills. (Glasheen, attorneys & Hernandez’s Valles Chapter discharge An attachment to the DeHoyos $3,881.17). No award was indicated that the order eliminated — order made to Hernandez himself. any legal obligation pay Hernandez’s prohibited any at- debt and Discussion collect tempt from Hernandez debt discharged. was Recoverability Damages I. “Dis- charged” Bankruptcy
Hernandez’s
action was
*5
subsequently
jury,
tried to a
and on March
determining
Before
the limitation im-
27, 2007,
jury
the
returned a verdict in
41.0105,
posed by Section
the first issue we
jury
of Hernandez. The
both
favor
found
expenses
must address is whether medical
negligent, assigning
Tate and Hernandez
discharged in bankruptcy
generally
are
re-
70% fault to
to
Tate and 30% Hernandez.
in a
coverable
lawsuit.
issue,
non-global
special
In a
itemized
the
conversely,
wrongdoer
Stated
should a
re-
jury
recovery
spe-
awarded Hernandez
of
discharge
ceive the benefit of a
of medical
past
expenses
cific
medical
in the amount
bankruptcy,
computing
when
$9,035.94
as follows:
injured party’s damages?
an
This is the
Lubbock
120.48
Pharmacy
$
bankruptcy equivalent of the collateral
Network Services
463.00
Physicians
$
$5,028.46
Covenant Health
System
source rule.
Services of Lubbock
$2,928.00
Physical Therapy
Diagnostic Radiology
Lubbock
496.00
$
The “collateral
rule”
source
Total
$9,035.94
that,
part,
common
prevents
law rule
provider
damages
Each medical
for which
wrongdoer from benefitting from a collat
awarded,
than
Diag-
were
other
Lubbock
discharge
liability
eral source of
for
($496.00),
Radiology
nostic
listed on
was
medical expenses independently procured
Hernandez’s bankruptcy filing.
jury
by party, including
injured party,
not
the
did not
any
award Hernandez
the
privity
wrongdoer.
Mid-Cen
other
Kidd,
tury
Ins. Co.
997
274
S.W.2d
(Tex.1999)
Following
hearings
damages
(citing
on
& n. 48
two
is-
Brown v. Ameri
sues,
Co.,
trial
judgment5
Storage
the
court entered
can
&
601 S.W.2d
Transfer
denied,
$7,017.92. 931,
(Tex.1980),
against Tate
the amount of
934-36
cert.
449
$9,035.94
The judgment represented the
101
66 L.Ed.2d
U.S.
S.Ct.
474
Judgment
by
Cherry,
any
was entered
Blair
did
J.
not take
action to collect their bills
Jr.,
Judge acting by assign-
Senior
agree
District
other than to
with Hernandez’s counsel
75.002(a)(3)
ment. Tex. Gov't Code Ann.
accept
light
to
the sums awarded.
In
of the
(Vernon 2005).
discharge
bankruptcy,
the other medical
providers (including the creditor not named
System
Physical
6. Covenant Health
Ther-
bankruptcy petition)
agree
in the
would not
apy
parties
Services of Lubbock were
accept any portion
jury’s
award.
Furthermore,
proceedings
they
the
below.
Therefore,
(holding
wrongdoer
that a
cannot
injured
whenever an
party incurs medical
independently
expenses proximately
credit for insurance
receive
another,
caused
the tortious conduct of
injured party.));
Black v.
procured
system
jurisprudence
our
Co.,
does not
Ins.
American Bankers
S.W.2d
liability
transfer
for those debts to
(Tex.1972)
(holding hospital
ex
Instead,
wrongdoer.
our jurisprudence al
penses eventually paid by Medicare on
injured party
lows the
judg
recover a
recoverable);
plaintiff
Tay
behalf of
were
ment against
wrongdoer
Fabritech,
Inc.,
lor
American
damages
amount of actual
proximately
(Tex.App.-Houston
[14th Dist.]
wrongful
conduct.
denied)
2004, pet.
(holding
payments
negligence
this,
case such as
a plaintiff is
employee
plan
made under an
benefit
con
permitted to recover damages
past
stitute a collateral source as
future
compensation
medical
employer).
discharge
We find that the
for the debt incurred. How that debt is
expenses through
bankruptcy is
settled,
ultimately
either through payment,
akin to
discharge
obligation by
of an
insurance,
gratuity,
write-down, write-off,
Lang,
collateral source. See Dodd v.
bankruptcy
is of no consequence to the
235, 242-43,
Va. Cir.
party) distinctly are In concepts. different Expenses or Health Care injured the context of the the bankrupt party, dischargeable debts are begin premise If with the that the we bankruptcy; damages Legislature accomplish are not. intended to some- held 41.0105, Appeals has likewise land Court of by the enactment of section
thing
care
by
off
a health
provision
that
such that sums
apply
then
must
written
we
“actu
accomplish
purpose.
that
not constitute amounts
provider
a fashion as to
do
purpose.
light
applying
on that
of
the
ally
purposes
cases have shed
for
Few
incurred”
date,
v. Fletch-
leading case is Mills
41.0105.
To
the
forth in section
limitation set
—
er,
Antonio
(Tex.App.-San
Gries,
-,
Matbon,
While
they
in turn
against
patients,
amounts
as it dealt
tionale of the Mills decision
wrong-
rule,
no claim for them
[the
the East-
had
the collateral source
with
Triana-Doyal,
Judge
D.
Another
applying section
also
Gisela
7. We remain convinced that
Incurred’’,
“Actually Paid or
72 Tex.
post-verdict,
cap
to recoverable
Take on
41.0105
January
arguments
for
in favor
damages,
judicial procedure.
BJ.
remains a sound
Gries,
Matbon,
"paid
post-verdict application of the
or
of a
Inc. v.
h.)
limitation.
- S.W.3d -, - (Tex.App.-Eastland
pet.
incurred”
Id. at
While Linnstaedter did
Our disposition
doer].”
of Tate’s second issue
pretermits
interpretation
not deal
consideration of her remaining
with
section
issues
41.0105,
pertaining to the exercise
support
position
juris-
it does
that
diction over non-parties,
imposition
compensation is the ultimate purpose of
trust,
a constructive
and the de
system jurisprudence.
our
facto
award of attorney’s
fees in a
inju-
longA
line of cases
held that
have
ry case. Tex.R.App. P. 47.1.
purpose
allowing
the recovery of actual
damages,
“compensatory
also called
dam-
Conclusion
ages,”
to repair wrong
compen-
or to
While, in
beginning,
postulated
we
injured plaintiff
sate the
injury.
for an
that the
personal injury
role of
litigation in
Inc.,
Quality
Parking,
Cavnar
Control
society
our
might be the ultimate question
(Tex.1985),
696 S.W.2d
modified
presented by
appeal,
we must be satis-
grounds,
on other
Higgins,
Johnson &
accept
fied to
the answer to that
Inc. v.
Energy,
Kenneco
second jury’s issue. Because the award agree I "with the Court’s rendition of was limited exclusively to sums either dis appellee Miguel Hernandez charged in bankruptcy or written-off take nothing myself join but find unable to the provider, medical the trial court should opinion. its disagree I with the Court’s take-nothing have rendered a judgment. disposition of the first and second issues question bankrupt whether a duty of bankrupt is owe a to all creditors of the compensation entitled to recover for medical Accordingly, express estate. opinion we no expenses "actually separate incurred” is as to bankruptcy, whether or not a trustee in question distinct from the of whether a bank- pursuing bankrupt party’s a chose in action rupt estate is entitled to recover those same against bankrupt a tortfeasor on of the behalf bankrupt Where the party would estate, damages would be entitled to recover longer legal duty pay no have a the medical past expenses. medical providers, bankrupt the estate would continue 542 denied). 2006, pet. Dist.] For Houston [1st Tate. by appellant Gailia
presented provides: rule The collateral source I would sustain expressed, the reasons re- injured person the second fact that and not reach [T]he Tate’s first issue payments source from a collateral ceives issue. to miti- tendency may have some which issue, of Tate’s first disposition In its consequences gate discharge in bank- that a holds Court have suffered he otherwise would a liability for ruptcy of taken into consideration may not be the collateral within collateral benefit or other assessing damages Hence, through discharge rule. source may be entitled. the claimant to which may of a debtor be relieved bankruptcy Reed, 376 Ins. v. & Co. Traders General by a expenses liability for medical 591, (Tex.Civ.App.-Corpus 593 S.W.2d in an action tortfeasor and n.r.e.); 1964, accord ref'd writ Christi the dis- recovery of seek a tortfeasor 457, 412 459 Corp., F.2d Sweep v. Lear Jet a dis- I would hold charged expenses. Cir.1969) law); (5th City Texas (applying liability of bankruptcy charge 906, Barlow, 313 v. S.W.2d Fort Worth of a collateral is not for medical 1958, (Tex.Civ.App.-Fort Worth writ 911 the collateral application benefit (“[n]o n.r.e.) damages abatement ref'd rule. source can partial compensation ground on the made where the evidence properly be Discussion from a been received funds have shows plain rule limits The one-satisfaction source, the defen independent of collateral injuries for the one satisfaction tiff “to but dant”). source rule is both “The collateral Baylor v. by him.” Bradshaw sustained damages.”1 John rule of evidence 703, Univ., 99, 705 84 S.W.2d 126 Tex. 853, County, 195 S.W.3d 855 v. Dallas son Casteel, 22 (1935); v. Ins. Co. Crown Life 2006, pet.); Taylor (Tex.App.-Dallas (Tex.2000). 378, allowing Thus Fabritech, Inc., 613, 132 S.W.3d American compensatory recovery in a tort action of 2004, (Tex.App.-Houston [14th Dist.] a collateral paid by damage element denied). point Its focal is “whether pet. defendant, source, has independent of benefits from tort victim has received a forbidden double re appearance that cannot be used collateral source payment But “if is within covery. by a damages owed reduce the amount rule, forbid principle collateral source Letourneau, 260 Va. tortfeasor.” Acuar recovery for the same ding (Va.2000). more than one S.E.2d Un Brown v. Ameri applicable.” loss is not rule is the derlying the collateral source Co., Storage & 601 S.W.2d can if there must be a equitable notion that Transfer (Tex.1980); Triumph Trucking, injured party justly is more “the windfall Inc., Manag wrongdoer.” Sweep, than Corporate Ins. entitled to it v. Southern ers, Inc., at 459. (Tex.App.- 412 F.2d 226 S.W.3d receipt of benefits. The con- source or the the collateral source rule 1. The dual nature of may may trier of fact use explained: be cern here is that the *9 deny improperly plain- to component a rule of that evidence is The substantive component recovery entitled. bars a defen- to which he is This tiff the full 72, compen- Catour, reducing plaintiff's dant from Ill.2d 295 Ill.Dec. Arthur v. 216 plaintiff satory 847, the amount the 641, award {quoting N.E.2d 852 833 The received from the collateral source. Fischer, Understanding Remedies James M. evidentiary component bars admission of (1999)). 12(a) § the existence of the collateral evidence of
543
Brown,
934-35; Finger
601
rule has
S.W.2d at
v.
The collateral source
historical
Servs., Inc.,
Southern Refrigeration
in
881
a
ly
to situations
which
applied
been
890,
(Tex.App.-Houston
S.W.2d
893-94
[1st
the benefit of the
third
acts for
1994,
denied);
v.
Payne Wyeth
writ
Dist.]
Brown,
See,
601 S.W.2d at
plaintiff.
e.g.,
Pharmaceuticals,
Inc.,
2:08cv119,
No.
2008
(insurance);
City
Twin
Fire Insur
934-36
4890760,
*3,
WL
at
2008 U.S. Dist. Lexis
Gibson,
565,
488
v.
S.W.2d
Company
ance
(E.D.Va.
91849,
*11,
12,
at
November
1972, writ ref 'd
(Tex.Civ.App.-Amarillo
571
2008). See
James B. Sales
generally 5
and
n.r.e.)
Barlow,
benefits);
(government
313
Hadley
J.
Texas Torts and
Edgar,
Reme
at
(gratuitous
S.W.2d
911
healthcare ser
(2008) (where
§
dies
collateral
88.01[1]
Administration).
vices
Veterans
insurer,
“particu
source is
it would be
(Second) of Torts
also Restatement
larly
for a tortfeasor
inappropriate”
to
(“rule
920A,
that collateral bene
cmt. c
in
foresight
benefit from the
pro
victim’s
plaintiffs
are
from the
fits
not subtracted
curing an
to
policy
insurance
which the
following
types
applies to
party).
gratu
tortfeasor was not a
Even
policies, employment
benefits”:
insurance
because,
itous medical sendees delivered
benefits,
legislation
and social
gratuities,
example,
a
person
veteran are
benefits).
Indeed,
“collateral
source”
rendered based on status at the time of
But
speaks
party.
an additional
it is
Long,
treatment.
v.
57 Va.
Walker
Cir.
funds but
char
so much the source of
(Va.Cir.Ct.1993).
419, 420
The collateral
received
deter
acter
the benefits
that
public policies
source rule furthers
like
application
mines the
collateral
encouraging
and
coverage
insurance
allow
Hall,
Inc. v.
840
Lee-Wright,
source rule.
employee
ing
governmental
to
benefits
572,
(Tex.App.-Houston
582
[1st
reach their intended beneficiaries
full.
writ)
1992,
(citing Phillips
no
Dist.]
The rule
may
thus
be said
reward a
Am.,
F.2d
Western
N.
Co. of
plaintiffs foresight
prior
injur
or status
(5th Cir.1992)).2
*4,
y.3 Payne,
at
2008 WL
Dist.
at *12.
U.S.
Lexis
Application of the collateral source rule
historically
those with fore-
has
benefitted
Bankruptcy fits neither of the historical
sight
acquire insurance
advance of
there
bankruptcy,
circumstances.
is no
party rendering
bargained-for
third
or
at least
advance
treatment.
Mollison,
Propeller
Illustrating
precept
this
are cases in which
The
Monticello
(17
(1854).
How.)
employer
L.Ed. 68
the tortfeasor is the victim’s
and has
U.S.
payments
employee
made
under an
benefit
"Monticello,”
steamship, and
"North-
plan.
plan is
western,”
schooner,
If the benefit
characterized
on Lake
collided
Hu-
fringe
employee then
ron,
benefit of the
it is classi-
causing
to sink
"Northwestern”
employer.
Mollison,
fied a
as to the
collateral source
cargo
its
owner of
salt.
Conversely,
employer purchased
"Northwestern,”
insured,
if the
was
his in-
plan primarily
protection,
plan
for its
then the
compensated
for his
surer
him in full
loss.
employer.
is not a
as to the
collateral source
steamship, its
When Mollison sued the
own-
Taylor,
& 626
gratuitous benefit.
Heritage
Oliver v.
Additionally, recognizing discharge in
Co.,
1,
Mut. Ins.
179 Wis.2d
505
bankruptcy
N.W.2d
as a collateral source benefit
452,
(App.1993).
may actually
Accord
v.
encourage bankruptcy by
Olariu
of
Marrero,
824,
121,
248 Ga.App.
549 S.E.2d
fering post-treatment
discharg
means of
(2001) (“[T]he
of bankruptcy
ing personal
effects
liability
while
do not constitute a ‘collateral source’ at
leaving available a potential
full
all”).
Oliver,
Rather bankruptcy
functions to “re
Fidelity
549, 554-55,
& Guar.
236 U.S.
ical
by
incurred
Hernandez but
289, 290,
(1915)
35 S.Ct.
manently enjoining collection of certain claims,4
creditor the windfall exists be
cause an express by decision made debtor after incurring the discharged lia ENTERPRISES, EDDINS INC. d/b/a bility. Payne, 4890760, 2008 WL at Friendly Manage Aviation and RSP *4, 91849, 2008 U.S. Dist. Lexis at *11-12. Services, Inc., Appellant/Cross- ment Oliver, As the Wisconsin court stated in Appellee the collateral source properly applies rule v. in cases where “a ‘benefit’ is bestowed ADDISON, Texas, OF TOWN party* ‘third and this third benefit Appellee/Cross-Appellant. Oliver, creates the windfall.” 505 N.W.2d rule, at however, 461. The properly has No. 05-08-00194-CV. no application plaintiff where a creates the Appeals Texas, Court of windfall obtaining discharge in bank- Dallas. ruptcy of medical expenses 6, March id.; injury-producing occurrence. See see Payne, also *5, 2008 WL at
U.S. Dist Lexis
at *14.
rives from
Town
("The policy of insurance is collateral to the
Townshend,
language