The Texas Supreme Court released four opinions with this week’s orders list.

Among other orders, the Court rescheduled its upcoming oral argument in IN THE INTEREST OF K.M.L., A CHILD, No. 12-0728 from June 3rd to June 24th.

Opinions

A supersedeas bond can ignore attorneys fees awarded in the judgment

A party who loses a money judgment is allowed to post a supersedeas bond to suspend enforcement of the judgment (collections activity) pending appeal. The statute prescribes that certain damage elements must be included (including compensatory damages) and some need not be included (including exemplary damages). But it does not explicitly place attorneys fees, which can be substantial relative to smaller judgments, into either category. This question had divided the intermediate courts of appeals.

With this decision, the Texas Supreme Court holds that a supersedeas bond need not include the amount of attorneys fees awarded on a judgment.

Texas adopts a narrower view of defamation per se

A doctor argued that a written accusation that he had a “reputation for a lack of veracity” and “deals in half truths,” circulated among some of his peers, caused him professional harm. The trial court awarded him $90,000 for actual damages and $85,000 for exemplary damages.

The Texas Supreme Court today reverses that damage award. First, it concludes that the statement at issue did not constitute defamation per se. Noting that the Court had not addressed defamation per se since the 1940s, the Court chose to clarify Texas law by adopting certain parts of the subsequently issued Restatement (Second) of Torts. The opinion quotes extensively from some of the comments and examples in the Restatement, which aim to delineate what statements affecting one’s profession might constitute defamation per se.

The Court found the type of statement at issue here — about a “reputation for a lack of veracity” — easy to classify under the Restatement. In a passage quoted by the Court, the commentary notes that dishonesty in billing (something related to his professionalism) is actionable but “an imputation of dishonesty in other respects” is not.

Having concluded that the statement was not defamatory per se, the Court then examined the damages evidence without the benefit of any presumption in its favor. (( That presumption is what was at stake: Did the jury need specific evidence, or could the jury presume at least some general harm from the “defamatory per se” nature of the statement? ))

Walking through the evidence, the Court concluded that no evidence demonstrated harm to the plaintiff, either in terms of mental anguish or loss of professional reputation. Accordingly, the Court reversed the actual damages and the exemplary damages.

When creditors can seek to recover debts owed by a (former) spouse

The specific dispute was whether one spouse in a divorce proceeding can be directly sued by their former spouse’s law firm over legal fees. The Court held that, under the governing statute, legal fees are not “necessities” that would create this type of direct claim by a third party against the spouse who did not incur them.

Along the way, the Court dealt with some interesting procedural issues likely to affect cases beyond the divorce context. Those include:

  • A discussion of when intervention is proper (hint: it wasn’t proper here), and the requirement that a ruling be obtained on the issue in the trial court (no motion to strike was filed here).

  • How the rule about suits on sworn accounts (Texas Rule of Civil Procedure 185) applies to situations where the debt is that of a third-party, such as a spouse (or, presumably, someone whose debt is otherwise guaranteed).

  • A clarification of the distinction between mere “community debt” and more conventional debts that create joint liability between two spouses.

Clarifying an earlier decision about Medicaid reimbursements

In EL PASO HOSPITAL DISTRICT D/B/A R.E. THOMASON GENERAL HOSPITAL DISTRICT, ET AL. v. TEXAS HEALTH AND HUMAN SERVICES COMMISSION AND DON GILBERT, COMMISSIONER, No. 05-0372 , the Court held that an administrative rule the state had adopted to govern certain Medicaid reimbursements was invalid.

After the case was remanded, the hospitals argued that the Court’s decision laid a foundation to reopen previous administrative cases in which they had been paid the lower rate. The district court agreed. The court of appeals reversed, concluding that the Texas Supreme Court’s decision did not provide a basis for the hospitals to circumvent the normal error-correcting procedures available under administrative law.

The Texas Supreme Court granted review to clarify the scope of its earlier decision. It chose to affirm the court of appeals, explaining that:

We did not decide whether the hospitals could reopen past agency proceedings or obtain relief for past years. Nor did we expressly order the agency to recalculate these hospitals’ rates, although that relief was available to the hospitals under the agency’s error-correction rules. We accordingly agree with the court of appeals’ interpretation and application of our judgment in the previous appeal, and its judgment is therefore affirmed.