After a trial on the merits
of his lawsuit, a nonunanimous jury returned a verdict in favor of Dr. Bob
J. Herrin against The Medical Protective Company, Herrin's former
malpractice insurer. That verdict specifically found Medical Protective
had violated the Texas Deceptive Trade Practices Act (DTPA) and awarded
$100,000.00 in damages for Medical Protective's "knowing" violation of the
DTPA. The jury further found Medical Protective had defrauded Herrin and
awarded him $250,000.00 on that claim. Additionally, the jury awarded
attorney's fees. Medical Protective now
appeals the jury's verdict, raising a plethora of appellate issues. We
find merit in two of the issues raised by Medical Protective and, for the
reasons stated below, we sustain those points of error and reverse the
trial court's judgment, rendering a take-nothing judgment in favor of
Medical Protective. I. Prior
History This is not the first time
this case has come before us on appeal. Six years ago, Herrin had appealed
the trial court's award of summary judgment in favor of Medical
Protective. Herrin v. Med. Protective Co., 89 S.W.3d 301 (Tex.
App.--Texarkana 2002, pet. denied). We affirmed the trial court's judgment
in part, reversed it in part, and remanded the case for further
proceedings. Id. II. The Evidence
Adduced at Trial in This Case The evidence at trial showed
Herrin is a retired general surgeon who has lived and worked in Marshall,
Texas, for most of his nearly fifty-year career. During most of that time
(until 1998), Medical Protective provided medical malpractice insurance to
Herrin. In 1994, Herrin performed laparoscopic gall bladder surgery on a
twenty-five-year-old female. Unbeknownst to Herrin at the time, there were
problems with the surgery. Herrin transected the patient's common bile
duct during the operation, resulting in bile spilling into her abdomen for
several days before the error was corrected by two other surgeries
(performed by a different surgeon). The patient suffered severe
complications as a result. The patient sued Herrin, and
that case settled in 1996 (following mediation) for $300,000.00. (This
amount was less than Herrin's Medical Protective policy limit of
$500,000.00.) Herrin testified at trial in the current case that, at the
time of that settlement, he was promised by Chuck Curtice (Medical
Protective's agent) that the doctor's agreement to the settlement would
not result in the cancellation or nonrenewal of his malpractice insurance
with Medical Protective. Herrin, however, later stated he was promised
only that his malpractice insurance would not be cancelled and testified
that he was not promised that his malpractice insurance would not
be nonrenewed. In 1997, Medical Protective
renewed Herrin's malpractice insurance. Id. at 304. But in 1998,
the company did not renew Herrin's policy because of the high "frequency"
and "severity" of claims against his policy. Id. After more than
forty years of doing business with Medical Protective, Herrin had to find
a replacement insurance carrier, which he was able to do before the
expiration of his then-current policy. Herrin, therefore, suffered no
lapse in coverage. Herrin's new carrier,
Frontier Insurance, kept Herrin's business for three years, but Frontier
then withdrew entirely from the Texas market, leaving Herrin to find yet
another company to provide him with medical malpractice coverage. By this
time, Herrin was over seventy years old and found himself unable to obtain
the same type of insurance policy he had been purchasing for the entirety
of his career. Id. (Herrin wanted "occurrence" coverage, but he
could only find "claim" coverage.) Herrin then "retired prematurely from
practicing medicine because he could not receive the necessary coverage to
continue his surgery practice." Id. Subsequent to his
retirement, Herrin sued Medical Protective for the damages (reduced
earning capacity and mental anguish) he associated with what he considered
to be a "forced" early retirement caused by Medical Protective's decision
to nonrenew his insurance coverage three years earlier. That lawsuit went
to trial and resulted in a jury verdict adverse to Medical Protective,
which the insurance company now appeals. III. Analysis of the
Issues Presented In one of its issues,
Medical Protective contends the evidence is legally insufficient to
support the jury's finding that Medical Protective violated the DTPA.
Assuming (without so deciding) that the jury correctly found Medical
Protective violated the DTPA, the jury's verdict in this case creates an
additional problem: The jury found Herrin suffered no actual damages as a
result of Medical Protective's alleged DTPA violation. Instead, the jury
found Herrin's only compensable injuries for the alleged DTPA violation
came from Herrin's resulting mental anguish. Therefore, Medical Protective
now contends this finding regarding mental anguish damages is unsupported
by legally sufficient evidence. In reviewing a challenge to
the legal sufficiency of the evidence, this Court must consider all of the
evidence in a light most favorable to the party in whose favor the verdict
was rendered. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51
(Tex. 2003). The final test for legal sufficiency must always be whether
the evidence at trial would enable reasonable and fair-minded people to
reach the verdict under review. City of Keller v. Wilson, 168
S.W.3d 802, 827 (Tex. 2005). The process of awarding
damages for amorphous injuries such as mental anguish is inherently
difficult because the alleged injury is a subjective, unliquidated,
nonpecuniary loss. Dollison v. Hayes, 79 S.W.3d 246, 249 (Tex.
App.--Texarkana 2002, no pet.). Juries are generally afforded wide
discretion in awarding a damages amount for mental anguish because our law
provides no absolute, objective guidelines to assess the monetary
equivalent to such injuries. See Texarkana Mem'l Hosp., Inc. v.
Murdock, 946 S.W.2d 836, 841 (Tex. 1997). Nevertheless, the Texas
Supreme Court has explicitly stated a plaintiff may not recover damages
for mental anguish unless the plaintiff provides (1) direct evidence of
the nature, duration, or severity of the anguish establishing a
substantial disruption of the daily routine, or (2) other evidence of a
high degree of mental pain and distress that is more than mere worry,
anxiety, vexation, embarrassment, or anger. Saenz v. Fid. & Guar.
Ins. Underwriters, 925 S.W.2d 607, 614 (Tex. 1996) (referencing
Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995)). In
Saenz, this State's highest civil court noted that the
Parkway plaintiffs' concerns about flooding were both real and
understandable; but the court also recognized that those same
Parkway plaintiffs had "failed to prove that their distress
involved more than these emotions." Id. In the case now on appeal,
Herrin testified he felt "[t]errible" when he received the nonrenewal
notice from Medical Protective. He testified he was "[t]remendously" upset
that Medical Protective wrote him a letter saying his claims were both
frequent and severe, although Herrin did not further elaborate on what he
meant by this "tremendous" feeling of upset. He also testified that,
following the nonrenewal, Herrin felt like he could no longer get his work
done as easily as he once could, that the work itself was no longer as
pleasant as it once had been, and that his work became more difficult
instead of being something enjoyable. He also theorized he had become
somewhat suicidal based on having once decided to drive his new motorcycle
at an extremely excessive rate of speed.
(1) Herrin provided no testimony
or evidence that his claimed mental anguish had any detriment to his
physical health. Nor did Herrin present evidence that he sought
professional psychiatric assistance or received medication to help him
cope with his alleged mental anguish. There was no testimony from Herrin
or other witnesses regarding the severity of any anguish that demonstrated
a substantial disruption to Herrin's daily routine, as would be required
to support a compensable mental anguish claim. In short, the evidence
before the jury regarding Herrin's mental anguish damages showed nothing
more than mere worry, anxiety, vexation, embarrassment, or anger.
Therefore, we cannot say the jury's finding that Herrin suffered
compensable mental anguish is supported by legally sufficient evidence. We
sustain this point of error. In another point of error,
Medical Protective contends the evidence is legally insufficient to
support the jury's finding that it committed fraud. The jury awarded
Herrin $250,000.00 in damages for his fraud claim. Herrin's claim of fraud
was premised on his belief that Curtice (an employee of Medical Protective
with whom Herrin had worked for many years) had promised Herrin that the
doctor's consent to settling the 1996 malpractice claim for $300,000.00
would not cause Medical Protective to cancel or nonrenew his malpractice
insurance. The elements of fraud are
(1) a material misrepresentation was made by the opposing party; (2) that
representation was false; (3) when that representation was made, the
speaker knew it was false or made the statement recklessly without any
knowledge of the truth and as a positive assertion; (4) the speaker made
the representation with the intent that the other party act on it;
(5) the party acted in reliance on that representation; and (6) the
party thereby suffered injury. Johnson v. Brewer & Pritchard,
P.C., 73 S.W.3d 193, 211 n.45 (Tex. 2002). Assuming (without deciding)
that Herrin met his burden of proof on the first five elements of his
fraud claim, a review of the entire record before us reveals no evidence
(and certainly not legally sufficient evidence) that Herrin suffered any
injury as a result of relying on Curtice's alleged promise that the
doctor's assent to settlement of the 1996 malpractice lawsuit would cause
the cancellation or nonrenewal of his insurance. We reach this conclusion
for several reasons. First, Medical Protective
did renew Herrin's malpractice insurance for the policy year
following the 1996 settlement. Second, for the years following Medical
Protective's decision not to renew Herrin's insurance, Herrin's net income
either rose (sometimes by as much as twenty-five percent) or remained
about the same as his final years with Medical Protective. Third, Herrin asserted his
overall surgical referrals had gone down since 1997, but he also explained
that this decline was attributable to his own professed desire to slow
down his practice and the recent arrival of two new orthopedic surgeons to
the Marshall community. In fact, Herrin admitted at trial he had no proof
he had lost any referrals as a result of Medical Protective's
nonrenewal decision. Fourth, following Medical Protective's decision to
not renew his insurance, neither Frontier Insurance (Herrin's 1998
replacement insurer) nor the Marshall hospital restricted Herrin's
surgical privileges in any way. Finally, a variety of
reasons leads us to conclude that the testimony of Herrin's expert
regarding Herrin's damages for fraud failed to establish a causal
connection between Herrin's alleged damages and Medical Protective's
alleged fraud. Initially, we note that the expert's opinion was based on
several presumptions that were false. The expert first assumed Herrin's
hospital privileges had been restricted during the years following Medical
Protective's nonrenewal. Yet even Herrin himself conceded that his
privileges had not been curtailed during the relevant time
period. The expert's economic loss projections were also based on the
premise that Medical Protective had told people in the Marshall community
that Herrin was, in essence, a bad doctor. This assumption was necessary
for Herrin's expert to link the expert's economic loss projections to
Medical Protective's conduct. But the jury heard no evidence from any
source that Medical Protective told anyone--other than Herrin himself--of
the company's decision not to renew. Instead, all the evidence at trial
showed that Herrin was the person who told others about his insurance
being nonrenewed. Thus, the expert's economic loss projections could not
be linked to any conduct by Medical Protective. In fact, the expert
conceded that, if the evidence at trial showed it was Herrin himself who
was responsible for telling others in the Marshall community about the
nonrenewal, then all of the expert's damages calculations could not be
attributed to Medical Protective.
(2) Thus, as a
matter of law, the expert's damages calculations could not support a
finding of loss in this case because the purported conduct on which those
calculations were based was not engaged in by Medical Protective or was
conduct (such as a limitation of Herrin's surgical privileges) that never
occurred. Accordingly, we cannot say
there is legally sufficient evidence of any fraud damages (assuming,
without deciding, that there was legally sufficient evidence to support
the first five elements of the fraud cause of action). Neither direct nor
indirect evidence links Herrin's claimed damages to any conduct by Medical
Protective. Herrin's insurance was renewed in 1997, the policy year
following the $300,000.00 malpractice settlement. The evidence in this
case does not support Herrin's claim of fraud. IV.
Conclusion The jury found only that
Medical Protective had violated the DTPA and committed fraud. The jury's
sole basis for awarding damages under the DTPA claim was for Herrin's
claim of mental anguish. We have concluded the mental anguish damages
awarded by the jury were not supported by legally sufficient evidence.
Similarly, the jury's $250,000.00 award for Herrin's fraud cause of action
was not supported by legally sufficient evidence inasmuch as there was no
evidence that tended to connect Medical Protective's alleged fraudulent
conduct to Herrin's alleged pecuniary losses. Therefore, for the reasons
stated, we reverse the trial court's judgment based on the jury's verdict,
and we render a judgment in favor of Medical Protective that Herrin take
nothing.
Jack Carter Justice Date Submitted: July 18,
2007 Date Decided: October 3,
2007 2. The expert told the jury, "Yeah, if
you shoot yourself in the foot, I guess you're responsible for your own
shooting." |