Amanda jones and david jones




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No. 01-10-00933-CV

__________________________________________________________________


In the First Court of Appeals

Houston, Texas

__________________________________________________________________
AMANDA JONES AND DAVID JONES,
Appellants
v.
FOUNDATION SURGERY AFFILIATES OF BRAZORIA COUNTY D/B/A BRAZORIA COUNTY SURGERY CENTER, AND

BRAZORIA COUNTY SURGERY CENTER
Appellees

__________________________________________________________________


APPEAL FROM CAUSE NO. 48281

IN THE DISTRICT COURT OF BRAZORIA COUNTY, TEXAS

412th JUDICIAL DISTRICT

HON. W. EDWIN DENMAN



__________________________________________________________________
APPELLANTS’ BRIEF

__________________________________________________________________


Spencer G. Markle

State Bar No. 12989200

Obed De La Cruz State Bar No. 24053175 17100 El Camino Real, Suite 500 Houston, Texas 77058

(281) 486-0677

(281) 486-0694 Fax
Counsel for Appellants

Amanda Jones And David Jones
ORAL ARGUMENT REQUESTED

IDENTITY OF PARTIES AND COUNSEL

Appellants/Plaintiffs: Trial and Appellate Counsel:
Amanda Jones and David Jones Spencer G. Markle

State Bar No. 12989200

Obed De La Cruz State Bar No. 24053175 17100 El Camino Real, Suite 500 Houston, Texas 77058

(281) 486-0677

(281) 486-0694 Fax


Appellees/Defendants: Trial and Appellate Counsel:
Foundation Surgery Affiliates Of John Wesley Raley

Brazoria County D/B/A Brazoria State Bar No. 16488400

County Surgery Center and Brazoria Lisa Massey

County Surgery Center State Bar No. 24039039 1800 Augusta Drive, Suite 300

Houston, Texas 77057

(713) 429-8050

(713) 429-8045 FAX

TABLE OF CONTENTS

Page


Identity of Parties and Counsel ………………………
Index of Authorities …………………………………..
Statement of the Case ………………………………..
Issues Presented ………………………….
1. V.A.C.S. Art. 6132b-3.03(a) provides that all partnerships are liable for injury caused by the actionable conduct of a partner if, at the time of the injury, such partner was acting within the ordinary course of the partnership’s business. V.A.C.S. Art. 6132b-2.02(e) provides for the creation of professional partnerships by licensed physicians, but further stipulates that such partner-physicians may not exercise control over any other partner’s practice of medicine. Does a professional partnership’s lack of “control” over its partner-physicians under Art. 6132b-2.02(e) implicitly exempt it from the vicarious liability provided for under Art. 6132b-3.03(a)?
2. V.A.C.S. Art. 6132b-3.03(a) provides that all partnerships are liable for injury caused by the actionable conduct of a partner if, at the time of the injury, such partner was acting within the ordinary course of the partnership’s business. Does a genuine issue of material fact exist as to whether, at the time the partner-physician committed malpractice, he was acting within the ordinary course of the professional partnership’s business, thus rendering summary judgment improper?
Statement of Facts…………………………………………
Summary of the Argument…………………………
Standards of Review………………………………………
Argument………………………………………………….
I. Does A Professional Partnership’s Lack Of “Control” Over Its Partner-Physicians Under Art. 6132b-2.02(e) Implicitly Exempt It From The Vicarious Liability Provided For Under Art. 6132b-3.03(a)?...............................................................
1. Vicarious Liability Of Partnerships, Generally………….
2. Effect Of Art. 6132b-2.02(e) On Physician-Partnership’s Vicarious Liability………………………………………..
3. Statutes Identically Worded To Art. 6132b-2.02(e) Held To Permit Vicarious Liability……………………………..
II. Does A Genuine Issue Of Material Fact Exist As To Whether, At The Time Dr. Martinez Committed Malpractice, He Was Acting Within The Ordinary Course Of The Partnership’s Business, Thus Rendering Summary Judgment Improper?......................
1. Traditional Summary Judgment Improper…………………..


  1. No-Evidence Summary Judgment Improper

Conclusion and Prayer………………………………………


Certificate of Service………………………………………..
Appendix………………………………………………………..

INDEX OF AUTHORITIES

Page(s)

Case Law
Arredondo v. Rodriguez, 198 SW3d 236, 238-39 (Tex. App. – San Antonio 2006, no writ)…………………………….
Berel v. HCA Health Services, 881 SW2d 21, 23 (Tex. App. – Houston [1st Dist.] 1994, writ denied)………………………………………
Carl J. Battaglia v. Alexander, 177 SW3d 893, 901-02 (Tex. 2005)…………
Clements v. Conard, 21 SW3d 514, 523 (Tex. App. – Amarillo 2000, pet. denied)…….
Cook v. Brundidge, Fountain, 533 SW2d 751, 759 (Tex. 1976)…………….
Fite v. EMTEL, 2008 Tex. App. LEXIS 7343 at *19-20 (Tex. App. – Houston 2008, pet. denied)…………………………………………………………….
Gaalla v. Citizens Medical Center, 2010 U.S. Dist. LEXIS 133714 at *9 (S.D. Tex. 2010)
Gupta v. Eastern Idaho Tumor Institute, 140 SW3d 747, 752 (Tex. App. – Houston [14th Dist.] 2004, pet. denied)…………………………………………..
Guthrie v. Suiter, 934 SW2d 820, 826 (Tex. App. – Houston [1st Dist.] 1996, no writ)
Hale v. Sheikholeslam, 724 F.2d 1205, 1208 (5th Cir. 1984)……………………….
Holy Cross v. Wolf, 44 SW3d 562, 568 (Tex. 2001)……………………………..
In Re Stacy K. Boone, P.A., 223 SW3d 398, 404-05 (Tex. App. – Amarillo 2006, no pet.)
Jeffcoat v. Phillips, 534 SW2d 168, 173 (Tex. App. – Houston [14th Dist.] 1976, writ ref., nre)………………………………………………………………………
Kelsey-Sebold Clinic v. Maclay, 466 SW2d 716 (Tex. 1971) …………
Maclay v. Kelsey-Sebold Clinic, 456 SW2d 229, 232 (Tex. App. – Houston [1st Dist.] 1970)………………………….
Miller v. Raytheon Aircraft Co., 229 SW3d 358, 375-76 (Tex. App. – Houston [1st Dist.] 2007, no pet.)…………………………………….
NGC v. Midgard Energy Co., 23 SW3d 372, 377 n.5 (Tex. App. – Amarillo 1999, pet. denied)………………………………………….
Nixon v. Mr. Property Management Co., Inc., 690 SW2d 546, 548-49 (Tex. 1985)….
Pulido v. Dennis, 888 SW2d 518, 520 (Tex. App. – El Paso 1994, no pet.)……….
Rogers v. Ricane, 772 SW2d 76, 81 (Tex. 1989)…………………………………
St. Joseph Hospital v. Wolff, 94 SW3d 513, 539-40 (Tex. 2002)……………………….
Statutes
Vernon’s Ann. Civ. St. Art. 1528f(2)(A)……………….
Vernon’s Ann. Civ. St. Art. 6132b-1.03(b)(8)………….
Vernon’s Ann. Civ. St. Art. 6132b-2.02…………………..
Vernon’s Ann. Civ. St. Art. 6132b-2.03…………………………….
Vernon’s Ann. Civ. St. Art. 6132b-3.03………………………………….
Vernon’s Ann. Civ. St. Art. 6132b-3.08…………………………………………
Vernon’s Ann. Civ. Prac. & Rem. Code 74.001………………………………………
Other
Bromberg and Ribstein On Partnership
Edgar, Sales, Texas Torts And Remedies
Hamilton, Miller And Ragazzo, 19 Texas Practice, Business Organizations, 2d ed. (2004).
Laufman, The Law of Medical Malpractice in Texas (1977)

TO THE HONORABLE FIRST COURT OF APPEALS:


Appellants, Amanda and David Jones, file this brief requesting that the Trial Court’s judgment be reversed. Appellants would respectfully show:
STATEMENT OF THE CASE
Nature of the Case: This is a medical malpractice case in which the injured parties seek to hold vicariously liable the professional partnership to which the negligent physician belonged.
Course of Proceedings: The injured parties sued both the negligent physician and his professional partnership. The professional partnership moved for both traditional and no-evidence summary judgment, claiming that there was no theory under which they could be held vicariously liable.
Trial Court’s Disposition: The trial court signed a final judgment granting both motions for summary judgment.

ISSUES PRESENTED
1. V.A.C.S. Art. 6132b-3.03(a) provides that all partnerships are liable for injury caused by the actionable conduct of a partner if, at the time of the injury, such partner was acting within the ordinary course of the partnership’s business. V.A.C.S. Art. 6132b-2.02(e) provides for the creation of professional partnerships by licensed physicians, but further stipulates that such partner-physicians may not exercise control over any other partner’s practice of medicine. Does a professional partnership’s lack of “control” over its partner-physicians under Art. 6132b-2.02(e) implicitly exempt it from the vicarious liability provided for under Art. 6132b-3.03(a)?
2. V.A.C.S. Art. 6132b-3.03(a) provides that all partnerships are liable for injury caused by the actionable conduct of a partner if, at the time of the injury, such partner was acting within the ordinary course of the partnership’s business. Does a genuine issue of material fact exist as to whether, at the time the partner-physician committed malpractice, he was acting within the ordinary course of the professional partnership’s business, thus rendering summary judgment improper?

STATEMENT OF FACTS
Appellee Foundation Surgery Affiliates of Brazoria County L.L.P. (“Partnership”) is a foreign limited liability partnership. (CR 000358) The Partnership operated an outpatient surgery center located in Brazoria County (“Surgery Center”), in conjunction with Appellee Brazoria County Surgery Center, a closely-related partnership which owned the real estate on which the Surgery Center was located (jointly, “Appellees”). (CR 000348, pp. 25-26) Dr. Henry Martinez became a partner of the Partnership on November 20, 2006, joining numerous other surgeons. (CR 000367-372) The sole business purpose of the Partnership was to operate the Surgery Center (CR 000352, p. 43), which provided all of the instruments, equipment, supplies, nurses, technicians and anesthesiologists for its partner-surgeons who performed surgery on the premises. (CR 000350-51, pp. 36-37) Despite the fact that such partner-surgeons had staff privileges at area hospitals, the Partnership agreement required each partner-surgeon to perform 1/3rd of all of his surgical procedures and derive 1/3rd of his income on the premises of the Surgery Center, or face being expelled from the Partnership. (CR 000349, p.29) The Partnership would bill for all of the above-listed services provided at the Surgery Center, save for the fees of the surgeon and anesthesiologist, and any resulting profits were to be divided among the partner-surgeons, including Dr. Martinez. (CR 000350-51, pp. 36-39)

On August 2nd, 2007, Dr Martinez performed gall bladder surgery on Appellant Amanda Jones, a 26 year old wife and mother, on the Surgery Center premises. During the procedure, Dr. Martinez committed multiple egregious surgical errors causing catastrophic injury to Amanda Jones. Amanda Jones and her husband David (“Appellants”) sued not only Dr. Martinez, but also the Appellees, seeking to hold them vicariously liable for the negligent acts of Dr. Martinez, performed while acting as a partner of the Partnership. The Appellees, in turn, filed for both traditional and no-evidence summary judgment, arguing inter alia that – as a matter of law – because Art. 6132b-2.02(e) of the Texas Revised Partnership Act bars physicians within a professional partnership from exercising control over any other partner’s practice of medicine, such lack of control automatically bars the imposition of vicarious liability. On August 20, 2010, the Trial Court granted both such Motions, unaccompanied by any discussion of the merits thereof. (CR 000433-34)



SUMMARY OF THE ARGUMENT
I. Appellees argued that because Art. 6132b-2.02(e) bars physicians within a professional partnership from exercising control over any other partner’s practice of medicine, the lack of such control automatically bars the imposition of vicarious liability. However, 1) Appellees failed to make any showing that the Partnership qualified as such an Art. 6132b-2.02(e) partnership; 2) the mere fact that Art. 6132b-2.02(e) outlaws such control has no bearing on whether Appellees did in fact exercise such; 3) neither Art. 6132b-3.03(a) -- the general rule rendering partnerships liable for a partner’s misconduct -- nor Art. 6132b-2.02(e), nor any other statute expressly exempts professional partnerships from Art. 6132b-3.03(a); 4) the legislative history behind Art. 6132b-2.02(e) gives no indication whatever that the Legislature meant to depart from the Art. 6132b-3.03(a) general rule; and 5) Texas courts have repeatedly held professional physician associations vicariously liable, despite identically-worded statutes barring them from controlling the practice of their member-physicians. Because Art. 6132b-2.02(e) does not bar imposition of vicarious liability upon partnerships, the trial court erred in granting summary judgment.
II. Under V.A.C.S. Art. 6132b-3.03(a), a partnership is liable for injury caused by the actionable conduct of a partner if, at the time of the injury, such partner was acting within the ordinary course of the partnership’s business. Apart from their lack-of-control argument based upon Art. 6132b-2.02(e), Appellees put forth no evidence to support their motion for summary judgment as to their vicarious liability under Art. 6132b-3.03(a). Because Appellees failed to meet their burden of proving that no genuine issue of material fact existed as to whether the partner-physician’s malpractice occurred within the ordinary course of the Partnership’s business, the trial court erred in granting their motion for traditional summary judgment.
III. Similarly, because Appellants brought forth far more than a scintilla of probative evidence raising a genuine issue of material fact as to whether the partner-physician’s malpractice occurred within the ordinary course of the Partnership’s business, the trial court likewise erred in granting Appellees’ motion for no-evidence summary judgment.
STANDARDS OF REVIEW
Findings Of Law. “Legal conclusions of a trial court are always reviewable on appeal. Trial court findings on the law are given no particular deference. Rather, as the final arbiter of the law, the appellate court has the power and the duty to independently evaluate the legal determinations of the trial court.” Pulido v. Dennis, 888 SW2d 518, 520 (Tex. App. – El Paso 1994, no pet.).

Traditional Summary Judgment. In reviewing a traditional Rule 166a(b) motion for summary judgment, the appellate court must apply the following standards: 1) the movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law; 2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true; and 3) every reasonable inference must be indulged in favor of the non-movant and doubts resolved in his favor. Nixon v. Mr. Property Management Co., Inc., 690 SW2d 546, 548-49 (Tex. 1985).

No-Evidence Summary Judgment. In reviewing a Rule 166a(i) no-evidence motion for summary judgment, the appellate court must review the evidence in the light most favorable to the non-movant against whom the no-evidence summary judgment was rendered, disregarding all contrary evidence and inferences. A no-evidence summary judgment is improperly granted if the non-movant brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. More than a scintilla exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Miller v. Raytheon Aircraft Co., 229 SW3d 358, 375-76 (Tex. App. – Houston [1st Dist.] 2007, no pet.).

ARGUMENT
Introduction
This is a case where the Appellees were successful at the trial level in obtaining summary judgment, by asserting that no genuine issue of material fact existed as to whether Appellants could hold the Partnership vicariously liable for the malpractice of its partner, Dr. Martinez. In their summary judgment pleadings, Appellees purported to establish that vicarious liability could not be established on any of the following three grounds: 1) the partnership relationship between Dr. Martinez and the Partnership; 2) an employee or agency relationship between Dr. Martinez and the Partnership; and 3) Dr. Martinez’s status as an alleged vice-principal of the Partnership. The present appeal confines itself solely to the first of these grounds, i.e. whether a genuine issue of material fact exists as to whether the Partnership could be held vicariously liable, by reason of the partnership relationship between itself and Dr. Martinez.

ISSUE I - Does A Professional Partnership’s Lack Of “Control” Over Its Partner-Physicians Under Art. 6132b-2.02(e) Implicitly Exempt It From The Vicarious Liability Provided For Under Art. 6132b-3.03(a)?
1. Vicarious Liability Of Partnerships, Generally
The Partnership is a foreign limited liability partnership (“LLP”). (CR 000358) Under Texas law, while the individual partners of such an LLP generally have no personal liability for partnership liabilities, the partnership itself remains liable to pay its debts and obligations. Vernon’s Ann. Civ. St. Art. 6132b-3.08(a)(1), (a)(3)(A); §12.4 of Hamilton, Miller And Ragazzo, 19 Texas Practice, Business Organizations, 2d ed. (2004). For the purposes of determining when a LLP or any other general or limited partnership incurs such a ‘debt or obligation’ by reason of the acts of a partner, the relevant statute is V.A.C.S. Art. 6132b-3.03(a).

Art. 6132b-3.03(a) provides that a partnership is liable for loss or injury to a person … caused by or incurred as a result of a wrongful act…of a partner acting: (1) in the ordinary course of business of the partnership; or (2) with the authority of the partnership. Accord, §8.4 of Hamilton, 19 Texas Practice, Business Organizations.

Thus, when a partner who is acting in the ordinary course of business of the partnership, or with the authority of his or her co-partners, wrongfully injures another person, the partnership is liable for the injury to the same extent as the active wrongdoer.
Edgar, Sales, 1 Texas Torts And Remedies §4.05[2][a][i]. Such general standard correlates precisely with longstanding Texas caselaw recognizing that medical partnerships (and individual physician-partners) can likewise be held vicariously liable for the actions of a partner-physician taken either a) within the ordinary scope of the partnership business, or b) outside such ordinary scope-of-business, if ratified by the partnership. Maclay v. Kelsey-Sebold Clinic, 456 SW2d 229, 232 (Tex. App. – Houston [1st Dist.] 1970), affirmed 466 SW2d 716 (Tex. 1971); Jeffcoat v. Phillips, 534 SW2d 168, 173 (Tex. App. – Houston [14th Dist.] 1976, writ ref., nre)(adhering to majority rule that partnership between physician and health care facility may give rise to vicarious liability); Laufman, The Law of Medical Malpractice in Texas (1977) at 64; Edgar, Sales, 1 Texas Torts And Remedies §11.01[1][d][iii].
2. Effect Of Art. 6132b-2.02(e) On Physician-Partnership’s Vicarious Liability
Argued somewhat incoherently over the course of its summary judgment Motion, Supplement, and Reply, Appellees essentially assert that the Partnership cannot be held vicariously liable for Dr. Martinez’s negligence because 1) vicarious liability is predicated upon control over the details over the work performed, and 2) Texas law allegedly prohibits physicians within a partnership from exercising such control, via V.A.C.S. Art. 6132b-2.02(e).

In their summary judgment pleadings, Appellees first assert that to hold the Partnership vicariously liable, Appellants must show that the Partnership was Dr. Martinez’s employer, with a right to control his work. This is blatantly false: Texas caselaw expressly mandates that exceptions to this general rule apply where the relationship between a physician and a healthcare facility involves a partnership relationship (as here). Jeffcoat, 534 SW2d at 173; Berel v. HCA Health Services, 881 SW2d 21, 23 (Tex. App. – Houston [1st Dist.] 1994, writ denied); Hale v. Sheikholeslam, 724 F.2d 1205, 1208 (5th Cir. 1984). As to partnerships, including those involving physicians, the applicable vicarious liability standard is that set out at Art. 6132b-3.03(a), providing for vicarious liability where the sued-upon act was either 1) performed within the course of the partnership’s business, or 2) with the partnership’s approval. Maclay, 456 SW2d at 232.

Somewhat embarrassingly for Appellees, their pleadings repeatedly assert that because the Texas Revised Limited Partnership Act bars a professional partnership from controlling its physician-partners’ corporate practice of medicine, the Partnership cannot be held liable for Dr. Martinez’s malpractice. To begin with, the statutory section that Appellees rely upon is found at V.A.C.S. Art. 6132b-2.02(e) of the Texas Revised Partnership Act, and not the Art. 6132a limited partnership statutes.

Second, although Appellees largely base their entire summary judgment motion upon Art. 6132b-2.02(e) – which permits a partnership entirely owned by Texas-licensed physicians to perform professional services – Appellees (though movants) wholly neglected their duty to point to any evidence in the record establishing that they actually qualify as such a partnership. Rogers v. Ricane, 772 SW2d 76, 81 (Tex. 1989); Arredondo v. Rodriguez, 198 SW3d 236, 238-39 (Tex. App. – San Antonio 2006, no writ); Guthrie v. Suiter, 934 SW2d 820, 826 (Tex. App. – Houston [1st Dist.] 1996, no writ). Indeed, at CR 000011, Appellees themselves cite evidence that one of the Partnership’s owners is Appellee Brazoria County Surgery Center, a “company” that seems highly unlikely to qualify as a licensed physician.

Third, Appellees’ summary judgment pleadings repeatedly lapse into the logical fallacy of assuming that because the Partnership was allegedly barred-by-statute from controlling its partner-physicians, it necessarily could not have done so. CR 000010, 000199, 000427. This is essentially akin to informing the arresting officer that one could not have driven at 100 mph through a school zone, solely because the posted limit was 25. In fact, whether or not a partnership can legally dictate the treatment decisions made by its partner-physicians has no bearing at all as to whether the Partnership actually did so dictate treatment. See St. Joseph Hospital v. Wolff, 94 SW3d 513, 539-40 (Tex. 2002), where the court rejected a hospital’s highly analogous attempt to claim that the “corporate practice of medicine” ban somehow automatically exempted it from vicarious liability for an employee’s negligence. To hold otherwise would allow a criminal to claim his crime was factually impossible, simply because it was illegal. Wolff, 94 SW3d at 539. The case that Appellees repeatedly cite in support of their own automatic-exemption argument, Clements v. Conard, 21 SW3d 514, 523 (Tex. App. – Amarillo 2000, pet. denied), in fact expressly acknowledges at p. 523 that a corporate entity statutorily barred from practicing medicine can nonetheless be held vicariously liable.

Relatedly, Appellants would also note that Tex. Civ. Prac. & Rem. Code §74.001(23)(C) expressly holds that the term “physician” – for the purposes of the Texas Medical Liability statutes – expressly includes “a partnership or limited liability partnership formed by a group of physicians.” If, as Appellees repeatedly claim, a limited liability partnership can be neither directly or vicariously liable for a physician’s actions, what possible purpose could be served by statutorily classifying them as “physicians” for malpractice purposes?

Fourth, Appellees’ summary judgment pleadings repeatedly confuse their Art. 6132b-2.02(e) control-of-treatment based argument with Texas’s ban on the “corporate practice of medicine”.

The purpose of [the prohibition on the corporate practice of medicine] is to preserve the vitally important doctor-patient relationship and prevent possible abuses resulting from lay control of corporations employing licensed physicians to practice medicine.


Fite v. EMTEL, 2008 Tex. App. LEXIS 7343 at *19-20 (Tex. App. – Houston 2008, pet. denied), citing Gupta v. Eastern Idaho Tumor Institute, 140 SW3d 747, 752 (Tex. App. – Houston [14th Dist.] 2004, pet. denied). See also Gaalla v. Citizens Medical Center, 2010 U.S. Dist. LEXIS 133714 at *9 (S.D. Tex. 2010). Via statute, the Texas legislature has authorized the creation of numerous entities by which physicians can practice medicine together without violating the prohibition against the corporate practice of medicine, by requiring that all members of such entities be licensed physicians. Fite, 2008 Tex. App. LEXIS 7343 at *20. Two primary examples of such all-physician entities are 1) physician professional associations authorized under the Texas Professional Association Act (“TPAA”), at V.A.C.S. Art. 1528f(2)(A), and 2) physician partnerships, authorized by Art. 6132b-2.02(e) of TRPA (and much cited by Appellees). Assuming, arguendo, that all of our Partnership partners are licensed physicians as required under Art. 6132b-2.02(e), then the evils of “lay control” are hence obviated, and the “corporate practice of medicine” doctrine has no true applicability here. Fite at *19-20, citing Gupta, 140 SW3d at 752.

3. Statutes Identically Worded To Art. 6132b-2.02(e) Held To Permit Vicarious Liability
We now turn to the apparent core of Appellees’ summary judgment argument, which is that since Art. 6132b-2.02(e) bars physician-partners from “exercising control over the other’s clinical authority”, the Partnership necessarily can’t be held vicariously liable for each partner’s wrongdoing. Unfortunately for Appellees, in the highly-analogous context of physician professional associations, an identical, word-for-word ban on “exercising control over the other’s clinical authority” is set out at Art. 1528f §2(B)(4) of the TPAA, yet Texas courts have repeatedly held that such associations can be held vicariously liable for member-physician’s malpractice. See In Re Stacy K. Boone, P.A., 223 SW3d 398, 404-05 (Tex. App. – Amarillo 2006, no pet.), citing Carl J. Battaglia v. Alexander, 177 SW3d 893, 901-02 (Tex. 2005); see also Appellees’ own much-cited Clements opinion, 21 SW3d at 523.

In upholding the permissibility of vicarious liability, the courts in Boone, at 405, and Battaglia at 902 n.14, both pointed to a separate section of the TPAA, Art. 1528f §24, which permits the professional entity itself to be liable for a member’s actionable conduct. As noted above, Art. 6132b-3.03 of the Texas Revised Partnership Act similarly permits partnerships to be held liable for their partners’ torts, with no apparent exclusions for physician partnerships formed under Art. 6132b-2.02(e).

To recap, then, both Art. 1528f, §2 of the TPAA and Art. 6132b-2.02(e) of TRPA allow licensed physicians to form entities to provide professional services. Using identical language, both the TPAA (at Art. 1528f, §2(B)(4)) and TRPA (at Art. 6132b-2.02(e)) bar member-physicians from “exercising control over the other’s clinical authority.” Furthermore, other longstanding provisions of TPAA (at Art. 1528f §24) and TRPA (at Art. 6132b-3.03) permit the imposition of vicarious liability upon professional associations or partnerships generally, with no express inclusion or exclusion of those comprised of physicians. Under such state of affairs, Texas courts have repeatedly ruled that professional associations may be held vicariously liable. Although it that appears no Texas case has addressed this issue in the partnership context after the 1999 enactment of Art. 6132b-2.02(e)’s bar on partner-physicians “exercising control over the other’s clinical authority”, it has already been shown that prior Texas law allowed such vicarious liability. Maclay, 456 SW2d at 232.

In the Appendix to this Appeal, Appellants have supplied the legislative history that accompanied the 1999 enactment of Art. 6132b-2.02(e) pursuant to H.B. 1572. There is absolutely nothing in such history suggesting that in enacting Art. 6132b-2.02(e), the legislature meant to either 1) overturn longstanding Texas precedent re the vicarious liability of physician-partnerships, nor 2) to thereby grant those partnerships a vast advantage over those fellow physicians in professional associations. Rather, the HB 1572 analysis performed by the House Research Organization suggests that the legislature aimed to do little more than make podiatrists feel as if they were almost like real doctors. Finally, note that the House Research Organization analysis directly and favorably refers to 1997’s HB 1149. HB 1149 enacted now-Art. 1528f §2(B)(4), which contains an identically-worded ban on member-physicians “exercising control over the other’s clinical authority”, and which courts have repeatedly held not to bar vicarious liability.

In sum, then, the existence of Art. 6132b-2.02(e)’s “no control” provisions does not, as a matter of law, exempt the Partnership from vicarious liability under Art. 6132b-3.03.

ISSUE II - Does A Genuine Issue Of Material Fact Exist As To Whether, At The Time Dr. Martinez Committed Malpractice, He Was Acting Within The Ordinary Course Of The Surgery Center’s Business, Thus Rendering Summary Judgment Improper?
Having now pushed aside Appellees’ various canards regarding both the corporate practice of medicine, and TRPA Art. 6132b-2.02(e)’s ban on partner-physicians “exercising control over the other’s clinical authority”, we find ourselves where we began. That is, a limited liability partnership of licensed physicians – like any other partnership – is liable for a partner’s actionable conduct if such conduct was committed either 1) in the ordinary course of business of the partnership; or 2) with the authorization of the partnership. V.A.C.S. Art. 6132b-3.03(a). Accordingly, the Trial Court should have granted summary judgment only if no genuine issue of material fact existed as to these two issues.

As noted in §8.4 of Hamilton, 19 Texas Practice, Business Organizations, “[t]here are relatively few Texas cases addressing the question of whether particular tortious conduct occurred within the ordinary course of business of a partnership.” Accordingly, it is striking that – in both of the cases cited in Hamilton’s accompanying footnote – the Texas supreme court refused to grant summary judgment on such course-of-business issue. See Kelsey-Seybold, 466 SW2d at 720, and especially Cook v. Brundidge, Fountain, 533 SW2d 751, 759 (Tex. 1976).

In Cook, the plaintiff was defrauded when her attorney converted funds entrusted to him strictly for investment purposes, and wholly apart from the divorce in which such counsel represented her. Although the entrustment of these investment funds was peripheral to the lawyer’s representation of the plaintiff, she sought to hold the lawyer’s law partnership vicariously liable. When the partnership sought summary judgment –

arguing that that investment activities were not within the scope of its legal practice – the Texas supreme court refused to grant such, noting that it was the partnership, as movant, who bore the burden of establishing that there was no way that the plaintiff could meet the statutory course-of-business standard (now set out at Art. 6132b-3.03(a)). Cook, 533 SW2d at 751. Although the law partnership had submitted evidence establishing that it engaged only in the practice of law, and that the offending attorney was not acting for the partnership when offering to invest plaintiff’s funds, summary judgment was held improper because 1) the funds in question were made payable to the partner “as attorney for” plaintiff, and 2) the plaintiff testified that the offending partner had never indicated he was at any time acting other than as her attorney, or separate from his partnership. Cook, 533 SW3d 754, 759.

Based on the court’s holding in Cook, summary judgment is likewise improper in our case, because of the vastly closer nexus between Dr. Martinez’s negligent surgery, and the ordinary course of the Partnership’s business. See CR 000428, where Appellees enthusiastically adopt Appellants’ statement that “the business purpose of the partnership was ‘to operate an outpatient surgery center and provide all of the instruments, equipment, supplies, nurses, technicians, and anesthesiologists’ for surgeries performed on the premises.” Infatuated with their dubious theory that TRPA Art. 6132b-2.02(e) somehow shields them from vicarious liability, Appellees went on to state at CR 000430-31 that “[o]utpatient surgery is the only business occurring on the premises. The sole reason for the partnership to exist is to provide a facility, equipment and non-physician employees so that the outpatient surgery can occur”, and supported it with deposition testimony from Partnership vice-president Bradley Cardenas (CR 000352). Such assertions of undisputed facts made within a summary judgment motion itself constitute admissions, and as such are proper summary judgment evidence. NGC v. Midgard Energy Co., 23 SW3d 372, 377 n.5 (Tex. App. – Amarillo 1999, pet. denied); Holy Cross v. Wolf, 44 SW3d 562, 568 (Tex. 2001).

In addition to Appellees’ own admissions, the Appellants’ Response (at CR 000233-34), carefully marshaled additional evidence establishing that the sued-upon surgery was performed within the ordinary course of the Partnership’s business:



The deposition of Bradley Cardenas, Vice President of Operations for Foundation Surgery Affiliates and the person most knowledgeable with the day to day business operations of the Surgery Center (Ex. G, p. 8) was deposed on November 19, 2009. He testified that the partnership of Foundation Surgery Affiliates was doing business as Brazoria County Surgery Center and engaged in the business of “ambulatory surgery center.” (Ex. G. p. 13 and Ex 1). Dr. Henry Martinez is one of the partners. (p. 14). Dr. Martinez’s subscription agreement purchasing shares of the partnership is dated November 20, 2006. (p. 15 and Ex. 5). On October 15th, 2008 the partnership was converted to a limited liability company. (p. 17 and Ex. 6). On August 2nd, 2007 there were ten partners in the partnership, all of them surgeons. One of the partners was Dr. Martinez. (p. 20). The partnership doing business as the surgery center contracted with vendors, purchased and provided surgical instruments, supplies and surgical equipment to the partner surgeons. (p. 28). The surgery center facility was the place where the partners came and performed surgical cases. (p. 30). On August 2, 2007, when Dr. Martinez operated on the Plaintiff in an operating room on the premises of the partnership, He was authorized to do so by the partnership (p. 31) and was attended by employees of the partnership doing business as the Surgery Center. (p. 31). Dr Martinez and the other partners were obligated by the partnership agreement to perform 1/3rd of their outpatient cases and derive 1/3rd of their income at the surgery center operated by the partnership. (pp. 29, 32, 33) failure to live up to the 1/3rd “rule” would be grounds for revocation of a partner’s partnership. (p. 33). The partnership would bill patients and their insurers one global fee to cover the use of the operating room, nurses, equipment, supplies, recovery and the facility itself. (p. 36, 37). The profits generated from these fees were distributed to partners such as Dr. Martinez. (p. 38). The partnership distributions were based upon pro rata equity ownership of the respective partners. (p. 41). There was no other business conducted at the Surgery Center other than surgical procedures performed by the doctors and that was the sole reason for the partnership to exist. (p. 43). The medical and surgical records, including the patient registration form for the Plaintiff Amanda Jones was a form provided by the partnership doing business as the surgery center, as was the pre-anesthesia checklist, anesthesia record, operative report, post op anesthesia orders and anesthesia evaluation report. (pp. 48, 51, 52, 53, 55). Despite the injuries inflicted upon Amanda Jones by Dr. Martinez, he remained in good standing as a partner and no sanctions were imposed upon him. (p. 58). Therefore, Dr. Martinez was acting within the authority of the partnership which has apparently ratified his conduct despite the filing of this lawsuit.
In contrast, Appellees – apart from their Art. 6132b-2.02(e) “no control” theory – put forth very little argumentation or evidence as to the question of whether Dr. Martinez’s malpractice occurred within the course of his partnership duties. What little attention Appellees did give this key issue in our case is set out at CR 000010-000014. Improperly editing various deposition excerpts together (at CR 000011), Appellees first cite testimony to the effect that Dr. Martinez’s “surgical fee” did not go to the Partnership. While this is correct, Appellants have shown above that the Partnership would bill for a “facility fee” for almost all other costs connected to the surgery. (CR 000350-51, pp. 36-37).

Next, Appellees cite Dr. Martinez’s testimony to suggest that Martinez never received any distribution of the Partnership profits resulting from such “facility fees”. However, what is crucial for partnership purposes is that Dr. Martinez expected to receive profits from the Partnership’s facility fees, and not whether he has actually received such. See Art. 6132b-2.03(a)(1) (listing “receipt or right to receive a share of profits” as a determining partnership element); Bromberg and Ribstein On Partnership, §2.06(c), p. 2:80.5; §2.07(b) at 2:88. Next, at 000013, Appellees point to paperwork signed by the injured Appellant, purporting to free the Partnership from liability for Dr. Martinez’s errors. However, Art. 6132b-1.03(b)(8) clearly bars the partnership from restricting the rights granted to third parties under the TRPA, which necessarily encompasses the Partnership’s vicarious liability provided for under Art. 6132b-3.03.

Ultimately, the lameness of Appellees’ ordinary-course-of-business argumentation is perhaps best demonstrated by the fact that, at CR 000426, they claimed that “In performing surgery on Ms. Jones, Dr. Martinez was not carrying out the partnership’s business”, yet state just two pages later at CR 000428 that “surgery is the only business occurring on the premises”, and the “sole reason for this entity to exist”. In the Cook decision, supra, the Texas supreme court ruled that summary judgment was improper as to a plaintiff’s claim against a law partnership, based on a partner’s investment activities far removed from the firm’s core purpose. Here, however, Appellants’ claims not only arise from the selfsame surgical procedures that the Partnership facilitated, but the Appellees themselves have essentially failed to advance any non-Art. 6132b-2.02(e) evidence or arguments to establish that no genuine issue of material fact exists as to whether Dr. Martinez’s malpractice occurred with the ordinary course of the Partnership’s business.

1. Traditional Summary Judgment Improper
As discussed above, Appellees relied nearly exclusively on the “no-control” provisions of Art. 6132b-2.02(e) in arguing that the Partnership could not be subject to vicarious liability under Art. 6132b-3.03(a). In this Brief, Appellants have amply demonstrated why such legal interpretation of Art. 6132b-2.02(e) is incorrect, leaving Appellees the burden of establishing that Dr. Martinez’s negligence occurred outside the ordinary course of the Partnership’s business. Contrastingly, while Appellees almost entirely failed to address this key issue, Appellants paraded out ample “ordinary course” evidence favoring their case. Given both that 1) Appellees-as-movants failed to meet their initial burden, and 2) the Texas supreme court in Cook indicated that summary judgment is not to be granted lightly in Art. 6132b-3.03 cases such as ours, the Trial’s Court’s grant of traditional summary judgment was erroneous.

2. No-Evidence Summary Judgment Improper
As discussed above, Appellees relied nearly exclusively on the “no-control” provisions of Art. 6132b-2.02(e) in arguing that the Partnership could not be subject to vicarious liability under Art. 6132b-3.03(a). In this Brief, Appellants have amply demonstrated why such legal interpretation of Art. 6132b-2.02(e) must fail. We are then left with the question of whether Appellants can show that they met their light Rule 166a(i) “no evidence” burden in producing at least a scintilla of evidence that Dr. Martinez was acting within the ordinary course of the Partnership’s business in conducting the botched surgery that injured Appellants.

The Court is referred to the voluminous evidence set out Appellants’ summary judgment Response (CR 000233-34), which relies upon the deposition testimony of the Surgery Center’s vice president of operations to establish that the Partnership’s sole business was to extensively assist its partner-physicians in performing surgeries such as that which injured Appellees. Such testimony also established that the Partnership billed for all such extensive services, and that any resulting profits were to be shared with its partners, including Dr. Martinez. Accordingly, Appellants have met their light no-evidence burden in showing that – at the very least – a scintilla of evidence supported their argument that a genuine issue of material fact existed as to whether Dr. Martinez was acting within the ordinary course of the Partnership’s business when injuring Appellants. Accordingly, Appellees are ineligible for no-evidence summary judgment as to Appellants’ vicarious liability claim against them.


CONCLUSION AND PRAYER
For the foregoing reasons, and pursuant to Texas Rule of Appellate Procedure 43, Appellants ask this Court to reverse the Trial Court’s grant of Appellees’ Motions for both traditional and no-evidence summary judgment. Appellants further request all other relief to which they are entitled, at law or in equity.
RESPECTFULLY SUBMITTED:
MARKLE ● DELACRUZ, LLP

By:______________________________ Spencer G. Markle

State Bar No. 12989200

Obed De La Cruz State Bar No. 24053175 17100 El Camino Real, Suite 500 Houston, Texas 77058

(281) 486-0677

(281) 486-0694 Fax



Counsel for Appellants


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