Opinion ID: 1773893
Heading Depth: 3
Heading Rank: 1

Heading: General Surgery Residency Program

Text: We need not go into detail to conclude the record contains the requisite evidence that St. Joseph and the Foundation had an agreement and a common purpose to establish a general surgery residency program at Brackenridge Hospital. The Program Contract recites that St. Joseph and the Foundation sought to operate an Integrated General Surgery Residency Program at Brackenridge Hospital, as an integral division of St. Joseph[`s] ... General Surgery Residency Program.... Even if the parties had not expressly recited this common purpose, the terms of the Program Contract make it clear this was a common purpose of the two parties. We now look to see whether there is more than a scintilla of evidence that St. Joseph and the Foundation had a community of pecuniary interest in that purpose, [57] i.e. the purpose of operating the general surgery residency program at Brackenridge Hospital. We conclude there is no such evidence. The ordinary meaning of pecuniary is of or pertaining to money. [58] Thus, to satisfy the third element of the Restatement definition an interest must first be monetary in nature. And again, that monetary interest must be common among the members of the groupit must be one shared without special or distinguishing characteristics. [59] There is no evidence in the record that St. Joseph agreed to share with the Foundation any money it received from operating the general surgery residency program. Although St. Joseph received Medicare funds based on the number of residents in the program, there is no evidence the Foundation shared in those funds. Similarly, there is no evidence the Foundation agreed to share with St. Joseph any money it received from operating the residency program. The evidence is undisputed that the Foundation contracted with the City of Austin to treat patients, using medical residents and others, at Brackenridge Hospital and other Austin locations. In return, the Foundation received certain payments from the City of Austin. The Foundation also retained the right to bill patients (except MAP Patients), government assistance programs, and third-party payors (as applicable) for the services provided by its physicians, including the general surgery residents, and to collect on those bills. It is undisputed the resulting income belonged to the Foundation and was not shared with St. Joseph. Although the Foundation reimbursed St. Joseph for the salaries and benefits paid to the general surgery residents while they were on rotation at Brackenridge Hospital in Austin, there is no evidence this obligation depended on the Foundation's receipt of any fees generated by the residents or was payable solely from that source of income. The Wolffs argue that both St. Joseph and the Foundation benefitted financially from the residency program. [60] Their brief first states that without the Foundation, St. Joseph could not have an accredited surgical residency program, making the most obvious benefit the program's very existence. However, the record references the Wolffs cite in their brief do not support this statement. Rather, these cited portions of the record make clear that it was the Foundation that could not have participated in a general surgery residency program without St. Joseph's involvement. There is also evidence St. Joseph could have operated an accredited residency program by affiliating with institutions other than the Foundation and had previously obtained surgical experience for its residents by working with other hospitals in Houston. Moreover, the existence of monetary benefits flowing from the program does not by itself satisfy the third element of a joint enterprise. There must still be evidence that the monetary benefits were shared among the members without special or distinguishing characteristics, and there is no evidence of such an arrangement here. The Wolffs also point to evidence that sponsoring a residency program enhances an institution's stature in the medical community and that institutions involved in residency training have an opportunity to recruit residents to stay and practice in their communities after they finish their training. To the extent that there is evidence that St. Joseph and the Foundation actually received these benefits, as opposed to evidence that these are the types of benefits that generally accrue from operating a residency program, these benefits are nonetheless non-pecuniary in nature because they do not constitute monetary interests resulting from the operation of the residency program. Moreover, these types of indirect, potential financial interests are similar to the indirect, potential financial interests of the franchisor, wholesaler, or supplier concerning the success of their respective franchisees, retailers, or customers. If such interests are sufficient to constitute a community of pecuniary interest in [the common] purpose, the possibility of joint enterprise vicarious liability would be extended to relationships and situations far beyond those considered in our prior cases and those envisioned and discussed in the Restatement. The Wolffs also point to evidence that physicians are drawn to hospitals that have residents available to assist with patient care at lower rates, thereby benefitting the hospitals. This interest is similar to the indirect, potential financial interests described above and is not sufficient to satisfy the Restatement's third element of a joint enterprise. Even if this interest were considered pecuniary in nature, it is not one common to both St. Joseph and the Foundation. The Foundation is not a hospital, but an organization of physicians set up to operate this and other residency programs in Austin. This case is unlike Texas Department of Transportation v. Able , [61] in which this Court held there was evidence to support a finding that a joint enterprise existed between a state agencythe Texas Department of Transportation (TxDOT)and a local transit authorityHouston Metropolitan Transit Authority (Metro). [62] The opinion in Able recited that the evidence included documents explaining the joint nature of TxDOT's and Metro's financial undertakings with respect to the construction and operation of the high occupancy vehicle lane involved in the case and stated that the documents clearly contemplate an economic gain that could be realized by undertaking the activities in [the manner they contracted]. [63] By contrast, this case contains no evidence that either St. Joseph or the Foundation agreed to share with each other any financial benefits resulting from the operation of the general surgery residency program as a whole, the program's operations at Brackenridge, or Wolff's treatment. The Wolffs next argue that the community of pecuniary interest requirement is met because St. Joseph and the Foundation shared costs related to the program, citing as examples evidence that they both contributed personnel and services and the Foundation reimbursed St. Joseph for the costs of the stipends paid to the residents who were on rotation at Brackenridge Hospital. The Restatement, however, requires the members of a joint enterprise to have a community of pecuniary interest in the common purpose or goal of the enterprise, not the means by which that purpose or goal is achieved. Like the co-owners who purchased the search plane that crashed in Shoemaker, St. Joseph and the Foundation may have both spent money in connection with the residency program. The investment of time and money to fulfill a common purpose, however, does not render that purpose pecuniary in nature. Rather, such an expenditure may be evidence of a common purpose or a joint right of control concerning the project or enterprise undertaken to accomplish that purpose. It does not, however, invest a non-pecuniary purpose with a pecuniary nature. Were it otherwise, an agreement to share the costs of accomplishing a commonthough non-pecuniarypurpose, such as taking a shared vacation or jointly purchasing a boat for recreational purposes, would render that purpose pecuniary in nature and, thus, sufficient to meet the third element of the Restatement's joint enterprise definition. Additionally, sharing the costs of accomplishing a common purpose does not render the parties' respective interests in that purpose community in nature. There still must be some evidence that the parties shared or held in community a pecuniary interest in the relevant common purpose. We have already detailed the evidence that negates any notion that St. Joseph and the Foundation had a community of pecuniary interest in the residency program. Accordingly, we conclude that there is no more than a scintilla of evidence of a community of pecuniary interest between St. Joseph and the Foundation in the operation of the surgical residency program at Brackenridge Hospital. Because this precludes a finding of joint enterprise with respect to this common purpose, we need not consider whether there is evidence of the other elements of such a joint enterprise.