The Doctors’ Company v. McDonough

THE DOCTORS’ COMPANY, AN INTERINSURANCE EXCHANGE, Appellant v. NANCY A. MCDONOUGH, Appellee

NO. 01-00-00741-CV

COURT OF APPEALS OF TEXAS, FIRST DISTRICT, HOUSTON

2002 Tex. App. LEXIS 6569

August 30, 2002, Filed

NOTICE:

[*1] PURSUANT TO THE TEXAS RULES OF APPELLATE PROCEDURE, UNPUBLISHED OPINIONS SHALL NOT BE CITED AS AUTHORITY BY COUNSEL OR BY A COURT.

PRIOR HISTORY:

On Appeal from the 80th District Court. Harris County, Texas. Trial Court Cause No. 98-50475.

DISPOSITION:

Reversed in part and affirmed in part.

JUDGES:

Panel consists of Chief Justices Schneider and Justices Jennings and Wilson. n6

n6 The Honorable Davie L. Wilson, who retired from the Court effective March 31, 2002, continues to participate by assignment.

OPINIONBY:

Michael Schneider

OPINION:

This suit arises from a health insurer’s denial of health benefits based on a “pre-existing condition” exclusion. The patient (Nancy A. McDonough) filed suit, alleging that the insurer (The Doctors’ Company, an Interinsurance Exchange): (1) breached its contract by refusing to pay medical expenses, which she incurred while undergoing cancer treatment, (2) acted in bad faith in denying coverage, and (3) misrepresented the coverage afforded by the policy. After the trial court denied the insurer’s motion for directed verdict, a jury returned a verdict for the patient, and the trial court entered a final judgment against the insurer for $ 181,520.00, plus interest, costs, and attorney’s fees for appeal, if [*2] necessary. This appeal followed. We reverse in part and affirm in part.

Facts

In January 1997, Nancy McDonough applied for insurance with The Doctors’ Company, an Interinsurance Exchange (hereinafter, “the insurer”). McDonough needed a one year policy to apply between the date she terminated another policy and the date she became eligible for Medicare. The insurer’s policy was designed for such short-term coverage and was automatically available if the applicant met three qualifications: (1) the applicant must have had no other medical coverage; (2) neither the applicant, nor anyone in their family could be pregnant; and (3) the applicant must have been a resident of the United States for the past five years. The cost of the policy was about half that of typical major medical policies. For reasons that are unclear from the record, but not disputed on appeal, McDonough’s policy was cancelled and her premiums were refunded in April 1997. The insurer invited her to “reapply for this valuable coverage.”

On May 2, 1997, McDonough visited her physician, Dr. Kathleen Gately, about a sinus infection. At this office visit, McDonough pointed out a mass on the left side of her neck [*3] to Dr. Gately. At trial, McDonough testified about her conversation with Dr. Gately as follows:

[Defense Counsel]: Well, I’m-what I’m going to ask you to do is to look at the letter from Dr. Gately. [“]At that point she pointed out a small mass in her left neck that she has recently noticed.[“] (quoting from Dr. Gately’s letter to the insurer dated February 10, 1998).

[McDonough]: That part is true.

[Defense Counsel]: “The mass was somewhat hard in the cervical …” Did she identify the mass as being-

[McDonough]: No she did not.

[Defense Counsel]: All right. Your testimony is that she didn’t do anything?

[McDonough]: And she did not. She did not prescribe anything. She just said that maybe in the future to watch it, and maybe an ENT, ear, nose and throat doctor should take had [sic] a look at it. And at that time, I told my daughter. And she’s the one that scheduled the appointment for Dr. McDonald.

[Defense Counsel]: All right. So Dr. Gately did say an ENT should look at that?

[McDonough]: The way I recall it, I believe she did. Or we had a discussion about it. But she did not refer me to Dr. McDonald, no.

Dr. Gately, in a letter to the insurance [*4] company, described the same appointment as follows:

Ms. McDonough was seen by me on May 2, 1997 for a sinusitis. At that point she pointed out a small mass in her left neck that she had recently noticed. The mass was somewhat hard in the cervical area and, because of her history of smoking, I sent her immediately to E.N.T. where she was evaluated by Dr. Sarah McDonald. This was done on May 14, 1997.

The day after her appointment with Dr. Gately, on May 3, 1997, McDonough applied for the policy at issue in this case. The application contained the following statements:

I understand that the Company will not pay benefits for loss due to any medical condition or illness for which I or any person to be insured have received treatment in the past 24 months.

Health conditions which you may presently have (pre-existing conditions) may not be immediately or fully covered under the new policy, whereas a similar claim might have been payable under your present policy.

McDonough signed the application on May 3, and on May 6, three days after McDonough saw Dr. Gately, the policy went into effect.

The policy excluded coverage for “pre-existing conditions,” which it defined as:

(a) Symptoms [*5] that would have caused an ordinarily prudent person to seek medical advice, diagnosis, care, or treatment during the twelve (12) months immediately preceding the effective date of coverage.

(b) A condition for which medical advice, diagnosis, care, or treatment was recommended or received from a Physician during the twenty-four (24) months immediately preceding the effective date of coverage.

On May 14, eleven days after pointing out the mass in her neck to Dr. Gately and eight days after the effective date of the policy, McDonough saw Dr. Sarah McDonald, an otolaryngologist (“ENT”). Dr. McDonald did a CT scan and determined that the mass was 4-5 cm in diameter. In July, a biopsy revealed that the mass was cancerous and McDonough began treatment at M.D. Anderson Cancer Center.

McDonough filed claims under the policy for the cost of her treatment, which the insurer denied, based on the pre-existing condition exclusion. This suit followed.

Breach of Contract

In question one of the charge, the jury was asked to decide whether McDonough’s cancer was a “covered sickness” under the terms of the policy. Covered sicknesses excluded pre-existing conditions as defined by the [*6] policy. The jury responded that it was, and awarded $ 42,380.00 based upon breach of the insurance contract.

In its first issue, the insurer contends that McDonough’s cancer was, as a matter of law, a pre-existing condition, as defined by the policy. We will construe this as a challenge to the trial court’s denial of the insurer’s motion for directed verdict. [HN1] Directed verdict is proper when: (1) a defect in an opponent’s pleadings makes them insufficient to support a judgment; (2) the evidence conclusively proves a fact that establishes a party’s right to judgment as a matter of law; or (3) the evidence is insufficient to raise an issue of fact. Kenneco Energy, Inc. v. Johnson & Higgins of Tex., Inc., 921 S.W.2d 254, 259 (Tex. App.–Houston [1st Dist.] 1995), aff’d in relevant part, 962 S.W.2d 507, 41 Tex. Sup. Ct. J. 268 (Tex. 1998). Under an issue questioning the denial of a motion for directed verdict, the appellant must show that the record contains evidence establishing the movant’s position as a matter of law. Rivera v. Herndon Marine Prods., Inc., 895 S.W.2d 430, 432 (Tex. App.–Corpus Christi 1995, writ denied); Kershner v. State Bar of Tex., 879 S.W.2d 343, 346 [*7] (Tex. App.–Houston [14th Dist.] 1994, writ denied). The appropriate inquiry when the trial court refuses to grant a directed verdict is whether the evidence raises an issue for the jury. See Collora v. Navarro, 574 S.W.2d 65, 68 (Tex. 1978).

The issue in this case is not who referred McDonough to Dr. McDonald n1, but whether Dr. Gately’s statement to “maybe see an ENT” was “medical advice” within the terms of the “pre-existing clause” of the policy.

n1 Dr. Gately’s letter indicates that she referred McDonough to Dr. McDonald, while McDonough testified that her daughter recommended that she see Dr. McDonald.

In Bartlett v. Am. Republic Ins. Co., 845 S.W.2d 342, 344-348 (Tex. App.–Dallas 1992, no writ), the patient saw her doctor, who told her that she had a mass in her left breast. Id. at 344. He also told her that she should see another doctor for a mammogram to determine whether a biopsy was necessary. Id. The second doctor advised the patient to wait [*8] a year before undergoing further tests. Id. During that year, the patient obtained new insurance, which contained a “pre-existing condition clause” similar to that in this case. n2 Id. After the new policy went into effect, the second doctor performed further tests and determined that the patient had breast cancer. Id. The court held that coverage was excluded under the policy, as a matter of law, because the first doctor gave the patient “medical advice” when he recommended that she see another doctor for a mammogram. Id. at 347. “Advice” was defined as “an opinion or recommendation offered as a guide to action [or] conduct.” Id., quoting WEBSTER’S ENCYCLOPEDIC UNABRIDGED DICTIONARY OF THE ENGLISH LANGUAGE 21 (1989). The court noted that the patient’s knowledge that her condition was cancer was irrelevant under the policy. Id. at 347. The fact that she sought “medical advice” about a health condition before the effective date of the policy was sufficient to trigger the exclusion. Id. at 348. The court also noted that even though the two doctors gave differing opinions, the patient, nonetheless received medical advice. [*9] Id. at 347. “Medical advice, although conflicting, is still medical advice.” Id.

n2 The “pre-existing condition” exclusion in Bartlett provided:

PRE-EXISTING CONDITION means:

(A) the existence of symptoms which would cause an ordinarily prudent person to seek diagnosis, care or treatment within a 5 year period before the date coverage begins for a covered person; or

(B) a health condition for which medical advice was given or treatment was recommended by or received from a doctor within a 5 year period before the effective date of the coverage of a covered person.

845 S.W.2d at 346.

However, in Bartlett,the medical advice actually given was more specific–the first doctor expressly recommended that the patient see another doctor for a mammogram, and, in addition, told the patient she should consider removing the lump even if it were benign. Id. at 347-48. In this case, Dr. Gately noted the existence of the mass and then, according to McDonough’s version [*10] of the facts, rather tenuously told McDonough to “maybe watch it” or “maybe see an ENT.” As such, Dr. Gately’s statements to McDonough were equivocal, as opposed to the express, pro-active recommendation given by the doctor in Bartlett.

We agree with Bartlett that medical advice is “a recommendation offered as a guide to action.” See id. at 347. We further agree that a doctor’s recommendation that a patient seek further medical advice is, in and of itself, medical advice. n3 However, in this case, Dr. Gately’s statements to McDonough to “maybe watch it” or “maybe see an ENT” are too equivocal to constitute “medical advice,” or even a recommendation to seek further medical advice.

n3 Therefore, had the jury accepted the version of facts as set forth in Dr. Gately’s February 10, 1998 letter to the insurance company, this Court would have no difficulty in concluding that McDonough had a “condition for which medical advice … was recommended,”and concluding that coverage was excluded. See Bartlett, 845 S.W.2d at 347. However, the jury was entitled to believe McDonough’s testimony that the “advice” she received from Dr. Gately was much more equivocal than a definitive recommendation to seek further medical advice.

[*11]

Accordingly, we overrule appellant’s first issue.

Extra-Contractual Claims

McDonough also pleaded extra-contractual claims under article 21.21 of the Texas Insurance Code and the Texas Deceptive Trade Practices Act. These claims can be divided into two basic categories: (1) “bad faith” settlement practices, and (2) misrepresentations made regarding coverage. n4

n4 These issues were submitted to the jury in Questions 3 and 5, which provided:

3. Did the DOCTOR’s COMPANY AN INTERINSURANCE EXCHANGE engage in any false, misleading, or deceptive act or practice that was a producing cause of damages to NANCY MCDONOUGH?

****”False, misleading, or deceptive act or practice” means any of the following:

Representing that an agreement confers or involves right, remedies or obligations which it does not have or involve.

Answer “Yes” or “No”

ANSWER: YES

5. Did THE DOCTOR’s COMPANY AN INTERINSURANCE EXCHANGE engage in any unfair or deceptive act or practice?

“Unfair or deceptive act or practice” means any of the following:

Making or cause to be made any statement misrepresenting the terms, benefits, or advantages of an insurance policy; or

Misrepresenting to a claimant a material fact or policy provision relating to the coverage at issue; or

Failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim when the insurers liability has become reasonable clear, or

Refusing to pay a claim without conducting a reasonable investigation of the claim.

Answer “Yes” or “No”

ANSWER: YES

[*12]

In its second and third issues, the insurer contends there was no evidence, or alternatively, insufficient evidence to submit the extra-contractual claims to the jury.

A. Statutory Duty of Good Faith and Fair Dealing

[HN2] Under Article 21.21 of the Insurance Code, an insurer violates its duty of good faith and fair dealing by denying or delaying payment of a claim when the insurer knew or should have known that it was reasonably clear that the claim was covered. Universal Life Ins. Co. v. Giles, 950 S.W.2d 48, 55-56 (Tex. 1997). However, an insurer does not breach its duty by delaying payment, when there is a bona fide controversy as to liability. See Provident Am. Ins. Co. v. Castaneda, 988 S.W.2d 189, 193, 42 Tex. Sup. Ct. J. 610 (Tex.1998). “As long as the insurer has a reasonable basis to deny or delay payment of a claim, even if that basis is eventually determined by the fact finder to be erroneous, the insurer is not liable for the tort of bad faith.” Lyons v. Millers Cas. Ins. Co., 866 S.W.2d 597, 600 (Tex.1993); see Castaneda, 988 S.W.2d at 193. The key inquiry in a bad faith claim is the reasonableness [*13] of the insurer’s conduct. Lyons, 866 S.W.2d at 600. Reasonableness is determined using an objective standard of whether a reasonable insurer under similar circumstances would have delayed or denied the claimant’s benefits. Aranda v. Ins. Co. of North America, 748 S.W.2d 210, 213 (Tex.1988).

The issue we must decide is whether there was any evidence that the insurer’s liability in this case had become “reasonably clear,” or whether the evidence merely showed that there was a “bona fide controversy as to liability.” [HN3] Whether an insurer’s liability has become “reasonably clear” is a jury issue unless there is no question of fact about the reasonableness of the insurer’s action in denying the claim. See Giles, 950 S.W.2d at 56. In other words, if there was a “bona fide controversy as to liability,” the insurer’s denial of coverage is reasonable as a matter of law, even if it is later proven that coverage exists. See Castaneda, 988 S.W.2d at 193.

In this case, the insurer had a reasonable basis for denying the claim based on Dr. Gately’s February 10, 1998 letter, in which Gately stated that she had seen the lump in McDonough’s [*14] neck and “immediately sent [McDonough] to ENT. . .” As we pointed out in footnote 3, unequivocal advice to seek further medical advice would have triggered the pre-existing condition exclusion under the policy. Thus, relying on a letter from McDonough’s own doctor, the insurer reasonably, albeit incorrectly, concluded that Dr. Gately had given McDonough medical advice regarding the cancerous lump in her neck before the policy was issued.

That McDonough disputed Gately’s letter by testifying that Gately’s “advice” was much more equivocal than indicated in the letter, does not make the insurer’s reliance on the letter in denying coverage unreasonable. In Nat’l Union Fire Ins. Co. v. Dominguez, 873 S.W.2d 373 (Tex. 1994), the insurer denied coverage based on a medical opinion that the plaintiff’s injury was the result of a degenerative disease, even though another doctor had expressed the opinion that the injury was work- related. Id. at 377. The supreme court concluded that because of the conflicting opinions, the insurer’s liability was not “reasonably clear,” and there was no evidence that the insurer lacked a reasonable basis for denying the claim. [*15] Id.

Even though we have held that, under McDonough’s version of the facts, the policy provided coverage, there was no evidence that the insurer acted unreasonably in denying coverage based on Dr. Gately’s letter. Thus, this case involved nothing more than a bona fide coverage dispute.

Therefore, we sustain appellant’s second issue and reverse the portion of the judgment awarding McDonough damages based on her bad faith denial of coverage claim.

B. Misrepresentations Regarding Coverage

In its third issue, the insurer contends that there is “no evidence that [the insurer] misrepresented the terms, benefits, or advantages of the policy, or a material fact or policy provision relating to coverage.” In response, McDonough points to the following statements, which she contends are actionable misrepresentations:

1. The insurer invited McDonough to apply for “valuable coverage,” which she argues was worthless.

2. The definition of pre-existing condition in the policy was vastly different from that in the application.

3. The insurer promised that it would investigate her claim, and represented that she had the right to appeal any denial of coverage.

4. The insurer [*16] promised that it would have its medical director review the pre-existing condition issue.

1. Post-loss misrepresentations

We begin by noting that [HN4] a misrepresentation claim regarding policy coverage may exist even in the absence of coverage. See Castaneda, 988 S.W.2d 189, 199- 200; Id. at 202 (Enoch, J., concurring). Nevertheless, the alleged misrepresentation must be a producing cause of the plaintiff’s actual damages. See TEX. BUS. & COMM. CODE ANN. § 17.50(a) (Vernon Supp. 2002). A representation that is made after the plaintiff suffers the complained of loss cannot be a producing cause of the plaintiff’s actual damages. See Castaneda, 988 S.W.2d at 200, n.55, citing Royal Globe Ins. Co. v. Bar Consultants, Inc. 577 S.W.2d 688, 694-95 (Tex. 1979) (distinguishing pre-loss representations, which were actionable, from post-loss representations, which were not actionable)).

The third and fourth representations alleged by McDonough both occurred after she suffered her damages, and were made during the claims process. As such, there is no evidence to show that McDonough’s [*17] damages were caused by these representations, even if they were untrue.

2. Pre-loss representations

Thus, we turn to the issue of whether the pre-loss representations alleged by McDonough were actionable, i.e., whether they are legally sufficient evidence to support the jury’s finding that the insurer’s misrepresentations damaged McDonough.

First, McDonough contends that even though the insurer represented that the coverage it provided was “valuable,” it was, in fact, worthless because of the insurer’s policy of carefully screening claimant’s who may have “adversely selected” it. The insurer explained that by using the term “adversely selected,” it meant that it was careful to watch for people who were trying to obtain coverage for pre-existing conditions by applying for this particular policy because the policy was easy to obtain and did not require a physical.

However, [HN5] an insurer’s act of carefully screening for pre-existing conditions, while at the same time describing its coverage as “valuable” is not an actionable misrepresentation. A policy is not “valueless” simply because it excludes coverage for a particular illness as it still provides coverage for a “myriad of other [*18] illnesses [the plaintiff] could have contracted while the policy was in effect.” Castaneda, 988 S.W.2d at 201.

Second, McDonough argues that the language of the application led her to believe that she would be covered, but the policy provided a “vastly different” definition of “pre-existing condition.” We disagree. The application does not even include a definition of “pre-existing condition.” Instead, it specifically tells the applicant that coverage for “pre-existing conditions” will be excluded. McDonough received exactly what she applied for; a policy that excluded “pre-existing conditions,” the definition of which is provided only in the policy. [HN6] An insured is deemed to know the contents of the contract she makes. Shindler v. Mid-Continent Life Ins. Co., 768 S.W.2d 331, 334 (Tex. App.–Houston [14th Dist.] 1989, no writ). A claim for misrepresentation can not stand when the party asserting the claim is legally charged with knowledge of the true facts. Id. at 334-35.

Because none of the misrepresentations alleged by McDonough are actionable, there is no evidence that the insurer misrepresented the terms of coverage to McDonough. [*19] Accordingly, we sustain appellant’s third issue and reverse the portion of the judgment awarding McDonough damages on her misrepresentation claim.

The Casteel n5 Issue

n5 See Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 388, 43 Tex. Sup. Ct. J. 348 (Tex. 2000).

In its fourth issue, the insurer contends “the trial court erred by submitting a single broad-form liability question to the jury, which commingled valid and invalid liability theories.” Specifically, the insurer contends that the “misrepresentation” issues should not have been submitted in the same question with the “bad faith” issues because there was no evidence of any actionable misrepresentation. We need not reach this issue because we have already held that there was no evidence to support the submission of either of the issues to the jury.

Conclusion

We reverse the portions of the judgment awarding McDonough extra- contractual damages for bad faith denial of coverage and misrepresentations regarding coverage. However, we affirm [*20] the portion of the judgment awarding damages for breach of contract.

Michael Schneider

Justice

Neville v. Molina

CAROLE NEVILLE AND MICHAEL NEVILLE, Appellant v. MARCEL MOLINA, M.D., Appellee

NO. 14-00-00082-CV

COURT OF APPEALS OF TEXAS, FOURTEENTH DISTRICT, HOUSTON

2001 Tex. App. LEXIS 3784

June 7, 2001, Majority and Dissenting Opinions Filed

NOTICE:

[*1] PURSUANT TO THE TEXAS RULES OF APPELLATE PROCEDURE, UNPUBLISHED OPINIONS SHALL NOT BE CITED AS AUTHORITY BY COUNSEL OR BY A COURT.

SUBSEQUENT HISTORY:

Petitions for Review Denied December 20, 2001.

PRIOR HISTORY:

On Appeal from the 165th District Court. Trial Court Cause No. 98-52772. Harris County, Texas.

DISPOSITION:

Affirmed.

JUDGES:

Panel consists of Justices Yates, Fowler, and Wittig. Opinion by Leslie Brock Yates, Justice. Don Wittig, Justice, Dissenting.

OPINIONBY:

Leslie Brock Yates

OPINION:

MAJORITY OPINION

Appellants, Carole and Michael Neville, complain that the trial court erred in granting summary judgment in favor of appellee, Marcel Molina, M.D., on the basis that appellants’ claims were time-barred. We affirm.

I. Factual Background and Procedural History

Carole Neville underwent surgery on November 12, 1992, the purpose of which was to implant a restrictive gastric band–called a Dacron band–around the outside of her stomach in order to treat her morbid obesity, a medical term usually applied to someone who is 100 pounds or more over his or her ideal weight. Dr. Molina, who performed the surgery, was to place the gastric band approximately 1 1/2 ” below the bottom of her esophagus. Following her surgery, Carole remained in the hospital for [*2] two days. Almost immediately after she was discharged, Carole began experiencing problems, including an inability to keep down her food and medication, food getting stuck in her throat, gastrointestinal problems such as constipation and diarrhea, and constant and severe internal pain. Carole testified she believed the gastrointestinal problems were related to the gastric banding, perhaps by 1995 or 1996. According to her deposition testimony, between 1992 and 1995, Carole called Dr. Molina’s office several times with complaints–usually about an inability to eat food without regurgitation, and she was told by Molina’s staff to follow the instructions on a list she was given before surgery telling her how to conduct herself after surgery. Despite her problems, Carole had lost close to 100 pounds within a year of surgery.

By the Spring of 1996, in “chronic pain” and frustrated with the responses she was receiving from Dr. Molina’s staff, she began calling Dr. Molina’s office less and less often. She made her last call to his office sometime in 1996. Between 1993, when her weight had dropped to its lowest postoperative level, and the Fall of 1997, Carole continued to gain weight at the [*3] rate of a few pounds per month, even though she testified that she did not eat any solid foods after the surgery until the gastric band was removed in 1997.

In 1995, Carole referred herself to Dr. Yalamanchili for treatment of headaches she had endured since shortly after her surgery, as well as for treatment of her gastrointestinal problems. n1 Carole explained to Dr. Yalamanchili that she had undergone gastric banding surgery, but he told her that he was not familiar with this brand of surgery, other than what he had read about it. Although she continued to see Dr. Yalamanchili, he never told her that the gastric banding was the source of her problems. Carole’s obstetrician then referred her to a neurologist, but because the charge for an initial office visit cost around $ 1,000.00 and her insurance would not pay, she did not schedule an appointment. Around this same time, Carole also saw Dr. Zafarnia, who told her she had an ulcerated esophagus, perhaps due to overeating. Finally, Carole had the gastric band surgically removed September 19, 1997 by Dr. Brunicardi. At this time, she weighed approximately 180 lbs. After the surgery, Dr. Brunicardi informed Carole that Dr. Molina [*4] attached the gastric band to her esophagus, not her stomach as intended. Dr. Brunicardi also testified that Carole’s problems could have been diagnosed as early as 1993, and certainly by early 1996, when she began to suspect that the problems she was experiencing were caused by the gastric banding.

n1 Carole testified that she would not see a neurologist Dr. Molina had referred her to “because Dr. Molina referred me to him,” and she did not trust Dr. Molina anymore. Although not more precisely stated, Carole testified that this referral was made sometime between her surgery and 1995.

Within a week of Dr. Brunicardi’s surgery, Carole hired an attorney. On November 17, 1997, a little less than a month after her surgery, Carole’s attorney served a statutorily required letter upon Dr. Molina advising him of her claim. On February 12, 1998, the parties agreed to toll the statute of limitations, presumably in order to allow the parties an opportunity to evaluate their claims with an eye towards settlement. Unable to [*5] reach an agreement, the Nevilles filed suit in state district court November 3, 1998, alleging Dr. Molina was negligent in (a) attaching the gastric band to her esophagus and (b) failing to properly follow-up and investigate her postoperative symptoms. A little less than a year later, Dr. Molina filed a motion for summary judgment, alleging the Nevilles’ claims were barred by limitations. On December 13, 1999, his motion was granted.

II. Summary Judgment

[HN1] Summary judgment is proper only if there are no genuine issues of material fact and the moving party has established that he is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). A defendant is entitled to summary judgment if he can disprove at least one element of each of the plaintiff’s causes of action or if he can establish all elements of an affirmative defense to each of the plaintiff’s claims. American Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). In our review, we view the facts in the light most favorable to the non-moving party, and we resolve all inferences and doubts in favor [*6] of that party. Id.

Appellants advance two arguments in support of their claim that the trial court erred in granting summary judgment on the basis of limitations. First, they contend the “discovery rule” applies to cases brought under the Medical Liability and Insurance Improvement Act (“4590i”). Accordingly, they conclude that the discovery rule tolled the statute of limitations found in 4590i until Carole discovered, or should have discovered, that Dr. Molina tied the gastric band to her esophagus and not her stomach. Alternatively, they argue that 4590i’s statute of limitations violates the open courts provision found in the Texas Constitution. We address each of these arguments in turn.

A. The Discovery Rule in Medical Malpractice Cases

Section 10.01 of article 4590i provides:

Notwithstanding any other law, no health care liability claim may be commenced unless the action is filed within two years from the occurrence of the breach or tort or from the date the medical or health care treatment that is the subject of the claim or the hospitalization for which the claim is made is completed; n2 provided that, minors under the age of 12 years shall have until their [*7] 14th birthday in which to file, or have filed on their behalf, the claim. Except as herein provided, this subchapter applies to all persons regardless of minority or other legal disability.

n2 Although 10.01 appears to provide three alternative dates for determining when a cause of action accrues, where the date of the act made the basis of the suit is ascertainable, that date applies. Casey v. Methodist Hosp., 907 S.W.2d 898, 902 (Tex. App.–Houston [1st Dist.] 1995, no writ) (citing Kimball v. Brothers, 741 S.W.2d 370, 372 (Tex. 1987)).

[HN2] TEX. REV. CIV. STAT. ANN. art. 4590i, § 10.01 (Vernon Supp. 2000) (emphasis added). This Court has previously held that, “[HN3] with the passage of article 4590i … the legislature intended to adopt an absolute two-year limitations period and to abolish the discovery rule for medical malpractice claims.” Jones v. Miller, 964 S.W.2d 159, 164 (Tex. App.–Houston [14th Dist.] 1998, no [*8] pet.) (citing Morrison v. Chan, 699 S.W.2d 205, 208 (Tex. 1985) (emphasis added)). Our supreme court recently affirmed this principle. Chilkewitz v. Hyson, 22 S.W.3d 825, 829-30 (Tex. 1999) (citing Morrison and Diaz v. Westphal, 941 S.W.2d 96, 99 (Tex. 1997)). Thus appellants’ contention that the discovery rule tolled the limitations period because Carole’s injury was inherently undiscoverable is without merit. n3

n3 Although some courts of appeals, even in the context of a medical malpractice claim, have suggested that the discovery rule applies where the injury is inherently undiscoverable, see, e.g., Savage v. Psychiatric Inst. of Bedford, Inc., 965 S.W.2d 745 (Tex. App.–Fort Worth 1998, writ denied) and Slater v. National Med. Enter. Inc., 962 S.W.2d 228 (Tex. App.–Fort Worth 1998, writ denied), those suggestions are misleading because the discovery rule has no application under 4590i. Diaz, 941 S.W.2d at 99.

[*9]

B. Open Courts

Appellants also maintain that article 4590i, section 10.01, as applied to the instant case, violates the open courts provision of the Texas [HN4] Constitution. The supreme court has held that section 10.01 violates the open courts provision n4 if it cuts off an injured person’s right to sue before that person has had a reasonable opportunity to discover the wrong and bring suit. See, e.g., Neagle v. Nelson, 685 S.W.2d 11, 12 (Tex. 1985) (reversing summary judgment in favor of healthcare providers where surgical sponge was left in patient’s stomach, making it impossible to discover). Thus, section 10.01 is not unconstitutional per se, but depending on the particular circumstances of a given case, section 10.01 may be unconstitutional as applied to a particular plaintiff. Compare Sax v. Votteler, 648 S.W.2d 661 (Tex. 1983) (holding statute of limitations not unconstitutional as applied to plaintiff who discovered his injury within two years of doctor’s alleged misdiagnosis), and Robinson v. Weaver, 550 S.W.2d 18 (Tex. 1977) (same), with Neagle, 685 S.W.2d 11 (holding statute of limitations violated [*10] open courts provision as applied to plaintiff who could not have discovered his injury within two-year period), and Nelson v. Krusen, 678 S.W.2d 918, 921 (Tex. 1984) (same).

n4 TEX. CONST. art. I, § 13.

[HN5] In order to establish an open courts violation, the plaintiff must satisfy a two-part test. First, she must show that she has a cognizable common-law cause of action. Second, she must show that restriction of that claim is unreasonable or arbitrary when balanced against 4590i’s purpose. n5 Diaz, 941 S.W.2d at 100.

n5 “The language of section 10.01, along with the stated legislative findings and purpose of [4590i], clearly indicates a legislative intent to strictly limit the time for asserting health care liability claims, not only to avoid stale claims, but also to reduce the frequency of claims.” Hyson v. Chilkewitz, 971 S.W.2d 563, 577 (Tex. App.–Dallas 1998) (citing Sax, 648 S.W.2d at 666), overruled on other grounds, 22 S.W.3d 825; see also Tsai v. Wells, 725 S.W.2d 271, 273 (Tex. App.–Corpus Christi 1986, writ ref’d n.r.e.) (stating strict two-year statute of limitations enacted due to perceived medical malpractice insurance crisis) (citing Morrison, 699 S.W.2d at 208).

[*11]

Stated simply, the open courts provision, to the extent it works as an exception to the strict application of section 10.01, allows a plaintiff a “reasonable time” within which to bring a lawsuit after the party has discovered an injury or should have discovered the injury, thereby eliminating an otherwise draconian result from a mechanical application of section 10.01. See, e.g., Hellman v. Mateo, 772 S.W.2d 64 (Tex. 1989) (holding that, in the context of a defendant moving for summary judgment in a medical malpractice action, the proof must conclusively establish that the plaintiff discovered or should have discovered her cause of action and brought suit within the limitations period); see also LaGesse v. Prima Care, Inc., 899 S.W.2d 43 (Tex. App.–Eastland 1995, writ denied) (affirming physicians’ summary judgment, even though injury not discovered until after statute of limitations had expired, where plaintiff delayed for an unreasonable amount of time after learning of injury before bringing suit). “The reasonable-time rule is a court-made standard, which has heretofore been applied only in a limited number of cases involving adult plaintiffs [*12] who, because of the nature of their claim, did not have a reasonable opportunity to discover their injuries and bring suit within a prescribed limitations period.” Weiner v. Wasson, 900 S.W.2d 316, 321 (Tex. 1995) (citing Krusen, 678 S.W.2d at 921-22).

With the foregoing principles in mind, the issues we must decide in this case are (1) whether the summary judgment proof conclusively establishes that Carole either actually discovered her injury within two years of her surgery or should have discovered it within the period of limitations, and if not, (2) then whether she delayed an unreasonable amount of time before filing her lawsuit. See Morrison, 699 S.W.2d at 207. If either question is answered in the affirmative, then section 10.01 is not unconstitutional as applied.

It is undisputed that Carole’s surgery was performed November 12, 1992. If Dr. Molina were negligent, his negligence necessarily occurred in the operating room. Therefore, although she remained in the hospital for several more days after her surgery, November 12, 1992 is the date on which limitations began to run. n6 See Casey, 907 S.W.2d at 902. [*13] Carole did not file her lawsuit against Dr. Molina until February 12, 1998, n7 well outside the applicable statute of limitations. Accordingly, we now turn to whether section 10.01 is unconstitutional as applied to her.

n6 See, e.g., Husain v. Khatib, 964 S.W.2d 918, 919 (Tex. 1998) (affirming summary judgment in favor of physician whose failure to diagnose plaintiff’s cancer occurred on readily ascertainable dates, even though course of treatment by same physician eventually led to correct diagnosis). Here, Carole testified that she never actually spoke to Dr. Molina after the surgery, other than one time while she was still in the hospital. Limitations on her claim of negligence based on Dr. Molina’s alleged failure to diagnose the cause of her symptoms, a theory distinct from her claim that he negligently implanted the gastric band, therefore, began running no later than the time she was discharged from the hospital–or within just days of her surgery. See also Rowntree v. Hunsucker, 833 S.W.2d 103, 108 (Tex. 1992) (holding that date for determining when statute of limitations began to run was date of last office visit in September, not date on which doctor refilled prescription by phone the following May, or date when patient last filled that prescription in December). [*14]

n7 For the purposes of this discussion, we apply the date of the tolling letter.

Medical malpractice is a common-law claim. Andress v. MacGregor Med. Ass’n, 5 S.W.3d 855, 859 (Tex. App.–Houston [14th Dist.] 1999, pet. filed) (citing Humphreys v. Roberson, 125 Tex. 558, 83 S.W.2d 311 (1935)). Because Carole has satisfied the first prong of the open courts test, we consider whether restriction of her claim would be unreasonable or arbitrary when weighed against the purpose of section 10.01. See Diaz, 941 S.W.2d at 100.

Batten v. Hunt recently presented the Austin Court of Appeals with a similar question. 18 S.W.3d 235 (Tex. App.–Austin 1999, no pet.). There, the plaintiff’s husband, Roy Swope, underwent surgery in 1989 to remove a precancerous tumor from his colon. Id. at 236. Hunt treated Swope during three brief, postoperative hospitalizations, the last of which occurred in May 1989. The court found that, although the plaintiff demonstrated she had a cognizable common-law cause of action, she failed to show [*15] that the limitations period unreasonably restricted her claim because Swope’s “continuing symptoms [of severe fatigability, episodes of weight loss, severe diarrhea, and blood in his stools] certainly provided the impetus to seek further examinations well before 1996 [when Swope died].” Id. at 239. The court reasoned that once Swope reasonably should have felt the need to be examined, any failure by the doctor to tell him to get examined became a non-factor in Swope’s course of treatment. Id.

This Court has also addressed whether a patient had a reasonable opportunity to discover the injury and bring suit where there were physical manifestations of the illness within the two years after the surgery. Desiga v. Scheffey 874 S.W.2d 244 (Tex. App.–Houston [14th Dist.] 1994, no writ). In Scheffey, we noted that “courts do require some diligence and effort on the patient’s part in making inquiry of symptoms related to the treatment received.” Id. at 251. Because the summary judgment proof showed that the plaintiff complained of pain and was dissatisfied with his doctor within the two years after the surgery, yet did nothing [*16] about his situation, the statute was found not unconstitutional as applied to Desiga because he had a reasonable opportunity to discover his injury and to bring suit. Id. at 252.

Here, Carole testified without contradiction that, following her surgery, she suffered chronic pain, as well as a variety of gastrointestinal problems, including virtually constant, mechanically-induced vomiting, a term used to distinguish vomiting induced from nausea. More importantly, she testified that she no longer trusted Dr. Molina at least by 1995, and that by 1995 or 1996, she believed the gastrointestinal problems were related to the gastric banding. Assuming arguendo that it was reasonable for Carole’s injury to have gone undiscovered for the nearly three years preceding 1995–the approximate point at which she no longer trusted Dr. Molina–she then only had a “reasonable time” after that within which to bring suit. See, e.g., Wright v. Fowler, 991 S.W.2d 343, 351-52 (Tex. App.–Fort Worth 1999, no pet.) (holding section 10.01 not unconstitutional as applied to patient who experienced problems shortly after surgery, where patient requested his records from his [*17] doctor “months” after his final follow-up examination because he knew he would never go back and he did not think he could rely on doctor to keep them).

And assuming Carole was not unreasonable in failing to discover her injury after she ceased trusting Dr. Molina, she further testified that she believed her injuries were caused by the gastric banding by early 1996, well before her September 1997 surgery to remove it. As we previously pointed out, the open courts provision, as an exception to the two-year statute of limitations found in section 10.01, only provides a party a reasonable opportunity to file suit after she (1) actually discovered the cause of her injury or (2) should have discovered the cause of her injury. n8 It does extend limitations indefinitely until Carole knew with certainty that Dr. Molina was negligent. To conclude otherwise would have the effect of “reinstating the discovery rule clearly abrogated in section 10.01 of the Act.” Scheffey, 874 S.W.2d at 252. Accordingly, we hold that, on these facts, application of the strict time limitations of section 10.01 to Carole does not violate the open courts provision of the Texas Constitution.

n8 Cf. Gandara v. Slade, 832 S.W.2d 164 (Tex. App.–Austin 1992, no writ) (finding that section 10.01 was unconstitutional as applied to parents’ claims against physician who allegedly was negligent in recommending surgery in which daughter became infected with HIV, where although the summary judgment evidence showed the parents knew of their daughter’s condition for more than two-and-a-half years before they filed suit, that knowledge did not also have the effect of putting them on notice that the doctor was negligent in recommending their daughter have surgery).

[*18]

The judgment of the trial court is affirmed.

/s/ Leslie Brock Yates

Justice

Judgment rendered and Majority and Dissenting Opinions filed June 7, 2001.

Panel consists of Justices Yates, Fowler, and Wittig.

DISSENTBY:

Don Wittig

DISSENT:

DISSENTING OPINION

I respectfully dissent. First, the majority opinion fails to review the facts in the light most favorable to the non-movant. Carole was assured by Dr. Molina’s staff that her pain and symptoms were simply her body’s adjustment to the band. Carole was told she experienced an “optimal” result. Carole was never told the band was improperly placed. Carole underwent numerous diagnostic tests, GI panendoscopy, barium x-rays and small bowel series and yet still was not informed of the erroneously placed gastric band. Not until Dr. Brunicardi removed the band was she informed the band was misapplied to her esophagus. This occurred September 19, 1997 . She immediately sought legal advice, an attorney investigation transpired, and suit was filed.

Carole’s invocation of the constitutional “open courts” doctrine of “reasonable opportunity to discover the injury” is further corroborated by two experts. Dr. Molina quite [*19] reluctantly admitted the only way a patient could know the problem occurred during surgery was from the corrective surgery “If she so told.” Question: “She can’t do a self-examination, can she?” Answer: “That’s right. She would have to go by what the doctor told her.”

Dr. Brunicardi stated the incorrectly placed band would be discoverable by a physician but there was not any way a patient would make the discovery. Contrary to two medical experts, the majority opinion states that she should have known of the injury when she no longer “trusted” Dr. Molina. Scant authority is cited for this proposition and the principal cases cited by the opinion are not materially in point.

In Hunt, the Austin court dealt not with a hidden appliance that could not be discovered by the patient, but simply an alleged failure to recommend follow-up colonoscopies. Hunt, 18 S.W.3d at 239. The patient himself had symptoms from the doctor’s last treatment in 1989 until 1997. Id. The patient did not allege the doctor told him the surgery freed him from future vigilance, the doctor was negligent in removal of the polyp, the doctor misinterpreted the test results, or prescribed [*20] a harmful course of treatment. Here was alleged both misplacement of the gastric band and failure to follow-up post surgery and investigate the cause of her symptoms.

In Scheffey, also cited by the majority, the only pleading against Dr. Guerrero was negligent referral to Dr. Scheffey. Scheffey, 874 S.W.2d at 249. The date of referral was clearly known and yet the plaintiff waited 16 months after he learned from Dr. Barrash the surgery was unnecessary to bring suit against Guerrero. Id. at 246. Accordingly, the plaintiff did not effectively invoke the Open Courts doctrine to defeat the two year statute of limitation. While I do not take issue with the majority’s view that the discovery rule is no longer applicable, vestiges of the rationale of the rule remain as we pointed out in Scheffey. Id. at 249. The discovery rule did not apply at common law in misdiagnosis cases such as Hunt or Scheffey. Id. at 250. The discovery rule did apply when a foreign object, such as a sponge, was left in the body, or when a vasectomy went awry. Id. (citing Hays v. Hall, 488 S.W.2d 412, 414 (Tex. 1969); [*21] Gaddis v. Smith 417 S.W.2d 577, 580 (Tex. 1967) (cause of action for leaving sponge in patent body accrues when patient learns, or through diligence, should have learned, of presence of foreign object)). The policy reasoning was the tangible manifestation of negligence coupled with the lack of dependence on the plaintiff’s credibility. Id. The older discovery rule cases still provide insight today into the virtually equivalent issue of “reasonable opportunity to discover.” So too today, we are faced with an objectively verifiable injury that could not be known by Carole until the removal of the gastric band in 1997.

Because Carole raised a fact issue that she could not and did not have a reasonable opportunity to discovery her injury until 1997, I would reverse and remand the trial court’s summary judgment.

/s/ Don Wittig

Justice

Judgment rendered and Majority and Dissenting Opinions filed June 7, 2001.

Panel consists of Justices Yates, Fowler, and Wittig.