Opinion

IN THE SUPREME COURT OF TEXAS

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No. 08-0215

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University of Texas

Southwestern Medical Center

at Dallas,

Petitioner,

v.

The Estate of Irene Esther

Arancibia by its Beneficiary

Victor Hugo Vasquez- Arancibia , Victor Hugo Vasquez- Arancibia , Individually, and Cecilia Vasquez- Arancibia ,

Individually,

Respondents

════════════════════════════════════════════════════

On Petition for Review from

the

Court of Appeals for the Fifth District of Texas

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Argued September 10, 2009

Justice Johnson , joined by

Justice Wainwright ,

dissenting.

I agree that the Tort Claims Act’s prerequisites to suit are

jurisdictional as to the Arancibias ’ claim. And

because the Arancibias did not give timely formal

notice of their claim as required by the Tort Claims Act, U. T. Southwestern’s immunity from suit was waived only if it had

actual notice of the Arancibias ’ claim as the term

“actual notice” is used in the Tort Claims Act. In order for Southwestern to

have had actual notice, it had to have timely, subjective knowledge that it was

at fault in causing Irene Arancibia’s death. See

Tex. Dep’t of Criminal Justice v. Simons , 140 S.W.3d

338, 348 (Tex. 2004). The basis for the Arancibias ’ claim that Southwestern was at fault is that the

surgeons who first operated on Irene negligently caused her death by breaching

the applicable standard of care. The Court does not identify evidence that

Southwestern knew the injuries to Irene were caused by breach of a standard of

care and that it therefore had actual subjective awareness it was at fault in

causing Irene’s death. Thus, I disagree with the Court’s conclusion that

Southwestern had timely, actual notice of the Arancibias ’ claim within the meaning of the Tort Claims

Act.

I.

The Arancibia family did not give notice of

claim to Southwestern, Parkland Hospital, where the surgery was performed, or

any of the doctors who performed the first surgery until over seven months after

Irene’s death. By a letter dated May 7, 2004, they notified Dr. Mark Watson, who

had supervised Irene’s surgery, that the family

intended to pursue legal action. On August 3, 2004, Irene’s son and daughter

filed suit against Dr. Watson and the doctors who had performed the surgery,

Drs. Curtis and Yau , individually. They alleged that

in several ways the doctors breached applicable standards of care and the

breaches caused Irene’s death. On January 28, 2005, the Arancibias amended their pleadings. They added Southwestern

and Dallas County Hospital District d/b/a Parkland Hospital (collectively, the

entities) as defendants and dismissed the doctors. The entities pled lack of

notice under the Tort Claims Act and sought dismissal on the basis of sovereign

immunity.

The trial court denied the entities’ jurisdictional pleas and the court

of appeals affirmed. 244 S.W.3d 455, 460 .

Only Southwestern filed a petition for review. It asserts, in part, that

sovereign immunity bars the Arancibias ’ claims because

section 311.034 makes prerequisites to suit jurisdictional, see Tex. Gov’t Code § 311.034, the Arancibias admittedly failed to give timely notice of claim

under section 101.101(a), see Tex. Civ. Prac. & Rem. Code §

101.101(a), and Southwestern did not have actual notice of the claim pursuant to

section 101.101(c). See id. § 101.101(c). In response, the Arancibias urge that formal notice to Southwestern was not

required because they first sued the doctors individually as opposed to the

entities, and reading the Tort Claims Act to require pre-suit notice to

Southwestern under such circumstances would yield an absurd result. They also

claim that Southwestern had actual notice of their claim so formal notice under

section 101.101(a) was not required.

II.

Section 101.101(a) of the Tort Claims Act establishes the general rule

that timely notice of a claim must be given to a governmental entity as a

prerequisite to suit against that entity:

A governmental unit is entitled to receive notice of a

claim against it under this chapter not later than six months after the day that

the incident giving rise to the claim occurred. The

notice must reasonably describe:

(1) the damage or injury claimed;

(2) the time and place of the incident;

and

(3) the incident.

Tex. Civ.

Prac. & Rem. Code §

101.101(a). As the Court notes, the purpose of

the notice requirement “is to ensure prompt reporting of claims in order to

enable governmental units to gather information necessary to guard against

unfounded claims, settle claims, and prepare for trial.” Cathey v. Booth , 900 S.W.2d 339, 341 (Tex.

1995) (citing City of Houston v. Torres , 621 S.W.2d 588, 591 (Tex.

1981)).

Even absent the formal notice of claim required by section 101.101(a),

however, section 101.101(c) waives a governmental entity’s immunity if the

entity “has actual notice that death has occurred, that the claimant has

received some injury, or that the claimant’s property has been damaged.” Tex. Civ. Prac. & Rem.

Code § 101.101(c). In

Cathey , the Court held that to have actual

notice under section 101.101(c), the governmental unit must have “knowledge of

(1) a death, injury, or property damage; (2) the governmental unit’s alleged

fault producing or contributing to the death, injury, or property damage; and

(3) the identity of the parties involved.” Id. at

341 .

The Court clarified the second element of this standard—the governmental

unit’s alleged fault producing or contributing to the death, injury, or property

damage—in Simons , a case strikingly similar to the case before us in

regard to whether the governmental entity had actual notice of its fault.

See 140 S.W.3d 338 . In Simons , a work

crew from the Terrell Unit of the Texas Department of Criminal Justice was

digging postholes using an auger attached to a power take-off (PTO) mounted on

the rear of a tractor. The auger became stuck in the ground, so the PTO was

disengaged and a pipe wrench was attached to the auger in an attempt to back the

auger out of the ground by hand. The TDCJ work supervisor, Ron Canon, left the

area of the auger, went to the tractor and re-engaged the PTO. Simons was struck

in the head and severely injured when the auger rotated and the pipe wrench

swung around.

TDCJ immediately investigated and took statements from Canon and all the

work crew. The statements and the report of the accident submitted by the prison

safety officer indicated that when Canon went back to the tractor to re-engage

the PTO, the pipe wrench had been taken off the auger, the workers had been told

to stand clear of the auger, and Canon looked back before he engaged the auger

and could see Simons but could not see that the pipe wrench, instead of being

off the auger, was on the auger. Id. at

339-41 .

Three days after the accident, the prison safety officer and the TDCJ

regional safety officer took a statement from Simons who was in the hospital and

on a prescription pain reliever. Simons opined that the person operating the

tractor was “ kinda new.” Simons remembered putting the

pipe wrench on the auger and making one or two turns to back the auger out, and

he did not remember hearing anyone say “stand clear.” He also opined that he did

not blame anyone for his injury, he did not want anyone to get in trouble or

lose good time over it, it was a mistake and “a mistake is a mistake.” 140 S.W.3d at 339-42 . Thus, there was an unquestioned,

unintended injury that resulted from a TDCJ employee’s intentional act of

re-engaging the PTO while a pipe wrench was attached to the auger, the wrench

was out of the employee’s field of view, and the injured person attributed the

injury to a “mistake” without directing blame toward anyone specific.

The court of appeals held that TDCJ had actual notice under the Tort

Claims Act. Tex. Dep’t of Criminal Justice v. Simons , 74 S.W.3d 138, 142

(Tex. App.—Beaumont 2002), rev’d , 140 S.W.3d

338 (Tex. 2004). In reaching its conclusion, it noted that there was an

unquestioned injury, a TDCJ employee had re-engaged the PTO that resulted in the

injury, and an investigation was accomplished that put TDCJ on inquiry of its

possible fault:

To support its argument that its records do not raise a

fact issue on notice of culpability, the Department relies upon the conclusion

it reached after it completed its investigation of the incident. We are

concerned here only with the Department’s realization of its possible

culpability, that is, whether the Department realized that it could be accused

of negligence arising from the accident. . . . [T]he Department’s safety

officers conducted an extensive investigation of a serious injury that occurred

while the inmates were operating motor-driven machinery in a supervised work

detail. Reports were prepared and promptly submitted to the unit’s safety

committee. That notice, sufficient to put the Department on inquiry of its

possible fault, is demonstrated by the existence of the safety review actually

conducted. The Department did investigate the accident and gather the

information it needed to defend Simons’s

claim.

Id. This Court disagreed and

explained:

What we intended in Cathey by the second requirement for actual notice

was that a governmental unit have knowledge that

amounts to the same notice to which it is entitled by section 101.101(a). That

includes subjective awareness of its fault, as ultimately alleged by the

claimant , in producing or contributing to the claimed injury. If a

governmental unit has this subjective awareness of fault, along with the other

information to which it is entitled under section 101.101(a), then requiring

formal, written notice in addition would do nothing to further the purpose of

the statute—which is, “to enable governmental units to gather information

necessary to guard against unfounded claims, settle claims, and prepare for

trial.” It is not enough that a governmental unit should have investigated an

incident as a prudent person would have, or that it did investigate, perhaps

as part of routine safety procedures, or that it should have known from the

investigation it conducted that it might have been at fault. If a

governmental unit is not subjectively aware of its fault, it does not have the

same incentive to gather information that the statute is designed to provide,

even when it would not be unreasonable to believe that the governmental unit was

at fault.

Simons , 140 S.W.3d at 347-48 (emphasis

added).

Proof of a defendant’s fault in a health care liability claim does not

depend on proof of ordinary negligence, such as failing to assure that no one

would be injured by the auger or an attached pipe wrench when a PTO on a tractor

was engaged, but is rather dependant on proof that the defendant breached an

applicable standard of care. See Tex. Civ. Prac. & Rem. Code §

74.351 (requiring timely service of a report providing an expert’s opinion

regarding applicable standards of care, the manner in which the care rendered by

the physician or health care provider failed to meet the standards, and the

causal relationship between that failure and the injury, harm, or damages

claimed); Murphy v. Russell , 167 S.W.3d 835, 838 (Tex. 2005). Then, if

breach of a standard of care is shown and it is also proved that the breach

proximately caused the injury, the defendant may be found liable for damages.

E.g. , Hart v. Van Zandt , 399 S.W.2d 791, 792 (Tex. 1965) (noting

that it is not enough in a medical negligence case to show an injury and that

the injury might have occurred because of a doctor’s negligence). In this case,

the Arancibias allege that the surgeons who first

operated on Irene were at fault because they breached standards of care. They

also allege, of course, that the breaches caused her death and Southwestern is

liable for the surgeons’ fault or negligence.

III.

A.

The Arancibias first claim that they were not

required to give notice of claim to Southwestern at all

because they first sued the doctors individually. I disagree.

Under section 101.106 of the Tort Claims Act, plaintiffs must elect to

sue either government employees or their employers. Tex. Civ. Prac. & Rem.

Code § 101.106. The Arancibias

assert that the notice requirements of section 101.101 do not apply to suits

against employees sued individually and because they first sued the doctors

individually, interpreting the Tort Claims Act to require notice to the doctors’

governmental-entity employers is unreasonable and absurd. They argue that

plaintiffs will not generally give notice when they sue government employees

individually because they are not required to. Thus, as will generally be the

case, if notice has not been given to the entity, then requiring the

governmental entity to be substituted for the employee is unfair and requires a

futile action because the entity will do what Southwestern has done here and

assert its lack of notice. The Arancibias , however, do

not point to any language in the Tort Claims Act that indicates the Legislature

intended section 101.106 to dispense with the notice requirements of section

101.101.

In responding, Southwestern makes four arguments: (1) section 101.101(a)

specifies that it applies to any claim against a governmental entity “under this

chapter,” and the clear statutory language contains no exceptions; (2) the

Legislature did not intend to allow plaintiffs to grant themselves an exemption

from the notice requirement by suing employees first, and to do so makes no

sense because regardless of when the governmental entity is sued it still needs

notice, so it can investigate the claim; (3) the Arancibias ’ interpretation would eviscerate the notice

requirements of section 101.101 because a plaintiff who failed to give notice

could initially sue an individual employee, wait for the inevitable motion to

dismiss the employee pursuant to section 101.106(f) and then sue the employer;

and (4) it is not unfair, as the Arancibias claim, to

require all claimants to give notice pursuant to section 101.101(a)—the notice

requirement is clearly stated and compliance is simple and

inexpensive.

I agree with Southwestern. There is no language in the Tort Claims Act

indicating the Legislature intended section 101.106 to allow persons to sue

governmental entities without giving statutory notice. Regardless of the Arancibias ’ concerns, construing the Tort Claims Act’s

language as they urge would, for all practical purposes, negate the notice

requirements of section 101.101(a). Plaintiffs who failed to give notice of

claim as required could sue a governmental employee individually, wait for the

employee to move for dismissal, and then sue the employer, thereby avoiding the

notice requirements. Thus, I would hold that regardless of the fact that the

Arancibias first filed suit against the doctors

individually, the Arancibias must still have satisfied

the notice prerequisites of section 101.101 in order to maintain their suit

against Southwestern.

B.

As to actual notice, the Arancibias urge that

Dr. Watson’s e-mails to his supervisor and the subsequent investigation prove,

or at least create a fact question about, whether Southwestern had subjective

knowledge of its fault. They also rely on testimony by Victor Arancibia that one of the surgeons who performed the

corrective surgery after Irene returned to the hospital told Victor “somebody

did something very wrong” during the first surgery and Victor should get a

lawyer. Southwestern argues this evidence does not raise a fact question

regarding whether Southwestern subjectively knew that breach of a standard of

care, as ultimately claimed by the Arancibias , caused

Irene’s death.

First, Victor Arancibia’s testimony that

following the second (corrective) surgery, one of the surgeons told Victor that

he should find a lawyer because someone had done something wrong during the

first surgery is not evidence that Southwestern had subjective knowledge it was

at fault in causing Irene’s death. Victor did not identify the surgeon who made

the statement and there is no evidence the surgeon was an employee of

Southwestern or that the surgeon’s opinion should be imputed to Southwestern.

Further, whether “in the first operation somebody did something very wrong” is

not the issue. Everyone agrees that the colon perforations were an unintended

and undesirable result. The issue is whether Southwestern had subjective

knowledge that the surgeons breached a standard of care appropriate to the

laparoscopic surgery. That issue was not addressed by the statement Victor

attributed to the unknown surgeon.

As for the actions of the doctors, immediately after Irene’s death Dr.

Watson e-mailed his supervisor, Dr. Edward Livingston, Chief of the

Gastrointestinal Endocrine Surgery Division at Southwestern, and Dr. Robert

Rege , Chair of both the Department of Surgery at

Southwestern and the Division of Surgery at Parkland Hospital, about the

situation. Dr. Watson described Irene’s death as a terrible outcome, noted that

he had “scrubbed the entire procedure,” thought it went well, and advised Drs.

Livingston and Rege that he had already spoken with

risk management.

Parkland has a possible three-step review process that takes place when

an unexpected patient care occurrence is identified. The first step is initial

screening by the hospital’s quality management team. The second is referral to a

physician or monitoring committee if certain criteria are identified in the

screening process. The third step is review by a Division Peer Review Committee

if the second-step physician reviewer or monitoring committee so

recommends.

Dr. Livingston was assigned to review the surgery as part of Parkland’s

quality control process. 1 His review was the second of the

three-step process. The documents used by Dr. Livingston in making his report

were preprinted with specific questions about most aspects of the patient’s

care. He answered in one instance that “[c] linical

management contributed to” Irene’s death and explained his answer by a narrative

that “a technical error occurred during the original hernia operation resulting

in a through-and-through small bowel injury.” In regard to questions as to

medical management, he checked the “No” box in response to “ Criteria 1 =

Practice [was] consistent with established standards. Physician Reviewer

comfortable with practice. Practice Acceptable.”

However, he checked the “Yes” box in regard to “ Criteria 2 = Reviewed

practice not necessarily consistent with established standards, but still

acceptable. Physician Reviewer comfortable with practice. Practice Acceptable.” He checked additional boxes to indicate

that the reviewed practice did not deviate or deviate significantly from

established standards or that the practice was unacceptable. He included a

narrative statement of his findings/conclusions in which he said that the

unfortunate occurrence was a recognized complication of laparoscopic hernia

surgery and no standard of care issues were identified. He did not recommend

further review of the case. See Roark v. Allen , 633 S.W.2d 804, 811 (Tex.

1982) (holding there was no evidence that a doctor’s negligence proximately

caused the injury when forceps slipped during delivery and a baby’s skull was

fractured).

In regard to Dr. Watson’s e-mail statement that he had contacted risk

management about Irene’s death, evidence that an employee or agent contacted an

enterprise’s risk management department is not evidence that the employee or

anyone else subjectively believed the enterprise was at fault. Most entities of

any significant size have risk management departments and require accidents or

unusual incidents to be reported to the risk management team. The reporting

requirement generally exists regardless of who , if

anyone, is suspected of being at fault in causing the accident or

incident.

The Arancibias point to the fact that Dr.

Watson contacted risk management, but the record does not contain evidence

explaining why he made the contact or what he reported to risk management. For

example, there is no evidence of whether (1) Dr. Watson contacted risk

management pursuant to routine protocol because a death was involved or because

of the unexpected patient outcome, (2) his contact was not routine but was out

of an abundance of caution, or (3) his contact was because he subjectively

believed a breach of appropriate standards of care caused Irene’s death.

Although Dr. Watson could not recall what he told risk management, the evidence

is undisputed that he reported to Drs. Rege and

Livingston that he believed the surgery went well and that the perforations

could have been retraction injuries that occurred out of the field of view of

the surgeons. Absent evidence of the reason Dr. Watson contacted risk management

or what he reported, the fact the contact took place does not raise an inference

that he believed Irene’s death was due to a breach of applicable standards of

care as alleged by the Arancibias any more than it

raises an inference that the contact was the product of routine protocol or some

other reason. Cf. Lozano v. Lozano , 52 S.W.3d 141, 148 (Tex. 2001)

(Phillips, C.J., concurring in part and dissenting in part) (noting that the

equal inference rule is a species of the no-evidence rule that “when the

circumstantial evidence is so slight that any plausible inference is purely a

guess, it is in legal effect no evidence”). For the same foregoing reasons, the

fact that Dr. Watson reported his contact with risk management to Drs.

Livingston and Rege , without more, does not support an

inference that any of the doctors subjectively believed Irene’s death was due to

a breach of applicable standards of care.

Next to be considered are Dr. Livingston’s investigation and report. The

evidence shows that when a patient dies, Parkland’s standard procedure is to

have the case reviewed for quality management purposes. There is no evidence Dr.

Livingston’s review was other than pursuant to standard procedures. His report

contains language that, considered in isolation or out of context, might support

an inference that he developed a subjective belief the surgeons may have been at

fault. For example, he indicated “[c] linical

management contributed to” Irene’s death, “a technical error occurred during the

original hernia operation resulting in a through-and-through small bowel

injury,” and checked the “No” box in response to “Criteria 1 = Practice

consistent with established standards. Physician Reviewer comfortable

with practice. Practice Acceptable.” But in considering

all the evidence, as we must, Dr. Livingston’s explanatory statement giving his

opinions and conclusions cannot be disregarded. See City of

Keller v. Wilson , 168 S.W.3d 802, 824-25 (Tex. 2005). He checked

boxes specifically indicating Irene’s death was not the result of a breach of

standards of care and in a narrative statement on the form he clearly set out

his opinion that the unfortunate occurrence was a recognized complication of

laparoscopic hernia surgery and “no standard of care issues were identified.”

See Roark , 633 S.W.2d at 811 . He recommended

that no further review be taken, and none was. The third step in Parkland’s

quality management follow-up process was not initiated and there is no evidence

that further investigation of any nature was made.

The Court recently considered the actual notice issue in a non-health

care setting in City of Dallas v. Carbajal , ___

S.W.3d ___ (Tex. 2010). There, the plaintiff sued for injuries she suffered when

she drove into a gap in the roadway in a construction area. A City of Dallas

police officer promptly investigated the accident. The officer’s written report

indicated that the plaintiff drove through an unbarricaded area. The plaintiff sued over a year after the

accident, but she had not given timely formal notice of claim to the City. The

trial court denied the City’s plea to the jurisdiction based on lack of timely

notice under the Tort Claims Act and the court of appeals affirmed. The court of

appeals’ opinion turned on the City’s immediate notice that an incident had

occurred, the lack of evidence of a responsible entity other than the City, and

the City’s knowledge of its possible fault in the matter:

[T]he police report here shows the City had immediate

notice of the incident and its possible fault in failing to block the

gap in the road properly with barricades. . . . [T]here is no evidence here of a

responsible entity other than the City, and the police officer making the report

is an employee of that entity. . . . [T]he police report here is more than just

notice of an accident or a description of a road condition; it is the police

officer’s report of her perception of the cause of the

accident.

City of Dallas v. Carbajal , 278 S.W.3d 802, 806 (Tex.

App.—Dallas 2009), rev’d , ___ S.W.3d ___ (Tex.

2010) (emphasis added). The Court reversed the court of appeals’ judgment. In

doing so, the Court quoted and emphasized some of the previously-quoted language

from Simons :

“It is not enough that a governmental unit should have

investigated an incident . . . , or that it did investigate, perhaps as

part of routine safety procedures, or that it should have known from the

investigation it conducted that it might have been at fault. If a governmental

unit is not subjectively aware of its fault, it does not have the same incentive

to gather information that the statute is designed to provide, even when it

would not be unreasonable to believe that the governmental unit was at

fault.”

Carbajal , ___ S.W.3d at ___

(quoting Simons , 140 S.W.3d at 347-48 ). The Court concluded that “[w]hen a

police report does not indicate that the governmental unit was at fault, the

governmental unit has little, if any, incentive to investigate its potential

liability because it is unaware that liability is even at issue.” Id. at ___. That same reasoning should apply to the

Arancibias ’ claim.

Dr. Livingston was designated to investigate the care Irene received and

determine whether breaches of applicable standards of care occurred as part of

routine procedures. His report shows that he recognized the perforations in

Irene’s bowel were technical errors, yet it also shows his opinion was that the

perforations were a recognized complication of the surgery Irene underwent and

were not outside the boundaries of accepted standards of care. He made an

unambiguous hand-written summary statement to that effect and recommended that

no further review of the matter take place. Dr. Livingston explained his

reasoning in his deposition and maintained that his report correctly set out his

subjective opinion that there were no standard of care violations. Based on Dr.

Livingston’s recommendation, the third step of Parkland’s quality management

review process did not occur. And there is no evidence that before the Arancibias finally sent their letter notice to Dr. Watson

more than seven months after Irene’s death, Southwestern believed it should take

action to gather information “necessary to guard against unfounded claims,

settle claims, and prepare for trial.” See Cathey , 900 S.W.2d at

341 .

The Court’s holding today does not take into account the nature of

determining “fault” in health care cases. All the physicians recognized that the

unrepaired perforations and Irene’s death were bad results. But although there

is always possible, or potential, liability for a bad health care result, a bad

result simply is not evidence that a health care provider was at fault because

standards of care were breached. The Arancibias

dispute Dr. Livingston’s opinion, but they do not point to any reason for

Southwestern to have subjectively disbelieved the sincerity of his findings and

conclusions. Nor do they refer to evidence that Southwestern or any of its

physicians discounted Dr. Livingston’s investigation and opinion or otherwise

independently formed a subjective belief that the surgeons caused the

perforations by breaching any standards of care. Thus, there is no evidence that

Drs. Watson, Livingston, Rege , or Southwestern had

subjective knowledge or belief that the surgeons and Southwestern were at fault

in regard to Irene’s death—and until today such knowledge has been required for

actual notice when a litigant fails to give timely formal notice of

claim.

In Simons , the Court stated that “a governmental unit cannot

acquire actual notice merely by conducting an investigation, or even by

obtaining information that would reasonably suggest its culpability. The

governmental unit must have actual, subjective awareness of its fault in the

matter.” 140 S.W.3d at 348 . And in Carbajal , the Court rejected the argument that

immediate knowledge of the facts by the City of Dallas together with the absence

of evidence of other responsible parties and its knowledge of possible fault

because of missing barricades was actual notice . ___

S.W.3d at ___. The Court should likewise reject the argument that

Southwestern had actual notice because it knew of injuries and knew of

undetected and uncorrected technical errors that potentially could generate

allegations that the injuries were caused by breaches of standards of

care.

IV.

I agree that statutory notice is jurisdictional under the Tort Claims Act

as it applies to this case. I would hold that the notice issue is dispositive:

Southwestern did not have actual notice, thus the Arancibias were required to, but did not, give timely formal

notice. I would reverse the judgment of the court of appeals and dismiss the

Arancibias ’ suit against Southwestern for lack of

jurisdiction.

________________________________________

Phil Johnson

Justice

OPINION DELIVERED: October 22, 2010

1 The

parties stipulated that Dr. Livingston’s investigation and findings could be

considered for the purpose of determining if Southwestern had actual notice of

the Arancibias ’

claim.