Locked Doors

In Durham v. Children’s Medical Center of Dallas, the Dallas Court of Appeals decided an issue of first impression: If a 12-year-old receives medical treatment and dies more than two years after that treatment because of the negligence of the health care providers, does the Texas Constitution’s Open Courts Clause prevent the running of limitations for survival and wrongful death claims? The Dallas Court of Appeals concluded that the answer is no because the Open Courts Clause does not apply to statutorily created claims.

The facts are plainly tragic. A 12-year-old girl was injured in a car accident in Hawaii. During treatment, the doctors also diagnosed a dilation of the ascending aorta, which apparently was not related to the accident itself. The doctors recommended a follow-up with a cardiologist. The girl was transferred to Children’s Medical Center of Dallas for a short time before then being transferred to Scottish Rite, where she was treated for her injuries resulting from the accident. Unfortunately, there was not a follow-up on the information about her enlarged aorta. A little more than two years later, the girl died because her aorta ruptured. She was only 15 years old. The girl’s mother and the administrator of her estate brought wrongful death and survival claims. Summary judgment was granted based on the 2-year statute of limitations.

The Dallas Court of Appeals affirmed. It held that Civil Practice and Remedies Code § 74.251 applied, which requires claims to be filed within 2 years of the treatment that is the subject of the claim unless the child is younger than 12. Because the girl was 12 at the time of treatment, the exception did not apply and limitations began to run on the date of treatment for statutory causes of action, including wrongful death and survival claims. The Court then distinguished the Texas Supreme Court’s decision in Weiner v. Wasson, which held that limitations are unconstitutional as applied to minors under the Open Courts Clause of the Texas Constitution because they would cut off the minor’s cause of action before he reaches majority. The Dallas Court of Appeals held that the Open Courts Clause and Weiner v. Wasson could not save the survival and wrongful death claims because the Open Courts Clause does not apply to statutory claims, which include survival and wrongful death claims. As a result, the survival and wrongful death claims arising from the girl’s death were already barred by limitations months before her death.

Durham v. Children’s Medical Center of Dallas

Last Friday, blog publisher David Coale spoke about recent federal cases on sanctions and professional responsibility issues; for some ethics CLE self-study, here is the handout that he used.

Interest Rates

“How many legs does a dog have if you call his tail a leg? Four. Saying that a tail is a leg doesn’t make it a leg.” — Abraham Lincoln.  The same can be said for usurious loans.

In Koch v. Boxicon, LLC, the Dallas Court of Appeals considered the appeal of Koch, a chiropractor, who was sued by Boxicon for breaching an agreement for the “purchase of future business income.”  Boxicon had financed Koch’s business by paying Koch $96,000 over six months. In exchange, Koch was required to make “pay back payments” to Boxicon totaling $192,000 over two years. The defendant claimed agreement was a usurious loan while the defendant claimed the agreement wasn’t a loan at all because the recitals expressly stated the agreement “is NOT a loan.”  The trial court allowed the jury to decide and entered a judgment in favor of the plaintiff. The Dallas Court of Appeals reversed and held that the agreement was usurious as a matter of law. Noting that courts look to the substance rather than the form of a transaction, the court held that agreement met the statutory definition of a loan and provided for an absolute obligation to repay the principal. Though the agreement stated it was a “purchase of a portion of the future cash stream generated by the business” and “is NOT a loan,” the agreement went on to state that “This is NOT an agreement to buy a percentage of the business, but for a fixed return upon capital invested by Buyer as per this agreement.” So, what is a loan agreement if you agree it isn’t a loan?  A loan.  Saying that it isn’t a loan doesn’t make it not a loan (regardless of your use of all caps).

Koch v. Boxicon