Court Opinion

ID: 4511066
Source: CourtListenerOpinion
Date Created: 2020-02-27 19:15:30.059483+00
Date Added: 2024-06-11T12:14:03.227313
License: Public Domain

IN THE
                          TENTH COURT OF APPEALS

                                 No. 10-19-00395-CV

        IN RE DAYBREAK COMMUNITY SERVICES TEXAS, LLC
            AND DAYBREAK COMMUNITY SERVICES, INC.

                                Original Proceeding

                             DISSENTING OPINION

      What happened to Alice is a crime. Mack committed the crime. Because of Mack’s

mental defect, it appears he will not be prosecuted for the crime. The persons and entities

to whom their care was entrusted have been sued for failing to meet the standard of care

for a health care provider. Alice’s guardian, therefore, Alice, wants to punish those

entities in addition to recovering economic and compensatory damages. Alice wants to

recover exemplary damages.

      Net worth of an entity is not relevant if there is no possibility of obtaining

exemplary damages. But the net worth of an entity is relevant to determine the amount

of exemplary damages to be awarded. If and when she gets to that issue, Alice wants to
be prepared to show the jury how much these entities are worth so that the jury will know

how much to award as exemplary damages to punish them for their failure to protect

Alice from the crime committed against her. She sought discovery of the net worth of

these entities. The entities resisted. There was a hearing. There was a pleading amended.

There was a ruling. The trial court ordered the entities to produce certain net worth

information in response to the discovery request.

       The Daybreak entities have brought this mandamus proceeding seeking a writ of

mandamus to prevent the discovery of their net worth. We are not yet to the issues of

whether Alice can prove by clear and convincing evidence the elements of her exemplary

damages claim. See TEX. CIV. PRAC. & REM. CODE ANN. § 41.003(b). We are only at the

discovery stage “of Evidence of Net Worth for [an] Exemplary Damages Claim.” See id.

§ 41.0115.

       The relevant statute related to the discovery of net worth provides that “[a] trial

court may authorize discovery of evidence of a defendant’s net worth if the court finds

in a written order that the claimant has demonstrated a substantial likelihood of success

on the merits of a claim for exemplary damages. Evidence submitted by a party to the

court in support of or in opposition to a motion made under this subjection may be in the

form of an affidavit or a response to discovery.” TEX. CIV. PRAC. & REM. CODE ANN. §

41.0115(a).

In Re Daybreak Community Services Texas, LLC, et. al                                Page 2
       Interestingly, the legislature specifically limited what this Court could consider

when reviewing a trial court’s decision. The statute provides that “[w]hen reviewing an

order authorizing or denying discovery of net worth evidence under this section, the

reviewing court may consider only the evidence submitted by the parties to the trial court in

support of or in opposition to the motion described by Subsection (a).” Id. § 41.0115(c)

(emphasis added).

       Because of the restrictions on what we can consider in our review of the trial

court’s ruling, much of the 883-page record submitted by the entities is at best

unnecessary; and at worst, it is distracting. First, there was no evidence submitted during

the course of the August 23, 2019 hearing. There was only argument. Thus, we turn to

the motion for discovery of net worth and the response. This is further complicated by

the fact that most of the discovery motion, Plaintiff’s Second Motion to Compel with

Appropriate Sanctions and Motion to Allow Discovery of Net Worth, was directed

towards alleged discovery violations and for sanctions, as were the related attachments

to the motion, and not to the discovery of net worth. As to the discovery of net worth,

the focus was primarily on showing what the corporate and individual defendants knew

about Mack, his history of violence and sexual proclivities, and how it was gross

negligence to allow him to be in a room with Alice without adequate supervision.

Moreover, there was no effort to show if any of the individual defendants or which, if

either, of the separate corporate defendants could be criminally liable for Mack’s conduct,

In Re Daybreak Community Services Texas, LLC, et. al                                   Page 3
specifically his aggravated sexual assault on Alice. And, the evidence of an exemption to

the general rule of a prohibition must be specific as to which corporate entity, if either,

could be held criminally liable for Mack’s conduct for that entity to have to produce net

worth information. There was no evidence that we can consider for this issue to show

who the individual defendants worked for as is necessary to establish not only the

vicarious liability for damages, but their corporate liability for the crime.

         Like the plaintiff’s motion, the response of the defendants, Defendants’ Response

to Plaintiff’s Motion to Compel and to Allow Discovery of Net Worth, primarily

addressed the alleged discovery violations and for sanctions, and not the discovery of net

worth.

         While the defendants, collectively, resisted net worth discovery on three grounds,

the only one directly argued in this proceeding is the bar on recovery of exemplary

damages and, therefore, the relevance of net worth data if the plaintiff’s damages are

based on the criminal act of another. TEX. CIV. PRAC. & REM. CODE ANN. § 41.005(a). As

relevant to the exercise in which we are currently engaged, that being the search of the

record for evidence we can rely upon to review the trial court’s order compelling the net

worth discovery, the defendants reference only Plaintiff’s Original Petition. That petition

has now been twice amended. For the sake of argument, we will give the trial court the

benefit of possible reliance on the original and both amended petitions, if it helps in

affirming the trial court’s discovery order. It does not. All three petitions, taken

In Re Daybreak Community Services Texas, LLC, et. al                                 Page 4
individually or collectively, establish that this medical malpractice case is, at its core,

about Daybreak’s failure to protect Alice from the aggravated sexual assault committed

by another client, Mack. But beyond that, we really have nothing that helps us with the

application of section 41.005(a) of Texas Civil Practice and Remedies Code and its

exemptions. TEX. CIV. PRAC. & REM. CODE ANN. § 41.005(a) and (b).

       Both parties have initially struggled with whether Mack’s conduct was a “criminal

act” within the meaning and purpose of the statutory bar to exemplary damages. The

Court, assumes “without deciding that Mack’s actions constituted an assault or other

criminal act.” I need not assume. Due to Alice’s mental defect, she could not consent to

sexual intercourse. This is true even though she had not yet been adjudicated mentally

incompetent and a guardian appointed over her person and estate. To suggest that it

could have been consensual intercourse borders on the absurd for both parties.

       If it was legally consensual from Alice’s perspective, then she would be criminally

liable for having sex with Mack if it is determined that due to his mental incapacity, he

could not legally consent to having sex with her. Moreover, if the plaintiff prevails in this

proceeding for the discovery of net worth due to this Court’s reliance on the defendants’

argument that it was not criminal because it was consensual, plaintiff will have won the

battle but lost the war.      This is because having prevailed on the argument of the

consensual nature of his client’s action that it was not a criminal act, the plaintiff would

then be judicially estopped from obtaining any damages on the theory that the

In Re Daybreak Community Services Texas, LLC, et. al                                   Page 5
defendants failed to protect her from Mack because she consented to Mack’s conduct.

       So, getting past that absurd argument brings us to the real crux of the issue. If

Mack had sex with Alice, was it a criminal act? The legal question in this issue is whether

Mack’s actions are criminal even if he cannot be held criminally liable for the act due to

his mental defect; in essence, being insane within the meaning of the relevant provision

of the Texas Penal Code. TEX. PENAL CODE ANN. § 8.01; see Graham v. State, 566 S.W.2d
941 (Tex. Crim. App. 1978).

       I will not, here in this dissenting opinion, engage in a legal dissertation of whether

a crime is committed if there is no one mentally there to commit it. But I will suggest to

the reader and the parties that a good place to start, and possibly end, the analysis is with

Graham v. State, 566 S.W.2d 941 (Tex. Crim. App. 1978). Based on Graham, in addition to

other research, I have satisfied myself that Mack’s conduct, and as it is relevant to the

statute at issue, was a “criminal act.” He would probably raise an insanity defense if he

were charged with the crime. But even if found not guilty by reason of insanity, that does

not mean a crime was not committed. It simply means that Mack will not be held

criminally liable for it.1

       The argument that it is still a crime, and thus a “criminal act” is strengthened by

Texas Penal Code section 7.03. In evaluating the potential liability of a particular actor,

1 I note that there is a strong argument to be made that Mack understood his conduct was “wrong” within
the meaning of Texas Penal Code Section 8.01(a) because he locked the door to the bathroom.

In Re Daybreak Community Services Texas, LLC, et. al                                            Page 6
based on the conduct of another, it is not a defense that the person for whose conduct that

actor is criminally responsible could not be or has not been tried or convicted of the crime.

TEX. PENAL CODE ANN. § 7.03(2).

        So, having made the determination that the harm to Alice was the result of a

“criminal act of another,” I now move to the next question – whether there is an

exemption to the statutory bar of awarding exemplary damages for this “criminal act of

another.” It is in the analysis of the possible exemptions to the bar that the failure of proof

and the limitation on what we can review is fatal to the plaintiff’s discovery of net worth

data at this time. There is simply no basis upon which to hold, as the Court does, that

any of the individual or corporate defendants could be held criminally responsible for

Mack’s conduct, which would get the plaintiff to the exemption under section 41.005(b)(2)

of the Texas Civil Practice and Remedies Code. The only basis upon which the Court

relies is a bare allegation of a label regarding the title or position of one of the individual

defendants.2 The largest gap in even this mere allegation is that there is no evidence we

can consider of which corporate entity the individual defendant worked for, and why

that single allegation of a title/status would require compelling the net worth data of

multiple corporate entities/defendants.

2
  Even if we could rely upon the deposition testimony referenced in the Court’s opinion, it is clear to me
that the individual defendant is not of the requisite managerial level to hold one of the entities criminally
liable for Mack’s conduct. Moreover, it appears he only works for one of the entities and is certainly not at
an executive level in either, or both, of those entities sufficient to hold the entity criminally liable.

In Re Daybreak Community Services Texas, LLC, et. al                                                  Page 7
        Based on the foregoing, I would conditionally issue a writ of mandamus

compelling the trial court to withdraw its order compelling the production of net worth

data.3 Because the Court denies the petition and thus allows the discovery, I respectfully

dissent.

                                                    TOM GRAY
                                                    Chief Justice

Dissenting opinion delivered and filed February 26, 2020

3 I note this would not be with prejudice. The plaintiff is certainly entitled to attempt to marshal the
evidence necessary to show criminal liability for Mack’s acts on one, or both, of the corporate defendants.
But on this record, the plaintiff has failed to do that. Moreover, this issue does not resolve whether, at trial,
the plaintiff will be entitled to an award of exemplary damages without sufficient proof of the criminal
liability of at least one of the corporate entities.

In Re Daybreak Community Services Texas, LLC, et. al                                                     Page 8