We generally think of the Civil Practice & Remedies Code as the source of critical rules governing venue, statutes of limitations, long-arm jurisdiction, products liability, healthcare liability, declaratory judgments, proportionate responsibility, attorney’s fees, trade secrets, arbitrations, damages, and many other things. Indeed, many of us consult and revisit these and other statutes so often we become comfortable with what we know. However, in the 173 chapters that comprise the code, there are traps for the unwary litigator that can rear their ugly heads. What follows are a few provisions that young lawyers may not yet have encountered but can have a big impact on litigation.
Chapter 18 is home to two provisions that often come into play in personal injury cases. Sections 18.001 and 18.002 detail the process for completing affidavits for the reasonable and necessary costs of services as well as the steps required for an opposing party to file controverting affidavits.
The purpose of Section 18.001 is to streamline the ability of a plaintiff to prove up medical expenses and services (i.e. attorney’s fees) without the need for expert testimony at trial. However, if an opposing party files timely counter-affidavits, the party is forced to prove the cost and necessity of services with expert testimony. Whether to file controverting affidavits is a strategic decision and is not always advisable, but in an era of exaggerated medical expenses and letters of protection it is sometimes a critical step.
Despite the fact that Sections 18.001 and 18.002 are silent as to the effects of failing to file counter-affidavits, some appellate courts have held that the failure to file a timely and proper-counter-affidavit, excludes an opposing party from putting on any evidence to controvert the cost and necessity of services.¹ In other words, if you are unable to get leave of court to file a late controverting affidavit, failing to timely file counter-affidavits may saddle you with the unenviable task of having to argue purely causation, and not the amount and necessity of costs.
Although the filing of an affidavit of cost and necessity is only sufficient to allow for a finding of fact and the jury is not required to award the amount in the affidavit, for all practical considerations the affidavit is conclusive if the opposing party fails to file a controverting affidavit and is excluded from presenting converting testimony at trial. More often than not, a jury will simply award uncontested expenses.
In theory, following an injury, a plaintiff could treat for about two years, file a petition with affidavits of cost and necessity of services on the last day of limitations, and a defendant would be required to file controverting affidavits within 30 days, which in some cases could be before the defendant’s answer is even due. While this seems like an absurd result, the current case law would allow for such a scenario and prohibit a defendant from putting on any controverting evidence in the absence of controverting affidavits.
Importantly, in March 2019, the Court of Appeals in Tyler recently granted a writ of mandamus² that vacated the trial court’s order to strike a defendant’s counter-affidavit that challenged the plaintiff’s medical expenses. The Brown case built on the Texas Supreme Court opinion in Gunn v. McCoy in which the Court held that insurance agents are “generally well-suited to determine the reasonableness of medical expenses.”³ Brown and Gunn undoubtedly will be a boon to insurance defense attorneys and insurance companies, who may be able to avoid the costs of retaining a medical billing expert or orthopedic to controvert a plaintiff’s medical expenses, but instead can rely on insurance agents (Gunn) a registered nurse (Brown), or another affiant familiar with medical billing practices.
Section 18.091 of the Civil Practice & Remedies Code is a useful tool for defendants and a cautionary tale for plaintiffs. If a claimant seeks to recover for (1) loss of earnings, (2) loss of earning capacity, (3) loss of contributions of a pecuniary value, or (4) loss of inheritance, the claimant must present the amount in the form of a net loss after reduction for income tax payments or unpaid tax liability pursuant to any federal income tax law.
In my experience, attorneys often goose their damages by presenting them in gross, pre-tax amounts. This is clearly contrary to Section 18.091. Rule 194 Disclosures require presenting the amount of economic damages, and thus a plaintiff’s failure to present the net amount after taxes for certain claims could be devastating if a defendant objected to testimony of pre-tax amounts at trial. Defendants may also use Section 18.091 as a tool to obtain a plaintiff’s income tax returns in discovery to ascertain not only all sources of income for a plaintiff, but also the effective tax rate by which certain claims must be reduced.
One final trap for the unwary comes from Chapter 142 of the Civil Practice & Remedies Code. Under Section 142.002, a party is barred from bringing a cause of action against an employer, general contractor, premises owner, or other third party solely for negligently hiring or failing to adequately supervise an employee, based on evidence that the employee has been convicted of an offense. There are exceptions to this rule that involve certain crimes, the employer’s constructive knowledge of the conviction, and that the prior conviction was committed while performing duties substantially similar to those reasonably expected to be performed in the employment, or under conditions substantially similar to those reasonably expected to be encountered in the employment taking into consideration factors listed in Section 53.022 and 53.023(a) of the Occupations Code.
In one case I helped try, an employee had shot and killed another employee. The employer had not conducted a background check and plaintiff’s counsel discovered two prior convictions of the shooter for unlawful possession of a firearm. However, because Chapter 142 applied, plaintiff was forced to try the case under a premises theory that the shooter was a dangerous condition rather than negligent hiring or supervision. The jury returned a very favorable verdict for the employer.
Because the Civil Practice & Remedies Code is a resource that is always changing, it is generally worth a few minutes of your time to see whether there are any statutes that can benefit your client or traps for the unwary that you can avoid and address.
Mark Firmin is an associate at Beard Kultgen Brophy Bostwick & Dickson, PLLC in Waco, where his practice is focused on litigation for plaintiffs and defendants. He can be contacted at firmin@thetexasfirm.com.
¹ Beauchamp v. Hambrick, 901 S.W.2d 747, 749 (Tex. App. Eastland 1995, no writ); Ten Hagen Excavating, Inc. v. Castro-Lopez, 503 S.W.3d 463, 491 (Tex. App.—Dallas 2016, pet. denied); and Figueroa v. Davis, 318 S.W3d 53, 61 (Tex. App.—Houston [1st Dist.] 2010, no pet.)
² In re Brown, 12-18-00295-CV, 2019 WL 1032458, at *3 (Tex. App.—Tyler Mar. 5, 2019, no pet. h.).
³ Gunn v. McCoy, 554 S.W.3d 645, 673 (Tex. 2018), reh’g denied (Sept. 28, 2018)