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KNAPP MEDICAL CENTER, Petitioner, v.

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JAVIER E. DE LA GARZA, AND JAVIER E. DE LA GARZA, M.D., P.A., Respondents. On Petition for Review from the Thirteenth Court of Appeals 13-04-00269-CV PETITION FOR REVIEW OF KNAPP MEDICAL CENTER Humberto G. Garcia CURNEY, ARCIA, FARMER, G PICKERING HOUSE, P.C. & 411 Heimer Road San Antonio, Texas 78232 (210) 377-1990-telephone (210) 377-1065-facsimile Miguel D. Wise 134 W. 5th Street Weslaco, Texas 78596 (956) 968-6898-telephone (956) 968-9787-facsimile Richard P. Hogan, Jr. Jennifer Bruch Hogan PILLSBURY WINTHROP SHAW ITTMAN LLP P 909 Fannin, Suite 2000 Houston, Texas 77010 (713) 276-7600-telephone (713) 276-7673-facsimile ATTORNEYS FOR PETITIONER, KNAPP MEDICAL CENTER

IDENTITY OF PARTIES AND COUNSEL

PetitionerIAppellantlDefendantis:

Knapp Medical Center Petitioner is represented by: Humberto G. Garcia CURNEY, ARCIA, FARMER, G PICKERING & HOUSE, P.C. 4 11 Heimer Road San Antonio, Texas 78232 (210) 377-1990-telephone (2 10) 377-1065-facsimile Miguel D. Wise 134 W. 5th Street Weslaco, Texas 785 96 (956) 968-6898-telephone (956) 968-9787-facsimile Richard P. Hogan, Jr. Jennifer Bruch Hogan PILLSBURY WINTHROP SHAW ITTMAN LLP P 909 Fannin, Suite 2000 Houston, Texas 77010 (713) 276-7600-telephone (7 13) 276-7673-facsimile

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Respondents/Appellees/Plaintiffsare:

Javier E. De La Garza, and Javier E. De La Garza, M.D., P.A. Respondents Javier E. De La Garza, and Javier E. De La Garza, M.D., P.A. are represented by: R a m h Garcia Sonia Lopez LAW OFFICE OF RAMON GARCIA, P.C. 222 West University Drive Edinburg, Texas 78539 (956) 383-7441-telephone (956) 381-0825-facsimile Rent5 B. Gonzhlez ATTORNEY AT LAW Post Office Box 5134 Brownsville, Texas 78523-5 134 (956) 371-9966-telephone

TABLE OF CONTENTS Page

IDENTITY OF PARTIES AND COUNSEL ....................................................................... i INDEX OF AUTHORITIES .............................................................................................. iv STATEMENT OF THE CASE .......................................................................................... vll

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STATEMENT OF JURISDICTION ............................................................................... viii

...

ISSUES PRESENTED ....................................................................................................... ix STATEMENT OF FACTS .................................................................................................. 1 SUMMARY OF THE ARGUMENT ........................... ..:.................................................... 6 ARGUMENT ............................................................................................................ I.

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The Court Should Grant Review to Reinforce and Clarifjr the Requirements for Settlement Agreements Dictated in Open Court. ............. 7 A. The court should reinforce the requirement for completeness in a settlement agreement dictated in court; here, there was no agreement to pay an extra $200,000.00. ............................................. 7 The Court should clarifL that all terms of a settlement agreement need to be expressed in writing or on the record. .............9

B.

11.

This Court Should Grant Review and Close the Loophole that Allows Fraud-In-The-Inducement Claims to Defeat a Valid Release. .......10 A. Since the Court's holding in Swanson, the law is open to debate about when a release can be avoided through a fraudulent-inducement claim. ........................................................ 11 No fraud exists on the record here, and the release should be enforced as a contract. ...................................................................... 13

B.

PRAYER........................................................................................................................... .14 CERTIFICATE OF SERVICE .......................................................................................... 15

APPENDIX Tab Findings of Fact and Conclusions of Law ....................................................... 1 Final Judgment................................................................................................Tab 2

Court of Appeals Oplnlon ............................................................................... 3 Tab Tab Excerpts of Trial on the Merits Settlement Agreement ................................... 4

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INDEX OF AUTHORITIES

Cases ClzerCo Properties, Inc. v. Law, Snakard & Gambill, P.C., 985 S.W .2d 262 (Tex. App.-Fort Worth 1999, no pet.) ...................................... .8 Coker v. Coker, 650 S.W.2d 391 (Tex.1983) .................... . .......................................................... 13 DaimlerChrysler Corp. v. Brannon, 67 S.W.3d 294 (Tex. App.-Texarkana 2001, no pet.).......................................... 8

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DRC Parts & Accessories, L.L.C. v. VMMotori, S.P.A., 112 S.W.3d 854 (Tex. App.-Houston [14th Dist.] ..........2003,...pet...denied)... ......... ...... .............

12

Dresser Indus., Inc. v. Page Petroleum, Inc., ... 853 S.W.2d 505 (Tex.1993) .................................................................................i vi~ Fisher Controls Intern., Inc. v. Gibbons, 911 S.W.2d 135 (Tex. App.-Houston [lst Dist.] 12 1995, pet. denied) ................................................................................................. In re GTE Mobilnet o S. Tex. Ltd. P'ship, f 123 S.W.3d 795 (Tex. App.-Beaumont 2003, orig. proceeding) ......................... 12

Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118 (Tex.1996) ................................................................................ 13 Howeth v. Davenport, 311 S.W.2d 480 (Tex. Civ. App.-San Antonio 1958, writ ref'd n.r.e.) ......,......... 12

J.M Davidson, Inc. v. We bster, 13 128 S.W.3d 223 (Tex.2003) .................................................................................

Kalyanaram v. Burck, 2006 \xn[, 1559230 (Tex. App.-El Paso 2006, n. pet. h.) ................................. viii

Keck, Mahin & Cute v. National Union Fire Ins. Co., ... viii 20 S.W.3d 692 (Tex. 2000) .................................................................................. Kennedy v. Hyde, 682 S.W.2d 525 (Tex. 1984)

................... . . ................................................10 . 9,

Knapp Medical Center, Inc. v. De La Garza, 2006 WL, 1431224 (Tex. App.&orpus McLendon v. McLendon, 847 S.W.2d 601 (Tex. App.-Dallas

Christi 2006, pet. filed) ....................... viii

...

1992, writ denied) .........................................8

Memorial Medical Center o East Texas v. Keszler, f ... 943 S.W.2d 433 (Tex.1997) ................................................................................. viii ', National Union Fire Ins. Co, v. Ins. Co. ofN. Am., 955 S.W.2d 120 (Tex. App.-Houston [14th Dist.] 1997), aff'd, 20 S.W.3d 692 (Tex. 2000) ..................................................................... viii NeasbPitt v. Warren, 105 S.W.3d 113 (Tex. App.-Fort

I

Worth 2003, no pet.)..................................... 8, 9

Padilla v. LaFrance, 907 S.W.2d 454 (Tex. 1995) ................................................................................8 7, Ronin v. Lerner, 7 S.W.3d 883 (Tex. App.-Houston [lst Dist.] 1999, no pet) .................................8

Schlumberger Technology Corporation v. Swanson, 959 S.W.2d 171 (Tex. 1995) ................................................................................. 11 TCA Bldg. Co. v. Entech, Inc., 86 S.W.3d 667 (Tex. App.-Austin 12 2002, no pet.) ................................................ Christi 1980, no writ) ...........................8

Travelers Ins. CO. V. Wi'lliams, 603 S.W.2d 258 (Tex. Civ. App.-Corpus

Victoria Bank & Trust Co. v. Brady, ... 811 S.W.2d 931 (Tex.1991) .......................................................................... viii Warehouse Associates Corporate Centre II, Inc. v. Celotex Corp., 192 S.W.3d 225 (Tex. App.-Houston [14 Dist.] 2006, n. pet. h.)........................11 Williams v. Glash, 13 789 S.W.2d 261 (Tex.1990) ...................................................................................

Rules and Statutes and Codes

TEX. GOV'T CODE ANN. Ej 22.001 (a) (2) (Vernon 2004) ..............................................viii TEX. GOV'T CODE ANN. Ej 22.001 (a) (6) (Vernon 2004) ..............................................viii TEX. R. CIV. P. 11 ................................................................................................................ 8

STATEMENT OF THE CASE

Nature of the case

Fraud and breach of contract claim. The plaintiff sued for payment of an additional $200,000.00 after a settlement agreement for $1 million that was (1) announced in open court; and (2) concluded by a "Full and Complete Release," signed by the plaintiff. The Honorable Mario E. Ramirez, presiding judge, 332nd Judicial District Court (Hidalgo County, Texas). Judgment for plaintiff after a bench trial. In addition to the $1 million it already had paid, the hospital was ordered to pay the plaintiff an extra $200,000.00; attorneys fees of $80,000.00; plus pre- and post-judgment interest.

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Trial Court: Trial Court's Disposition:

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Parties:

Defendant/Appellan t/Petitioner:

Knapp Medical Center

Javier E. De La Garza, and Javier E. D e La Garza, M.D., P.A.

Court of Appeals: Court of Appeals' Disposition: Citation:

Thirteenth Court of Appeals (Justices Valdez, I-Iinojosa, and YaAez (author)). Affirmed. 2006 WL 143 1224 (Tex. App.--orpus ChristiFdinburg 2006, pet. filed) (memorandum opinion).

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STATEMENT OF JURISDICTION

The supreme court has jurisdiction because the court of appeals has committed an error of law that is of such importance to the jurisprudence of the state that it requires correction. See TEX. GOV'T CODE A m . 5 22.001 (a) (6) (Vernon 2004). In addition, this Court has jurisdiction because the court of appeals' opinidi holds differently from a prior decision of another court of appeals or the supreme court on a question of law material to the decision of the case. Id. at

5 22.001 (a) (2) .

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First, the court of appeals opinion fails to hold that the release "mentions the claim" sued on in the second trial. See Knapp Medical Center, Inc. v. De La Garza, 2006

WL 1431224, *6 (Tex. App.--Corpus Christi 2006, pet. filed). This ruling conflicts with

a number of other appellate decisions, including Memorial Medical Center o East Texas f

v. Keszler, 943 S.W.2d 433, 434 (Tex.1997); and Kalyanaram v. Burck, 2006 WL

1559230, *5 (Tex. App.-El

Paso 2006, n. pet. h.).

Second, the court of appeals opinion conflicts with other decisions when it fails to enforce the settlement agreement as a contract. Finding the release was fraudulently induced, the court of appeals' holding conflicts with numerous decisions from this Court including National Union Fire Ins. Co. v. Ins. Co. ofN. Am., 955 S.W.2d 120, 127 (Tex. App.-Houston [14th Dist.] 1997), afd, 20 S.W.3d 692 (Tex. 2000); Dresser Indus.,

Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex.1993); and Victoria Bank & Trust Co. v. Brady, 81 1 S.W.2d 931, 938 (Tex.1991). See also Keck, Mahin & Cate v. National Union Fire Ins. Co., 20 S.W.3d 692, 698 (Tex. 2000).

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7005 15229~1

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ISSUES PRESENTED

1. After the Plaintiff sends a Stowers demand letter for a hospital's $1 million policy limits, PX 1, he then announces, through counsel in open court, his agreement to the $1 million settlement, PX 3 at 5. After signing a "Full and Complete Release," does the Plaintiff have a viable claim to an additional $200,000.00? 2. Does a Rule 11 settlement agreement, and a signed release, bar a claim for breach of contract and fraud premised on payment of an amount not agreed to in the settlement agreement?

3.

Is there a valid Rule 11 agreement by which Knapp Medical Center agreed to pay $200,000.00 to the Respondents?

4.

May a claim for attorneys fees premised upon enforcement of a settlement agreement be awarded without presentment of the claim? [unbriefed]

5.

When a recovery is premised on fraud-not breach of contract-may a party recover attorneys fees? [unbriefed]

6.

Does legally sufficient evidence support the trial court's findings of fact on attorneys fees, breach of contract, or fraudulent inducement? [unbriefed]

7.

Did the trial court err in allowing the Respondent's counsel, R a m h Garcia, to testify in the second trial? [unbriefed]

STATEMENT OF FACTS The Parties and Lawsuits. Javier De La Garza is a medical doctor from Hidalgo

County who practices gastroenterology. PX '7 at 2. He is the plaintiff in two lawsuits against Knapp Medical Center, a "non-profit hospital corporation," and the defendant in both the cases. PX '7. In the first case, filed in the 370th district court, Dr. De La Garza l alleged that Knapp ~ e d i c aCenter was responsible for "false and malicilous" statements made by another doctor about Dr. De La Garza's professional ability. PX '7 at 3. The other doctor, Kannan Ramamurthy, allegedly confronted Dr. De La Garza at a hospital general staff meeting in June 1994 and belittled his medical treatment as providing "the worst patient care I have ever seen . . . ." PX '7 at 2. In the second case, filed in the 332nd district court, Dr. De La Garza sued Knapp Medical Center for fraud and breach of contract because of its refusal to pay an additional $200,000.00 on top of the $1 million its insurer had compensated Dr. De La Garza in settlement of the first case. This appeal arises from the second lawsuit. Among the questions presented is whether the first case settled for just $1 million or an extra $200,000 was included in the settlement, and whether the release he signed bars Dr. De La Garza's claim for more money.

Tlze Attorneys~iInesses.The lawyer who represented Dr. De La Garza in both

cases is Ram& Garcia of Edinburg. He is the County Judge of Hidalgo County. For Knapp Medical Center, Rex Leach of Atlas & Hall appeared as counsel in the first lawsuit. PX 3 at 2. In the second case, the hospital engaged a new lawyer, Humberto Garcia of San Antonio, because Mr. Leach would be a witness about the settlement

reached in the first case. Rex Leach and R a m h Garcia, as the lawyers who negotiated and announced the settlement of the first case, were the witnesses who testified in the second trial about their negotiations during the first case. RR 30-83 (Mr. Garcia's testimony); RR 84-10 (Mr. Leach's testimony). Mr. Garcia testified over the hospital's objection that Mr. Garcia was engaged in a "dual role" as advocate and witnesdin the same case. RR 29.

The Negotiations. After a lengthy charge conference and trial in the first case, the

parties exchanged settlement demands and offers on September 14, 2000. PX3 at 3. Mr. Garcia called these "serious settlement negotiations." Id. Although he had been under the impression "that we had a $2 million insurance policy, . . . " he was incorrect, and he wrote a Stowers demand letter for $1 million in "policy limits" to Mr. Leach the evening of September 14. PX 1; PX3 at 5. In addition to the $1 million demand to settle Dr. De La Garza's defamation claims in the first case, Mr. Garcia had talked to Mr. Leach earlier that day about the hospital paying some money on its own. Mr. Garcia "thought [Mr. Leach] had the authority" to pay $200,000.00 more in settlement. PX 3 at 4; RR 42. At a board meeting at 7:30 a.m. the morning of September 15, 2000, Knapp Medical Center resolved "&to contribute any money to the settlement." PX 8 at 2

&I (emphasis in original). The board minutes, in addition to disclosing the decision"-"

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to

pay Dr. De La Garza any money, also recounted the series of settlement demands, starting on September 13, to resolve the case for $2.5 million. Id. at 1.

liflze Badiga Case. As the hospital board's minutes show, there was also the

matter of "the De La Garza case that is currently on appeal." Id. at 3. The board minutes

recount that, in exchange for a payment of $200,000.00, the plaintiff would agree to "drop" that matter. Id. Correspondence from Mr. Garcia refers to this other matter as the "De La Garza v. Knapp, Badiga case pending in the 275th District Court." PX 2. In his letter, also dated September 14, 2000 (the same day as the Stowers demand to the hospital), Mr. Garcia offered to "settle all claims" in this 'Badiga case" for $250,000.00.

Id. Apart from these facts as documented, the accounts of the settlement differ.

a. Mr. Garcia's version.

In his testimony during the second trial, Mr. Garcia repeated his belief that the plaintiff was promised $200,000.00 from the hospital itself, and "on reliance on that, [he] went ahead and sent out that Stowers letter for the million dollars." RR 33. Mr. Garcia also "sent out the letter on the Badiga case saying that we will agree to settle that case, the also." Id He was surprised when Mr. Leach told him Knapp "was not paying theadditional 200,000 . . . ." RR 38. The other letter, "the Badiga letter," was written "so that we could use that case" as a "vehicle to collect the other $200,000." Id.

b.

Mr. Leach's version.

When the settlement was dictated to the court reporter in the first case, Mr. Leach's version differed. He said, "I think as far as this case is concerned, there was a million dollar settlement offer. It was accepted." PX 3 at 7-8. He summed up his understanding this way: The only place I would differ in regard to that was at the point we were discussing the 200,000 yesterday, we were not at a point where the insurance company had offered a million dollars. We were talking about discussing that matter, but that's what will have to be addressed in this later proceeding.

But I think for the purposes of this case, the record should reflect that I did receive last night on behalf of Mr. Garcia's client a letter saying that they would settle this matter for policy limits, which were a million dollars. I forwarded that to St. Paul, as I'm required to do, and Saint Paul has accepted that offer. So I believe as far as this case is concerned, there is a settlement agreement for the million dollar amount, and as Mr. Garcia said, he is going to address this other matter and it will be dealt with pursuant to the law and with the board. After being told by the judge to consult again with their clients, the lawyers returned to open court. PX 3 at 11. Again, Mr. Leach repeated his client's agreement "to settle this matter for the million dollars that was offered . . . ," with the understanding that Mr. Garcia had another claim. PX 3 at 12. The hospital "still wish[es] to go ahead and settle this matter and deal with those other issues." PX 3 at 12.

c. The Judge's Recitations.

Once Mr. Leach finished, the trial judge in the first case asked 'Tverybody in agreement?" PX 3 at 12. The lawyers each answered yes, and the court announced: "This case is settled, gentlemen." PX 3 at 12. He said, "The court hereby approves said settlement, and that's the end of this case." PX 3 at 13. He told the jury, "[Tlhis case would not have settled had it not been for y o u . . . the case has been settled. This means you're now free to go home and . . . go back to your lives." PX 3 at 15.

Final&, the "Full and Complete Release." When the first case settled, and

despite Mr. Garcia's contention about an additional $200,000.00 that he believed should be paid, the plaintiffs signed a release. PX 6. In the release, signed after some edits, see PX 4, 5, Dr. De La Garza released Knapp Medical Center from:

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"any claims or causes of action, at common law, statutory or otherwise," "which the Releasing Parties have, now existing," "which are attributable to certain alleged incidents, which are more particularly described in the pleadings on file."

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PX 6 at 1. In the release, Dr. De La Garza stated his intention "to release all'claims which the Releasing Parties have against the Released Parties, which were asserted in [the lawsuit]." Id. He agreed to entry of "an . . . Order dismissing with full prejudice the causes of action of Plaintiffs, Javier De La Garza, M.D., P.A., in said cause." PX 6 at 2. The release was "in full satisfaction of all damages . . . which releasing parties have now existing which are attributable to certain alleged incidents . . . asserted in the aboveentitled and numbered case." PX 6 at 2. Dr. De La Garza signed the release before a notary on October 2, 2000. PX 6 at 3,4.

The Second Lawsuit. On July 20,200 1, Dr. De La Garza filed suit against Knapp

Medical Center in the 332nd District Court, alleging fraud and breach of contract. Tab 1, finding of fact 29. The claims were based on the failure of the hospital to pay an additional $200,000.00 in settlement. In addition to awarding that amount as both a fraud and contract measure of damages, the trial judge awarded $80,000.00 in attorney's fees, plus pre-and post-judgment interest. Tab 2, final judgment. The court of appeals

affirmed the trial court's judgment. Tab 3.

SUMMARY OF THE ARGUMENT

I.

Completeness is one of the key ingredients in a Rule 11 agreement. Here, the parties identified a missing ingredient-payment of an extra $200,000.00 in addition to the $1 million settlement. Both sides told the trial judge that there was no agreement to pay an extra $200,000.00, and that claim was left for later. Without consensus on paying that amount, no valid Rule 11 existed. There was nothing to enforce in a second lawsuit. This is a question of law, not fact, Because there appears to be confusion in the law, and because cases like this happen, the Court should grant review to reinforce the rule. The court of appeals resorted to several waiver holdings, and it side-stepped the real issues. As briefs on the merits could show, there is no waiver nor any procedural obstacle to deciding this case and clarifying the legal questions presented.

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11.

Apart from lacking essential agreement over paying an extra $200,00.00, Dr. De La Garza signed a release of "all claims." Again using waiver holdings and fraud findings, the court of appeals avoided any analysis of the release as a bar. Full briefing could show easily that no waiver occurred. If the merits of the release are considered, there are critical policy questions at stake. Since Schlumberger v. Swanson, courts have struggled with how fraud-in-theinducement can defeat a valid release. The courts of appeals have identified concerns with how that doctrine operates. To clarifL this important doctrine, and how it works, this Court should grant review. Here, the issue is clean and squarely presented for the Court's consideration.

ARGUMENT I. The Court Should Grant Review to Reinforce and Clarify the Requirements for Settlement Agreements Dictated in Open Court.

No agreement ever existed to pay Dr. De La Garza the extra $200,000. However, he has convinced two courts in Hidalgo County to give him that extra measure of justice. His ability to squeeze more money out of the hospital can only be explained by the uncertain state of the law on settlements and how they are enforced. This Court should close the loopholes that allowed this case to happen. It would have been easier, perhaps, to present this case as crying out for error correction. On that score, there can be little doubt that the errors below should be corrected. The good doctor, a victim of harsh statements by another doctor in a hospital staff meeting, received a million dollars after demanding that much in settlement. PX 1. He signed a "Full and Complete Release" of all his claims after getting the check. PX 6. But as an error-correction case, there is only a single measure of justice in overturning the result. More is achieved-with greater effect on many cases- the Court looks at how if the law in this area has been evolving, and why it needs clarification.

A.

The court should reinforce the requirement for completeness in a settlement agreement dictated in court; here, there was no agreement to pay an extra $200,000.00.

An agreement to settle a case is enforceable by the trial court if it complies with Rule 11 of the Texas Rules of Civil Procedure. See Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995). To comply with Rule 11, the agreement must be either: (1) in writing, signed and filed with the papers as part of the record; or (2) made in open court

and entered of record. Id. at 459; TEX. R. C IV. P. 1 l(''No agreement between attorneys or parties touching on any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record."). A valid Rule 11 agreement, whether written or oral, must contain all essential terms of the agreement and must be complete in every material detail. Padilla, 907 S.W.2d at 460; Neasbitt v. Varren, 105 S.W.3d 113, 116 (Tex. App.-Fort Worth

2003, no pet.); see also Travelers Ins. Co. v. Williams, 603 S.W.2d 258, 261 (Tex. Civ, App.-Corpus Christi 1980, no writ) (requiring that parties agree upon the provisions of

a settlement as the court has no power to supply terms, provisions, or essential details). The purpose of the rule is to avoid disputes over the terms of oral settlement agreements. Padilla, 907 S.W.2d at 461. The purpose of the settlement's being filed with or made in open court is to put the agreement before the court so the judge can determine its import, and proceed to act upon it with safety. Id. Such an agreement read into the record, or written, is not an agreed judgment, but it is a binding contract. Id, Whether a Rule 11 agreement fails for lack of an essential term is a question of law unless there is ambiguity or unless surrounding facts and circumstances demonstrate a factual issue as to an agreement. DaimlerChrysler Corp. v. Brannon, 67 S.W.3d 294, 298 (Tex. App.-Texarkana App.-Houston 2001, no pet.); Ronin v. Lerner, 7 S.W.3d 883, 888 (Tex.

[lst Dist.] 1999, no pet); see also McLendon v. McLendon, 847 S.W.2d 1992, writ denied) (holding apportionment of liability for

60 1, 606 (Tex. App.-Dallas

indemnification was not an essential term because the record reflected the essential terms with sufficient detail to determine the obligations of the parties); CherCo Properties, Inc.

v. Law, Snakard & Gambill, P.C., 985 S.W.2d 262,266 (Tex. App.-Fort

Worth 1999,

no pet.) (time for performance is not a material term). Although a valid agreed judgment cannot be rendered if one party has withdrawn consent to a Rule 11 agreement, a settlement agreement that complies with Rule 11 can be enforced by the trial court after

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proper notice and a hearing. Neasbitt, 105 S.W.3d at 117. Nothing in this record evidences any agreement by Knapp Medical Center to pay an extra $200,000.00. To the contrary, the record shows that extra payment to remain in controversy, even after the settlement for $1 million was announced. The trial court noted, "and there may or may not exist. . .the Honorable Mr. R a m h Garcia may have a cause of action against the hospital based upon some contractual relationship that might have come into deal or not into deal. I don't know." PX 3 at 9. Elsewhere, the trial court said "this case will be settled for a million dollars and you're going to retain a cause of action against the hospital for a couple of hundred thousand dollars, which may result in another lawsuit down the road." PX3 at 7. A real controversy existed about the $200,000.00 claim, but the parties nonetheless negotiated a settlement and the Plaintiff signed a "Full and Complete Release." PX 5, 6. With the release, the case should have been over.

B.

The Court should clarify Chat all terms of a settlement agreement need to be expressed in writing or on the record.

There is wisdom in a rule requiring settlements to be written and recorded. Kennedy v. Hyde, 682 S.W.2d 525, 530 (Tex. 1984). It ensures that such agreements themselves do not become the sources of controversy, impeding resolution of suits. Id.

The amicable settlement of lawsuits is greatly to be desired. Id. A requirement that an out-of-court settlement be memorialized by a writing aids the settlement process, permitting free and frank discussion and negotiation without fear that a careless word or mistake of meaning will itself become the basis for further litigation. Id. The court of appeals and the Hidalgo County district court disregarded the purpose of Rule 11 of the Texas Rules of Civil Procedure. By upholding as valid an alleged "agreement" that the parties did not specifically agree upon, or dictate on the record in open court, the court of appeals has allowed such an agreement to "become the source[] of controversy" and such a decision will serve to "imped[e] resolution of suits" in the future. See Kennedy, 682 S.W.2d at 530. This court should intervene to correct this error and to clarify the legal requirements of Rule 11.

11.

This Court Should Grant Review and Close the Loophole that Allows Fraud-In-The-Inducement Claims to Defeat a Valid Release.

Dismissing the affirmative defense of release as a bar to Dr. De La Garza's claim,

the court of appeals held the release was defeated by fraud. "[Wle agree with appellees that a release may be set aside if induced by fraud. Here, appellees pleaded that their Stowers demand to appellant's carrier was induced by fraud and the trial court concluded appellees were entitled to judgment on their claim of fraud." Tab 3 at *6. If it is that easy to get out of a release and be affirmed in the court of appeals, something is wrong. This Court needs to address the issue of when a release may be avoided through a fraudulent-inducement claim.

A.

Since the Court's holding in Swsnson, the law is open to debate about when a release can be avoided through a fraudulentinducement claim.

This Court's decision in Schlumberger Technology Corporation v. Swanson, 959 S.W.2d 171 (Tex. 1995), was a watershed moment in defining when a fraudulentinducement claim could happen after a release. However, the water left behind after

Swanson is murky. In its decade-old opinion, the Court recognized certain instances

when fraudulent inducement could not happen, such as when a party disclaims reliance on previous statements: The contract and the circumstances surrounding its formation determine whether the disclaimer of reliance is binding. Because the parties were attempting to put an end to their deal, and had become embroiled in a dispute over the feasibility and value of the project, we conclude that the disclaimer of reliance the Swansons gave conclusively negates the element of reliance.

Swanson., 959 S.W.2d at 179-80 (citations omitted).

The Swanson court emphasized that a waiver-of-reliance clause will not always bar a fraudulent-inducement claim. "We conclude only that on this record, the disclaimer of reliance conclusively negates as a matter of law the element of reliance on representations about the feasibility and value of the sea-diamond mining project needed to support the Swansons' claim of fraudulent inducement." See id. at 181. If the

applicability of such an important principle relies only on the record in a particular case, that holding is of little guidance. It provides no predictability. Because of its case-specific holding, the Swanson decision is not informative or predictable in its application. Other courts have tried to grasp its reasoning, but they have struggled with the holding and its import. See, e.g., rarehouse Associates Corporate

Centre II, Inc. v. Celotex Corp., 192 S.W.3d 225, 231-233 (Tex. App.-Houston

[14

Dist.] 2006, n. pet. h.). Some courts have held that, even without merger clauses or

contractual disclaimers of reliance, fraud claims predicated upon alleged representations squarely contradicted by the express, unambiguous terms of a written agreement are foreclosed as a matter of law because reliance is not justifiable. See In re GTE Mobilnet

of S. Tex. Ltd. P'ship, 123 S.W.3d 795, 799-800 (Tex. App.-Beaumont

2003, orig.

proceeding); DRC Parts & Accessories, L.L. C. v. VM Motori, S.P.A., 1 12 S. W.3d 854, 858-59 (Tex. App.-Houston 1114th Dist.] 2003, pet. denied); cf: TCA Bldg. Co. v. 2002, no pet.) (reliance element

Entech, Inc., 86 S.W.3d 667, 674-75 (Tex. App.-Austin

of fraud claim negated as matter of law where plaintiff rejected contract containing alleged misrepresentation). These courts have reasoned that, because a contrary approach "would defeat the ability of written contracts to provide certainty and avoid dispute, the prevailing rule. . . is instead that a party who enters into a written contract while relying on a contrary oral agreement does so at its peril and is not rewarded with a claim for fraudulent inducement when the other party seeks to invoke its rights under the contract."

DRC, 112 S.W.3d at 859. "Otherwise, contracts would be 'nothing more than a scrap of

paper.' " Fisher Controls Intern., Inc. v. Gibbons, 911 S.W.2d 135, 141-42 (Tex. App.-Houston [lst Dist.] 1995, pet. denied) (quoting Howeth v. Davenport, 311 S. W.2d Antonio 1958, writ ref'd n.r.e.)). This Court should grant

480, 482 (Tex. Civ. App.-San

review to resolve the outstanding questions and to close the loophole that is evident in this case.

B.

No fraud exists on the record here, and the release should be enforced as a contract.

Under Texas law, a release is a contract. See Williams v. Glash, 789 S.W.2d 261, 264 (Tex.1990). Deciding whether a contract is ambiguous is a question of law. Coker v. Coker, 650 S.W.2d 391,394 (Tex.1983). In construing a contract, it is the primary task of

' t

this Court to determine the parties' true intentions as expressed in the agreement. See id. at 393; J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223,229 (Tex. 2003). Based on the record of the seBlernent agreement dictated in the first case, and the language of the release itself, there is no reasonable dispute that only $1 million should have been paid in the settlement. Despite knowing that the claim for an extra

$200,000.00 was outstanding, Dr. De La Garza agreed to receive payment of the money "in full satisfaction of all damages . . . which releasing parties have now existing which are attributable to certain alleged incidents . . . asserted in the above-entitled and numbered case." PX 6 at 2. His intentions could not have been any more clear. Here, as in most cases, if the contract can be given a definite or certain legal meaning, it is unambiguous and should be construed as a matter of law. Id If the contract is unambiguous, the court must enforce the contract as written. Heritage

Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex.1996). Dr. De La Garza released all existing claims, which should include his assertion that the hospital shortchanged him. The contract of release bars the claim for an extra $200,000.00, and the court of appeals erred in holding to the contrary. This Court should grant review to make sure that this error is not repeated and to clarify the kinds of cases where fraudulentinducement can work to defeat a valid release.

BRAYER

The petition for review should be granted. Knapp Medical Center prays for any relief to which it is entitled. Respectfully submitted, Humberto G. Garcia State Bar No. 07636620 CURNEY, GARCIA, FARMER, PICKERING HOUSE, P.C. & 4 11 Heimer Road San Antonio, Texas 78232 (210) 377-1990-telephone (210) 377-1065-facsimile Miguel D. Wise State Bar No. 2181 1500 134 W. 5th Street Weslaco, Texas 78596 (956) 968-6898-telephone (956) 968-9787-facsimile PILLSBURY WINTHROP SHAW PITTMAN LLP By: Richard P. m a n , Jr. u ' State Bar No. 09802010 Jennifer Bruch Hogan State Bar No. 03239100 909 Fannin, Suite 2000 Houston, Texas 77010 (713) 276-7627-telephone (713) 276-7673-facsimile

*

ATTORNEYS FOR PETITIONER

CERTIFICATE OF SERVICE

I certifL that a true and correct copy of the foregoing instrument was served in accordance with Rule 9.5 of the Texas Rules of Appellate Procedure.

a . Richard P. ~ o ~ ~ r @ Dated: August 24, 2006 Counsel of Record:

I I

Counsel for Respondents, Javier E. De La Garza, and Javier E. D e La Garza, M.D., P.A. R a m h Garcia Sonia Lopez L AW OFFICE OF RAMON GARCIA, P .C. 222 West University Drive Edinburg, Texas 78539 CertiJied Mail Return Receipt No. 7004116000028641 1586 Reni B. Gonziilez ATTORNEY AT L AW Post Office Box 5134 Brownsville, Texas 78523-5134 CertiJied Mail Return Receipt No. 7005 11600005 12543861

CAUSE NO.$-1297-01 -F

,./.

FINDINGS OF FACT & CONCLUSIONS OF LAW

Thc above-qtioncd cause camc on for t i befom the Court without a juFY on M r h xd ac 25, 2004. Al partic6 and th& attomcys were present Mf considerkq the pleadings, thc l f cvidcncc, the argument and bd& f b m c o w 4 tht court in rcspanse to a request fiom Dcfeadant F b p p M c d i d Ccnta, lac, makes its tindings o f f a d and conctusions of h w as ron~ws: m m G S0' 3 FACT 0 1or about Scplunbcr 4,2000,a tdal i C a w N . C-3066954, in tho 370' Judicial x n o 1 . District Court of Hidalgo CoUnly, Tmss styled Jav'icr be La et d v. &app Medical

Gnter, I~c. O ~ ~ Y C U ~ . C

On or about Septcm"a 1, 2000, h o n Gantia, attorney far tbc PIaintif&, told RUC 4 Leach, momty Ibr thc DtSitndanf the case s y c Jmim E De b G u m , a t v. Knapp tld d M d c ~ Center. Inc, Cause N . C-3066-95-G, in tbs 370' Judicial District C o w d aidalga l o

2. Cotmy, Texas2would never settle f ~ $1,000,000.00 and so the h c of "creative scttlcmcnt was r

tom& wound" by the ~lajntifl3 d ~ t f m d a n t k bn or about S~cptembrr14, 2000, REXLC&, 3,

agent Sbr Knapp Medical Center7 Inc,

mtcrtdinto ngrccmmt with Ramon Garcia to scscttlc t;hc cast for $1,2Q0,000.00.

On or about Syltnrrba: 14, 2000, Ziex h c h and Ramon G a i a agreed that the ctisc 4 . would settle for $1,200,0OO.QO if Plaintiff3 made a Srowem demand so Dcfcndmrt's insurnnct carricr for $1,000,000.00 and the insarnnec m g c rtcndcrcd it policy lmt of $1,000,000.00 iis bcc;iusc he had autltority for $200,000.00 of Knnpp M e d i d Cmtmmonics to settle the lawsuit.

On or about Sqtcmbcr 14,2000. Rex Leuch, agml for Krrapp Mcdical Center- Inc. modc 5. a material rcprcscnration, thnt hc kncw was Wse or made thc rc3pwcntau'on m:Maly, as a

and without knowledge of its tntth, to Plaintiff3 that he had d o r i t y for $200,000.00 of ICnapp Medical Cnrm monies to conm%utetowards scthncnt of thc awe and t h tbc case would settle for $1,200,000.00 if thc Dckndant's insumcc d e r teader#'l is

positive $i,000,000.00 policy limits,

6 .

On or about $cptcmbcr 14,2000, RQL Lcach, agcnt for Kanpp Mqical Center, TnE, made a rcpscscntdon with the intent that the Plainti& act on it that hc had authority for $200,000.00 of m p p M d c l Ccr~tet eia monies to contrii~tc towards scttlcmcnt of thc w c nnd that the cast would settle for $1,200,000.00 if the Dcfcndaot's i n m c c t m d d its 51,000,000.00

7.

policy limb.

PI^^ rclicd on thc rqrresentatjons made by Rex W h , agent fw Knapp M c d i d hc had authority fix $200,000.00 of Knapp Medid Cater mania 1 0 . Center, b. c, con1~1ibutco w & scttltmtnt df thc w c a tbat the CUC would scttlc fm $l,ZW3,000.00 if rht t d DeSidant's insurance d c r tcndcrcd is S1,000,000.00 policy limit8 and the repramations t mused tht PlaintifEs' injury. On or about September 14,2000, Rcx Jaicb, agmt for h p p M c d i d Carter, Inc. told 8. Rimon Garcia to send a Srcwers demand to f i q p M d c d Center, lnc's insur;roce ~ ~ t m * r r parr of the t l g r c ~ m ~ l . . On or &out Scptcmbe~ 14,2000, Ranon Garcia sent a Stowem demand to Dcfcndant's 9. insumcr d e r for %17000,000.00 based an the maten'd r e p r a d o n rrtadc by Rex I;cachthat hc bud authority fbr $20OY000.00of Knsy3p Medid Centar modes to contriiute towar& srt13erneat of thc case and that thc casc would d c for $1,20o70M).00 if the Wendant's insmxucc carrier tendered its $1,000,000.00 policy limita. 10. On or about September 14,2000, Ramon Garcia scnt a scparatc 1ctm t Rex Ltach o

'

addt.cssing the $200,000.00.

On or a b u t Septcmbcr 14,2000, Ruc Lea& rcdwd Runon G8~~1*1?s Stowen: demand 1 I. for $1,000,000.90 to Dhdant's insmuce carrier. On or about Scptcmbcc 14, 2000, Rex Ixzu;h forwarded Plaintiffs' Sruwers dGmand to 12. m p Medid Catcryhc.'s j.murmce m * m .

13.

14;

OD or about Scptcmbe 15,2000,Dcrmdant's insumcc.

:

its policy limits

the $200,000.00

of $2,000,OQ0.00.

Dcfcndnnl had no intention of paying the $200,009.00

tlmt w a part of tlre agcemcnt.

15.

Knapp Medid Cmter7sBoard of Dircctom held a meeting on Scpxembu 15, 2000, at 7:30 am., to d i s w the cflsc tbc filcd against drem by Javicr & De La Gana that wns then in

trial.

I

1

I

16.

Knapp M t d i d Cmzer's B o d of Dlrcctors Minutc~ o September 15,2000, r c v d that f ~

Qn or &out Septembu I ,2000, Ramon Garcia rind Rrx Leach read thcir agrccmnrt into S

the Dcfmdsnt was ware tIra1Plainti& wauld not settle:f S , 0 , 0 . 0 a I00000.

1. 7

18.

the record dthc 370" ~ i s t r i c tcourt of ~ i d n l ~ o ' County, T a a . The Sertlemcnt Transcript d t Scptcmba 15, 2000, pmvidcs drat Rex Leach told n d Ramon G d a that he had authority for Si2W3000.00 of 'Knapp Mcdicat Ctnta rnonim to conm'butetowards se#lmrm of the cmc, , , The Sctttcmmt Tmcript dcmonstratts that Rex Lmch agreed and nwcr disputed th;;it hc 19. told Ranton Garcia that he had authority far $200,000.00 of Knapp Medical Cr?ater monies to

contriibute towards settlemwt oftbe case. T4c Sdcment Trnascdpt states that the issue of "creative settlemar was tosscd m n n u d 20.

h valid contmc~ existed bctwtm P1dnt.ifl's ntld Defendant to settle the m ,the PlaintifR c 21, p c r f ~ ~ c dtender4 pafonnance, the Dcfadnnt:breached the mtract, d tht Pldntiffj:were or

.

t ofthc brcacb. On September 14, 2000, Ibe PIabtiiB and Defendant to s d e the case cntcrcd into a 22 vzllid con17"d~t, Plaintif% perfmcd or tendered p e r S o ~ c e the Dtfmdant brmchcd the tbc , cantract, and the Pl&tif% w m dnmagcd as a result of thc brcmh On or about September 15,2000. the valid contract and sgrttmmt between PlniaiifE and

dzrmagcd as a d

Dcfmdwt wsr nad into the record of the 370' District Court of Hidalgo County, T24- The contract and agreement bctwtan Plainti* and Dcfcndant could be perSormcd in a

Y=

25. The claims nsscrted by the Plainti& in this cause are not bamd by the Full and Complete Rdcasc executed by thc Plaintiffs on Octobcr 2, 2000 in Caurc No. C-3066-95-0, B e 370' in

Judicial Dsrn Court of Hidalgo County, Tam, styled Jpvier E. De La C a m , e 4 v. K it i r

26.

B

~

No mcntion is made in t l ~ c rcdnaed Full and Complete R d c a ~ c Plaintiffs' GI&or of

tht aficgations tha~ fonn tbr:bnsis of this rmit

The conduct of the parrics clearly cvidnces thc Plainti%' inmt ta preserve its p27. c h s tbr thud and brach of contract Defendant made all of thc rcdsctions requested by thc PfdntifEs;to, the pmposcd Full md 28.

Cornplac Relase.

On or about July 20,2002, Plabliffb filed h w ~ ia&sl Ddmdrint Knripg Medical t 29. Ccr~tcr, Tor brmch of contract and kc. Plaintif% m t d into a con~ngcncyh ngrccmcnt wilh Tbc &W Office of ban e 30,

Oatcia, P.C. in ardmb obt.sia legal representation and prosecute tbis wbon, Plaintif6 inaurtd reasonab1e aad ncccsary attorneys' f c e in the -mount of $SO,M30.00 31.

in proscution of ti case, hs

On April 19, 2004, Ihis Court mled and sipcd a hnal judgment on behalf of the 32 PMW.

CONCLUSIONS OF LAW Defmdmt is irrdcbrcd to Plaintiff3 for Ihe sum of $200,000.00, plus court costs, and 1 . attorneys' fur=s i the sum of $80,000.00. n Thc indebledaees of Deftrrdant Knapp Mcdical Center, Inc. to Plaintie beam pre2. judgment ktacdat tile rate o f 5% per a u n f b m July 20,2001, to April 18,2004. mr The indcbtcdness of Defmdant Koapp Mcdical Ccntcr, Xnc. lo [email protected] b w s past3. [email protected]% rate of5K pcr aunum h m April '19.2004, unh7 pnid the

On or about September 14,2000, Rat b h , agent for Knapp Medial Cmtcr, lac.made a matuial repracnbtion, ibat hc kncw was fIilst or made the reprej~artatioa e s s l y , 9s a d positive assm~ion,md without knowlcdp of its truth to Piahti& lhat he h d authority far . $200,000.00 oflbapp Mdcl Crntcr monies to conim%utctowards selllmcnt of thc case and eia that the cast would settle far $1,200,000.00 if thc Dr:TmdmtYs insutance carrier t e n d e d

4.

$1,000,000.00 policy rimi#

On or about Scptcmber14,2000, Rcx Lath, agent for Rwpp Medical Cater, Lnc., made 5. a rcpres~tation with tbc intent thtu the Plaintif% act on i t h t hc had authority for $200,000.00 n

of Knapp Mcdical Cmtalmonicsto conbihut;e rowurds scttlernmt of/l~ecase ond that thc case would settle for SI,20il,000.00 i the Defcndimc's insurance d c f tmdned its $1.000,000.00 f

?*

policy limils. Plaintif&rclied on the representations made by Rcx LC 6.

I

Center, h. that hc h?d authority for $200,000.00 of Rnnpp Medical Center monies to c,

B".

agent for Knapp Mcdical

ton~sl"butc towards scrtlcmtnt of the case and that the cast would s d c for $1,200,000,00 if the

tqdered iu $I,OW,OO~.OOpolicy limi~s and Ddmdmt's insmmcc caused thc Plaintiff%' injury. ,

tbc

rtpresentations

7. Dcfendmt had na intcntjori of paying thc~$200,000.OQ hm not paid the $200,000.00 and that was part of lhc agnemcnt.

8 .

On or about ~cpttn'tbk 2000, d o n Carcia and Rg Lcilch read theif agreement mto IS. thc record of thc [email protected] District C u t of Hidalgo County, Tcxas. or

9. A valid con* existed bctwcca [email protected] and Ocfmdart to settle the cssc, thc plains ptrformcd or tendered pcrform~cc, [email protected] brcached the conhack and dlc Plaintiff3w e t the

damaged ps a result of the brcach.

On Stptembcr 14. 2000. the Plainli.nir and Dcfindmt to settle thc ruc m s imo a ad 10. valid contract, ihe Plainti£@performed or tcnducd perfonnrmce, thc Dcfcndant breached the

conmcf and the PlaintifB wens damaged ;ts a rcsult ofthc breach. On or about Scptcmba 15,2000, thc w&d contract and a p c m w t btrwccn Pluintiffs and 11. Dcfcndant was m h t o the rccord ofthc 3' Distrid COW. d 7 0 The conaaGt and agreement bctwetn Plaintif32 and Dcfcndant could be pcrrformcd in a 12.

ycat*

13.

Thc driins assert& by the Plaintiffs i this muse are not bmd by the Full and Complete n

Release cxecutcd by thc PkihtiffS on ~clobm 2000 in Cawit N . C-3066-954, m the 370* f o

~adilldieial District Court o f Hidalgo County, T & ,

atylcd Juvier E.

De Ln G m u , ct a1 v. Knapp

Medical Center, fnc

14.

No mention i s made i thc rcdacted Full and Complete Release of Plaintiff$ claims or n

the allegations that form h e basis of .this suit.

The conduct of the parties clairly cvidmccs the [email protected]' intent to preswe its prcscnt c h s fir iinud and breach of con&&.

15.

I

16. i pmsecution of this C ~ J S ~ . n The affirmative defmscs raised by Dcfmdant are without mail and do not bar 17.

Plaintif& incumd iWonnblc m d nccasary attr~mcy.;'Sees in thc amount d 080,000.00

tamt tiffs

li.om rccovcring again? the Defmdant. l2efcodslt lidled te prove their affirmative defenssa. 18. l?l&dffs are entiflcd to judpmt on their claims for bra& of contract and h d . 19,

I I I

, D. Mgd M. r

a2

W k Migoel D Whc, P.C., 134 W a 9Swc& Wrrl~ca, . Tdwi 78596 R l u n b ~ ~ ~ o ctawy, Gmdr.Furn!tcr, Pickcring & House, 411 FTcimr RPQ Sari AnirPo, TX 78232 Gars*, Mrs. Sanin L Lapcs l a w O f f i e of Ramon Garth, P C , 222 W, UwaYiry D, Cdhbuq, Tcnr 78539 r

CAUSE NO.C-1297-01-F

JAVIER E. DE LA GARZA AND JAVIER E. DE LA GARZA, M.D., P.A., Plaintzffs

VS.

5 5

§ §

IN THE DISTRICT COURT

,332ND JUDICIAL DISTRICT

§ § §

MNAPP MEDICAL CENTER, INC., Defendants

HIDALGO COUNTY, TEXAS

FINAL JUDGMENT

BE IT REMEMBERED that on March 25, 2004, the court called this case for trial.

Plaintiffs Javier E. De La Garza and Javier E. De La Garza, M.D., P.A., appeared in person and through their attorneys, Sonia I. Lopez and Ramon Garcia of the Law Office of Ramon Garcia, P.C., and announced ready for trial. Defendant, Knapp Medical Center, Inc., appeared through its attorneys Miguel D. Wise of Miguel D. Wise, P.C.,and Hurnberto Garcia fkom Curney, Garcia, Farmer, Pickering & House, and announced ready for trial. The parties submitted all matters in controversy, legal and factual, to the Court., After hearing all of the evidence and arguments of counsel the Court renders judgment for Plaintiffs. I. Therefore, the court orders that Plaintiffs Javier E. De La Garza and Javier E. De La

Garza, M.D., P.A., recover the total sum of $

, I

I

700,000 ,00

1. 1

, and court costs.

Plaintiffs requested attorneys fees and offered evidence at trial proving reasonable and -necessary attorneys fees in the amount of % 80 8 0 0 0 ~ 0 0 Knapp Medical Center, Inc. to pay Plaintiffs $80,000 ,00

11 1.

.

The court orders Defendant for attorney fees.

Additionally, the court awards prejudgment interest on the s m at the annual rate of 5 u percent (%) per m u m , to be paid &om date of the filing of this suit until the day before this judgment is signed.

IV.

Postjudgment interest is payable on all the above amounts allowable by law at the rate of

5 - percent (%) per annum fi-om the date this judgment is entered

until the date the judgment is

paid.

,

v.

The court orders execution to issue for this judgment.

VI.

The c s : : ~ denies d l relief nct santc:! in this :dm n. j , z:

SIGNED on this

1 9 ~day~of

APR I L

,2004.

cc: Mr. Miguel D. Wise, Miguel D. Wise, P.C., 134 West 5Ih Street, Weslaco, Texas 78596 Mr. Humberto Garcia. Cumey, Garcia, Farmer, Pickering Sr House, 41 1 Heimer Road, San Antonio, TX 78232 Mrs. Sonia I. Lopez, Law Ofice of Ramon Garcia, P.C., 222 W. University Dr., Edinburg, Texas 78539

Final Judgment, p2

Page 2 of 8

Not Reported in S.W.3d Not Reported in S.W.3d, 2006 WL 1431224 (Tex.App.-Corpus Christi) (Cite as: Not Reported in S.W.3d)

Page 1

H Briefs and Other Related Documents Only the Westlaw citation is currently available. SEE TX R RAP RULE 47.2 FOR DESIGNATION AND SIGNING OF OPINIONS. MEMORANDUM OPINION Court of Appeals of Texas,Corpus Christi-Edinburg. KNAPP MEDICAL CENTER, INC., Appellant, v. Javier E. DE LA GARZA and Javier E. De La Garza, M.D., P.A., Appellees. NO. 13-04-269-CV.

violated the par01 evidence rule; (4) there is no evidence to support the trial court's finding of fraud because there' is no evidence of a material misrepresentation or reliance; (5) appellees' claims are barred by the release; and '(6) the trial court erred in awarding attorney's fees because there was no presentment of the claim.FN2We affirm. FN1. In the underlying cause, cause number C-3066-95-G in the 370th District Court of Hidalgo County, Texas, appellees sued appellant for various causes of action, including defamation and slander. After the case was presented to a jury, but before closing arguments, the parties notified the trial court that a settlement had been reached. The parties read the settlement agreement into the record of the trial court and the court dismissed the jurors. Thereafter, appellees contend that appellant refused to perform pursuant to the settlement agreement. Appellees sued appellant (in the present cause) for fraud and breach of the settlement agreement. FN2. See Tex. Civ. Prac. & Rem.Code Ann. § 38.002 (Vernon 1997).

May 25,2006. On appeal from the 332nd District Court of Hidalgo County, Texas. Humberto G. Garcia and Miguel D. Wise, for Knapp Medical Center, Inc. Sonia I. Lopez and Rene B. Gonzalez, for Javier E. De La Garza and Javier E. De La Garza, M.D., P.A. Before Chief Justice VALDEZ HINOJOSA and Y A ~ ~ E Z . and Justices

MEMORANDUM OPINION Memorandum Opinion by Justice Y A ~ ~ E Z . *1 After reaching a settlement agreement in the underlying cause,FN1 appellees, Javier E. De La Garza, M.D., and Javier E. De La Garza, M.D., P.A., sued appellant, Knapp Medical Center, Inc., for fraud and breach of the settlement agreement. Following a bench trial, the trial court rendered judgment in favor of appellees and awarded damages in the amount of $200,000.00, court costs, and $80,000.00 in attorney's fees to appellees. In six issues, appellant contends (1) there was no valid rule 11 agreement between the parties by which appellant agreed to pay appellees $200,000.00; (2) the trial court improperly allowed appellees' counsel, Ramon Garcia, to testify; (3) the trial court erred in permitting Garcia's testimony because it

I. Background

On September 15, 2000, the parties to the underlying case advised the trial court that a settlement had been reached. Counsel for the parties explained the terms of the settlement to the court, and the trial court accepted the settlement. It is undisputed that pursuant to the settlement, appellant's insurance carrier agreed to pay, and appellees agreed to accept, the sum of one million dollars. The central issue in the present case, however, is whether the settlement agreement also included appellant's agreement to pay an additional sum of $200,000.00. Appellees contend that appellant's counsel represented that he had authority

O 2006 ThomsonIWest. No Claim to Orig. U.S. Govt. Works.

Page 3 of 8

Not Reported in S.W.3d Not Reported in S.W.3d, 2006 WL 1431224 (Tex.App.-Corpus Christi) (Cite as: Not Reported in S.W.3d) to offer '$200,000.00 towards settlement from appellant (in addition to the one million from the carrier), and that therefore, the settlement agreement included appellant's agreement to pay $200,000.00. Appellant contends (1) the settlement agreement did not include appellant's agreement to pay $200,000.00 to appellees, and (2) that appellees knew appellant was not going to contribute any monies to the settlement at the time they executed a release of all claims on October 2, 2000. After appellant refused to pay appellees $200,000.00, appellees filed suit for fraud and breach of the settlement agreement. As noted, the central issue is whether the September 15, 2000 settlement agreement, disclosed in open court, included appellant's agreement to pay appellees $200,000.00. The trial court found that it did and awarded judgment in favor of appellees. The trial court also issued findings of fact and conclusions of law, which included, among other things: 3. On or about September 14, 2000, Rex Leach, agent for Knapp Medical Center, Inc., entered into agreement with Ramon Garcia to settle the case for $1,200,000.00.

Page 2

25. The claims asserted by the Plaintiffs in this cause are not barred by the Full and Complete Release executed by the Plaintiffs on October 2, 2000 in Cause No. C-3066-95-G, in the 370th Judicial District Court of Hidalgo County, Texas, styled Javier E. De La Garza, et a1 v., ,Knapp Medical Center, Inc.

....

31. Plaintiffs incurred reasonable and necessary attorneys' fees in the amount of $80,000.00 in prosecution of this case. This appeal ensued. 11. 'Admission of Counsel's Testimony We will review appellant's issues in a logical rather than sequential order. Thus, we begin by addressing appellant's arguments that the trial court improperly permitted appellees' counsel to testifjl. In its second issue, appellant contends the trial court erred in permitting appellees' counsel, Ramon Garcia, to testifjl because under rule 3.08 of the Texas ' Disciplinary Rules of Professional ~ o n d u c t , F ~an attorney who represents a party in a lawsuit is incompetent to testifjl as a witness unless one of the exceptions to rule 3.08 applies. Appellees contend appellant waived its right to seek disqualification of appellees' counsel on the basis of rule 3.08. We agree. FN3. See Tex. Disciplinary R. Profl. Conduct 3.08. On March 7, 2002, appellant filed a Motion to Disqualifjl Counsel on grounds that ,appellees1 counsel was disqualified as a fact witness. On March 26, 2002, appellees filed a response. At a hearing on May 13,2002, appellant's counsel stated: [Appellant's counsel]: On the Motion to Disqualifjl, Your Honor, we believe that the Plaintiffs [sic] argument is valid, and we will not pursue that. [The Court]: All right. Accordingly, appellant waived any right to complain of the trial court's decision to permit appellees' counsel to t e s t i ~ .We ~ overrule ~ ~

....

5. On or about September 14, 2000, Rex Leach, agent for Knapp Medical Center, Inc.[,] made a material representation, that he knew was false or made the representation recklessly, as a positive assertion, and without knowledge of its truth, to Plaintiffs that he had authority for $200,000.00 of Knapp Medical Center monies to contribute towards settlement of the case and that the case would settle for $1,200,000.00 if the Defendant's insurance carrier tendered its $1,000,000.00 policy limits. *2 .... 18. The Settlement Transcript dated September 15, 2000, provides that Rex Leach told Ramon Garcia that he had authority for $200,000.00 of Knapp Medical Center monies to contribute towards settlement of the case. 21. A valid contract existed between Plaintiffs and Defendant to settle the case, the Plaintiffs performed or tendered performance, the Defendant breached the contract, and the Plaintiffs were damaged as a result of the breach.

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Not Reported in S.W.3d Not Reported in S.W.3d, 2006 WL 1431224 (Tex.App.-Corpus Christi) (Cite as: Not Reported in S.W.3d) appellant's second issue. FN4. See Tex.R.App. P. 33.1. In its third issue, appellant complains that the trial court erred in permitting appellees' counsel to testify because such testimony violated the parol evidence rule. Appellees argue that the trial court did not abuse its discretion in permitting their counsel to testify because (1) they alleged fraud and the trial court concluded they were entitled to judgment on their fraud claim, (2) Garcia's testimony did not contradict, add to, or vary the terms of the settlement agreement, and (3) to the extent the agreement may have been ambiguous, Garcia's testimony assisted the trial court in ascertaining the intentions of the parties. We apply an abuse-of-discretion standard in reviewing whether a trial court erred in admitting or excluding evidence.FN5 In other words, the trial court commits error only when it acts in an unreasonable and arbitrary manner, or acts without reference to any guiding principles.FN6 Reversible error does not usually occur in connection with rulings on questions of evidence unless the appellant can demonstrate that the whole case turns on the particular evidence that was admitted or excluded.FN7 FN5. See City of BrownsviIle v. Alvarado, 897 S.W.2d 750,753 (Tex.1995). FN6. Pitman v. Lightfoot, 937 S.W.2d 496, 517-1 8 (Tex.App.-San Antonio 1996, writ denied) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238,241-42 (Tex.1985)). FN7. Id. at 518. *3 The parol evidence rule is a rule of substantive law which provides that, in the absence of fraud, accident, or mistake, extrinsic evidence is not admissible to vary, add to, or contradict the terms of a written instrument that is facially complete and unambiguous.FN8 Parol evidence may be used to

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explain or clarify a written agreement, but not to supply its essential terms.FN9 Parol evidence is admissible regarding the intentions of the 'parties when the writing contained in the document is arnbiguo~s.~~'~

'

0

FN8. Hayes v. Rinehart, 65 S.W.3d 286, 288 (Tex.App.-Eastland 2001, no pet.); Pitman, 937 S.W.2d at 515-16. FN9. Tex. Builders v. Keller, 928 S.W.2d 479,481 (Tex.1996). FN10. Pitman, 937 S.W.2d at 517. The issue before the trial court was whether the parties' agreement to settle the underlying suit included an agreement that appellant would pay $200,000.00. The only two witnesses were the two attorneys involved in the settlement, Ramon Garcia for appellees, and Rex Leach for appellant. At the bench trial, both were permitted to testify and both were cross-examined. To the extent that the ,trial court found the September 15, 2000 agreement ambiguous, we hold the trial court did not abuse its discretion in permitting Garcia's testimony. We overrule appellant's third issue.

1 1 Settlement Agreement 1.

I

In its first issue, appellant contends no valid rule 11 agreement existed regarding its agreement to pay $200,000.00 to appellees. We construe appellant's complaint as a challenge to the sufficiency of the evidence supporting the trial court's finding that counsel for the parties entered into an agreement to settle the underlying case for $1,200,000.00 (finding of fact number three). Citing Bransom v. Standard Hardware, ~ n c . , ~ appellees argue that ~" because appellant asserted only a general complaint regarding the sufficiency of the evidence supporting the judgment and failed to challenge specific fact findings, it waived its complaint. See Bransom v. Standard FNII. Hardware, Inc., 874 S.W.2d 919, 927

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Not Reported in S.W.3d Not Reported in S.W.3d, 2006 WL 1431224 (Tex.App.-Corpus Christi) (Cite as: Not Reported in S.W.3d) (Tex.App.-Fort Worth 1994, writ denied).

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FN15. City of Keller, 168 S.W.3d at 812-18. FN16. Merrell Dow Pharms. v. Havner, 953 S.W.2d 706, 711 (Tex.1997). FN17. , Id. (quoting Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex.1995)). , FN18. Haynes & Boone v. Bowser Bouldin, Ltd., 896 S.W.2d 179, 183 (Tex.1995).

*4 In reviewing a factual sufficiency issue, we consider all the evidence, whether it supports or is contrary to the The party challenging the factual sufficiency of a finding on which an adverse party bore the burden of proof must demonstrate that there is insufficient evidence in the record to support the finding.FN20We set aside the finding based on factual insufficiency only if the evidence supporting the jury's verdict is so contrary to the overwhelming weight of the evidence as to be manifestly unjust and clearly wrongFN21

A. Standard of Review

We address legal-sufficiency challenges as either " no-evidence" or "matter-of-law" issues.FN12 We analyze the issue as a "no-evidence" challenge when, as here, the party complaining on appeal did not bear the burden of proof at triaLFN13 FN12. Gooch v. Am. Sling Co., 902 S.W.2d I8 I, 183-84 (Tex.App.-Fort Worth 1995, no writ). FN13. Id. at 183. In reviewing the legal sufficiency of the evidence, we view the evidence in the light most favorable to the verdict, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not.FN14 We do not disregard contrary evidence if there is no favorable evidence, or if contrary evidence renders supporting evidence incompetent or conclusively establishes the opposite.FN15 There is legally insufficient evidence or "no evidence" of a vital fact when (1) there is a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence conclusively establishes the opposite of the vital fact.FN16More than a scintilla of evidence exists where the evidence supporting the finding, as a whole, "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." FN17 If the evidence is so weak as to do no more than create a mere surmise or suspicion of its existence, its legal effect is that it is no evidence. FN18

FN19. Golden Eagle Archery, Iizc. v. Jackon, 116 S.W.3d 757, 761 (Tex.2003) ; Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402,406-07 (Tex.1998). FN20. Gooch, 902 S.W.2d at 184. FN21. Mar. Overseas Corp., 971 S.W.2d at 407. Findings of fact in a bench trial have the same force as a jury's verdict upon jury questions.FN22 However, the findings are not conclusive when a complete statement of facts appears in the record, if the contrary is established as a matter of law, or if there is no evidence to support the findings.FN23 Findings of fact are reviewable for factual and legal sufficiency under the same standards that are applied in reviewing evidence supporting a jury's

FN14. Ysleta Indep. Sch. Dist. v. Monarrez, 177 S.W.3d 915, 917 (Tex.2005); City oj Keller v. Wilson, 168 S.W.3d 802, 807 (Tex.2005).

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Not Reported in S.W.3d Not Reported in S.W.3d, 2006 WL 1431224 (Tex.App.-Corpus Christi) (Cite as: Not Reported in S.W.3d) FN22. City of Clute v. City of Lake Jackson, 559 S.W.2d 391, 395 (Tex.Civ.App.-Houston [14th Dist.] 1977, writ refd n.r.e.). FN23. Middleton v. Kawasaki Steel Corp., 687 S.W.2d 42, 44 (Tex.App.-Houston [14th Dist.] 1985, writ refd n.r.e.). FN24. Zieben v. Platt, 786 S.W.2d 797, 799 (Tex.App,-Houston [14th Dist.] 1990, no writ). Our review of trial court conclusions of law is de ~ o v o However,~ as noted above, although . ~ ~ ~ findings of fact are reviewable for legal and factual sufficiency, an attack on the sufficiency of the evidence must be directed at specific findings of fact rather than at the judgment as a whole.FN26 The rule has often been otherwise stated that if the trial court's findings of fact are not challenged by a point of error on appeal, they are binding upon the appellate However, a challenge to an unidentified finding of fact may be sufficient for review if it is included in the argument of the issue or point, or if after giving consideration to the nature of the case, the underlying applicable legal theories, and the findings of fact provided, the specific finding(s) of fact which the appellant challenges can be fairly determined from the argument.FN28 FN25. In re Humphreys, 880 S.W.2d 402, 403 (Tex. 1994). FN26. In re M. W., 959 S.W.2d 661, 664 (Tex.App.-Tyler 1997, writ denied). FN27. Nortliwest Park Homeowners Ass'n, Inc., v. Brundrett, 970 S . W.2d 700, 704 (Tex.App.-Amarillo 1998, pet. denied); Carter v. Carter, 736 S.W.2d 775, 777 (Tex.App.-Houston [14th Dist.] 1987, no writ). FN28. See Holley v. Watts, 629 S.W.2d 694,696 (Tex. 1982).

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B. Analysis

Here, appellant's attack is not directed at specific findings of fact. Instead, appellant contends generally that the transcript of the September 15, 2000 hearing does not establish that it agreed to pay appellees $200,000.00. As noted, we construe appellant's issue as a challenge to the legal sufficiency of the evidence supporting finding of fact number three: that on or about September 14, 2000, counsel for the parties agreed to settle the case for $1,200,000.00. Appellant argues that the transcript of the September 15, 2000 hearing reflects there were " discussions between the attorneys for the parties about the possibility of getting the hospital to pay $200,000.00 on top of the $1,000,000.00 to be paid by the insurance carrier ... [but] does not reflect a mutual assent by the parties or a meeting of the minds ... as to the payment of the sum of $200,000.00 ...." Appellant also argues that prior to the statements made at the September 15, 2000 hearing, its counsel had advised appellees' counsel that appellant was not going to pay $200,000.00.

....

*5 Appellees point to the following testimony provided by appellees' counsel at the March 25, 2004 bench trial: Q [by appellees' co-counsel]: Could you tell us please what your discussions were with Rex Leach on September the 14th dealing specifically with resolution of that case? A [Garcia]: Yes. Well, Mr. Leach was the lawyer representing Knapp Hospital; therefore, he was the agent of Knapp Hospital that I had been discussing this case with and that I believed had authority to act for and speak for Knapp Hospital.

Mr. Leach comes and tells us-tells me that, no [the policy limit is] not two million, that it's a million. And that he believes that if we go out there and Stowerize [sic ] them for a million that, you know, we will get the million. And at that point I said, well, you know, I don't want to settle for a million. We've got a good case and-and, you know, we want to be able to get full compensation not partial compensation. The concern was that they would go ahead and-and not allow themselves to be

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I

1

Not Reported in S. W.3d Not Reported in S.W.3d, 2006 WL 1431224 (Tex.App.-Corpus Christi) (Cite as: Not Reported in S.W.3d) Stowerized [sic 1. And that's where we came up through this, I guess, the term you used was "creative settlement discussion." And there was another pending case, the Badiga [sic ] case, that Mr. Leach and I both agreed we could use as a way of getting the balance of-of the money that in the event the company paid the million, Knapp Hospital had 200,000. And Mr. Leach said he was-well, I agreed to accept the 200,000. He said he was-but I told him that-he said he was going to make an effort to get the 250. We went ahead and on reliance on that, I went ahead and sent out that Stowers [sic ] letter for the million dollars. And the following day-and also sent out the letter on the Badiga [sic ] case saying that we will agree to settle that case, also. We also note that the minutes of appellant's September 15, 2000 Board of Directors meeting were introduced into evidence at the bench trial. The minutes reflect that "[Appellees] later offered to settle near the policy limits, which are $1 million, provided that the Hospital would contribute approximately $200,000. [Appellees] would in turn be willing to drop the De la Garza case that is currently on appeal." Viewed in the light most favorable to the verdict, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not,FN29 we conclude that the evidence is legally sufficient to support the trial court's finding of fact number three. We overrule appellant's first issue. FN29. See City o Keller, 168 S.W.3d at f 807.

IV. Fraud

Page 6

I

trial court's findings that Mr. Leach made a material misrepresentation that he intended appellees to rely on, and that appellees did rely on the misrepresentation. However, in its fourth issue, appellant does not specifically cite the findings of fact it seeks to challenge. Accordingly, we ~onclude appellant failed to preserve any issue for our 'review. FN31 We overrule appellant's fourth issue. FN30. See Tex. Disciplinary R. Profl. Conduct 3.08. FN31. See In re M.W., 959 S.W.2d at 664; Bransom, 874 S.W.2d at 927.

V. Affirmative Defense of Release

*6 In its fifth issue, appellant contends that appellees' claims were barred by the release executed on October 2, 2000. Appellant concedes the well-settled principle that "to release a claim, the releasing document must 'mention' it." FN32 However, appellant argues that the release " mentions" its breach-of-contract claim because it contains language releasing "all claims, known, present, that [appellees] have against the released parties herein," and because appellees knew at the time the release was executed that appellant had refused to pay $200,000.00, the breach-of-contract claim is included in the release.

FN32. Mem'l Med. Ctr. v. Keszler, 943 S.W.2d 433, 434-35 (Tex.1997) (citing Victoria Bank and Trust Co. v. Brady, 81 1 S.W .2d 931, 938 (Tex.1991)). Again, appellant does not specifically cite the findings of fact it seeks to challenge. Accordingly, we conclude appellant failed to preserve any issue for our review.FN33 Moreover, even if appellant had preserved the issue, we agree with appellees that a release may be set aside if induced by fraud. FN34 Here, appellees pleaded that their Stowers demand to appellant's carrier was induced by fraud and the trial court concluded appellees were entitled to judgment on their claim of fraud. We overrule appellant's fifth issue.

In its fourth issue, appellant argues that the "only evidence" of the purported "material misrepresentation" that Mr. Leach stated that he had authority to offer $200,000.00 to settle the underlying case is Mr. Garcia's testimony, which the trial court should have disregarded under rule 3.08. FN30 We construe appellant's issue as a challenge to the sufficiency of the evidence supporting the

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Not Reported in S.W.3d Not Reported in S.W.3d, 2006 WL 1431224 (Tex.App.-Corpus Christi) (Cite as: Not Reported in S.W.3d) FN33. See In re M. W., 959 S.W.2d at 664; Bransom, 874 S.W.2d at 927. FN34. See Deer Creek, Ltd. v. N. Am. Mortg. Co., 792 S.W.2d 198, 201 (Tex.App.-Dallas 1990, no writ).

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VI. Attorney Fees

In its sixth issue, appellant contends the trial court erred in awarding appellees attorney fees because there was no "presentment" of the claim pursuant to section 38.002 of the civil practice and remedies code. FN35 However, the record reflects that appellant did not object at trial to appellees' request for attorney fees. Accordingly, it has waived its complaint.FN36 overrule appellant's sixth issue. We FN35. See Tex. Civ. Prac. & Rem.Code Ann. § 38.002 (Vernon 1997). FN36. See Tex.R.App. P. 33.1; Pal-Mart Stores, Inc, v. McKenzie, 997 S.W.2d 278, 280 (Tex.1999) ("To preserve a complaint for appellate review, a party must present to the trial court a timely request, motion, or objection, state the specific grounds therefore, and obtain a ruling."). We AFFIRM the trial court's judgment. Tex.App.-Corpus Christi,2006. Knapp Medical Center, Inc. v. De La Garza Not Reported in S.W.3d, 2006 WL 1431224 (Tex.App.-Corpus Christi) Briefs and Other Related Documents (Back to top)

* 2004 WL 31591 92 (Appellate Brief) Appellees' Brief (Nov. 19, 2004) Original Image of this Document (PDF) * 2004 WL 2362991 (Appellate Brief) Amended Brief of Appellant (Sep. 20, 2004) Original Image of this Document with Appendix (PDF) 13-04-00269-CV (Docket) (May 27,2004)

END OF DOCUMENT

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REPORTER'S RECORD V L M 1 O 1V O L W OU E F TRIAL C U T C U E NO. C-3066-95-G OR AS

.

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3

4

J A V I E R E. DE LA GARZA, M.D. A Z , AND JAVIER E. DE LA G R A M.D., P.A.

) )

I N THE DISTRICT C U T O R

5

vs.

)

1

HIDALGO COUNTY. TEXAS

1

EXCERPT O F TRIAL ON T E MERITS H SETTLEMENT A R E E T GEMN

18

I

O t h e 1 5 t h day of September, 2000 t h e f o l l o w i n g n proceedings came on t o

be

heard i n t h e a b o v e - e n t i t l e d and Judge

-

19

20

numbered cause b e f o r e t h e Honorable Homer S a l i n a s , p r e s i d i n g , h e l d i n Edinburg, Hidalgo County. Texas:

21

Proceedings r e p o r t e d by com p uterized ' s t e n o t y p e

L

VOLUME 1 EXCERPT OP TRILL ON THE MERITS SETTLEMENT AGREEMENT

Septenber 15, 2 0 0 0

3

4

Page

I

Vol

1

.

Adjourment

.....................................

Certificate

*

I

21

5

Court Reporter's

.......O...........

22

1

U~~BETICAL WITNESS INDEX

8

1

Direct (NO witnesses)

EXHIBIT INDEX

Cross

Voir Dire

' 4

Vol.

I

.

10

11

PLAINTIFF'S NO. DESCRIPTION (No exhibits) DEFENSE NO. DESCRIPTION (No exhibits)

I

OFFERED

ADMITTED

I

I

VOL.

13

OFFERED

ADMITTED

VOL.

14

2 3

1 MR.

RAMON GARCIA MS. SONIA LOPEZ LAW OFFICES OF RAMON GARCIA, P.C. SBOT NO. 07641800; 24003862 -222 West University Edinburg, Texas 78539 Phone: (956) 383-7441 ATTORNEYS FOR PLAINTIFFS

-

AND

-

MR. REX N. LEACH

MS. SOFIA A. RAMON ATLAS f HALL, L.L.P. SBOT NO. 12086300; 00784811 818 Pecan Post Office Box 3725 McAllen, Texas 78502-3725 Phone: (956) 682-5501 ATTORNEYS FOR DEFENDANT

1

THE BAILIFF:

THE COURT:

4

A l l rise.

You nay be s e a t e d .

Good m o r n i n g ,

l a d i e s and gentlemen.

MR. LEACH: MR. GARCIA:

THE COURT:

5

Good morning. Good morning, your Honor. Good morning.

I1 .

Gentlemen, t h e c o u r t J a v i e r E. D e La We

8 9

i s g o i n g t o c a l l Cause N u m b e r C-3066-95-6,

Garza v e r s u s Knapp Medical Center., prepared

What s a y t h e p a r t i e s ?

10 11 12

--

t h e record' w i l l r e f l e c t w e worked l a t e y e s t e r d a y .

I t was g o i n g t o b e

W e had a c o u r t charge prepared and ready.

typed up.

I haven't seen it y e t , b u t i t t s r e a d y a n d ready t o

I

and

-THE COURT:

MR. GARCIA:

The j u r y is now o u t o f c o u r t .

Yes.

Judge, b u t w e wanted t o make z

s t a t e m e n t i n t o t h e r e c o r d , a n announcement t o t h e c o u r t . Yesterday we began some s e r i o u s s e t t l e m e n t negotiations.

W e had

--

I was u n d e r t h e i m p r e s s i o n throughou-

a l l t h i s t h a t we had a $2 m i l l i o n i n s u r a n c e p o l i c y , and it t u r n s o u t t h a t it was only a n i l l i o n d o l l a r p o l i c y .

y So m

o f f e r s had been a c t u a l l y g e a r e d a t t h a t $2 m i l l i o n p o l i c y . Turns o u t t h a t it was

--

t h a t I was i n c o r r e c t .

But a f t e r

0

-

having been made aware of t h a t , w e t h e n s t a r t e d f o c u s i n g i n

how w e could possibly s e t t l e t h e case with t h e new circumstances, t h e new

--

t h e d o l l a r s involved.

M r . Leach t e l l s m t h a t e

I talked t o M r . Leach.

he had t a l k e d t o h i s c l i e n t s and they had a u t h o r i z e d t h e most

I

t h a t t h e y would pay was $200,000 and t h e most the i n s u r a n c e company would,pay would b e a m i l l i o n d o l l a r s b e c a u s e t h a t war t h e amount of t h e l i m i t s of t h e i r p o l i c y . And t h e n t h e term

,

of c r e a t i v e s e t t l e m e n t was t o s s e d around, t r y i n g to f i g u r e o u t how w e could possibly s e t t l e t h i s c a s e , and I made him

--

I

I

asked him t o s e e i f t h e r e was a p o s s i b i l i t y of g e t t i n g 250 i n s t e a d of 200. And t h i s happened y e s t e r d a y , and he s a i d he

d i d n ' t have t h e a u t h o r i t y f o r t h e 250, that t h e o n l y t h i n g t h a t t h e y had t o l d him was 200. Because w e have pending t h e o t h e r c a s e , t h e Badiga c a s e , f o r l a c k of a b e t t e r term, t h e f i r s t c a s e , t h a t has been dismissed and is on appeal o r could b e r e v i v e d i n a b i l l of review o r whatever t h e s t a t u s may have been, I made a s t a t e m e n t t h a t m c l i e n t d i d n ' t c a r e where t h e money g o t p a i d y i n t o a s long a s he g o t it, a f i x e d amount, and M r . f e l t t h e same way, t h a t a s l o n g a s it g o t Leach a l s o

-- it was -- it

d i d n ' t exceed t h a t amount t h a t t h e y w e r e w i l l i n g t o pay t h a t

it d i d n ' t m a t t e r t o anybody.

W t h e n a g r e e d t h a t I would send i n t h a t l e t t e r e t o s e t t l e t h i s c a s e a d d r e s s i n g t h e $1 m i l l i o n l i m i t p o l i c y t h a t S a i n t Paul's I n s u r a n c e Company had provided coverage for

I

and I would send i n t h e o t h e r l e t t e r r e q u e s t i n g t h e 250, knowing t h a t he only had 2 0 0 , but t h a t he was, a s was', w e d i s c u s s e d , was going t o t r y t o g e t 250.

8

--

This morning

--I

o r l a s t n i g h t M r . Leach c a l l s m e

and s a y s , What about t h e s i t u a t i o n

-- what

would h a p p e n if

I said,

Well,

s a i n t Paul says yes and t h e board s a y s n o ? thought you had t h e a u t h o r i t y f o r t h e 200.

I

And

'i t o l d M r .

Leach, W e l l , then u n t i l you t a l k t o M r . Vanderveer he g o t enough i n f l u e n c e t o

-- I t h i n k

Mr.

--

i f he's a l r e a d y s a i d 2 0 0 , h e r s '

g o t enough i n f l u e n c e t o make s u r e t h a t it happens, d o n r t send t h a t l e t t e r u n t i l you t a l k t o M r . Vanderveer. Leach f e l t a t t h e time was

A d what n

-- a s

I understand it b a s e d on o u r

conversation i n chambers was t h a t he f e l t o b l i g a t e d t o send a l e t t e r t o S a i n t Paul i n any event, and he d i d . S a i n t Paul

t h i s morning responded by a t f i r s t making a $700,000 o f f e r , and b e f o r e I had an o p p o r t u n i t y t o even r e j e c t it, t h e y came back and s a i d t h a t t h e y would pay t h e m i l l i o n . But t h e problem l i e s now i s t h a t w e h a v e t h a t l e t t e r t h a t I d i d s e n d t o S a i n t Paul based on o u r ~nderstanding Leach. :he

--

o r aimed a t S a i n t Paul.

I t was s e n t t o Mr.

And t h e y ' v e accepted t h e m i l l i o n d o l l a r payment, b u t

board has

--

i s no l o n g e r w i l l i n g t o pay t h e 200,000.

rhat p u t s us i n a

i t

--

somewhat of a dilemma, and w e feel t h a t

t h i s p o i n t w e need t o

--

i n o r d e r t o e f f e c t our agreement,

re're g o i n g t o b e a c c e p t i n g t h e m i l l i o n d o l l a r s , which I've

V

been t o l d would be paid w i t h i n t e n days, and we w o u l d b e

--

p u r s u a n t t o t h i s understanding t h a t I ' m d i c t a t i n g i n t o t h e r e c o r d , t h a t m c l i e n t w i l l a c c e p t t h a t money and t h a t we w i l l y

I

s t i l l have o u t s t a n d i n g t h e rnatter of t h e 200,000 t h a t I w i l l

b e s e n d i n g M r . Leach a l e t t e r , making him aware t h a t w e i n t e n d t o s e e k t h e b a l a n c e of t h e s e t t l e m e n t amount, which I b e l i e v e t o be 1 . 2 , o r s e e k t h e o t h e r 200,000. And t h e n h e ? s g o i n g t o and then

I

be a d d r e s s i n g t h a t w i t h t h e board a t a l a t e r d a t e ,

t h e y w i l l make whatever d e c i s i o n t h e y want t o make. But t h a t , I t h i n k , more o r less d e s c r i b e s t h e s t a t u s of where we f i n d o u r s e l v e s a t t h i s p o i n t .

MR. LEACH:

Well,

y o u r Honor, i f I m i g h t

respond.

The o n l y p l a c e I would d i f f e r i n r e g a r d t o t h a t was$

a t t h e p o i n t we were ciiscussing t h e 2 0 0 , 0 0 0 y e s t e r d a y , w e w e r e n o t a t a p o i n t where t h e i n s u r a n c e company had o f f e r e d a million dollars.

W e were t a l k i n g a b o u t d i s c u s s i n g t h a t

m a t t e r , b u t t h a t ' s what w i l l h a v e t o b e a d d r e s s e d i n t h i s l a t e r proceeding. e, But I t h i n k f o r t h e p u r p o s e s of t h i ~ ~ c a s the r e c o r d s h o u l d r e f l e c t t h a t I d i d r e c e i v e l a s t n i g h t on b e h a l f of M r . G a r c i a ' s c l i e n t a l e t t e r s a y i n g t h a t t h e y would s e t t l e

t h i s m a t t e r f o r p o l i c y l i m i t s , which were a m i l l i o n d o l l a r s .

I forwarded t h a t t o S a i n t P a u l , a s I ' m

r e q u i r e d t o d o , and

S a i n t Paul has accepted t h a t o f f e r . So I b e l i e v e a s f a r a s t h i s c a s e i s c o n c e r n e d ,

t h e r e i s a s e t t l e m e n t f o r t h e m i l l i o n ' , d o l l a r amount, and a s

Mr.

G a r c i a s a i d , he i s going t o a d d r e s s t h i s o t h e r m a t t e r and

it w i l l be d e a l t with p u r s u a n t t o t h e law and w i t h . t h e board.

I

I

MR. GARCIA:

'

/

Yes, sir., Because we're

looking a t

it a s b e i n g p a r t of t r y i n g t o accomplish o u r o b l i g a t i o n s u n d e r

t h a t agreement.

This is p a r t of it.

We're g o i n g t o b e

a c c e p t i n g t h i s m i l l i o n , and then we're going t o be w a i t i n g and h o p e f u l l y g e t t i n g t h e b a l a n c e of t h e 200 w i t h i n a r e a s o n a b l e p e r i o d of t i m e . later.

1f'n o t , of course, w e t l l d e c i d e w h a t t o do

THE COURT:

folks

I n e f f e c t , w h a t O s going t o happen,

--

you1re asking m e t o approve some k i n d of s e t t l e m e n t

here t h a t this c a s e w i l l be s e t t l e d f o r a m i l l i o n d o l l a r s a n d you're going t o r e t a i n a c a u s e of a c t i o n a g a i n s t the h o s p i t a l t o r a c o u p l e of hundred thousand d o l l a r s , which may r e s u l t i n m o t h e r l a w s u i t down t h e road. l o t s a y i n g it won't.

I ' m n o t s a y i n g it w i l l .

I'm

I ' m s a y i n g it might.

T h a t ' s c o r r e c t , t h a t b e c a u s e of the

NR. GARCIA:

igreement t h a t we would ~ o t e n t i a li s there.

-- t h a t

w e b e l i e v e e x i s t e d , t h a t that

How w e c l a s s i f y it, you know

-- you know

. t t s _ - -I ' m j u s t l e t t - g t h e c o u r t know t h e f a c t s a n d our in

~nderstanding.

MR. LEACH:

And, y o u r Honor, I t h i n k t h a t can b e

e a l t w i t h p u r s u a n t t o law, b u t I t h i n k as f a r as t h i s c a s e i oncerned, t h e r e was a m i l l i o n d o l l a r s e t t l e m e n t o f f e r .

It

1

2

was accepted.

So I t h i n k t h i s case has been s e t t l e d , and t h i s

o t h e r matter w i l l have t o be d e a l t with what M r . Garcia is saying, b u t

THE COURT:

I

--

and I Understand

3

--ex parte,

4

W e l l , somewhere down i n the

5

6

discussions t h a t took place ex p a r t e , t h e c o u r t strike that

--

t h a t took p l a c e i n t h e c o u r t ' s chambers w i t h

7

8

a l l p a r t i e s being present, it was mentioned t h a t the 2 0 0 o r

2 3 0 , 0 0 0 was

--

whatever t h e s m was u

-- 2 0 0 ,

I believe.

9

10 11

MR. GARCIA:

The 200 was t h e sum Mr. Leach

represented he had a u t h o r i t y f o r o r t h e board had a u t h o r i z e d him t o

-THE COURT:

MR. GARCIA:

12

13

14

And you wanted 250. And I wanted 250, b u t I was w i l l i n g

t o t a k e t h e 2 0 0 i f h e made good- faith e f f o r t .

THE COURT:

15 16

But, fellows, i n having t o do w i t h

the

--

I ' m going t o use t h e term a n c i l l a r y case, t h a t being

17

18

t h e Badiga case

MR.

--

is that c o r r e c t ?

LEACH:

Your Honor

-Honor, I

19

20

THE C U T O R:

MR.

Where does t h a t come i n ?

Well, I

LEACH:

-- your

-- t h a t

--

is

21

t h e other case t h a t is on appeal.

I think

-- I

didn't

Mr.

22

p e r s o n a l l y a c t u a l l y d i d n ' t see t h e s e l e t t e r s .

Garcia say

23 24 25

h e s e n t a l e t t e r t o m o f f i c e i n r e g a r d t o a demand i n t h a t y case. I ' m n o t d i s p u t i n g t h a t he s e n t it.

I j u s t didn't pic)

it up l a s t n i g h t , I assume.

I g o t t h i s one and I d i d n ' t see

b e o t h e r one, but a t any r a t e , your Honor, 1 j u s t t h i n k t h a t

1 f a r a s t h i s case i s concerned w need t o f i n a l i z e it and s e

:his o t h e r matter w i l l be d e a l t with

I

--

THE COURT:

This case we're t a l k i n g a b o u t r i g h t

o w D La Garza versus Knapp, involvipg t h e i n t r u s i o n , e interference with t h e

-Right.

MR. LEACH:

THE COURT:

de

--

contractual r e l a t i o n s h i p , t h e case

worked on

--

t h a t w e worked so 'hard on t h e c h a r g e f i n a l l y and

yesterday, t h i s c a s e is going t o be s e t t l e d f u l l y , completely f o r how much?

MR. LEACH:

THE COURT:

$ 1 million.

A l l right.

And t h e r e may o r m y not

e x i s t , b u t i f t h e r e is, t h e Honorable M r . Ramon G a r c i a may have a cause of a c t i o n a g a i n s t t h e h o s p i t a l based upon some contractual r e l a t i o n s h i p t h a t r i g h t have come i n t o deal o r not into deal.

I donf t know.

MR.

LEACH: W w i l l be happy t o a s s e s s that upon e

receipt.

THE COURT:

I ' m going t o t a k e a three- minute

Knock

recess.

Both of you t a l k t o your r e s p e c t i v e c l i e n t s .

on my door when y o u t r e ready, and i f your c l i e n t s

--

respective c l i e n t s u r g e m e t o accept o r recommend t h a t I accept t h e s e t t l e m e n t , I w i l l do so. -

MR. GARCIA:

Judge, 1 j u s t want t o make sure that

-

-t h e record is c l e a r .

Your language was p r e t t y i n c l u s i v e , and

t h a t is correct.

W e a r e t r y i n g t o do

--

t h a t is o u r i n t e n t ,

t o s e t t l e t h i s case o n l y a s it r e l a t e s t o as being a p a r t of t h e t o t a l understanding of dhe 1.2, that 1.2. our n e x t there. and wef re t r y i n g t o e f f e c t

I mean, t h a t ' s going t o be our l e g a l p o s i t i, o n a t

--

i n any f u t u r e proceeding i n t h e e v e n t it g e t s

We're very hopeful t h a t t h e Knapp h o s p i t a l b o a r d of

t r u s t e e s w i l l look a t and

-- a f t e r

t h e y g e t t h e letter and

I

d e c i d e t o pay it and t h a t w i l l be, t h e end o f it, but i f they don't,

I d o n t t want t o be f a c i n g a

-,

THE COURT:

What you're s a y i n g is, i f they d o n ' t ,

y o u ' r e going t o have a c a u s e of a c t i o n a g a i n s t t h e h o s p i t a l f o r b r e a c h of c o n t r a c t , your damages, p a s t , p r e s e n t , f u t u r e and a l l t h i s o t h e r s t u f f .

MR. GARCIA:

sure t h a t that's clear

THE COURT:

That's correct.

I j u s t want t o make

-You w i l l n o t be l i m i t e d t o a q u a r t e r

m i l l o r 200, whatever.

MR. GARCIA: understanding, l e t m e clients.

THE COURT:

Yes, sir.

1'11

And with t h a t go v i s i t w i t h t h e

--

-- w e ' l l

You go s p e a ~ i t h your c l i e n t s . w

Mr.

Leach, you go t a l k t o your c l i e n t s .

MR. LEACH:

I ' v e spoken w i t h m c l i e n t , your y

Honor.

They understand.

THE COURT: Go t a l k t o khem again, a n d t h e n when

you come back, be ready t o t e l l t h e court whether y o u urge me t o a c c e p t t h e settlement a s is.

I

MR. GARCIA:

#

Yes, sir.

A l l rise. ,

1

THE BAILIFF:

(Recess from 10:01 a.m. t o 10:08 a,m.)

THE COURT:

L e t m e c a l l Cause Number C-3066-95-G

D e La Garza versus Knapp Medical Center.

I

I took a recess'to

allow you f o l k s a chance t o t a l k t o your r e s p e c t i v e c l i e n t s ,

8 8

and b e l i e v e it o r not, I took t h a t recess t o protect m attorneys t h i s t i m e . y

-- so

8

t

I can

I j u s t want t o make s u r e t h a

: d o n t t wind up with c l i e n t s suing a t t o r n e y s down the road

Have y f a l l had a

-- have

Garcia?

you- all had a chance t c

:alk t o your r e s p e c t i v e c l i e n t s r e f e r e n c e a proposed settlement of t h i s case.

MR. GARCIA:

Mr.

Y e s , sir, r e f e r e n c e t h e s e t t l e m e n t

~greementbased on our understanding a s I d i c t a t e d i n t o the .ecord t h a t was heard by b o t h p a r t i e s who a r e p r e s e n t i n the ourtroom, i n c l u d i n g m c l i e n t , D r . J a v i e r D e La Garza, and y ased on t h e s e t t l e m e n t agreement a s we b e l i e v e it t o have ccurred as r e p r e s e n t e d t o t h e c o u r t , w e a r e

-- h e h a s a g r e e

nd authorized m e t o go ahead and proceed t o e f f e c t it, yo=

THE COURT:

M r . Leach?

IfS. LEACH:

2

Your Honor; m c l i e n t h a s a g r e e d to y

settle t h i s matter f o r t h e m i l l i o n d o l l a r s t h a t w a s offered,

3

and t h e y ' r e i n c l e a r u n d e r s t a n d i n g of what M r . G a r c i a s a i d

I

i n t o t h e r e c o r d a w h i l e ago, t h a t h e p l a n s t o make a c l a i m i n r e g a r d t o any o t h e r i s s u e s and t h a t t h a t w i l l b e d e a l t w i t h . And u n d e r s t a n d i n g t h a t , t h e y s t i l l wish t o go a h e a d and s e t t l e t h i s m a t t e r and d e a l w i t h t h o s e o t h e r i s s u e s .

MR. GARCIA:

J u d g e , I t h i n k p a r t of t h e

agreement

-

I ' m n o t s u r e i f it was d i c t a t e d

-

i s t h a t we're

supposed t o g e t t h e m i l l i o n d o l l a r s w i t h i n t e n d a y s from t o d a y , which means September t h e 25th. T E COURT: H Very w e l l .

Is t h e r e any need,

1 gentlemen,

again?

16

t o r e a d t h e s e t t l e l e t agreement i n t o t h e r e c o r d

MR.

sir.

I think that

--

1

MR. LEACH:

MR. GARCIA:

No, y o u r Honor.

T E COURT: H

Everybody i n agreement?

Y e s , y o u r Honor. Y e s , sir.

-

l9

20

I1

MR. LEACH:

MR. GARCIA:

T E COURT: H

T h i s case i s s e t t l e d , g e n t l e m e n .

m e b r i n g t h e j u r y i n and a d v i s e t h e m

M . GARCIA: R

THE COURT:

--

Y e s , sir.

--

and dismiss t h e jury.

25

MR. GARCIA:

A l l r i g h t , sir.

.

44 .

MR. LEACH:

b e f o r e w e do t h a t ?

Can w e g e t f l a p j a c k e t s f i r s t , ~ u d g e ,

THE COURT:

that.

I don't t h i n k t h e r e ' s any n e e d for

I

MR. GARCIA:

W i l l t h e c o u r t make them a y ,a r e that

we have t h e r i g h t t o , i f they want t o l i s t e n t o a n y more lawyers, a t l e a s t v i s i t with them o r t a l k to them?

THE COURT:

11 '1

t a l k t o them h e r e .

l

Then what I

u s u a l l y do, I go back and I v i s i t with them f o r a f e w minutes and I s o r t of g e t them a t e a s e and t h e n I e x p l a i n t q them thad you guys might want t o t a l k t o them. that.

I'll a d v i s e t h e m of

MR. GARCIA:

THE COURT:

Thank you.

And 1'11 do it h e r e .

For the r e c o r d

t h e c o u r t has heard t h e s e t t l e m e n t agreement as read i n t o the record. The c o u r t hereby approves s a i d s e t t l e m e n t , and t h a t * P l e a s e b r i n g t h e jury i n .

Y e s , sir.

t h e end of this case.

THE BAILIFF:

A l l r i s e f o r t h e jury.

(Jury present)

THE COURT:

You may be s e a t e d .

Good morning,

.adies and gentlemen of t h e j u r y .

Boy, j u s t l i k e t h e army

-

turry up and w a i t .

Right?

Well, you h e a r d the e v i d e n c e , l a d i e s and

rentlemen of t h e j u r y , and a s you're aware, t h i s case s t a r t e r

some f i v e , s i x , seven y e a r s ago going through t h e m i l l s . was going t o go t o you today.

~t

W e were going t o charge you,

Remember, w e worked and w e g o t t h e charge ready, and we were g o i n g t o charge you. The a t t o r n e y s would make their c l o s i n g

I

arguments, and t h e n you would have d e l i b e r a t e d . But l i k e e v e r y o t h e r c a s e t h a t h a p p e n s , 'and especially

--

sometimes a t t o r n e y s and t h e p a r t i e s are n o t

-l

a r e b o t h v e r y s u r e o f t h e i r p o s i t i o n s and t h e y r e a l l y a r e n o t

i n a position t o start talking negotiations u n t i l t h e y hear e a c h o t h e r ' s p r o s p e c t i v e sides and see t h e e v i d e n c e . c a s e i s no d i f f e r e n t . This

I t t o o k you f o l k s s i t t i n g there g i v i n g

u s y o u r l i v e s and your t i m e t o b r i n g t h i s c a s e t o s e t t l e m e n t , and t h e case h a s s e t t l e d . Both p a r t i e s s t a r t e d o u t t h e t r i a l w i t h o u f r e a l l f u l l y knowing what t h e o t h e r s i d e ' s e v i d e n c e would be o r m i g h n o t b e , and, c o n s e q u e n t l y , t h e y a r e n o t i n a p o s i t i o n t o come t o any agreement. Once t h e y h e a r d t h e e v i d e n c e a n d t h e

'

evidence came a b o u t and was p r e s e n t e d because you w e r e h e r e t

h e a r t h e evidence

here,

--

I g u a r a n t e e you, i f you had n o t been

I t c a n come

t h e case would n o t h a v e been worked o u t .

3 e f o r e a judge a hundred t i m e s , I g u a r a n t e e you w e ' d s t i l l b c

lere a n o t h e r t e n y e a r s from now, b u t when w e h a v e a j u r y , 1 2

? e o p l e from o u r community, r e a d y , w i l l i n g and a b l e t o h e a r t l zvidence, h e a r t h e c a s e and t h e n r e n d e r what h o p e f u l l y would lave been

-

I know would h a v e b e e n

-a

f a i r and a j u s t and a

1

2

true verdict, then is when people get serious*

-7

I

i

1

I don't want you leaving dere today thinking that

3

4

I

your time has been wasted.

I

It has not,

I

I can assure you this

case would not have been settled had it not been f o r you and all of you being here ,qaking that sacrifice.

1

5

Id '

l i k e to

thank you for that. you're

8

The case has been settled.

This means

now free to go home and go back t o y o u loved ones, go

1 back to y c u r lives.

I

I hope that your service here has been .of

value t o you as to how our system works, and thank God we have juries, Thank God we have you, This nation and this country

8

I

is a nation of laws.

We have to follow the laws.

We can't

go

around every time we have a dispute, whatever it may be, and solve it by the old I shot you and now I get to keep whatever.

15

We don't

settle our disputes that way.

W e try them

I

in court right here, and it takes people like you willing to give us of your lives and your time that make it possible, Our system of justice has a lot of imperfections,

18 19

20

lots of them.

I r m not going to tell you it doesn't,

but with

all of its imperfections, with all of its delays, it's

the

best in the world, and whatever is in second place is so far behind us, itrs not even funny. Occasionally I have jurors

21

22 23 24 25

that complain, Well, they hurry up and keep us waiting, they

I

1 donrt tell us, we can't

hear, we d o n r t know.

Sometimes I tell

those people, I say, Well, go down south and get involved in a little traffic accident down there. You don't have to go too

f a r s o u t h , j u s t a few m i l e s down south.

Go v i o l a t e one of

t h e i r laws up t h e r e , g e t involved i n a d i s p u t e w i t h anybody, and, f o l k s , t h e y don't have j u r y t r i a l s . doesntt exist.

I

The j u ~ yt r i a l

They throw you i n j a i l and you stay i n t h e r e But this i s .

,

u n t i l somebody pays somebody o f f somehow. America, thank God.

I l e a v e you with one thought.

I t f s y o u r money

I

t h a t funds t h e s e c o u r t s . makes t h i s p o s s i b l e .

I t ' s your t a x p a y e r ' s money t h a t

I

So p l e a s e come and v i s i t , g e t y o u r s e l v e s

involved i n your c o u r t system, f i n d o u t who the j u d g e s a r e . You've g o t some very good l o c a l judges s i t t i n g h e r e .

Get

involved i n your communities, g e t involved i n y o u r c o u n t j because you- all a r e t h e community. You re it.

f

F o r having

been h e r e w i t h u s , I ' d l i k e t o thank you very, v e r y much. Now, f o r a l o n g t i m e there I k e p t s a y i n g I sound Like a n o l d r e c o r d i n g machine

- you c a n t t t a l k to

each other,

l o n f t t a l k t o anybody, you know.

W e l l , i n a f e w minutes

r o u f l l be f r e e t o t a l k t o whoever you want t o t a l k t o . :an t a l k t o anybody. ;peak t o you.

5 know t h a t t h e a t t o r n e y s

You

w i l l want t o

Lc

Every t r i a l w e t r y

--

and w e were b l e s s e d .

e t e l l you.

W e were b l e s s e d i n having t h e two l e a d a t t o r n e 3

h a t I know v e r y w e l l , and w e had some v e r y f i n e a s s o c i a t e ttorneys.

W had two sets of a t t o r n e y s who e

are some of the

est I ' v e e v e r seen.

They behaved a s l a d i e s and gentlemen a x

ado m job s o much e a s i e r , it's n o t even funny. y

I

2

But even a s experienced a s a l l of t h e s e l a d i e s

and gentlemen a r e , a s good a s they are*, every t r i a l t h e y t a k e ,

3

every case they t a k e i s a l e a r n i n g experience t o t h e m .

l i k e t o learn. from my j u r i e s .

They'd

4

5

W e l e a r n from each case.

I

I learn*

I p i c k up

I pick, up from t h e lawyers.

And so I know

6

t h a t t h e y ' d l i k e t o t a l k t o you.

They'd l i k e t o f i n d o u t ,

7

8

w e l l , how was I doing, what d i d I do r i g h t , w h a b , d i d I do

wrong, how do you f e e l , would you have awarded t h i s o r n o t o r whatever.

9

It's a l e a r n i n g experience f o r them.

I

10 11 12 13

14

So t h o s e of you t h a t f e e l l i k e you want t o

I

I

d i s c u s s anything with them, feel free t o do so. do s o , b u t thank God w e l i v e i n America.

I u r g e you t c

,

%

I f you d o n ' t

want t c

t a l k t o anybody and you f e e l you d o n ' t want t o t a l k to m e , don't. T e l l them t o go away, and t h e n i f they p e r s i s t and

15 16

17

t h e y keep bothering you, you come back t o o l d u n c l e j u s t i c e u] h e r e , a s m granddaughters c a l l m e , and w e ' l l y t h a t matter. You've g o t r i g h t s . Okay? t a k e care of

18

So, f o l k s , 1/11 a l l o w each s i d e j u s t a v e r y b r i e moment t o thank t h e j u r y on t h e r e c o r d , and t h e n w e ' l l t o d i s m i s s t h e jury.

MR.

-

19

20

procee

Mr.

~ a r c i a r Ms. Lopez? o

Well,

I j u s t want t o t h a n k you on

As t h e judge said,

21

22 23 24 25

GARCIA:

behalf o f D r . De La Garza a t t h i s t i m e .

i

has been a long, long t i m e f o r him t o g e t h e r e , and whatever d e c i s i o n you may have made, it was s t i l l going t o t a k e another

-- probably a

c o u p l e o f years b e f o r e it became final

La

because of t h e a p p e l l a t e process.

d o e s work.

It's a slow System, b u t it

A s t h e judge s a i d , it i s t h e b e s t t h a t a n y c o u n t r y

h a s , b e s t system t h a t ' s ever been devised, and t h e o n l y r e a s o n

I

t h i s t h i n g s e t t l e d a f t e r s i x y e a r s i s because t h e r e were 12 p e o p l e t h a t were w i l l i n g decision.

-- t h a t were going t o make ,

-- whatever

a

'

And you were going t o

you d e c i d e d ,

t h a t ' s what w e a l l had t o l i v e w i t h . So on behalf of D r . D e La Garza, we w a n t t o thank you f o r your r o l e i n b r i n g i n g this m a t t e r t o a c l o s e f o r him and h i s family.

THE COURT:

chance.

MS.

M s . Lopez, 1/11allow everybody a

LOPEZ:

I wanted t o thank you p e r s o n a l l y

because I know I d i d n ' t s a y it i n opening and I w a s n ' t going t o s a y it i n c l o s i n g , b u t t h i s is m f i r s t t r i a l . y

.

And so 1 1 ':

never f o r g e t any of you guys.

I a l s o want t o thank you on behalf of D r .

D e La

Zarza and t e l l you t h a t I ' m very proud t o have r e p r e s e n t e d D r

2e L a Garza and very proud t o have had t h i s e x p e r i e n c e and

;hat you by s e r v i n g on t h i s jury allowed me, a s w e l l a s D r .

L Garza, t o have t h i s experience. a

And, h o p e f u l l y , some of

D

rou w i l l allow u s t o t a l k t o you. .ot t o learn.

I know I c e r t a i n l y h a v e a

And so any criticism, any advice t h a t you guys

So if

:an g i v e m e p e r s o n a l l y I would c e r t a i n l y a p p r e c i a t e .

*

: o d d have maybe a f t e r t h e c o u r t d i s m i s s e s you some t i m e and

1

2

3

some of you would l i k e t o s h a r e your thoughts with me, I would

c e r t a i n l y a p p r e c i a t e it.

THE COURT:

Again, thank you.

Ms. Ramon?

I

4

MS. RAMON:

Y O U d i d n ' t g e t t o h e a r from m e

bery

I,

5

6

'

much a t a l l . argument.

I was expecting t o t a l k t o you i n c l o s i n g , '

My name is S o f i a Ramon.

I ' v e been s i t t i n g h e r e So I

7

8

w i t h Rex, who is used t o doing t h i s t h i n g on h i s own.

wanted t o come and s i t with him and h e l p him o u t and r e p r e s e n t Knapp, and on behalf o f everybody, w e want t o t h a n k you for

I

9

10 11 12 13 14 15 16 17 la

rn

your service.

And w e a l l a p p r e c i a t e

--

i t 8 sn o t m y f i r s t

t r i a l , b u t we a l l a p p r e c i a t e t h e o p p o r t u n i t y t o t a l k t o you and g e t your f e e l i n g s about t h i n g s you l i k e , d i d n ' t what gone. like,

-- you

know, where you would have gone o r w o u l d n f t have

But thank you a g a i n f o r your s e r v i c e s .

THE COURT:

M r . Leach?

MR. LEACH:

Ladies and gentlemen, I know it8s

been a long two weeks, a l o t l o n g e r t h a n I t h i n k anybody i n t h i s room ever thought it w a s going t o be, b u t i f nothing

else, I c e r t a i n l y understand t h a t you've h a d t o h a v e p a t i e n c e

19 20 21 22 23 24

w i t h u s and I a p p r e c i a t e t h a t very much.

As everybody else

h a s s a i d , I know it s e e m s l i k e I j u s t wasted two weeks of m y

life.

You r e a l l y d i d n ' t .

T h i s case would n o t have s e t t l e d

So I a p p r e c i a t e it very much.

had it n o t been f o r y f a l l .

Like t h e judge s a i d , I've been a t this a while, b u t every t i m e I t r y a c a s e I l e a r n something new. And so I

25

would l i k e t o have t h e opportunity, i f you wish, to kind of

l e t you grade m paper a l i t t l e b i t and see what I d i d r i g h t y and wrong because i t ' s important t o m c l i e n t s and t h e y y a p p r e c i a t e very much t h e f a c t t h a t you've been h e r e , too.

I

~ n d

so I hope you won't be too jaundiced by t h i s and n o t want to come back, t o t h e courthause again, but you r e a l l y h a v e 'been a big h e l p and w e a p p r e c i a t e it. TEE CO-VRT: Thank you, M r . Leach. sure that

Ladies and gentlemen of t h e j u r y , I'm your paychecks w i l l be i n t h e mail.1 heard t h a t ?

H w many t i m e s have w e o

You'll b e free t o l e a v e i n j u s t a few moments. Ross, if anybody needs excuses o r c e r t i f i c a t e s o:

whatever, p l e a s e t a k e c a r e of t h e s e m a t t e r s .

THE BAILIFF:

THE COURT:

Y e s , sir.

Please t a k e t h e jury back to t h e j u r

room.

THE BAILIFF:

THE COURT:

Y e s , sir.

You're now f r e e t o l e a v e .

We'll

be

d i t h you i n a few moments.

THE BAILIFF:

A l l rise f o r t h e j u r y .

THE COURT:

Thank you v e r y much and G o d b l e s s a1

lf you.

(Jury not present)

T E COURT: H Ladies and gentlemen, a n y t h i n g t o pt

In the r e c o r d o u t s i d e t h e presence of t h e j u r y ?

MR. LEACH:

MR. GARCIA:

N O , your Honor.'

N O , your Honor.

THE COURT:

4 5

6

These proceedings a r e c o n c l u d e d , I

i. i

gentlemen.

MR. LEACH:

MR. GARCIA:

,

Thank you, yo=

Honor.

Thank you, your HonorI'd l i k e t o thank a l l t h e a t t o r n e y s

A l l of

7

8

THE COURT:

I

involved i n t h i s c a s e f o r behaving t h e way you d i d you a r e a c r e d i t t o t h e l e g a l p r o f e s s i o n MR. GARCIA:

9

10

Thank you, sir. Thank you, your Honor. Thank you- all v e m much.

11

12

MR. LEACH:

THE COURT:

13

(Proceedings concluded)

THE STATE OF TEXAS COUNTY OF HIDALGO COUNTY

I

1

)

I, CINDY KOCHER, official Court Reporter in and for the 370th District Court of Hidalgo County, State of Texas, do hereby certify that the above and foregoing contains a true and correct transcription of all portions of evidence and other proceedings requested in writing by counsel for the parties to be included in this volume of the Reporter's Record, in the above-styled and numbered cause, all of which occurred in open court or in chambers and were reported by me.

I further certify that this Reporter's

Record of the

proceedings truly and correctly reflects the exhibits, if any, admitted by the respective parties. I further certify that the total cost for the preparation of this Reporter's and was paid/will be paid by WITNESS MY OFFICIAL HAND this the

F

Record is $

57-

2 1

day of

CINDY KOCHER, ~ e x d s CSR 5387 Expiration Date: 12-31-01 Official Court Reporter, Jail Court Hidalgo County, Texas 100 North Closner Edinburg, Texas 78539

(956) 318- 2654

('A- K Z ~J,

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