Reverse and Render

Appellate Trends

Mike Northrup — Fri, 11 May 2012 06:44:08 -0600

Kirk Pittard of Kelly Durham & Pittard, LLP will be speaking on "Trends in Rulings by the Texas Courts of Appeals" at the May meeting of the Dallas Bar Association Appellate Law Section. The meeting will be at noon on Thursday, May 17th at the Belo Mansion. One hour of CLE credit is available.

Is a Judgment Included in a Net Worth Calculation?

Mike Northrup — Thu, 03 May 2012 07:19:01 -0600

The El Paso Court of Appeals has become the most recent appellate court to weigh in on the issue of whether the judgment that is being appealed should be included on a balance sheet insofar as determining an appellant's net worth for supersedeas bond purposes.

In Business Staffing Inc. v. Jackson Hot Oil Service, Jackson obtained a joint and several judgment against four defendants. Each of the four defendants filed affidavits of net worth showing a negative balance and each affidavit included the amount of the judgment as a liability on the balance sheets. Jackson filed a contest to the affidavits, which the trial court sustained. The trial court then set bond amounts as 50% of the net worth of each defendant as calculated after elimination of the judgment as a liability. The four defendants/appellants sought review of the trial court's order from the court of appeals.

The court of appeals first observed that "net worth" is calculated as assets minus liabilities, as determined by generally accepted accounting principles. In spite of this observation, the court pointed out that the appellants had not cited any legal authority for inclusion of the judgment in the net worth calculation. The court then cited two other opinions for the proposition that the judgment--a contingent liability--should not be included in the net worth calculation. Although the appellants presented an expert CPA, the court of appeals observed that the expert testified only that the judgment should be included on the balance sheet and not that the judgment was part of the net worth calculation. Applying an abuse of discretion standard, the court holds that the trial court did not abuse its discretion because the court did not act without reference to guiding rules and principles. The court's opinion may be found here.

Issues practitioners may want to watch for: (1) Is the issue of whether the judgment is a liability one that requires expert testimony, as some courts have held, or is it a question of law for the court, as other courts have held? (2) This is one of only two opinions of which I am aware where the appellants presented unrebutted expert testimony supporting inclusion of the judgment as a liability under GAAP principles, but the trial court and appellate court rejected the testimony. (3) Is GAAP the only means by which an appellant may establish net worth (particularly if the appellant uses another accepted method of accounting)?

Attorneys' fees must be reasonable under Rule 1.04

Byron Henry — Wed, 02 May 2012 08:56:46 -0600

The Dallas Court of Appeals recently decided an interesting issue involving whether evidence that attorney's fees are reasonable under the Arthur Anderson v. Perry factors is required in a breach of contract case between attorney and former client. Here, a law firm brought suit against its former client for non-payment of fees pursuant to a contract and attached its unpaid invoices to its motion for summary judgment. The firm did not introduce or establish the agreement at issue. However, the summary judgment evidence did support that the client owed the fees represented by the invoices. The trial court granted summary judgment to the law firm and the client appealed.

The court of appeals framed the issue as: "[T]he unique situation of deciding whether a party must prove its attorneys' fees are reasonable and necessary under the Andersen factors when there has been no showing of a breach of an underlying contract." The court held that "under the unique facts of this situation, we conclude that the Anderson factors apply in determining the reasonableness of attorneys' fees." Without a contract, the court continued, "it only seems prudent that we employ some gatekeeping function to ensure attorneys' fees are reasonable under Texas Rule of Professional Conduct 1.04." Accordingly, the court reversed the grant of summary judgment and remanded to the trial court. The opinion in Ashton Grove, L.C. v. Jackson Walker L.L.P. can be found at this link.

Spring Appellate CLE Opportunities

Mike Northrup — Tue, 01 May 2012 17:49:19 -0600

There are a couple of Appellate Continuing Legal Education opportunities on the horizon that I will call out for you.

First, on May 31st and June 1st, the 22nd Annual UT Conference on State and Federal Appeals will be held at the Four Seasons Hotel in Austin, Texas. The program for registration may be found here.

And if you can't make that seminar, there's another one June 21st and 22nd at the Hyatt Regency Hotel in Cambridge, Massachusetts. The Defense Research Institute will be holding its Appellate Advocacy Seminar on those dates in June. The program for registration at this seminar may be found here.

Offer of Settlement: No extension of deadlines to respond

Mike Northrup — Wed, 25 Apr 2012 07:49:26 -0600

The Tyler Court of Appeals has held that a trial court has no authority to extend the deadline for a party to respond to an offer of settlement made under Texas Civil Procedure Rule 167. In In re Complete Rx, Ltd., Good Shepherd Hospital sued Complete Rx for an accounting. Complete RX invoked Rule 167 and Chapter 42 of the Civil Practice and Remedies Code to make a settlement offer, and establised a deadline by which the offer had to be accepted. Good Shepherd filed a motion to modify the deadline until after a court-appointed auditor had rendered his final report. The trial court granted the motion and extended the deadline. Complete Rx filed a petition for writ of mandamus to challenge the order extending the deadline for response to the settlement offer.

Tthe court of appeals relied upon the fact that Rule 167.5 allows for modification of only two deadlines--the time for filing a declaration under Rule 167.2(a), and the time for making an offer. Good Shepherd pointed out that while Rule 167 did not explicity refer to extending the deadline for responding to offers, the legislation authorizing adoption of Rule 167 does. The court of appeals rejected this argument, pointing out that it has no authority to modify the existing rule of procedure, and that recognition of any authority permitting extension of this deadline would be "tantamount to amending established rules of procedure," which is something only the Supreme Court of Texas may do. Because Complete Rx had no adequate remedy by appeal to challenge the trial court's order, the court of appeals granted the petition for mandamus. The court's opinion may be found here.

Mandamus is Proper When Leave Denied to Join Responsible Third Parties

Byron Henry — Mon, 16 Apr 2012 14:43:37 -0600

The Dallas Court of Appeals recently weighed in (again?) on whether a trial court's erroneous ruling regarding designation of a responsible third party is subject to mandamus. In this case, the trial court denied relator's motion to designate a responsible third party. The trial court did not allow relator to replead. A divided panel held that it was an abuse of discretion to deny a motion to designate a responsible third party without allowing movant the opportunity to replead. The court then addressed whether relator had an adequate remedy by appeal. Citing its prior opinion in In re Oncor, the court held that "appeal is ordinarily an inadequate remedy when a trial judge erroneously denies a motion for leave to designate a responsible third party." In a footnote, the court highlighted the split of authority regarding whether an appeal is an adequate remedy for a trial court's erroneous ruling on a responsible third party issue. In dissent, Justice Murphy argued that relator should have requested permission to replead, and, by failing to do so, waived error. The court's opinion in In re Houston M. Smith can be found here and the dissent here.

Mandamus for Discovery of Personal Computer Hard Drive

Mike Northrup — Fri, 06 Apr 2012 13:33:31 -0600

The Dallas Court of Appeals granted a petition for writ of mandamus in a case in which the trial court ordered production of a personal computer hard drive and e-mail account.

Misty Jordan sued Gajekse, Inc. alleging that she was subjected to a hostile work environment and then fired for reporting it. The trial court signed an order compelling Jordan to permit Gajekse's forensics examiner to access her personal computer to look for pornagraphic material (Jordan had asserted she had never seen pornography until she became employed by Gajekse), and to examine her e-mail.

The court of appeals granted the petition for writ of mandamus, noting that the discovery order failed to comply with the Texas Supreme Court's opinion in In re Weekly Homes, LP, in several respects: (1) failure to make a specific request for the information and specify the form of production; (2) failure to demonstrate the specific characteristics of the electronic storage devices; (3) the familiarity of the expert with those characteristics; and (4) a showing of a reasonable likelihood that the search would yield the information sought. Because of the court's disposition of the case, it expressly did not address Jordan's contention that Gajekse was seeking irrelevant information. The court's opinion in In re Jordan may be found here.

Net Worth and Supersedeas

Mike Northrup — Thu, 15 Mar 2012 16:51:49 -0600

The Dallas Court of Appeals has reaffirmed its opinion in Anderton v. Cauley, in which the court held that the trial court's judgment being appealed is not to be included as a liability of the judgment debtor in calculating the judgment debtor's net worth for purposes of determining the amount of an appeal bond.

In McCullough v. Scarbrough, Medlin and Assocs., the court held that the trial court did not err by refusing to allow the judgment debtor to deduct the amount of the judgment from net worth. The Appellants also argued that they would suffer substantial economic harm if required to post additional security. The court of appeals concluded that there was no abuse of discretion on the trial court's part in rejecting this argument because the court determined that there was evidence the appellants could access funds from their retirement accounts to post the supersedeas bond. This holding is significant as it would seem to suggest that funds that are otherwise exempt from execution must be included in a judgment debtor's net worth calculation. To put it another way, to avoid execution on non-exempt assets during an appeal, it appears that an appellant may have to pledge exempt assets and thereby put more at risk for the right of appeal than would otherwise be at risk had no supersedeas bond been filed. The court's opinion may be found here.

Continuing Education opportunity

Mike Northrup — Tue, 13 Mar 2012 18:07:06 -0600

The Dallas Bar Association Appellate Law Section is having its monthly meeting Thursday, March 15, 2012, at noon at the Belo Mansion.

The speaker is Diana Faust of Cooper & Scully, P.C. She will be addressing Supersedeas Issues in State and Federal Court. One hour of CLE credit is available.

Failure to Comply with an Appellate Mandate

Mike Northrup — Wed, 29 Feb 2012 17:22:58 -0600

What happens when a trial court ignores the court of appeals' mandate?

Answer: The trial judge gets a little visit to the principal's office. Last year, in Elite Door & Trim, Inc. v. Tapia, the Dallas Court of Appeals held that the trial court had erred in requiring Elite Door and Trim to file an amended petition and re-serve the defendant and by refusing to hear Elite Door and Trim's motion for default judgment. Following the remand of the case to the trial court, the trial judge dismissed the case for want of prosecution. Elite Door and Trim then filed a petition for writ of mandamus, complaining that the trial judge had abused her discretion by failing to follow the appellate court's mandate. In an unusal move, the court of appeals asked the trial judge to explain the basis for the dismissal. The trial judge explained that she had re-reviewed the file, determined that the citation and return were defective, and concluded that she had no jurisdiction.

The court of appeals did not take kindly to the trial judge's dismissal. The court of appeals held that the trial judge had "no discretion to review, interpret, or enforce the mandate." The trial judge's actions on remand are "limited to the issues specified in the mandate" and the scope of the mandate is determined by referring to the opinion as well as the mandate. The court of appeals stated that in the first appeal, it had reviewed the petition, the citation, and the return of citation and determined that they were proper. Accordingly, the trial judge had no discretion to decide differently. The court therefore directed the trial judge to hold a hearing on the motion for default judgment by a date certain, AND to have the entire proceeding recorded by the court reporter. The court of appeals' opinion in In re Elite Door & Trim, Inc. may be found here.

Attorney disqualification redux

Byron Henry — Tue, 28 Feb 2012 10:14:21 -0600

The San Antonio Court of Appeals recently reaffirmed that "[t]he fact that a lawyer serves as both an advocate and a witness does not, standing alone, compel disqualification." Here, the court also restated the well-settled rule that disqualification of counsel is subject to mandamus. The court reiterated that Rule 3.08 only requires disqualification if the attorney's testimony is essential to establish a fact on behalf of the client and actual prejudice will result. The court added that the fact that an attorney notiarized a key document does not require disqualification. Because the real party in interest failed to establish that the attorney's testimony was necessary to establish an essential fact, the trial court abused its discretion by disqualifying relator's counsel. Accordingly, the court granted the writ. The court's opinion in In re Garza can be found at this link. Our previous blog entry on this subject can be found at this link.

41.0105 -- post-judgment reduction does not cure error

Hilaree Casada — Fri, 24 Feb 2012 14:12:14 -0600

I have been waiting and watching for post-Haygood opinions, and the Amarillo Court of Appeals delivered a great opinion this week with Henderson v. Spann. In a 2-1 opinion, the panel held that the trial court's admission of unadjusted medical bills and exclusion of adjusted medical bills constituted reversible error even though the trial court reduced the award to the adjusted amount post-trial. Yes. Even though the past medical expenses ultimately awarded matched the adjusted amounts, the judgment was still reversed and the case remanded for a new trial.

Justice Hancock wrote the majority opinion, and I think he got it right. He provides a thorough analysis of Haygood and notes that the Haygood court rejected the post-trial adjustment method to implement article 41.0105.

Justice Pirtle concurred in the result (i.e., that reversal and remand were necessary due to the trial court's erroneous exclusion of the adjusted medical bills). But he wrote separately to encourage the Texas Supreme Court to revisit whether unadjusted medical bills are per se irrelevant. Justice Pirtle opined that unadjusted medical bills could be relevant to the question of damages for future medical bills, and that "the use of proper instructions and carefully tailored jury questions" would make it possible to present unadjusted and adjusted medical bills to the jury.

Justice Quinn concurred in the determination that error occurred, but dissented as to the determination that the error was harmful. Justice Quinn opined that no harm occurred because the trial court reduced the medical expenses awarded, leaving a judgment for only the adjusted amounts. Respectfully, I believe this approach fails to consider that a jury could decide to award less than the maximum amount of the adjusted bills. A post-verdict reduction to the maximum amount of the adjusted bills prevents the defense from arguing that even the adjusted amounts are not reasonable and necessary and improperly takes that factual determination away from the jury.

Links to all 3 opinions can be found here.

Failure to Announce for Trial May Result in Dismissal

Mike Northrup — Fri, 10 Feb 2012 10:14:13 -0600

Can the failure to announce ready for trial be a basis for dismissal of the suit? The answer is apparently "yes."

Texas Rule of Civil Procedure 165a allows a court to dismiss a case for want of prosecution for failure of any party seeking affirmative relief to appear for any hearing or trial. In Ogunfeyimi v. Charalambopoulos, the trial court sent out a notice of trial setting of January 4, 2011. The notice advised counsel to make an announcement for trial by 10:30A.M. on the Friday of the preceding week and upon failure to announce, the case will be dismissed. Dallas County Local Rule 3.02 states that if the Plaintiff does not announce by 10:30 A.M. on the Friday preceeding the trial, the court may dismiss the case for want of prosecution.

Counsel for Ogunfeyimi did not contact the court clerk to make an announcement. He appeared for trial on January 4, 2011, only to discover that the trial court had dismissed Ogunfeyimi's case under authority of Rule 165a and the court's inherent power. At a hearing on the motion to reinstate the case, counsel fo Ogunfeyimi observed that the Friday prior to January 4, 2011 was New Year's Eve. The court of appeals concluded that Ogunfeyimi never argued to the trial court that he didn't think an announcement was necessary because of a belief that New Year's Eve was a holiday. The court of appeals went on to point out that New Year's Eve is not a holiday and recited the fact that Appellee's counsel had announced ready. The court of appeals affirmed the dismissal for want of prosecution because Ogunfeyimi had not provided any explanation to show that the failure to announce was not intentional or the result of conscious indifference but was due to accident or mistake. The court's opinion may be found here.

Appellate CLE Opportunity: Appellate Mediation

Mike Northrup — Fri, 10 Feb 2012 10:03:46 -0600

The Dallas Bar Association Appellate Law Section will have its monthly luncheon on Thursday, February 16, 2012, at noon at the Belo Mansion. The topic is "Positioning Your Appeal for Successful Mediation." Speakers include Vikram Chandhok (Fifth Circuit Conference Attorney), David Keltner (former justice on the Fort Worth Court of Appeals), and Mark Whittington (former justice on the Dallas Court of Appeals). The CLE has been approved for one hour of credit. Details may be found here.

Texas Supreme Court confirms that temporary employees are subject to the comp bar

Hilaree Casada — Tue, 31 Jan 2012 08:00:00 -0600

In Port Elevator-Brownsville, L.L.C. v. Casados, the Texas Supreme Court reaffirmed this State's prohibition on split workforces (i.e., Texas employers are not permitted to cover some but not all employees with worker's compensation insurance if the employer is a subscriber), and confirmed that a temporary employee is covered by the employer's comp policy (and subject to the comp bar) even if the employer took steps to intentionally exclude the temporary employee from coverage (such as not paying premiums for such employees or not including a classification for temporary employees under the policy).

Practitioners on both sides of the bar that deal with personal injury and wrongful death claims should take note of this opinion because it confirms what many in the defense bar have been arguing for a number of years. But coverage attorneys should also take note because one key point in the Court's analysis was its acceptance of a rule set out by the Amarillo Court of Appeals in 1940 -- that "premiums are an issue between the employer and the insurer; they do not affect the employee's coverage." (Slip op. at 9) (citing Tex. Employers' Ins. Ass'n v. Stanton, 140 S.W.2d 337, 339-40 (Tex. Civ. App.--Amarillo 1940, writ ref'd).

In Casados, Rafael Casados worked for a temporary staffing agency that provided Casados to Port Elevator to perform general labor. Mr. Casados died in a work-related injury while working at the Port Elevator facility. The temporary staffing agency and Port Elevator were both considered Mr. Casados' employers at the time of his death, and both carried workers' compensation insurance. However, Port Elevator's policy did not include a classification for temporary workers like Mr. Casados, and Port Elevator did not pay premiums for such workers. Port Elevator's carrier denied coverage related to Mr. Casados' death.

Mr. Casados' parents sued Port Elevator directly for negligence, negligence per se, and gross negligence. Port Elevator moved for summary judgment based on the comp bar, arguing that the plaintiffs' exclusive remedy was workers' compensation. The trial court rejected that argument, and granted summary judgment for Plaintiffs, determining that the Port Elevator policy did not cover Casados. The case was tried to a jury, and Plaintiffs obtained a favorable judgment on their negligence claim. The court of appeals affirmed.

But the Supreme Court reversed and rendered judgment for Port Elevator. Port Elevator's failure to pay premiums for temporary workers, the failure to include a classification for temporary workers in the comp policy, and the carrier's denial of coverage were all inconsequential to Port Elevator's exclusive remedy defense. Indeed, the Supreme Court rejected the Casados' argument that the rule against splitting workforces should be subject to an intent-based exception whereby courts would look to the employer's intent to determine whether the comp bar applies. Simply put, if an employer has worker's compensation coverage, then all employees are covered (and subject to the comp bar) regardless of whether the employer tried to exclude the employee from coverage and regardless of whether the carrier denies coverage.

So, the main take away from this opinion is that subscriber employers of temporary employees may rely on the exclusive remedy defense. However, workers' comp carriers should also take note of this opinion when making coverage determinations.

When does "expedite" mean "eliminate"?

Mike Northrup — Thu, 26 Jan 2012 15:12:42 -0600

The Texas Supreme Court's Advisory Committee will be meeting Friday, January 27th and Saturday, January 28th to discuss--among other things--the proposal that the Court's task force has assembled to implement House Bill 274. In relevant part, House Bill 274 requires the Court to adopt rules for a "prompt, efficient, and cost-effective resolution of civil actions" for claims that do not exceed $100,000. The house bill provides that the rules to be adopted must address the procedure for "ensuring that these actions will be expedited in the civil justice system." So why would the task force propose a rule that all but eliminates an appeal except in the narrowest of circumstances? That doesn't sound like a procedure for expediting an appeal.

The Task Force has presented proposed Rules 262.4 and 262.5. Proposed subparagraph 262.5(e) deals with appeals and would allow for an appeal in a case under the expedited jury trial process only in (1) cases of judicial misconduct, (2) jury misconduct, (3) corruption, fraud, or undue means that prevented a fair trial, or (4) summary judgments. In other words, no challenges to factual or legal sufficiency. No challenges to jury charges. No challenges to the form of the judgment. Is this procedure expediting an appeal, or eliminating an appeal? I thought perhaps that there was some definition of "expedite" that I was missing, so I looked it up to make sure. Nope. But I did find it interesting that some thesauruses list "block," "cease," "curtail," and "halt" as antonyms of expedite. I have to wonder how many of my clients will realize or understand that they are essentially giving up their appellate rights to challenge the outcome by agreeing to the expedited process.

Temporary injunction rules vs. Arbitration: which one is superior?

Mike Northrup — Wed, 25 Jan 2012 10:22:40 -0600

The Texas arbitration statutes contemplate that a trial court has jurisdiction to issue an injunction in support of an arbitration. So what happens if the trial court issues a temporary injunction but the form of the injunction does not (and cannot) comply with Rule 683? According to the Dallas Court of Appeals, Rule 683 takes a backseat to the Texas Arbitration Act.

Senter Investments, L.L.C. v. Veerjee, involves an interlocutory appeal from a temporary injunction order. The parties to the appeal had a lease agreement that required them to arbitrate, but the Veerjees asserted that there was a breach of the agreement when Senter entered into a contract with a third party to sell the property without first giving the Veerjees a right of first offer. For that reason, the Veerjees sought and obtained a temporary injunction to halt the sale. The trial court also ordered the parties to arbitrate pursuant to the arbitration clause in the lease agreement. In its interlocutory appeal, Senter challenged the injunction as void because Rule 683 requires an injunction order to set a date for trial on the merits.

The court of appeals held that Rule 683's trial-setting requirement would conflict with the Texas Arbitration Act and that the Texas Arbitration Act must prevail over court rule. Interestingly, the court also refused to address any of the merit-based challenges to the temporary injunction on the ground that doing so would constitute an advisory opinion, which is prohibited. The court's opinion scolds the parties for having done nothing toward filing and pursuing the arbitration ordered by the trial court. One question that is raised by this opinion (and the predecessor opinions cited within it) is whether the statutory right to an interlocutory appeal to challenge the granting of a temporary injunction is an empty right if it means a party can never have the merits of the temporary injunction determined by the court of appeals. The court's opinion may be found here.

Dominant Jurisdiction and Mandamus Relief

Mike Northrup — Fri, 20 Jan 2012 09:17:46 -0600

Since 1985, the test for whether a writ of mandamus will issue in connection with a trial court's refusal to grant a plea in abatement under the doctrine of dominant jurisdiction has required proof of an active interference by one court with the jurisdiction of another court. The loosening of mandamus standards does not appear to have changed that requirement. The Texarkana Court of Appeals reaffirmed that rule in In re Martin.

The underlying dispute involves a fight between brothers Scott Martin and Ruben Martin over a family-owned company, Martin Resource Management Corporation (M.R.M.C.). Scott initially sued M.R.M.C and Ruben in Harris County, complaining of a wrongful issuance of shares of stock aimed at diluting Scott's voting power. M.R.M.C. subsequently filed suit against Scott in Gregg County and eventually limited his claim to one for breach of fiduciary duty. Although some of the factual bases for alleged liability against Scott arose after the Harris County suit, the court of appeals points out that at least a part of the basis for the breach of fiduciary duty claim was the filing of the Harris County lawsuit.

The trial court issued a writ of injunction against Scott prohibiting Scott from taking any action to prevent M.R.M.C.'s prosecution of the Gregg County case or preventing M.R.M.C. from participating in the Gregg County trial. The injunction was apparently issued because of Scott's attempts to have the Harris County court enjoin M.R.M.C. from proceeding with the Gregg County case. The court of appeals denied mandamus relief upon a finding that the trial court's injunction against Scott does not amount to an interference on the part of the Gregg County Court with the Harris County trial court proceedings. The court's opinion may be found here.

Justice Don Willett to visit North Texas

Byron Henry — Tue, 17 Jan 2012 15:23:30 -0600

Justice Don Willett will speak to the Dallas Bar Appellate Section at noon on Thursday, January 19, 2012 at the Belo Mansion. He will speak on "Tips and Preferences on Practicing Before the Court." One hour of CLE is available.

Justice Willett will also speak to the Collin County Bar Association at its monthly lunch meeting at noon on Friday, January 20, 2012 at the Center for American and International Law in Plano. Lunch will be provided and one hour of CLE is available.

Justice Willett was appointed to the Texas Supreme Court by Governor Rick Perry in 2005. Justice Willett has lead a diverse and distinguished career as Deputy Attorney General of Texas and before that, serving as a lawyer in the White House and Department of Justice. He is recognized for his engaging and scholarly opinions and has been cited by noted columnist George Will. He is currently serving a term that expires on December 31, 2012. For more information about Justice Willett visit his official court bio.

Vicarious liability under Chapter 33

Mike Northrup — Wed, 28 Dec 2011 13:28:38 -0600

The Dallas Court of Appeals has explained how to submit jury questions for negligence of employees for whose conduct employers may be held vicariously liable.

In Janga v. Colombrito, two defendant doctors appealed an adverse jury verdict and complained that the trial court had not submitted the liability of two nurses as part of the liability question. The appellate court first had to decide whether the nurses were "settling persons" under Chapter 33 of the Civil Practice and Remedies Code. The court held that the nurses were settling persons. Even though the nurses did not themselves pay money, their employer--the hospital--did pay money on their behalf and the nurses were parties to a settlement agreement whereby they were dismissed from the case. The hospital would have had vicarious liability for the nurses' alleged negligence.

Next, the court examined the record to determine if there was some evidence of the nurses' negligence and concluded that there was some evidence. Thus, the court held that it was error to omit them from the list of parties whose negligence should have been decided by the jury. Noting that when there is a respondeat superior claim submitted, the individual employee defendant's negligence is submitted, rather than that of the employer. The court concluded there is no reason to treat settling employees any differently. Finally, the court rejected the argument that the jury had disregarded the jury questionnaire and assessed liability on the hospital for the nurses' conduct along with direct liability to the hospital. The court must presume that the jury followed the trial court's written instructions. The court's opinion may be found here.