Martha Arango and Americare Nursing Services, Inc. v. Andrea Davila

NUMBERS
13-09-00470-CV
13-09-00627-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI – EDINBURG

MARTHA ARANGO AND AMERICARE
NURSING SERVICES, INC., Appellants,

v.

ANDREA DAVILA, Appellee.

On appeal from the 139th District Court
of Hidalgo County, Texas.

MEMORANDUM OPINION
Before Justices Yañez,1 Garza, and Benavides
Memorandum Opinion by Justice Garza

1
The Honorable Linda Reyna Yañez, former Justice of this Court, was a member of the panel at
the time this case was argued and submitted for decision, but did not participate in deciding the case
because her term of office expired on December 31, 2010. See TEX. R. APP. P. 41.1.
 In these two consolidated appeals, we are asked whether an employer‘s duty to

provide a safe workplace may extend to publicly accessible roadways. The trial court

ruled in this case that it does, in part due to deemed admissions resulting from the

failure of appellants, Martha Arango and Americare Nursing Services, Inc.

(―Americare‖), to timely respond to a request for admissions. See TEX. R. CIV. P.

198.2(c). A jury then awarded over $1.8 million dollars in damages to appellee, Andrea

Davila. By seven issues on appeal, Americare and Arango contend that: (1) employers

have no duty to make public roadways safe for employees; (2) if an employer does have

such a duty, that duty is non-delegable and does not apply to Arango individually; (3)

the deemed admissions should have been set aside; (4) the trial court erred by denying

their request to designate a responsible third party; (5) evidence of contributory

negligence should have been admitted; (6) medical expenses written off by health care

providers should not have been included in the damages award; and (7) the trial court

erred by assessing post-judgment discovery sanctions against Arango. We reverse and

remand.

I. BACKGROUND

Davila, an in-home nurse employed by Americare, suffered multiple severe

injuries on April 13, 2005 when the vehicle she was driving collided head-on with

another vehicle on a public road in Palmview, Texas. At the time, Davila was traveling

from the home of one patient to the home of another patient. It is undisputed that she

was in the course of her employment at the time of the collision and that Americare was

a non-subscriber under the Texas Workers‘ Compensation Act. See TEX. LABOR CODE

ANN. § 406.033 (West 2006). Davila sued Americare and its president and director,

2
Arango, asserting claims of negligence, gross negligence, breach of an implied contract,

and fraud, and requesting actual and exemplary damages.

Davila later propounded a request for admissions on Americare and Arango.

The request asked for, among other things, the following admissions: (1) that

Americare failed to provide Davila a safe place to work by ―sending [Davila] in[to] an

area which Americare and [Arango] knew or in the exercise of reasonable care should

have known was an area having a high incidence of motor vehicle accidents and

criminal activity‖; (2) that Americare ―failed to maintain a ‗time management and travel

scheduling system‘ which would have prevented [Davila] from being forced to work in an

unsafe environment‖; (3) that Americare and Arango ―negligently and with reckless

disregard for the rights of [Davila] scheduled critical home health care visits in a

dangerous and unsafe area and in such a manner as to create an unreasonable risk of

harm, injury or death to [Davila]‖; (4) that, ―as a direct and proximate cause [sic] of the

negligent and reckless scheduling of critical home health care visits on or about April

13, 2005, [Davila] was seriously injured by a hit and run driver‖; (5) that Americare and

Arango ―scheduled an excessive amount of time critical home health care visits for the

sole purpose of maximizing profits for themselves with wanton and reckless disregard

for the safety and welfare of their employees‖; (6) that Americare and Arango ―knew or

should have known‖ that such ―excessive‖ scheduling ―created an unreasonable risk of

harm, injury or death‖ to Davila; and (7) that the ―excessive‖ scheduling of visits ―in a

dangerous area‖ caused the damages sustained by Davila.2 According to Davila, the

requests for admissions were served on appellants‘ counsel on November 2, 2007;

2
The requested admissions largely tracked the allegations made in Davila‘s fifth amended
petition.

3
Americare and Arango claim that they were not served with the requests until ―late

December 2007.‖

Americare and Arango filed responses to the requests on January 8, 2008,

denying or objecting to the majority of the requests. They then moved the trial court to

―clarify the status‖ of the admissions by ruling whether the admissions had been

deemed due to the alleged untimeliness of their responses. Americare and Arango also

asked the trial court, if it found the admissions deemed, to strike the admissions,

arguing that: (1) if the responses were untimely served, it was not intentional but rather

―due to an old address being used to serve the request for admissions‖; (2) as soon as

counsel for Americare and Arango became aware that responses were due, he

promptly filed responses; (3) Davila ―will not be unduly prejudiced‖ if the admissions are

struck; and (4) ―there is good cause for the court to strike the admissions.‖ See TEX. R.

CIV. P. 198.2(c). The trial court denied both the motion to clarify and the motion to

strike.

A partial instructed verdict was subsequently entered against Americare and

Arango on the issue of negligence and causation, and only a damages question was

submitted to the jury. The jury awarded $1,818,606.20 to Davila, including pre-

judgment interest, assessed jointly and severally against Americare and Arango.

Americare and Arango filed a motion for judgment notwithstanding the verdict

contending that they owed no duty to Davila as a matter of law. On August 3, 2009, the

trial court entered judgment on the verdict, thereby implicitly denying the motion for

judgment notwithstanding the verdict. These appeals followed.3

3
In appellate cause number 13-09-00627-CV, Americare and Arango challenge the trial court‘s
August 3, 2009 judgment awarding damages to Davila. In appellate cause number 13-09-00470-CV, they

4
 II. DISCUSSION

A. Request to Set Aside Deemed Admissions

We first consider Americare and Arango‘s third issue, by which they argue that

the trial court erred in denying their request to set aside the deemed admissions.

Appellants do not dispute that Roberto Puente, their attorney at the time Davila‘s

requests for admissions were propounded, failed to timely respond to the requests. The

trial court was therefore correct in considering the admissions deemed. See TEX. R.

CIV. P. 198.2. Americare and Arango argue, however, that the trial court abused its

discretion in declining to permit the withdrawal of the admissions because there was no

evidence that Puente acted with ―callous disregard or bad faith‖ in failing to timely

respond to the requests.

Once an action is filed, a party can serve written requests for admissions on an

adverse party. TEX. R. CIV. P. 198.1. When a party does not serve responses to

requests for admissions within thirty days, the matters in the requests will be deemed

admitted against that party. TEX. R. CIV. P. 198.2; Wal-Mart Stores, Inc., v. Deggs, 968

S.W.2d 354, 355 (Tex. 1998). Any matter deemed admitted is conclusively established

unless the court, on motion, permits withdrawal or amendment of the admission. TEX.

R. CIV. P. 198.3; Marshall v. Vise, 767 S.W.2d 699, 700 (Tex. 1989).

Withdrawal or amendment of an admission is permitted on a showing of good

cause and a finding by the trial court that (1) the party relying on the deemed admission

will not be unduly prejudiced, and (2) presentation of the merits of the action will be

served thereby. TEX. R. CIV. P. 198.3; Deggs, 968 S.W.2d at 356. ―Good cause is

seek to reverse the trial court‘s subsequent judgment, dated November 6, 2009, awarding discovery
sanctions to Davila. The post-judgment discovery sanctions order is fully addressed below. See infra
section II.C.

5
established by showing that the failure involved was an accident or mistake, not

intentional or the result of conscious indifference.‖ Wheeler v. Green, 157 S.W.3d 439,

442 (Tex. 2005). ―Even a slight excuse will suffice, especially when delay or prejudice

to the opposing party will not result.‖ Boulet v. State, 189 S.W.3d 833, 836 (Tex. App.–

Houston [1st Dist.] 2006, no pet.); Spiecker v. Petroff, 971 S.W.2d 536, 538 (Tex. App.–

Dallas 1997, no writ). The party seeking withdrawal of deemed admissions has the

burden to establish good cause. Id. (citing Webb v. Ray, 944 S.W.2d 458, 461 (Tex.

App.–Dallas 1997, no writ)). ―Undue prejudice depends on whether withdrawing an

admission or filing a late response will delay trial or significantly hamper the opposing

party‘s ability to prepare for it.‖ Id. at 836-37 (citing Wheeler, 157 S.W.3d at 443).

We will not set aside a trial court‘s ruling to permit or deny the withdrawal of

deemed admissions unless we find an abuse of discretion. Stelly v. Papania, 927

S.W.2d 620, 622 (Tex. 1996); Boulet, 189 S.W.3d at 837. Although a trial court has

broad discretion to permit or deny the withdrawal of deemed admissions, it cannot do so

arbitrarily, unreasonably, or without reference to guiding rules or principles. Boulet, 189

S.W.3d at 837 (citing Wheeler, 157 S.W.3d at 444). Among those ―guiding rules and

principles‖ is the notion that, ―absent flagrant bad faith or callous disregard for the rules,

due process bars merits-preclusive sanctions.‖ Wheeler, 157 S.W.3d at 443.

Moreover, ―[d]iscovery sanctions cannot be used to adjudicate the merits of a party‘s

claims or defenses unless a party‘s hindrance of the discovery process justifies a

presumption that its claims or defenses lack merit.‖ TransAmerican Natural Gas Corp.

v. Powell, 811 S.W.2d 913, 918 (Tex. 1991).

6
 According to Davila, the requests at issue were sent to Puente by certified mail,

return receipt requested, on November 2, 2007. The requests were sent to Puente‘s

address as contained in the court‘s file; however, Puente had since moved from that

address and did not file a notice of address change. The return receipt was signed by

Emilia Puente, Roberto Puente‘s mother, and indicated that the item was delivered on

December 10, 2007.4 The responses were therefore due on January 10, 2008. See

TEX. R. CIV. P. 198.2(a). No responses were served on Davila‘s counsel by that date.

Later in 2008, Puente withdrew as counsel for Americare and Arango.

Appellants‘ substitute counsel, Peter Ferraro, then filed the above-referenced motion to

clarify or strike the deemed admissions. At a hearing on September 18, 2008, Ferraro

stated that, when he took over the case file, he noticed a copy of what appeared to be

responses to Davila‘s requests for admissions dated January 8, 2008. He then

prepared an affidavit, which was signed by Puente, stating that the responses had in

fact been sent to Davila‘s counsel on January 8. Subsequently, after realizing that

Davila‘s counsel had not in fact received any response to the requests, Ferraro moved

to withdraw Puente‘s original affidavit and submitted a revised affidavit stating that

Puente was unsure whether the responses had in fact been sent to Davila‘s counsel.

Davila contends on appeal that the conduct of attorneys Puente and Ferraro

evinces both ―flagrant bad faith‖ and ―callous disregard for the rules,‖ thereby

authorizing merits-preclusive sanctions. We disagree. There is no evidence in the

record establishing that Puente knew of the due date for responding to the requests for

admission, nor is there any indication that Puente intentionally signed the original

4
The parties do not explain, and the record does not reveal, why it took over a month for the
requests for admissions to be delivered.

7
affidavit knowing it was false, or that Ferraro prepared the affidavit knowing it was false.

Moreover, there is no evidence that Puente‘s failure to timely respond to the requests

for admission—which resulted in predictably severe deleterious effects to his client‘s

defense—was in any way intentional or the result of conscious indifference. See

Wheeler, 157 S.W.3d at 442. Davila emphasizes the fact that, in his two affidavits,

Puente gave two contradictory explanations for why no timely responses were filed.

However, without any plausible explanation for why Puente would have intentionally or

consciously refused to respond to the requests for admissions, we must consider

Puente‘s contradictory affidavits to be merely the product of mistake or negligence, not

intent. Under these circumstances, Americare and Arango should not be punished for

their counsel‘s mistakes. See TransAmerican Natural Gas Corp., 811 S.W.2d at 917

(―[A] party must bear some responsibility for its counsel‘s discovery abuses when it is or

should be aware of counsel‘s conduct and the violation of discovery rules. On the other

hand, a party should not be punished for counsel‘s conduct in which it is not implicated

apart from having entrusted to counsel its legal representation.‖).

We find that Americare and Arango met their burden to show good cause for

setting aside the deemed admissions, and that there is no evidence of flagrant bad faith

or callous disregard for the rules. See Wheeler, 157 S.W.3d at 443. Additionally,

merits-preclusive sanctions are inappropriate in this case because there is nothing in

the record that would ―justif[y] a presumption that [Americare and Arango‘s] defenses

lack merit.‖ See TransAmerican Natural Gas Corp., 811 S.W.2d at 918. The trial court

8
therefore abused its discretion by denying appellants‘ request to set aside the deemed

admissions.5 We sustain appellants‘ third issue.

B. Duty as a Matter of Law

By their first issue, Americare and Arango argue that, as a matter of law,

employers have ―no duty to their employees to make public roadways safe or to warn of

dangerous neighborhoods surrounding those roadways.‖ They further contend that,

―because the existence of a duty is a legal question for the court, the deemed

admissions in this case have no effect on question of duty.‖ We construe this issue as a

challenge to the trial court‘s granting of Davila‘s motion for partial directed verdict on the

issue of liability and its denial of Americare and Arango‘s motion for judgment

notwithstanding the verdict.

In a negligence case, the existence of a duty is typically a threshold question of

law which the trial court decides based on the particular facts surrounding the

occurrence in question. Van Horn v. Chambers, 970 S.W.2d 542, 544 (Tex. 1998);

Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995); Nat’l Convenience

Stores, Inc. v. Matherne, 987 S.W.2d 145, 148 (Tex. App.–Houston [14th Dist.] 1999, no

pet.). If there is no duty, liability for negligence cannot exist. Thapar v. Zezulka, 994

S.W.2d 635, 637 (Tex. 1999). ―[F]actors which should be considered in determining

whether the law should impose a duty are the risk, foreseeability, and likelihood of injury

5
Davila argues that she would be unduly prejudiced by the withdrawal of the deemed admissions
because withdrawal ―would have amounted to an almost-complete restarting of the litigation more than
four full years after the accident giving rise to the suit occurred.‖ Americare and Arango contend, to the
contrary, that requiring a party to ―actually prove its case rather than rely on deemed admissions‖ does
not constitute undue prejudice. Cudd v. Hydrostatic Transmission, Inc., 867 S.W.2d 101, 105 (Tex. App.–
Corpus Christi 1993, no writ). However, we need not determine whether the lack of undue prejudice has
been established in this case because, as noted, when deeming admissions results in precluding the
presentation of the merits of the case, as here, constitutional due process requires the admissions to be
withdrawn if there is no evidence of ―bad faith or callous disregard for the rules.‖ See Wheeler v. Green,
157 S.W.3d 439, 443 (Tex. 2005).

9
weighed against the social utility of the actor‘s conduct, the magnitude of the burden of

guarding against the injury and consequences of placing that burden on the employer.‖

Nabors Drilling, Inc. v. Escoto, 288 S.W.3d 401, 405 (Tex. 2009) (citing Otis Eng’g Corp.

v. Clark, 668 S.W.2d 307, 309 (Tex. 1983)). Foreseeability of the risk has been called

the ―foremost and dominant consideration‖ in the duty analysis. El Chico Corp. v.

Poole, 732 S.W.2d 306, 311 (Tex. 1987). The test for foreseeability is what a party

should, under the circumstances, reasonably anticipate as a consequence of its

conduct. J.P. Morgan Chase Bank, N.A. v. Tex. Contract Carpet, Inc., 302 S.W.3d 515,

533 (Tex. App.–Austin 2009, no pet.) (citing Foster v. Denton Indep. Sch. Dist., 73

S.W.3d 454, 465 (Tex. App.–Fort Worth 2002, no pet.)).

―Though the existence of duty is a question of law when all of the essential facts

are undisputed, when the evidence does not conclusively establish the pertinent facts or

the reasonable inferences to be drawn therefrom, the question becomes one of fact for

the jury.‖ Bennett v. Span Indus., Inc., 628 S.W.2d 470, 474 (Tex. App.–Texarkana

1981, writ ref‘d n.r.e.); see Mitchell v. Mo.-Kan.-Tex. R.R. Co., 786 S.W.2d 659, 662

(Tex. 1990) (―While foreseeability as an element of duty may frequently be determined

as a matter of law, in some instances it involves the resolution of disputed facts or

inferences which are inappropriate for legal resolution.‖), overruled on other grounds by

Union Pac. R.R. Co. v. Williams, 85 S.W.3d 162 (Tex. 2002).

We have already determined that the trial court erred in refusing to set aside the

deemed admissions. Barring consideration of those admissions, the ―essential facts‖ of

the case—including facts pertinent to the question of whether Americare and Arango

could have reasonably foreseen Davila‘s accident—remain disputed by the parties. See

10
Bennett, 628 S.W.2d at 474; see also Mitchell, 786 S.W.2d at 662. Because there is a

fact issue as to the existence of a duty, the trial court therefore erred in granting Davila‘s

motion for directed verdict on the issue of liability.6 See Koepke v. Martinez, 84 S.W.3d

393, 395 (Tex. App.–Corpus Christi 2002, pet. denied) (―A directed verdict is proper

when . . . the evidence conclusively proves a fact that establishes a party‘s right to

judgment as a matter of law . . . .‖). For the same reason, the trial court did not err in

denying Americare and Arango‘s motion for judgment notwithstanding the verdict. See

TEX. R. CIV. P. 301 (―[T]he court may render judgment non obstante veredicto if a

directed verdict would have been proper . . . .‖).

We note that, because the deemed admissions were considered by the trial court

to have conclusively established the issues of liability and causation, Davila was not

afforded the opportunity to present evidence at trial on those issues. Accordingly, the

appropriate disposition is to remand the case for a new trial so that Davila may have

that opportunity. See Knapp v. Wilson N. Jones Mem’l Hosp., 281 S.W.3d 163, 176

(Tex. App.–Dallas 2009, no pet.) (―Appellate courts have broad discretion to remand a

case for a new trial in the interest of justice. . . . Remand is appropriate when, for any

reason, a case has not been fully developed.‖).

Appellants‘ first issue is sustained in part.7

6
Although the issue of foreseeability is presently disputed by the parties, we do not intend to
imply that the issue must necessarily be submitted to the jury for its consideration. For example, given
our ruling that the deemed admissions must be set aside, nothing prevents Americare and Arango from
filing a motion for no-evidence summary judgment once the case is remanded to the trial court. If such a
motion is found to be meritorious, judgment must be rendered for Americare and Arango as a matter of
law, and there would be no question of fact remaining for the jury. See TEX. R. CIV. P. 166a(i).
7
Americare and Arango argue that the deemed admissions in the case cannot be used to
establish the existence of a duty, because whether a duty existed is a pure matter of law. We have
already concluded that the deemed admissions should have been set aside. Nevertheless, we recognize
that the rule regarding requests for admissions does not contemplate or authorize admissions to

11
C. Delegability of Duty

By their second issue, Americare and Arango assert that, even if Americare did

owe a duty to Davila under the circumstances of this case, that duty is non-delegable to

Arango. Arango argues that she is entitled to judgment as a matter of law because ―an

officer of the employer has no independent duty to a fellow employee to provide a safe

place to work.‖

Appellants are correct that, ―[w]hen the employer is a corporation, the law

charges the corporation itself, not the individual corporate officer, with the duty to

provide the employee a safe workplace.‖ Leitch v. Hornsby, 935 S.W.2d 114, 117 (Tex.

1996). However, individual liability may arise if the corporate officer owes an

independent duty of reasonable care to the injured party apart from the employer‘s duty.

Id. (citing Werner v. Colwell, 909 S.W.2d 866, 868 (Tex. 1995)). ―An officer or any other

agent of a corporation may be personally as responsible as the corporation itself for

tortious acts when participating in the wrongdoing.‖ Permian Petroleum Co. v. Barrow,

484 S.W.2d 631, 634 (Tex. Civ. App.–El Paso 1972, no writ). An officer or agent of a

corporation is always primarily liable for her own torts, even though the principal is also

liable, but she cannot be held liable for a wrong in which she has not participated. Id.

questions involving points of law. Boulet v. State, 189 S.W.3d 833, 838 (Tex. App.–Houston [1st Dist.]
2006, no pet.) (citing Gore v. Cunningham, 297 S.W.2d 287, 291 (Tex. Civ. App.–Beaumont 1956, writ
ref‘d n.r.e.)). Accordingly, responses to requests for admissions merely constituting admissions of law are
not binding. Id. (citing Am. Title Co. v. Smith, 445 S.W.2d 807, 809-10 (Tex. Civ. App.–Houston [1st Dist.]
1969, no writ)). Here, however, the question of whether a duty existed was a mixed question of law and
fact. See Mitchell v. Mo.-Kan.-Tex. R.R. Co., 786 S.W.2d 659, 662 (Tex. 1990) (―While foreseeability as
an element of duty may frequently be determined as a matter of law, in some instances it involves the
resolution of disputed facts or inferences which are inappropriate for legal resolution.‖). If, at a full trial on
the merits, Davila is able to prove that Americare and Arango reasonably foresaw that scheduling home
health care visits in the vicinity of the accident was likely to result in injury to Davila, then she will have
shown that Americare and Arango owed a duty to her. Similarly, if Davila can prove that appellants
reasonably foresaw that scheduling ―excessive‖ visits would likely result in injury to Davila, then she will
have met her burden.

12
 Davila‘s live pleading asserted identical allegations as to both Arango and her

corporate employer, Americare. Although the general duty to provide a safe workplace

is not applicable to Arango, see Leitch, 935 S.W.2d at 117, that does not establish

conclusively that Arango owed no duty to Davila as a matter of law. Arango may have

owed a duty to Davila—independent of the employer‘s duty to provide a safe

workplace—if she could have reasonably foreseen that her actions could lead to

Davila‘s accident. The issue of whether such a duty existed—along with the issues of

whether a breach of any duty occurred and if so, whether the breach caused Davila‘s

damages—are in dispute and must be left to the jury to decide. See Bennett, 628

S.W.2d at 474; see also Mitchell, 786 S.W.2d at 662. We conclude that Arango was not

entitled to judgment as a matter of law on this basis, and we overrule appellants‘ second

issue.

D. Request to Designate Responsible Third Party

By their fourth issue, Americare and Arango argue that the trial court erred by

denying their motion for leave to designate the hit-and-run driver who collided with

Davila as a responsible third party. We review a trial court‘s denial of such a motion for

abuse of discretion. MCI Sales & Serv. v. Hinton, 272 S.W.3d 17, 36 (Tex. App.–Waco

2008), aff’d, 329 S.W.3d 475 (Tex. 2010); In re Arthur Anderson, 121 S.W.3d 471, 483-

85 (Tex. App.–Houston [14th Dist.] 2003, orig. proceeding).

Section 33.004 of the Texas Civil Practice and Remedies Code sets forth the

procedure a defendant must follow if it wishes to designate a responsible third party.

See TEX. CIV. PRAC. & REM. CODE ANN. § 33.004 (West 2008). Under the statute, a

motion to designate a responsible third party ―must be filed on or before the 60th day

13
before the trial date unless the court finds good cause to allow the motion to be filed at a

later date.‖ Id. § 33.004(a). The trial court must grant the motion unless the plaintiff

files an objection and establishes that the defendant, after being given the opportunity to

replead, ―did not plead sufficient facts concerning the alleged responsibility of the

person to satisfy the pleading requirement of the Texas Rules of Civil Procedure.‖ Id. §

33.004(g). Subsection (j) of the statute further provides:

Notwithstanding any other provision of this section, if, not later than 60
days after the filing of the defendant's original answer, the defendant
alleges in an answer filed with the court that an unknown person
committed a criminal act that was a cause of the loss or injury that is the
subject of the lawsuit, the court shall grant a motion for leave to designate
the unknown person as a responsible third party if:

(1) the court determines that the defendant has pleaded facts
sufficient for the court to determine that there is a reasonable
probability that the act of the unknown person was criminal;

(2) the defendant has stated in the answer all identifying
characteristics of the unknown person, known at the time of
the answer; and

(3) the allegation satisfies the pleading requirements of the
Texas Rules of Civil Procedure.

Id. § 33.004(j).

Americare and Arango first moved for leave to designate a responsible third party

on August 7, 2008, which was less than sixty days prior to the originally scheduled trial

date of September 15, 2008. In the motion, Americare and Arango claimed that an

―unknown hit and run driver . . . was indeed the cause of this accident‖ and asked the

trial court for leave to file the motion late ―for good cause shown as the circumstances of

the second driver [i.e., the driver that collided with Davila] were ascertained in the

responses to Defendants[‘] written discovery on or about July 21, 2008.‖ See id. §

14
33.004(a). The trial court denied the motion on September 3, 2008. Trial was

subsequently postponed and did not take place until June 9, 2009.

On September 16, 2008, Americare and Arango filed amended answers that, for

the first time, alleged that an unknown third party committed a criminal act that caused

Davila‘s injuries. See id. § 33.004(j). Also on that day, Americare and Arango urged

the trial court to reconsider their motion to designate a responsible third party; the trial

court declined that request.

Americare and Arango argue on appeal that the trial court abused its discretion in

denying their original motion because, even though it was filed within sixty days of the

trial setting, ―there is no dispute a third party was directly responsible for Ms. Davila‘s

injuries‖ and Americare and Arango ―asked for leave to designate this party several

months before the trial‖ eventually occurred. In response, Davila notes that the

amended answers—the first to allege that an unknown party‘s criminal act was the

cause of Davila‘s injuries—were not filed within sixty days of the defendants‘ original

answer. Davila also argues that, even if the original motion to designate is considered

timely because trial did not take place until ten months after the motion was filed, see id.

§ 33.004(a), the trial court did not abuse its discretion in denying the motion because

the motion did not identify the alleged responsible third party by name.

We agree with Davila on both points. First, there is no dispute that the amended

answers, filed on September 16, 2008, were filed well outside the sixty-day window

provided by subsection (j) of the statute. See id. § 33.004(j). Accordingly, the trial court

did not abuse its discretion by denying Americare and Arango‘s request pursuant to that

subsection. Second, we agree that subsection (j) is the exclusive means by which

15
defendants may designate ―unknown,‖ rather than named, responsible third parties. In

In re Unitec Elevator Services, the First Court of Appeals was similarly asked whether

defendants could, under section 33.004, designate unknown responsible third parties

even though the defendants first alleged that the criminal acts of unknown third parties

were responsible for the plaintiff‘s injuries more than sixty days after the defendants‘

original answer. 178 S.W.3d 53, 60 (Tex. App.–Houston [1st Dist.] 2005, orig.

proceeding). In construing the statute, the court found that:

the statute clearly and unambiguously requires a defendant seeking to
designate an unknown person as a responsible third party, based on the
person‘s commission of criminal acts causing the loss or injury that is the
subject of the lawsuit, to file an answer containing such allegations no
later than sixty days from filing its original answer.

Id. at 61. The court reasoned as follows:

While revised section 33.004 clearly recognizes the right of a defendant to
submit an unknown person as a responsible third party to a jury for the
jury‘s apportionment of responsibility, subsection (j) provides that as a
prerequisite to designating such an unknown person, a defendant must
comply with certain pleading requirements likely designed to furnish the
other parties with notice that the defendant intends to assert that the
claimant‘s injuries were caused by an unknown criminal. Relators‘
argument, that subsection (j) merely affords a defendant an additional and
independent means to designate unknown persons as responsible third
parties, would render the pleading deadlines imposed in subsection (j)
meaningless. A defendant would never have an incentive to comply with
the pleading requirement in subsection (j) when it could simply wait to
designate the unknown person sixty days before trial, and obtain a
strategic advantage not intended by the legislature.

Id.8 The court thus concluded that ―[t]he structure of section 33.00[4] indicates that the

legislature intended to prescribe different procedures for designating named and

8
The Unitec court explained that the statute imposes more onerous requirements when a
defendant seeks to designate an unknown, rather than a named, responsible third party:

Subsection (j) expressly applies to the designation of unknown persons as responsible
third parties, and, even absent an objection, requires a defendant seeking to designate

16
unnamed persons.‖ Id. at 61 n.8. We agree with that conclusion. Therefore, we find

that the trial court did not abuse its discretion in denying the original motion to

designate, because, even assuming the motion was timely filed, it impermissibly sought

to designate an unknown, rather than named, responsible third party. See id.

Americare and Arango‘s fourth issue is overruled.

E. Evidence of Contributory Negligence

By their fifth issue, appellants argue that Arango should have been permitted to

introduce evidence of contributory negligence ―based on Americare‘s non-subscriber

status under the Texas Workers‘ Compensation Act.‖ They argue that the trial court

erroneously denied their motion for new trial on this basis. We review a trial court‘s

denial of a motion for new trial for abuse of discretion. In re R.R., 209 S.W.3d 112, 114

(Tex. 2006).

Appellants specifically contend that Americare was Davila‘s ―employer‖ and

Arango was not Davila‘s ―employer‖; therefore, according to appellants, while Americare

was not permitted to raise the defense that Davila was guilty of contributory negligence,

Arango should have been afforded that opportunity. See TEX. LABOR CODE ANN. §

406.033(a)(1) (prohibiting an ―employer‖ who does not elect to have workers‘

compensation insurance coverage from raising a defense that the employee was guilty

of contributory negligence). However, Davila sued Arango individually and alleged that

Arango was doing business under the assumed name of Americare. Crucially, Arango

an unknown person to satisfy specific pleading requirements before a trial court may
grant a motion for leave to designate. TEX. CIV. PRAC. & REM. CODE ANN. § 33.004(j).
Subsection (f), on the other hand, expressly applies to the designation of named persons,
and compels a trial court to grant a motion to designate a named person unless an
objection is filed. [Id.] § 33.004(f).

In re Unitec Elevator Servs., 178 S.W.3d 53, 61 n.8 (Tex. App.–Houston [1st Dist.] 2005, orig.
proceeding).

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did not file a verified denial that she was doing business under that assumed name.

See TEX. R. CIV. P. 93(2), (14) (requiring verification by affidavit of any pleading that ―the

defendant is not liable in the capacity in which [s]he is sued‖ or that ―a party plaintiff or

defendant is not doing business under an assumed name or trade name as alleged.‖).9

We accordingly conclude, based on the record before us, that the trial court did not

abuse its discretion in determining that Arango was Davila‘s ―employer‖ and therefore

could not introduce evidence of Davila‘s contributory negligence. We overrule

appellants‘ fifth issue.

F. Medical Expenses

By their sixth issue, Americare and Arango argue that certain medical expenses

were improperly included in the award of damages. Specifically, appellants contend

that the trial court, in rendering judgment on the verdict, should have excluded from the

damages award amounts that were allegedly written off by health care providers.10

Section 41.0105 of the civil practice and remedies code provides that, ―[i]n

addition to any other limitation under law, recovery of medical or health care expenses

incurred is limited to the amount actually paid or incurred by or on behalf of the

claimant.‖ TEX. CIV. PRAC. & REM. CODE ANN. § 41.0105 (West 2008). The courts of

appeal that have considered this issue have unanimously held that the phrase ―actually

paid or incurred‖ does not include expenses adjusted or ―written off‖ by health care

9
We note that there is nothing preventing Arango from filing such a verified denial on remand,
nor is there anything preventing Arango from presenting evidence at the new trial that she was not, in
fact, Davila‘s employer. In any event, it will be the responsibility of the trial court to determine whether
Arango was Davila‘s employer based upon all the evidence adduced at the new trial.
10
Americare and Arango also appear to complain by their sixth issue that the damages award
improperly included ―expenses that were paid on Ms. Davila‘s behalf by Americare‘s insurance.‖
However, Americare and Arango do not provide any argument or authority with respect to this complaint.
Therefore, it has been waived. See TEX. R. APP. P. 38.1(i).

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providers because neither the claimant nor anyone acting on the claimant‘s behalf will

ultimately be liable for paying those amounts. See Matbon, Inc. v. Gries, 288 S.W.3d

471, 480 (Tex. App.–Eastland 2009, no pet.); De Escabedo v. Haygood, 283 S.W.3d 3,

7 (Tex. App.–Tyler 2009, no pet.); Tate v. Hernandez, 280 S.W.3d 534, 541 (Tex. App.–

Amarillo 2009, no pet.); Mills v. Fletcher, 229 S.W.3d 765, 769 (Tex. App.–San Antonio

2008, no pet.). We agree with our sister courts and hold that charges written off by

health care providers are not recoverable under section 41.0105. Appellants‘ sixth

issue is sustained. On remand, the trial court is instructed either: (1) to instruct the jury

that amounts written off by health care providers may not be included in the damages

award; or (2) if such damages are eventually included in the damages award, to reduce

the damages award by such amounts.

G. Post-Judgment Discovery Sanctions

By their seventh issue on appeal, Americare and Arango contend that the trial

court erred in assessing post-judgment discovery sanctions against them. We review a

post-judgment sanctions order, as well as a ruling regarding the sufficiency of a

supersedeas bond, for abuse of discretion. See Darya, Inc. v. Christian, 251 S.W.3d

227, 332 (Tex. App.–Dallas 2008, no pet.) (sanctions); In re Kajima Int’l, Inc., 139

S.W.3d 107, 112 (Tex. App.–Corpus Christi 2004, orig. proceeding) (sufficiency of

bond).

On October 2, 2009, after the trial court rendered its judgment, Americare and

Arango posted a supersedeas bond in the amount of $2,000,467, representing the

damages awarded and anticipated interest pending appeal. See TEX. R. APP. P.

24.1(a)(2) (permitting a judgment debtor to supersede the judgment pending appeal by

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filing a good and sufficient bond with the trial court clerk). The trial court found the bond

to be insufficient.11 See TEX. R. APP. P. 24.2 (stating that the amount of the bond must

equal the sum of compensatory damages, interest during the appeal, and costs, but

must not exceed the lesser of (A) fifty percent of the judgment debtor‘s net worth or (B)

twenty-five million dollars). The trial court further ordered Americare and Arango to

respond to outstanding discovery requests regarding Arango‘s net worth, and ordered

Arango to appear for deposition.12 Americare and Arango then filed a second bond on

October 20, 2009, which the trial court also found to be insufficient. 13 The trial court

again ordered Americare and Arango to respond to discovery requests, appear for

deposition, and pay fines of $1,000 per day. Arango‘s deposition was scheduled to be

taken on November 4, 2009, but she did not appear. That same day, Americare and

Arango filed a third supersedeas bond and sought protection from the pending

discovery order.14 The trial court again found the bond insufficient and ordered Arango

to pay $19,000 in sanctions, representing $4,000 in per diem fines and $15,000 in

attorney‘s fees. The trial court finally approved a supersedeas bond on November 12,

2009.

11
The trial court specifically found that the surety on the original bond, Insurors Indemnity
Company (―IIC‖), was only authorized to write bonds up to a maximum of $831,000. Further, though IIC
was re-insured by General Reinsurance Company (―GRC‖) for the balance of the bond, nothing on the
face of the bond obligated GRC to pay any part of the judgment.
12
On October 30, 2009, Americare and Arango filed an emergency motion with this Court to
vacate the trial court‘s October 26, 2009 order determining that the first supersedeas bond was
insufficient and ordering discovery. On November 3, 2009, we denied appellants‘ request to vacate the
trial court‘s finding and discovery order, but we granted appellants‘ request to stay execution on the
judgment for twenty days ―to allow appellants time to file a good and sufficient bond, the sufficiency of
which shall be determined by the trial court.‖
13
Unlike the original bond, the October 20, 2009 bond explicitly stated that both IIC and GRC are
co-sureties.
14
IIC and GRC were also co-sureties on the third bond.

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 Americare and Arango contend that the award of sanctions was an abuse of

discretion by the trial court because the second and third bonds were in fact sufficient,

and therefore, Arango‘s net worth was irrelevant. We agree. A sufficient surety is an

entity or individual that is a legal entity, separate from the judgment debtor and not a

party to the suit, whose solvency and ability to pay the judgment are established.

TransAmerican Natural Gas Corp. v. Finkelstein, 905 S.W.2d 412, 414 (Tex. App.–San

Antonio 1995, writ dism‘d). The trial court found that the second and third bonds were

insufficient because they did not state on their face which portion of the judgment each

co-surety would pay in the event the appeal failed, and because one of the sureties was

limited to paying only $831,000, which is far less than the total required amount of the

bond. However, nothing in the applicable rules requires that a specific apportionment

between co-sureties appear on the face of the bond, and, in fact, the law implies a

particular apportionment that is adequate to protect Davila. Cf. TEX. R. APP. P. 24.1(e)

(authorizing the trial court to ―make any order necessary to adequately protect the

judgment creditor against loss or damage that the appeal might cause‖). Under the

general rule set forth in the Restatement (Third) of Suretyship and Guaranty, ―a

cosurety‘s contributive share is the aggregate liability of the cosureties to the obligee

divided by the number of cosureties.‖ RESTATEMENT (THIRD) OF SURETYSHIP AND

GUARANTY § 57(1) (1996). In other words, if the bond does not provide contrary terms,

a court will assume that each of two co-sureties is liable for half of the bond amount.

However, if, as here, a co-surety‘s liability is limited to less than its contributive share,

―[t]he contributive shares of the other cosureties are recalculated by subtracting from the

aggregate liability of the cosureties the contributive share of the secondary obligor

21
whose obligation is so limited, and dividing by the number of cosureties whose

obligations are not so limited.‖ Id. § 57(2)(a). Here, although one of the co-sureties was

limited in its liability to $831,000, the other co-surety was not so limited, and the total

amount payable by both co-sureties exceeded the amount of the bonds. Therefore, the

October 20, 2009 bond was adequate to protect Davila, and the trial court abused its

discretion in determining that it was insufficient. See Walker v. Packer, 827 S.W.2d

833, 840 (Tex. 1992) (―A trial court has no ‗discretion‘ in determining what the law is or

applying the law to the facts. Thus, a clear failure by the trial court to analyze or apply

the law correctly will constitute an abuse of discretion . . . .‖).

Because the October 20, 2009 bond should have been ruled sufficient, the

discovery order was therefore unwarranted, and the trial court‘s award of sanctions for

violating that discovery order also constituted an abuse of discretion. We sustain

appellants‘ seventh issue.

III. CONCLUSION

We reverse the judgments of the trial court, including its order of post-judgment

discovery sanctions, and we remand for a new trial consistent with this opinion.

________________________
DORI CONTRERAS GARZA
Justice

Delivered and filed the
19th day of May, 2011.

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