Jones v. Foundation Surgery Affiliates of Brazoria County

403 S.W.3d 306, 2012 WL 6754833, 2012 Tex. App. LEXIS 10793
CourtCourt of Appeals of Texas
DecidedDecember 28, 2012
DocketNo. 01-10-00933-CV
StatusPublished
Cited by5 cases

This text of 403 S.W.3d 306 (Jones v. Foundation Surgery Affiliates of Brazoria County) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jones v. Foundation Surgery Affiliates of Brazoria County, 403 S.W.3d 306, 2012 WL 6754833, 2012 Tex. App. LEXIS 10793 (Tex. Ct. App. 2012).

Opinion

OPINION

EVELYN V. KEYES, Justice.

Appellants, Amanda and David Jones (collectively, the “Joneses”), appeal the no-evidence and traditional summary judgments granted by the trial court in favor of appellees, Foundation Surgery Affiliates of Brazoria County L.L.P. d/b/a Brazoria County Surgery Center (the “Partnership”) and Brazoria County Surgery Center (the “Surgery Center”) and Henry [308]*308Martinez, M.D., P.A.1 The Joneses’ suit alleges that the Partnership is vicariously liable for the medical negligence of Dr. Martinez, a partner in the Partnership, in performing gall bladder surgery on Mrs. Jones at the Surgery Center in August 2007.

In two issues, the Joneses argue that the trial court erred in granting the Partnership’s and the Surgery Center’s separate motions for summary judgment because their own response and attached exhibits presented more than a scintilla of evidence that (1) Dr. Martinez was acting as a partner in the ordinary course of the Partnership’s business when Mrs. Jones was injured and (2) Dr. Martinez’s actions were authorized by the Partnership. They contend that “[appellees] are vicariously liable for the acts of Dr. Martinez as Dr. Martinez was a partner at the time of his injurious acts and partnerships are liable for the actionable conduct of [their] partners.” We reverse the summary judgments and remand the case.2

Background

This case arises out of gallbladder surgery performed on Amanda Jones by Dr. Martinez at the Surgery Center on August 2, 2007. Dr. Martinez had become a partner in the Partnership on November 20, 2006. The Joneses allege “Dr. Martinez committed multiple egregious surgical errors causing catastrophic injury to Amanda Jones.”

The Partnership was formed as Foundation Surgery Affiliates of Brazoria County, L.L.P. in 2003 and registered with the Texas Secretary of State by Robert M. Byers as a limited liability partnership pursuant to section 3.08(b) of the Texas Revised Partnership Act (“TRPA”). The Partnership stated its business as “Ambulatory Surgery Center.” In January 2005, the Partnership filed an assumed name certificate with the Texas Secretary of State listing “Brazoria County Surgery Center” as “[t]he assumed name under which the business or professional service is ... conducted.” The Partnership characterized itself as a “Registered Limited Liability Partnership.” In November 2006, Byers, as the president of “Foundation Surgery Affiliates, LP, manager of Foundation Surgery Affiliates of Brazoria County, LLP,” filed a “Renewal of Registration of a Limited Liability Partnership” with the Texas Secretary of State on behalf of the Partnership. That filing includes an attached “Statement of Partnership Business” listing the Partnership’s business as “outpatient surgery.”

After Mrs. Jones’s surgery in August 2007, the Partnership and its general partner were both converted to limited liability companies. Specifically, in September 2007, Byers, as the president of Foundation Healthcare Affiliates, LLC, registered Foundation Surgery Holdings, L.L.C., a Delaware entity, as a foreign limited liability company whose business was the “management of outpatient surgery centers and surgical hospitals” to manage the Surgery Center. In November, 2007, Byers, as president of Foundation Surgery Holdings, LLC, “a managing partner of Foundation Surgery Affiliates of Brazoria County, LLP,” filed a new “Statement of Partnership Business,” again listing the Partnership’s business as “outpatient surgery.” In October 2008, the Partnership, “Foundation Surgery Af[309]*309filiates of Brazoria County, a Texas general partnership,” filed a “Certificate of Conversion of a General Partnership Converting to a Limited Liability Company” with the Texas Secretary of State pursuant to Texas Business Organizations Code (“TBOC”) section 10.101 and Texas Revised Partnership Act (“TRPA”) article 6132b. It listed its general partner as Foundation Surgery Holdings, L.L.C. That same day, the converting entity, “Foundation Surgery Affiliate[s] of Brazo-ria County, LLP, a Texas limited liability partnership, organized on November 18, 2003,” filed a “Certificate of Formation Limited Liability Company” with the Texas Secretary of State, converting to a limited liability company named Foundation Surgery Affiliates of Brazoria County, L.L.C. The filings by the Partnership "with the Texas Secretary of State included in the summary judgment record recite that the purpose of the Partnership was to provide outpatient surgery, and they show that the Partnership did business as the Surgery Center, a registered assumed name of the Partnership.

According to the Partnership’s “Subscription Agreement,” included in the summary judgment record, the Surgery Center is “a multi-specialty outpatient surgery center or hospital located in Brazoria County, Texas” that is owned and operated by the Partnership. At the time of the surgery, Dr. Martinez was a partner in the Partnership by virtue of his purchase of Class A Units of Partnership Interests in November 2006 under the Subscription Agreement.

Among the “Investment Risk Factors” associated with Dr. Martinez’s investment in the Partnership, listed in Appendix “C” to the Subscription Agreement, were a number of risks associated with the heavily regulated health care industry, including risks associated with “the establishment, marketing and operation of hospitals and surgery centers ... subject to various federal and state regulations.” The “Investment Risk Factors” appendix pointed out that, in order to satisfy the “safe harbor” provisions of certain federal regulatory requirements that guarded against illegal remuneration, the “multi-specialty portion of the safe harbor for ambulatory surgery centers in which the physicians are engaged in different specialties,” it was required that “all of the investors are (i) physicians in different specialties or hospitalfs] ....” (Emphasis in original.) The “Investment Risk Factors” further provided:

The Partners have limited rights to take part in the management or control of the Partnership’s business or affairs. In addition, the Partnership has limited control over the actions of physicians who may treat their patients at the Partnership.

Dr. Martinez acknowledged and accepted these risks in executing the Subscription Agreement.

The summary judgment evidence also included the deposition testimony of Bradley Cardenas, the Surgery Center’s vice president of operations. Cardenas testified that the business of the Partnership was to provide a facility — the Surgery Center — where its partner-surgeons could perform their cases and that when Dr. Martinez operated on Mrs. Jones at the Surgery Center in 2007, he was one of the Partnership’s ten partner-surgeons. Cardenas also testified that the Surgery Center was formed by the Partnership as a stand-alone surgery center that provided “nursing staff, technical staff, scrub techs, supplies, equipment, [and] a business staff’ to its partner-surgeons; the Partnership billed the patients and their insurance carriers for such services performed at the Surgery Center; any resulting profits [310]*310were periodically distributed to all of the partners based upon their pro rata equity ownership; Dr. Martinez and the other partner-surgeons were obliged via the Partnership to perform one-third of their outpatient cases and to derive one-third of their income at the Surgery Center; and them failure to do so would warrant revocation of their Partnership interest.

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403 S.W.3d 306, 2012 WL 6754833, 2012 Tex. App. LEXIS 10793, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jones-v-foundation-surgery-affiliates-of-brazoria-county-texapp-2012.