Perea: Statutory Cap Stacking

Jacob Perea was a 78-year old widower who, despite having a history of heart disease, respiratory issues, and diabetes, stayed active in maintaining 17 acres of his sons' land. In the spring of 2004, he was admitted to Covenant Medical Center in Lubbock a number of times for a number of things—abdominal pain, confusion, chest pains, shortness of breath, etc. During those visits, the doctors diagnosed that he was allergic to the drug Ativan and they marked that up in his records. ++In late 2004, he suffered a fall that caused a slight cervical fracture. Again he was admitted to Covenant, but Covenant decided to transfer him to Southwest Hospital. Evidence at trial showed that Covenant documented Perea's allergy to Ativan and that the medical personnel at Southwest were well aware of it. Despite the documentation, two nurses administered Ativan to Perea. He lapsed into a ventilator-assisted coma and Southwest transferred him back to Covenant. Seeing no changes in his condition after a week, his family asked that he be removed from the ventilator and he expired.

++The family sued Southwest (THI of Texas at Lubbock) and its pharmacy for wrongful death and survival damages. A jury found the defendants negligent and awarded a total of $1,696,595.50 against THI. It appealed.

++In its appeal, THI asserted:

  • The trial court abused its discretion by using a broad-form jury instruction on negligence and proximate cause cause when the family had sought survival and wrongful death damages.
  • The trial court abused its discretion by granting the family a trial amendment for negligent credentialing because it was prejudicial to THI's defense.
  • The family's evidence was legally and factually insufficient to support negligent credentialing and factually insufficient to support a negligence claim.
  • The family's evidence was legally and factually insufficient to support a gross negligent claim.
  • The trial court abused its discretion by excluding evidence that THI had conducted an investigation of Jacob's death.
  • The trial court abused its discretion as a matter of law by failing to apply statutory damage caps in sections 41.008(b) and 74.301(b) of the Texas Civil Practice and Remedies Code.

Jury Instructions

THI had objected to the Texas Pattern Jury instruction that asked about it proximately causing the injury in question. THI wanted the instruction to read: proximately causing the death in question. It argued that death should have been substituted for injury because the "only evidence of injury is death."

The court held that the trial court didn't abuse its discretion by leaving injury in the charge. It explained that the family had also brought a survival action where injury is the proper term and an added instruction might have confused the jury. It also said that THI had failed to offer any evidence that the use of injury over death caused the rendition of an improper judgment.

Trial Amendment

During their case-in-chief, the family confronted a nurse supervisor with a past employment credentialing issue without any objection from THI or a request for continuance of the trial. In overruling THI's issue, the court held that it waived any error because it didn't object at trial or ask for a continuance of the proceedings.

Legal Sufficiency Challenge – Negligent Credentialing

Leonard Espinoza was the nurse supervisor who gave the order to his supervisee to administer Ativan to Jacob. He had done that before. Earlier in his career, he administered Ativan to a patient without authorization and he was suspended for it.

The court held, given this evidence, there was more than a scintilla of evidence (proper standard of review) supporting the family's negligent credentialing cause of action. The court said that the jury could have reasonably inferred that THI hired Espinoza knowing he was on probation due to disciplinary proceedings in another state, for conduct that reasonably endangered the health and safety of patients entrusted to his care. The court also held that, since Espinoza's conduct in the case was identical to his previous wrongful conduct, THI's issue was easily overruled.

Legal and Factual Sufficiency Challenges

THI asserted that the evidence was factually insufficient to support a finding of negligence because the credentials of its expert were superior to the family's expert's and so its experts' opinions were entitled to more weight. The court observed that THI hadn't objected to the family's expert testimony at trial, and his opinion fell within the province of the jury. Significantly (at least for Texas plaintiffs' lawyers), his testimony provided a traceable chain of causation from Jacob's condition to the event.

The court also found the family's gross negligence claims legally sufficient. The court said that virtually all of the testifying health professionals agreed that giving a patient Ativan without a doctor's permission was extremely reckless and could cause severe injury. Given that Espinoza testified to the same thing, and had given Ativan to a previous patient without authorization, the court didn't have any problem finding that he was actually aware of the extreme risk that he was taking in instructing his supervisee to give Jacob the drug. The court also found corporate liability for gross negligence, finding that Southwest had consciously disregarded the danger Espinoza exposed to patients by allowing him to administer medications.


Finally, THI argued that the family's damages should be modified to reflect the statutory caps. Specifically, it said:

  • Section 41.008(b) should be applied to limit  exemplary damages.
  • Section 74.301(b) should be applied to limit non-economic damages (capped at $250,000 for each claimant).
  • Section 74.303 should be applied to limit the family's overall recovery on a health care liability claim.

Regarding section 74.303, the court found that the family should be considered a single claimant. Consequently, Jacob's estate and his four sons were entitled to recover no more than $1,737,272.00 (based on CPI), excluding necessary medical, hospital, and custodial care. Since the overall award didn't exceed the cap, the trial court didn't abuse its discretion.

As for § 74.301(b), the family argued that it shouldn't apply if § 74.303 applied (two caps shouldn't apply to one cause of action). The court disagreed and held that the Legislature intended that both caps apply. Applying the section, the court held that THI's civil liability was limited to just $250,000 because the family comprised a single claimant.

And as for limitations for exemplary damages, the court overruled the family's waiver argument. It held that the exemplary cap applied as a matter of law and that the trial court erred by not applying it. In applying § 41.008(b), the court said that the trial court should first apply the non-economic damages cap and then § 41.008(b).

Correction of Judgment

The jury had awarded the estate economic damages of $17,526.27 and non-economic damages of $40,000. It also awarded Jacob's sons $100,000 apiece and exemplary damages of $1,250,000. The court couldn't calculate the exact amount of the corrected judgment because a settling defendant's payment (the pharmacy) had to be figured in. But a ballpark figure would bring the family's $1.7 million verdict down to just over $700,000 (assuming section 41.008(b) is given its plain meaning).

And that's what's called Texas justice nowadays.

Read the case here: THI of Texas v. Perea.