H.E. Butt Grocery Company, Inc., (APPELLANT/CROSS-APPELLEE) v. RenCare, Ltd., (APPELLEE/CROSS-APPELLANT)--Appeal from 38th Judicial District Court of Medina County

MEMORANDUM OPINION
No. 04-03-00190-CV
H.E. BUTT GROCERY COMPANY, INC.,
Appellant/Cross-Appellee
v.
RENCARE, LTD.,
Appellee/Cross-Appellant
From the 38th Judicial District Court, Medina County, Texas
Trial Court No. 01-05-015527-CV
Honorable Mickey R. Pennington, Judge Presiding

Opinion by: Catherine Stone, Justice

Sitting: Catherine Stone, Justice

Sarah B. Duncan, Justice

Phylis J. Speedlin, Justice

Delivered and Filed: February 4, 2004

REVERSED AND RENDERED

H.E. Butt Grocery Company, Inc. ("HEB") appeals a final judgment rendered in favor of RenCare, Ltd. based on RenCare's quantum meruit claim. HEB asserts three reasons it contends that the trial court erred in entering judgment in favor of RenCare. We sustain HEB's first issue on the basis that the evidence conclusively established that HEB had paid more than the reasonable value of RenCare's services as determined by the jury; therefore, we do not address HEB's alternative issues. See Tex. R. App. P. 47.1 (opinions should only address issues necessary to final disposition of appeal). By cross-appeal, RenCare also challenges the judgment, contending: (1) HEB's highly inflammatory closing argument prejudiced RenCare; (2) the jury's damage award failed to award RenCare the reasonable value of its services; (3) the trial court erred in admitting into evidence rates paid by RenCare to other insurance companies; and (4) other evidentiary errors caused the entry of an unfavorable judgment. We reverse the trial court's judgment and render judgment that RenCare recover no damages from HEB because the damages awarded by the jury did not exceed the credit to which HEB was entitled for payments previously made by HEB to RenCare.

Background

HEB was a self-insurer of a health benefit plan which provided health benefits to employees and their dependents. HEB contracted with Blue Cross/Blue Shield ("Blue Cross") to administer the plan. A dependent of an HEB employee sought dialysis services from RenCare. RenCare alleged that it contacted Blue Cross to verify benefits and was told that the treatments had no insurance limitations. After RenCare began submitting its claims, and after it was clarified that the patient did not have Medicare coverage, Blue Cross began to pay RenCare based on the allowed amount for the dialysis service. The allowed amount was a comprehensive per diem amount of $400. The total amount paid by HEB to RenCare for services it rendered for the patient in question was $194,704. Eventually, RenCare sued HEB for fraud, negligent misrepresentation, and quantum meruit. A jury found that HEB was not liable for fraud or negligent misrepresentation, but that RenCare was entitled to recover $184,859.00 as the reasonable value of its compensable services on its quantum meruit claim. Both parties appeal the judgment entered by the trial court based on the jury's verdict.

Quantum Meruit

In a suit on quantum meruit, the plaintiff is entitled to recover the reasonable value of the services performed. Colbert v. Dallas Joint Stock Land Bank, 150 S.W.2d 771, 776 (Tex. 1941);

Rocha v. Ahmad, 676 S.W.2d 149, 156 (Tex. App.--San Antonio 1984, writ dism'd). The amount determined by the jury to be the reasonable value of the services performed, however, must be offset by the amount previously paid to the plaintiff for such services. Davidson v. Clearman, 391 S.W.2d 48, 49, 52 (Tex. 1965) (rendering judgment for amount determined by the jury to be the reasonable value plaintiff was allowed to recover ($27,150.00) less the $4,000 previously paid by the defendant to the plaintiff); Thomason v. Freberg, 588 S.W.2d 821, 830 (Tex. Civ. App.--Corpus Christi 1979, no writ) (noting any reasonable offset must be deducted from the amount of damages awarded as the reasonable value of the services).

During the charge conference, HEB sought to expressly instruct the jury that they should limit the damage award to the reasonable value of RenCare's services in excess of the amount HEB previously paid RenCare. HEB's counsel stated that his objection to the question was, "that it fails to limit the jury's consideration to the reasonable value of the services in excess of the amount that RenCare has already been paid." RenCare objected to this request, and the trial court sustained the objection. The question presented to the jury was, "What is the reasonable value of such compensable services at the time and place they were performed?" Accordingly, the jury was asked the reasonable value of the services, not the reasonable value of the services in excess of the amount previously paid. Based on the jury's finding, HEB was entitled to an offset of the amount it previously paid, which amount totaled $194,704. Since the evidence conclusively established that HEB paid an amount in excess of the amount of damages awarded by the jury, the trial court erred in entering judgment in favor of RenCare.

Closing Argument

In its first cross-point, RenCare contends that "HEB's counsel delivered an outrageous jury argument, given for the sole purpose of inciting prejudice against RenCare." RenCare takes issue both with the statements made by counsel and with counsel having spoken "in a loud, harsh voice, marching back and forth in front of the jury box."

Specifically, RenCare contends that HEB's counsel used "vile epithets" because counsel: (1) pointed at RenCare's representative, Bob Ehl, and questioned the location of phone records that would prove RenCare's claim that it had called to verify benefits; (2) referred to letters written by Ehl as hateful, nasty, and cruel; (3) referred to Ehl as a jailhouse lawyer, which RenCare contends implied to the jury that Ehl should be in jail; and (4) used profanity by making references to "God's name" and "God Almighty." Rencare further contends that HEB's counsel "accused Mr. Ehl of filing unfounded lawsuits to extort settlements" by referring to the other lawsuits RenCare had filed against other insurance companies. RenCare also objects to HEB's counsel referring to meetings between a RenCare employee, Ruth Frazier, and RenCare's counsel before Frazier testified. RenCare contends that these references "accused RenCare's attorney of manufacturing evidence through Ruth Frazier." RenCare asserts that HEB's counsel "accused Ms. Frazier of lying under oath" in the course of questioning the differences between Frazier's deposition and her trial testimony. RenCare further asserts that HEB's counsel "accused RenCare's counsel of 'tricking'" an HEB employee during deposition. RenCare contends that this reference to "trickery" "was intended to denigrate counsel's character as an attorney." Finally, RenCare takes issue with HEB's counsel referring to RenCare's fraud claim as a criminal charge and arguing that no other claims had been filed against HEB.

HEB initially responds that RenCare failed to preserve error. Generally, in order to obtain reversal on the basis of improper jury argument, appellants must prove (1) that an error was made in argument; (2) that the argument was not invited or provoked; (3) that the error was preserved by the proper objection, motion to instruct or motion for mistrial; and (4) that the argument was not curable by an instruction, prompt withdrawal, or reprimand." Standard Fire Ins. Co. v. Reese, 584 S.W.2d 835, 839 (Tex.1979); Macias v. Ramos, 917 S.W.2d 371, 375 (Tex. App.--San Antonio 1996, no writ). In this case, RenCare objected to the reference to the fraud allegation as a criminal charge and to HEB's counsel "abusive style of argument and turning and speaking directly to Mr. Ehl"; however, the trial court sustained the objections and RenCare failed to ask that the jury be instructed to disregard or move for a mistrial. The trial court's sustaining of the objections indicated to the jury that the fraud claim was not a criminal charge. RenCare fails to explain how the reference to the fraud claim as a criminal charge in closing argument was the basis for the jury's verdict. The only other portion of the jury argument to which an objection was made and about which RenCare complains on appeal was HEB's counsel stating that no other lawsuits were pending against HEB. In response to the objection, HEB's counsel stated, "I think that [HEB's employee] said that there were no other claims, but you go by what she said. I guarantee you that she said that there were no lawsuits." Accordingly, HEB's counsel was summarizing for the jury what he believed the evidence to be, but he also told the jury to "go by what [the employee actually] said." HEB's counsel appears to have been referring to the testimony in the record regarding whether HEB had been sued by any another provider with regard to payments made under its health benefit plan.

With regard to RenCare's remaining complaints about closing argument, RenCare failed to make any objections. In its reply brief, RenCare asserts that no objection was required because the closing argument was "overwhelmingly prejudicial." Accordingly, RenCare contends that the jury argument was incurable.

An objection is not required in order to preserve error if the error is deemed to be incurable. Otis Elevator Co. v. Wood, 436 S.W.2d 324, 333 (Tex. 1968); Macias, 917 S.W.2d at 375. However, there are only rare instances of incurable harm arising from improper jury argument. Reese, 584 S.W.2d at 839; Macias, 917 S.W.2d at 375. The test for incurable error in jury argument is whether the argument, when viewed in light of the entire record, was so inflammatory as to strike at the heart of the adversarial process or appeal to fundamental prejudices. Macias, 917 S.W.2d at 375. In such a case, an instruction to the jury to disregard the argument would not eliminate the probability that an improper verdict resulted from the error. Id.

Having reviewed the record, we conclude that the jury argument in the present case does not rise to the level of incurable error. Trial counsel is given great latitude in closing argument to discuss the facts and the issues. Sanchez v. Espinoza, 60 S.W.3d 392, 395 (Tex. App.--Amarillo 2001, pet. denied). Leeway given to trial counsel includes the opportunity to encourage the jury to weigh, evaluate, and test the evidence before it. Id. Referring to RenCare's letters as hateful, nasty, and cruel does not rise to the level of a "vile epithet." In addition, we do not believe that the jury would infer from counsel's reference to Ehl playing "jailhouse lawyer" that Ehl belonged in jail. Finally, we do not believe that counsel was referring the Ehl as being a "vampire" when counsel stated, "if there is any question about fraud, let me just tell you what puts the final stake in the heart of the vampire here." Most of the argument by HEB's counsel about which RenCare complains was meant to attack the credibility of Ehl and Frazier, and the argument was not so inflammatory as to strike at the heart of the adversarial process or appeal to fundamental prejudices. RenCare's first cross-point is overruled.

Damages

In its second cross-point, RenCare contends that the jury's failure to award a greater amount of damages resulted in RenCare being paid zero dollars for all medications, supplies, and special consultations. Because RenCare is requesting a new trial, the contention is a challenge to the factual sufficiency of the evidence on an element for which RenCare had the burden of proof.

When a party attacks the factual sufficiency of an adverse finding on an issue on which the party has the burden of proof, the party must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001). The court of appeals must consider and weigh all of the evidence, and can set aside a verdict only if the evidence is so weak or if the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Id.

In this case, Ehl testified regarding the manner in which he set prices for each of the revenue codes on RenCare's bill. Ehl testified that he relied on the usual charges listed on two websites (American Medical Association and Medispan) and on information he personally obtained as a member of the National Renal Administrators Association. During cross-examination, Ehl was questioned regarding certain line items appearing on the bill. For example, Ehl testified that RenCare charged $150 for fifty pairs of gloves that cost RenCare $25. Ehl was asked whether the formula he developed to determine RenCare's usual charge was "such though that a box of gloves that cost twenty-five dollars, when you apply your formula to it, then it's okay to charge a hundred and fifty dollars." Ehl responded, "Yes, sir." With regard to the nutritional counseling, RenCare's bill reflected a charge of $185. Ehl stated that the charge was per hour and that the nutritional counselor could perform six or seven consults each day. HEB's attorney then multiplied the hourly rate by the number of consults per day. He then multiplied that number by the number of days per week and by fifty weeks per year. The product of the multiplication was $323,750. Ehl testified that the nutritional counselor was paid between fifty and sixty thousand a year, plus benefits. Ehl also testified that the typical treatment counseling for which RenCare charges $190 lasts between thirty minutes to an hour and the medical consultation for which RenCare charges $175 would take from twenty minutes to an hour. In response to this line of questioning, Ehl stated that the charges for the consultations "[didn't] work that way."

In addition to RenCare's actual bills and Ehl's testimony, evidence was presented that many insurance companies charge a per diem rate for dialysis services that covers all services, supplies, and medications used during the dialysis. Ehl admitted that RenCare had previously contracted with Blue Cross to receive a $400 per diem for its services. Ehl testified that RenCare contracted with one insurance company to receive a $250 per diem for its services. Evidence also was presented that HEB relied on Blue Cross's experience in setting rates for medical services, and that Blue Cross typically paid a per diem of $400 for dialysis treatment.

The jury's award of $184,859 for the "reasonable value of [RenCare's] compensable services at the time and place they were performed" was within the range of the evidence presented at trial. The jury weighed the credibility of Ehl's testimony in determining whether the charges listed in RenCare's invoices were reasonable. The jury evaluated whether a per diem charge was more reasonable than an itemized charge for each service, supply, and medication. The jury may have awarded damages based on a per diem or by adding the line items from RenCare's bill that the jury believed to be reasonable charges. We cannot speculate as to the manner in which the jury reached its award. Peterson v. Reyna, 908 S.W.2d 472, 476 (Tex. App.--San Antonio 1995), modified on other grounds, 920 S.W.2d 288 (Tex. 1996). The jury's damage award is not so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. RenCare's second cross-point is overruled.

Evidentiary Rulings

In its final two cross-points, RenCare contends that the trial court made numerous erroneous evidentiary rulings. RenCare contends that the trial court erred in allowing the following irrelevant evidence to be introduced: (1) the contract between RenCare and United HealthCare and the payment structure used in other plans; (2) other lawsuits RenCare filed against other insurers; (3) Ehl's own dialysis treatment and payment problems; (4) other providers' acceptance of Blue Cross's per diem rate; (5) the absence of other suits against HEB by service providers; and (6) the ownership structure of RenCare. Finally, RenCare contends that the trial court erred in allowing an HEB employee to testify that HEB had been fair and honorable in HEB's dealings with RenCare because the testimony was an inadmissible personal opinion.

Relevant evidence means "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable that it would be without the evidence." Tex. R. Evid. 401. The admission and exclusion of evidence is committed to the trial court's sound discretion; thus, we review this issue under an abuse of discretion standard. City of Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995).

With regard to the evidence of RenCare's contract with United HealthCare, the payment structure used in other plans, and other providers' acceptance of Blue Cross's per diem rate, the evidence was relevant to the reasonable value that should be awarded for RenCare's services. With regard to Ehl's own dialysis, RenCare opened the door to this testimony by initially questioning Ehl regarding this treatment. With regard to whether HEB had been sued by other providers, the evidence has some tendency to enable the jury to assess whether it was more or less probable that HEB had intentionally misrepresented its benefits plan. With regard to other lawsuits RenCare had filed against other insurers, the line of questioning was attempting to show that RenCare claimed other insurers also made misrepresentations regarding their benefits when RenCare called to verify benefits. One of the issues in the case was whether RenCare made the phone call to verify benefits and whether it asked the necessary questions to elicit the information regarding limitations on those benefits. Evidence that RenCare claimed to have made similar phone calls to other insurers and that those insurers were alleged to have made similar misrepresentations regarding benefit limitations is relevant to whether the events transpired as RenCare claimed. Even assuming that the trial court erred in admitting evidence regarding RenCare's ownership structure and the personal opinion of HEB's employee regarding whether HEB had been fair, RenCare fails to explain how the admission of that evidence was harmful. RenCare's third and fourth cross-points are overruled.

Conclusion

Because the amount HEB previously paid RenCare exceeded the damages awarded by the jury for the reasonable value of RenCare's services, the trial court erred in entering judgment in RenCare's favor. The judgment of the trial court is reversed, and judgment is rendered that RenCare take nothing on its claims against HEB.

Catherine Stone, Justice