Opinion issued July 12, 2007
In The
Court of Appeals
For The
First District of Texas
NO. 01-06-00631-CV
PAIGE B. HATCH, Appellant
V.
TEXAS PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION FOR THE HOME INDEMNITY COMPANY, Appellee
On Appeal from the 269th District Court
Harris County, Texas
Trial Court Cause No. 2001-50730
MEMORANDUM OPINION
This is an appeal from a suit for judicial review of a Texas Workers= Compensation Commission (ATWCC@)[1] determination concerning the compensability of on-the-job injuries suffered by appellant, Paige B. Hatch. Appellee, Texas Property and Casualty Insurance Guaranty Association (ATPCIGA@), brought a suit for judicial review, seeking a declaration that Hatch=s rheumatoid arthritis (ARA@) was not a component of his compensable injuries and recovery of its costs. After a jury trial, the trial court rendered judgment on a verdict that RA was a compensable component of Hatch=s injuries.
In his sole issue on appeal, Hatch contends that the trial court erred by excluding his trial counsel as an expert witness on the issue of attorney=s fees.
We affirm.
FACTS AND PROCEDURAL HISTORY
In 1991, Hatch suffered injuries to his wrists, shoulders, and knees while at work unloading gravel trucks. Hatch was subsequently diagnosed with trauma-induced RA. The workers= compensation carrier for Hatch=s employer at the time, The Home Indemnity Company (AHome@), covered Hatch=s treatment until year 2000.
On May 14, 2001, Home challenged the compensability of Hatch=s injuries before the TWCC. The TWCC concluded that RA was a compensable component of Hatch=s injuries. A TWCC appellate panel later affirmed the determination.[2]
On October 1, 2001, Home filed a petition for judicial review in the 269th District Court, alleging that the evidence was insufficient to support the finding that RA was a component of Hatch=s compensable injuries, and seeking a denial of future benefits and recovery of costs. Hatch answered with the affirmative defenses of waiver, estoppel, and laches. In addition, Hatch sought to recover his attorney=s fees Apursuant to Section 408.221(c) of the Labor Code effective September 1, 2001.@[3]
On November 16, 2001, Home served Hatch with a Request for Disclosure, seeking the designation of any testifying experts, and disclosure of the subject matter and bases of their opinions, as well as any underlying data. Hatch responded by designating two physicians. Home also requested disclosure of the amount of economic damages Hatch would seek and the method of computation. Hatch responded that he would seek $960,000 and AAttorneys fees at 40% = $384,000.@
In May 2003, during the pendency of the appeal to the district court, Home was declared an impaired insurer.[4] Appellee, TPCIGA, became the statutory successor to Home and substituted into the lawsuit, adopting Home=s petition in the district court.[5]
On October 12, 2004, the trial court issued an Agreed Scheduling Order, setting the case for a jury trial on January 10, 2005. The Order granted TPCIGA until November 10, 2004 to designate expert witnesses and prohibited Hatch from designating additional experts without leave of court.[6] On October 13, 2004, the trial court issued a Trial Preparation Order, requiring the parties to exchange their lists of trial witnesses by January 10, 2005. When trial was later reset for January 24, 2005, the parties agreed to extend this deadline to January 21, 2005.
On December 27, 2004, TPCIGA amended its petition to assert, inter alia, that section 408.221(c) of the Labor Code did not allow Hatch to recover attorney=s fees as Hatch had originally contended in 2001 in his answer to Home=s suit.
On January 21, 2005, pursuant to the agreed modification of the Trial Preparation Order, Hatch filed his witness list, designating two physicians as his experts. Hatch did not designate an attorney to testify regarding attorney=s fees.
Subsequently, trial was reset for May 16, 2005. Two business days prior to trial, on May 12, 2005, and without seeking leave as instructed, Hatch filed a Supplemental Witness Designation, in which he designated his trial counsel, Allan G. Levine, as a testifying expert regarding the reasonableness and necessity of attorney=s fees. Hatch did not provide any information concerning the bases or underlying data. On May 13, 2005, TPCIGA filed a motion to exclude Levine on the grounds of surprise, prejudice, and Hatch=s failure to provide any information, reports, or underlying data as to attorney=s fees, as had been requested in Home=s Request for Disclosure.
On May 16, 2005, at a pre-trial hearing, the trial court considered TPCIGA=s motion to exclude Levine as an expert witness on attorney=s fees. TPCIGA=s counsel, Gregory Whigham, argued that he had spoken with Levine in 2004 and had explained that section 408.221(c) of the Labor Code[7] did not permit Hatch to recover attorney=s fees because Home, TPCIGA=s predecessor as the original insurer, was impaired, and, therefore, article 21.28BC of the Insurance Code[8] controlled and prohibited the collection of attorney=s fees from TPCIGA. Whigham argued that, subsequent to those discussions, when Levine failed to timely designate an expert as to attorney=s fees, Whigham understood that Levine had reviewed the statutes as discussed and had agreed that recovery of attorney=s fees was not possible. TPCIGA contended that it prepared the case accordingly and was unfairly surprised when it learned, through the designation of Levine two business days before trial, that Hatch would pursue his original claim for attorney=s fees.
Hatch argued that his failure to designate Levine was inadvertent and contended that section 408.221(c) of the Labor Code controlled and made TPCIGA liable for attorney=s fees.
The trial court orally granted TPCIGA=s motion to exclude Levine=s testimony on the ground that Hatch had failed to timely designate Levine as an expert. The trial court declined to make a specific ruling with regard to the implications of Insurance Code article 21.28BC in this case, but noted that it had Acertainly factored that in for [its] consideration.@
At the conclusion of trial, the jury found that Hatch=s 1991 injury was a cause of his RA, and the trial court rendered judgment in favor of Hatch on May 9, 2006. Hatch filed a motion for new trial on the issue of attorney=s fees, which the trial court denied. This appeal ensued.
Exclusion of Expert Witness
In his sole issue on appeal, Hatch contends that the trial court erred by excluding his trial counsel as an expert witness on the issue of attorney=s fees. Hatch contends that the exclusion of his expert witness improperly precluded him from exercising his statutory right, pursuant to Labor Code section 408.221(c), to recover attorney=s fees. We construe Hatch=s contention to be that, because attorney=s fees are statutorily prescribed, the trial court was compelled to accept his evidence.
Hatch contends that resolution of this case turns on a reconciliation of perceived conflicts between Labor Code section 408.221(c)[9] and Insurance Code article 21.28BC.[10] The trial court expressly declined to rule on the statutory issues presented when it ruled that Hatch=s expert witness would be excluded. We agree that the resolution of this case does not depend upon a reconciliation of perceived conflicts in the statutes because even if, as Hatch contends, Labor Code section 408.221(c) governs this dispute and shifts liability for Hatch=s Areasonable and necessary@ attorney=s fees to TPCIGA, Hatch failed to meet his evidentiary burden under the statute to show that the fees sought were reasonable and necessary.[11] See Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818B19 (Tex. 1997) (concluding that party cannot simply ask for percentage of recovery as fee without evidence of factors demonstrating that fees were reasonable and necessary); Firefighters= & Police Officers= Civil Serv. Comm=n of the City of Houston v. Herrera, 981 S.W.2d 728, 735B36 (Tex. App.CHouston [1st Dist.] 1998, pet. denied) (concluding that, although attorney=s fees shifted to Commission by statute, claimants were not relieved of burden to prove that attorney=s fees under contingency arrangement were reasonable and necessary); see also Volume Millwork, Inc. v. West Houston Airport Corp., 218 S.W.3d 722, 732 (Tex. App.CHouston [1st Dist.] 2006, pet. denied) (concluding that award of attorney=s fees must be supported by evidence that fees were both reasonable and necessary).
Hatch=s evidence regarding the reasonableness and necessity of attorney=s fees was to be the expert testimony of his counsel, Levine. Hatch contends that the trial court erred when it excluded Levine as an expert witness.
A. Standard of Review and Principles of Law
We review a trial court=s exclusion of an expert on the basis of improper designation for an abuse of discretion. Mentis v. Barnard, 870 S.W.2d 14, 16 (Tex. 1994). A trial court abuses its discretion if it acts without guiding rules or principles. Owens-Corning Fiberglass Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). A party seeking to reverse a judgment based on an evidentiary error must prove that the error probably resulted in an improper judgment or that the error probably prevented the appellant from properly presenting the case to the court of appeals. See Tex. R. App. P. 44.1; Malone, 972 S.W.2d at 43; Benavides v. Cushman, Inc., 189 S.W.3d 875, 879 (Tex. App.CHouston [1st Dist.] 2006, no pet.). An appellate court must uphold the trial court=s evidentiary ruling if there is any legitimate basis for the ruling. Malone, 972 S.W.2d at 43.
Under the Texas Rules of Civil Procedure, which govern civil actions in the district court, a party may serve the opposing party with a request for disclosure of any testifying experts and the subject matter on which the expert will testify, the general substance and basis of the expert=s opinions, and all underlying reports and data. Tex. R. Civ. P. 2, 194.1, 194.2, 195.1. Unless otherwise ordered by the trial court, a party must designate its experts and furnish the requested information Aby the later of the following two dates: 30 days after the request is served, orC(a) with regard to all experts testifying for a party seeking affirmative relief, 90 days before the end of the discovery period; (b) with regard to all other experts, 60 days before the end of the discovery period.@ Tex. R. Civ. P. 195.2.
If a party learns that its response to written discovery was incomplete or incorrect when made or, although correct when made, is no longer complete and correct, the party must supplement the response to the extent that the request sought, inter alia, identification of expert witnesses and other informationCunless the other information has been made known to the other party in writing, on the record at a deposition, or through other discovery responses. Tex. R. Civ. P. 193.5, 195.6. A supplemental response must be made reasonably promptly after the party discovers the necessity of the response. Tex. R. Civ. P. 193.5. Generally, Ait is presumed that [a] . . . supplemental response made less than 30 days before trial was not made reasonably promptly.@ Tex. R. Civ. P. 193.5.
When a party fails to supplement a discovery response in a timely manner, Rule 193.6 provides that:
. . . [the party] may not introduce in evidence the material or information that was not timely disclosed, or offer the testimony of a witness (other than a named party) who was not timely identified, unless the court finds that:
(1) there was good cause for the failure to make, amend, or supplement the discovery response; or
(2) the failure to timely make, amend, or supplement the discovery response will not unfairly surprise or unfairly prejudice the other parties.
Tex. R. Civ. P. 193.6(a). The party seeking to call the witness bears the burden to establish good cause or the lack of unfair surprise or prejudice. Id. 193.6(b). The trial court=s finding of good cause or lack of unfair surprise or prejudice must be supported by the record. Id. If the party fails to carry its burden, the trial court may grant a continuance to allow a response to be made, amended or supplemented, and to allow opposing parties to conduct discovery regarding any new information presented by the response. Id. 193.6(c).
B. Analysis
Here, in 2001, when Home appealed the TWCC decision to the trial court, Hatch answered that he would seek attorney=s fees, Apursuant to Section 408.221(c) of the Labor Code, effective September 1, 2001.@ However, when Home served Hatch with a Request for Disclosure, requesting that Hatch designate his expert witnesses, disclose information concerning those witnesses, the general substance of the experts= opinions, a brief summary of the bases for the opinions, and all reports or data compilations, Hatch did not designate an attorney as a testifying witness. See Tex. R. Civ. P. 194.2, 195.1.
In February 2003, in response to Home=s request for disclosure of the amount of economic damages Hatch would seek and the method of computation, Hatch included in his response that he would seek 40 percent of the asserted economic damages as attorneys fees, or $384,000. In June 2003, Home was declared an impaired insurer and TPCIGA substituted into the suit. In October 2004, when the trial court issued an Agreed Scheduling Order, prohibiting Hatch from designating any additional (non-rebuttal) experts without leave of court, Hatch did not seek leave to designate his attorney as an expert witness.
In December 2004, when TPCIGA asserted in its amended petition that Hatch could not recover attorney=s fees under section 408.221 of the Labor Code, Hatch did not supplement his response to the request for disclosure or seek leave to designate Levine as an expert witness. In January 2005, Hatch timely filed a witness list, pursuant to the agreed modification of the Trial Preparation Order, but did not designate an attorney to testify as to attorney=s fees.
Subsequently, two business days before trial, on May 12, 2005, Hatch filed a Supplemental Expert Witness Designation, naming, for the first time, Levine as his expert witness as to the reasonableness and necessity of attorney=s fees. Pursuant to Rule 193.5, Hatch=s supplemental response was not made reasonably promptly. See Tex. R. Civ. P. 193.5 (providing that supplemental response made less than 30 days before trial is presumed not to have been made reasonably promptly).
Because Hatch failed to supplement his response in a timely manner, he was prohibited by Rule 193.6 from offering the expert testimony of Levine unless Hatch met his burden to establish that (1) there was good cause for the failure to supplement his discovery response or (2) the failure to timely supplement his discovery response would not unfairly surprise or prejudice TPCIGA. See Tex. R. Civ. P. 193.6(a), (b). In addition, the record must contain evidence to support a finding of good cause or a lack of unfair surprise. See id. 193.6(b).
First, Hatch conceded in the trial court that he should have designated Levine in response to the request for disclosure and that Hatch=s failure to timely designate Levine was inadvertent. It is well-established, however, that the inadvertence of counsel does not constitute Agood cause.@ See Alvarado v. Farah Mfg. Co., 830 S.W.2d 911, 915 (Tex. 1992); Harris County v. Inter Nos, Ltd., 199 S.W.3d 363, 367 (Tex. App.CHouston [1st Dist.] 2006, no pet.). Therefore, the record establishes that Hatch did not show good cause for the late designation of Levine.
Second, Hatch failed to meet his burden to show that his failure to timely supplement his discovery response would not unfairly surprise or unfairly prejudice TPCIGA. See Tex. R. Civ. P. 193.6(a). In a brief Hatch submitted to the trial court in the matter, Hatch stated only that TPCIGA was not prejudiced by the late designation because, in 2003, as part of his response to Home=s request for disclosure as to economic damages, Hatch responded that he would seek attorney=s fees of $384,000 as 40 percent of his asserted economic damages. At the pre-trial hearing, TPCIGA argued that it was surprised by the late designation because it thought that Hatch was no longer seeking attorney=s fees after the parties= discussion and that it had not been put on notice to develop this aspect of its case. Hatch contended that TPCIGA knew all along that Hatch would seek attorney=s fees. However, throughout preparation for trial, following the time that TPCIGA substituted into the suit, Hatch did nothing to alert TPCIGA to the fact that it planned to seek attorney=s fees. Moreover, at the pre-trial hearing, although Hatch argued the availability of attorney=s fees under section 408.221(c) of the Labor Code, he failed to persuade the trial court that TPCIGA was not unfairly surprised or unfairly prejudiced by Hatch=s untimely designation of his expert witness.
We conclude that Hatch=s indirect disclosure (through his response to a question concerning economic damages in a request for disclosure submitted by Home in 2001) that he would seek $384,000 in attorney=s fees, was not, on its own, sufficient to demonstrate that TPCIGA was not prejudiced by the late designation of Levine.
Moreover, rule 193.6 provides the trial court with the discretion to the grant a continuance to allow a response to be supplemented and to allow opposing parties to conduct discovery regarding any new information presented by the response. See Tex. R. Civ. P. 193.6(c). However, the record before us does not reflect that Hatch sought a continuance.
The trial court=s implicit finding that TPCIGA was unfairly prejudiced is supported by the record. We must uphold the trial court=s evidentiary ruling if there is any legitimate basis for the ruling. Malone, 972 S.W.2d at 43. We hold that the trial court did not abuse its discretion by excluding Levine as an expert witness as to attorney=s fees.
Accordingly, Hatch=s sole issue is overruled.
CONCLUSION
We affirm the judgment of the trial court.
Laura Carter Higley
Justice
Panel consists of Chief Justice Radack and Justices Keyes and Higley.
1 The Texas Workers= Compensation Commission was replaced in 2005 by the Texas Department of Insurance, Division of Workers= Compensation. See Tex. Lab. Code Ann. _ 402.001 (Vernon 2006). We refer to that authority as it existed at the time of the administrative hearings in this case.
2 Tex. Workers= Comp. Comm=n, The Home Indemnity Co. v. Paige B. Hatch, Resp., Docket No. SU-91-082909-04-CC-SU41, No. 011579 (Aug. 29, 2001).
3 See Act of May 18, 2001, 77th Leg., R.S., ch. 1456, _ 8.01, 2001 Tex. Gen. Laws 5189 amended by Act of May 20, 2005, 79th Leg., R.S., ch. 265, _ 3.132, 2005 Tex. Gen. Laws 469, 529 (current version at Tex. Lab. Code Ann. _ 408.221(c) (Vernon 2006)). The 2001 version applies to a request for judicial review that, as here, occurred on or after September 1, 2001.
4 Generally, an Aimpaired insurer@ is an insurer that has been placed in receivership or conservatorship based upon a finding of insolvency. Tex. Ins. Code Ann. _ 462.004 (Vernon 2006).
5 See id. at __ 462.002, 462.051 (stating that TPCIGA is a nonprofit, unincorporated legal entity composed of member insurers that was created to avoid financial loss to claimants and policyholders because of the impairment of an insurer).
6 Hatch was given until December 10, 2004 to designate rebuttal experts.
7 See Act of May 18, 2001, 77th Leg., R.S., ch. 1456, _ 8.01, 2001 Tex. Gen. Laws 5189, 5189 (amended 2005).
8 See Act of May 12, 1971, 62nd Leg., R.S., ch. 360, _ 1, 1971 Tex. Gen. Laws 1362, 1362, repealed by Act of May 24, 2005, 79th Leg., R.S., ch. 727, _ 18(a)(6), 2005 Tex. Gen. Laws 1752, 2187 (now codified at Tex. Ins. Code Ann. 462.001B.351 (Vernon 2006)).
9 See Act of May 18, 2001, 77th Leg., R.S., ch. 1456, _ 8.01, 2001 Tex. Gen. Laws 5189, 5189 (amended 2005).
10 See Act of May 12, 1971, 62nd Leg., R.S., ch. 360, _ 1, 1971 Tex. Gen. Laws 1362, 1362 (repealed 2005).
11 Section 408.221provides as follows, in pertinent part:
. . . .
(c) An insurance carrier that seeks judicial review . . . of a final decision of the appeals panel regarding compensability . . . [of] benefits is liable for reasonable and necessary attorney=s fees as provided by Subsection (d) incurred by the claimant as a result of the insurance carrier=s appeal if the claimant prevails on an issue on which judicial review is sought by the insurance carrier . . . .
(d) In approving an attorney=s fee under this section . . . the . . . court shall consider:
(1) the time and labor required;
(2) the novelty and difficulty of the questions involved;
(3) the skill required to perform the legal services properly;
(4) the fee customarily charged in the locality for similar legal services;
(5) the amount involved in the controversy;
(6) the benefits to the claimant that the attorney is responsible for securing; and
(7) the experience and ability of the attorney performing the services.
See Act of May 18, 2001, 77th Leg., R.S., ch. 1456, _ 8.01, 2001 Tex. Gen. Laws 5189, 5189 (amended 2005). The Texas Supreme Court has set forth these factors as determinative of the reasonableness and necessity of attorney=s fees in other contexts. Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).