Nath v. Baylor Coll. of Med. & Tex. Children's Hosp.

RAHUL K. NATH, M.D. AND USHA NATH, Appellants v. BAYLOR COLLEGE OF MEDICINE AND TEXAS CHILDREN'S HOSPITAL, Appellees

No. 01-20-00401-CV

Court of Appeals of Texas, First District

April 7, 2022

On Appeal from the 269th District Court Harris County, Texas Trial Court Case No. 2019-85080

Panel consists of Justices Kelly, Landau, and Hightower.

MEMORANDUM OPINION

SARAH BETH LANDAU JUSTICE

Rahul K. Nath, M.D., and Usha Nath sued Texas Children's Hospital and Baylor College of Medicine. The Naths alleged that the two hospitals had interfered with their sale of real property, intending that property to satisfy a future money judgment the hospitals anticipated receiving against Rahul Nath in a separate suit.

The hospitals filed dismissal motions under the Texas Citizens Participation Act and Rule 91a. The trial court granted both motions. The trial court later entered a final judgment awarding the hospitals hundreds of thousands of dollars in attorney's fees.

In six issues, ^[1] the Naths contend that (1) one of the two orders granting dismissal was the final judgment, making the other dismissal order and the later "final judgment” nullities, (2) dismissal under Rule 91a was in error, (3) the TCPA does not apply to all their claims and they met their TCPA burden, regardless, (4) the trial court abused its discretion in its evidentiary rulings on the hospitals' attorney-fee claims, (5) the trial court erred in denying the Naths their right to a jury trial on the attorney-fee claims, and (6) the trial judge erred by ruling on a motion to recuse that the Naths say they never presented.

Because the trial court erred in evaluating a counter-affidavit by examining excerpted phrases and sentences in isolation without the context that explained the expert's opinions we remand for further consideration of the affidavit, which then requires a new determination of whether summary judgment on attorney's fees was appropriate.

Background

To understand the claims, it is necessary to briefly recount the parties' past litigation.

The sanctions order that led to Nath I and Nath II

In 2006, Rahul Nath sued Texas Children's Hospital and Baylor College of Medicine. See Nath v. Tex. Child. 's Hosp., 446 S.W.3d 355 (Tex. 2014) (Nath I). The trial court granted summary judgment to the hospitals and sanctioned Nath personally for litigation abuse, obliging him to pay the hospitals' attorney's fees of $1.4 million. Id. at 361. The hospitals filed abstracts of judgment. Nath appealed the judgment.

The Texas Supreme Court held that the trial court had not abused its discretion in sanctioning Nath but that remand was necessary for the trial court to determine whether the hospitals bore some responsibility for the large amount of attorney's fees they incurred, such that Nath should not be responsible for the entire amount. Id. at 371-72 ("A defending party cannot arbitrarily shift the entirety of its costs on its adversary simply because it ultimately prevails on a motion for sanctions. Because the trial court did not discernibly examine [the degree to which TCH and BCM's own behavior caused the expenses for which recovery is sought], we remand for it to do so.").

On remand, the trial court sanctioned Nath in the same amount. The hospitals filed abstracts of judgment on the second judgment. Nath appealed again.

In the second appeal, the hospitals argued that they did not have to establish the reasonableness of the attorney's fees because the fees were awarded as a sanction instead of a traditional fee-shifting. Nath v. Tex. Child.'s Hosp., 576 S.W.3d 707, 710 (Tex. 2019) (per curiam) (Nath II). The Texas Supreme Court rejected their argument and reversed the second sanction order, holding that the affidavits submitted by the hospitals in support of their attorney's fee awards were conclusory and did not show the reasonableness of either the hourly rate or the hours worked. Id. The Court remanded a second time for the trial court to determine a sanction amount that complied with Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019), which clarified the evidentiary standards for shifting attorney's fees. Id.

Two months after Nath II, the hospitals filed notices of withdrawal of their abstracts of judgment, but both notices included language warning that the hospitals anticipated filing replacement abstracts soon. Rahul Nath contended that the releases' language was clouding title to his real property, and he demanded that the phrasing be replaced with unequivocal language of release. Nath noted that neither hospital had an enforceable judgment against him to support the filing of any abstract of judgment.

According to their pleadings, the Naths had a buyer ready to purchase a non-homestead piece of real property in the Houston area. They assert that the buyer backed out because of the cloud on their title caused by the equivocal language in the abstract withdrawal.

The hospitals contend that the Naths have mischaracterized the status of the sale transaction and linked no damages to their abstract filings.

This litigation

After the potential buyer backed out, the Naths sued the hospitals for interfering with the sale of their property. Their November 2019 petition asserted claims for tortious interference with a contract and conspiracy. Soon after, the hospitals filed a joint Rule 91a motion to dismiss all claims as having no basis in law or fact and being barred by the affirmative defenses of judicial proceedings privilege and justification. The joint Rule 91a motion sought attorney's fees. On the same day, the hospitals jointly moved to dismiss pursuant to the Texas Citizens Participation Act, again seeking attorney's fees.

The trial court entered two orders on May 20, 2020, one minute apart. One order granted the joint Rule 91a motion to dismiss. That order contained the following language: "The Court orders that all of the claims alleged by Plaintiffs [ ] are hereby DISMISSED WITH PREJUDICE." As for the request for attorney's fees, the order stated: "The Court finds that the Defendants['] request for costs and reasonable attorneys' fees under [Rule] 91a.7 should be GRANTED. The Court will consider evidence as to the reasonableness of such fees and costs."

The other order granted the hospitals' joint TCPA motion to dismiss. The order contained the following language: "The Court finds that the Motion should be GRANTED in all things. The court therefore orders that all of the claims alleged by [the Naths] are hereby DISMISSED WITH PREJUDICE." As for the request for attorney's fees, the order stated: "The Court further finds that Defendants [ ] are entitled to the costs and reasonable attorneys' fees they incurred in defending against this legal action. The Court will consider evidence as to the reasonableness of such fees and costs."

The Naths filed a notice of appeal. The hospitals immediately filed a motion in this Court to dismiss the Naths' appeal for lack of jurisdiction, arguing that the two dismissal orders were interlocutory. They also filed a motion in the trial court, moving for summary judgment on their yet-unresolved attorney-fee claims.

The Naths' argued that one of the two orders entered on May 20 was a final, appealable judgment, the trial court lost plenary power 30 days after that judgment, and the hospitals' joint motion for summary judgment on attorney's fees filed on June 30 was presented too late to permit an attorney-fee award. The Naths objected to the hospitals' summary-judgment motion and filed two counter affidavits: one from former Justice of the Supreme Court of Texas, Craig Enoch; the other from local attorney, A.G. Crouch. The Naths contended that, at a minimum, these two affidavits raised issues of fact to prevent an award of attorney's fees through summary judgment, if plenary power existed to award attorney's fees.

The trial court rejected the Naths' argument that it had lost plenary power, overruled their objections to the hospitals' evidence, sustained the hospitals' objections to the Naths' counter-affidavits, and entered a final judgment awarding more than $1.2 million in attorney's fees to the hospitals.^[2]

A short time later, this Court denied the hospitals' motion to dismiss the Naths' appeal for lack of jurisdiction.

We now consider the merits of the appeal.

Identifying the Final Judgment

The Naths' first issue hinges on a determination of which trial court ruling was the final judgment. We start there.

In Lehmann v. Har-Con Corp., the Texas Supreme Court held that "a judgment issued without a conventional trial is final for purposes of appeal if and only if either [1] it actually disposes of all claims and parties then before the court, regardless of its language, or [2] it states with unmistakable clarity that it is a final judgment as to all claims and all parties." 39 S.W.3d 191, 192-93 (Tex. 2001). As for the second option, the Court clarified that "the language of an order or judgment can make it final, even though it should have been interlocutory, if that language expressly disposes of all claims and all parties." Id. at 200; Farm Bureau Cnty. Mut. Ins. Co. v. Rogers, 455 S.W.3d 161, 163 (Tex. 2015).

Neither the Rule 91a dismissal order nor the TCPA dismissal order disposed of all parties and all claims: the hospitals' attorney-fee claims remained pending. See McNally v Guevara, 52 S.W.3d 195, 196 (Tex. 2001) (per curiam) (unresolved attorney-fee claim prevented summary-judgment order from being final judgment). Similarly, neither order contained language reflecting it disposed of all parties and claims. Both orders contemplated future fee awards and left unresolved the amount of fees to be awarded. Thus, neither order...