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Horizon/CMS Healthcare Corp. v. Auld8/24/2000
On Petitions for Review from the Court of Appeals for the Second District of Texas
Argued on November 17, 1999
Justice Abbott delivered the opinion of the Court, in which Justice Hecht, Justice Enoch, Justice Owen, and Justice Gonzales join.
Justice Hankinson filed a concurring and dissenting opinion, in which Chief Justice Phillips, Justice Baker, and Justice O'Neill join.
The focus of this case is whether Texas Revised Civil Statutes article 4590i, section 11.02(a) (part of the Medical Liability and Insurance Improvement Act), or Texas Civil Practice and Remedies Code section 41.007, provides a statutory basis for capping punitive damages that are awarded in cases involving health-care-liability claims. We hold that the latter provision, section 41.007, provides the basis for capping the punitive damages that were awarded in this case, and that article 4590i, section 11.02(a), does not. We also hold that article 4590i, section 11.02 does, however, cap the amount of prejudgment interest awarded on Auld's actual damages falling within section 11.02(a)'s cap. As a result, Auld is not entitled to the entire prejudgment interest award in this case. Other issues raised by the parties include the constitutionality of article 4590i, section 11.02, and evidentiary and procedural concerns. We agree with the court of appeals' judgment on these matters. Accordingly, we affirm the court of appeals' judgment in part. With regard to that portion of the judgment affirming the trial court's award of prejudgment interest to Auld, we hold that Auld may recover prejudgment interest awarded on the damages specifically excluded from article 4590i's damages cap by section 11.02(b), but that Auld may recover prejudgment interest on damages subject to the cap only to the extent that such interest does not exceed the cap. Accordingly, we reverse in part and remand to the trial court to render judgment in accordance with this opinion.
I.
Martha Hary became a resident at Heritage Western Hills Nursing Home (Heritage) in August 1994. When she arrived at Heritage, Hary suffered from, among other things, Alzheimer's disease, anxiety, malnutrition, emphysema, and spinal arthritis. She resided at Heritage for about one year before she was hospitalized in Fort Worth, where she was treated for ten days. After her hospitalization, Hary was transferred to a different nursing home that is not a party to this suit.
Through her next friend Francis Orr, Hary filed suit against Horizon/CMS Healthcare Corporation (Horizon) alleging that its nursing home - Heritage - was negligent and grossly negligent by failing to provide her with medical care and treatment within the acceptable standard of care. Hary alleged that substandard nursing care proximately caused her to develop pressure sores, that she suffered from contractures in all extremities, that not all the wound-care treatments and pressure-relieving devices that had been ordered were provided to her, and that the care actually administered for her pressure sores was painful. While the case was pending, Hary died from a heart attack. Hary's administratrix, Lexa Auld, continued the suit through a survival action, which was tried to a jury.
The jury returned a verdict of $2,371,000 in actual damages, which included $1,750,000 for physical pain and mental anguish, $150,000 for disfigurement, $250,000 for impairment, and $221,000 for medical care. The jury also awarded $90,000,000 in punitive damages, based on its finding that the nursing home engaged in grossly negligent conduct toward Hary. The trial court reduced both the actual and punitive damages awards. The court applied the article 4590i ca
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