Madelyn Holzman, M.D. v. State

NUMBER 13-11-00168-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

MADELYN HOLZMAN, M.D., Appellant,

v.

THE STATE OF TEXAS, Appellee.

On appeal from the 94th District Court
of Nueces County, Texas.

MEMORANDUM OPINION

Before Chief Justice Valdez and Justices Garza and Benavides
Memorandum Opinion by Chief Justice Valdez

By two issues, which we address as one, appellant, Madelyn Holzman, M.D.,

appeals from the trial court’s order denying her motion to dismiss based on the failure of

the State of Texas to comply with the expert report requirements of chapter 74 of the

Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. §

74.351 (West 2011). We affirm.
 I. BACKGROUND

The State of Texas, acting through the Office of the Attorney General, filed this

suit against appellant after it discovered that appellant had allegedly discarded

approximately 200 medical files containing sensitive personal information about her

patients in a trash dumpster accessible to the public. The State asserted causes of

action under the Deceptive Trade Practices Act and the Identity Theft Enforcement and

Protection Act. See TEX. BUS. & COM. CODE ANN. §§ 17.01–.926 (West 2011 & West

Supp. 2011); §§ 521.001–.152 (West 2011 & West Supp. 2011).

In its live petition, the State alleges in relevant part:

In the regular course of business, defendant[] provide[s] medical services
to [her] patients. Defendant[] maintain[s] the patient’s medical file, in [her]
possession, custody, and control and has kept all of the files, as part of
defendant[’]s[] business records, since the inception of the medical
practice.

...

Although the medical files contain sensitive personal information that
could be used to steal the identities of individuals or to permit access to an
individual’s private medical information, defendant[] failed to implement
and maintain reasonable procedures to protect and safeguard from
unlawful use or disclosure any sensitive personal information collected or
maintained by defendant[] in the regular course of business . . . .

As a consequence of defendant[’]s[] failure to implement and maintain
reasonable procedures to protect and safeguard such information, on or
about May 2, 2009, approximately 200 of defendant[’]s[] medical files,
containing sensitive personal information, were found in a trash dumpster
that was readily accessible to the public in Corpus Christi, Texas.

One hundred and twenty days after the State filed suit, appellant filed a motion to

dismiss the lawsuit, arguing that the claims alleged by the State were subject to the

provisions of chapter 74 of the Texas Civil Practice and Remedies Code and that the

claims should be dismissed because the State had failed to comply with the provisions

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of that chapter. See TEX. CIV. PRAC. & REM. CODE ANN. § 74.351. The trial court denied

the motion, and this appeal ensued. See id. § 51.014(a)(9) (West 2011).

II. ANALYSIS

A. Applicable Law

Chapter 74 of the Texas Civil Practice and Remedies Code entitles a defendant

to dismissal of a healthcare liability claim if the defendant is not served, within 120 days

of the date suit was filed, with an expert report showing that the claim has merit. See id.

§ 74.351(b). The report must provide a fair summary of the expert’s opinions as of the

date of the report regarding: (1) applicable standards of care; (2) the manner in which

the care rendered by the healthcare provider failed to meet the standard of care; and (3)

the causal relationship between that failure and the injury, harm, or damages claimed.

Id. § 74.351(r)(6).

To avoid dismissal, the report must present an objective good-faith effort to

comply with these requirements. See id. § 74.351(l). A “good-faith effort” in this context

simply means a report that does not contain a material deficiency. Samlowski v.

Wooten, 332 S.W.3d 404, 409–10 (Tex. 2011). To constitute a good-faith effort, the

report must provide enough information to: (1) inform the defendant of the specific

conduct the plaintiff has called into question; and (2) provide a basis for the trial court to

conclude that the claims have merit. See Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48,

53 (Tex. 2002). The report must include the expert’s opinion on each of the three

elements: (1) standard of care; (2) breach; and (3) causal relationship. Id. A report

cannot merely state the expert’s conclusions about these elements. Id. “Rather, the

expert must explain the basis of his statements to link his conclusions to the facts.”

Earle v. Ratliff, 998 S.W.2d 882, 890 (Tex. 1999).

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B. Standard of Review

The denial of the motion to dismiss is reviewed for abuse of discretion. Jelinek v.

Casas, 328 S.W.3d 526, 539 (Tex. 2010). However, when the issue, as in this case,

involves the applicability of chapter 74 to the plaintiff’s claims and requires an

interpretation of the statute, we apply a de novo standard of review. Buck v. Blum, 130

S.W.3d 285, 290 (Tex. App.—Houston [14th Dist.] 2004, no pet.); Ponce v. El Paso

Healthcare Sys., Ltd., 55 S.W.3d 34, 36 (Tex. App.—El Paso 2001, pet. denied).

C. Discussion

This case involves two distinct issues: (1) Are the claims in this case healthcare

liability claims subject to the provisions of chapter 74? (2) If so, is the State of Texas

subject to the provisions of chapter 74?

A healthcare liability claim consists of three elements:1 “(1) a physician or health

care provider must be a defendant; (2) the claim or claims at issue must concern

treatment, lack of treatment, or a departure from accepted standards of medical care, or

health care, or safety or professional or administrative services directly related to health

care; and (3) the defendant’s act or omission complained of must proximately cause the

injury to the claimant.” Tex. West Oaks Hosp., LP v. Williams, 371 S.W.3d 171, 180

(Tex. 2012); Marks v. St. Luke’s Episcopal Hosp., 319 S.W.3d 658, 662 (Tex. 2010).

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Chapter 74 of the Civil Practice and Remedies Code provides the following definition of a
healthcare liability claim:

a cause of action against a health care provider or physician for treatment, lack of
treatment, or other claimed departure from accepted standards of medical care, or health
care, or safety or professional or administrative services directly related to health care,
which proximately results in injury to or death of a claimant, whether the claimant’s claim
or cause of action sounds in tort or contract.

TEX. CIV. PRAC. & REM. CODE ANN. § 74.001(a)(13) (West 2011).

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 In this case, the first element is not in dispute. The relevant inquiry concerns the

second and third elements.

“A cause of action alleges a departure from accepted standards of safety if the

act or omission complained of is an inseparable part of the rendition of medical

services.” Valley Baptist Med. Ctr. v. Azua, 198 S.W.3d 810, 814 (Tex. App.—Corpus

Christi 2006, no pet.). If the essence of the suit is a healthcare liability claim, a party

cannot avoid the requirements of chapter 74 through artful pleading. Diversicare Gen.

Partner, Inc. v. Rubio, 185 S.W.3d 842, 851 (Tex. 2005). Therefore, in determining

whether the claim is governed by chapter 74, we review the underlying nature of the

claim and not the labels used by claimants. Azua, 198 S.W.3d at 814.

The core allegations in this case are that, in the course of providing healthcare to

patients, (1) appellant maintained medical files, (2) the files contained private medical

information, (3) appellant had a duty to keep the information confidential, and (4)

appellant breached that duty with respect to 200 files by disposing of them in a trash

dumpster accessible to the public.

The Dallas Court of Appeals has previously noted that “[m]aintaining the

confidentiality of patient records is part of the core function of providing health care

services.” Sloan v. Farmer, 217 S.W.3d 763, 768 (Tex. App.—Dallas 2007, pet.

denied). According to the court, “any duty [a healthcare provider] may have had to

maintain the confidentiality of the health-care communication is inextricably intertwined

with the physician-patient relationship and the health-care services to which the

communication pertains.” Id. Thus, in Sloan, the court concluded that chapter 74 was

applicable to claims involving alleged breaches of confidentiality between physician and

patient. Id. at 768–69.

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 Assuming the foregoing establishes the second element of a healthcare liability

claim, what remains missing is an allegation of a patient’s injury or death. See Marks,

319 S.W.3d at 662. Obviously, the State is not a patient. Nor has the State alleged that

any patient suffered bodily injury or death. If any non-physical injury has been alleged

in this suit, it arises from the medical files being deposited in a trash dumpster

accessible to the public. However, the State did not allege that this act caused any

person to suffer any injury. There is no allegation that any confidential information

actually fell into the hands of any third-parties—only that the information could have

potentially been accessed by the public. Thus, the injury, if any, is purely hypothetical.

Moreover, it is not necessary for the State to allege any injury to a patient to recover the

civil penalties it seeks in its live petition. See TEX. BUS. & COM. CODE ANN. §§ 17.47(c)

(DTPA); 521.151(a) (ITEPA). Therefore, we conclude that the third element for a

healthcare liability claim is absent in this case.

Accordingly, the trial court did not err in denying appellant’s motion to dismiss.

Appellant’s two issues are overruled.

III. CONCLUSION

The judgment of the trial court is affirmed.

___________________
ROGELIO VALDEZ
Chief Justice

Dissenting Memorandum Opinion by
Justice Gina M. Benavides.

Delivered and filed the
31st day of January, 2013.

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