Court Opinion

ID: 4042870
Source: CourtListenerOpinion
Date Created: 2016-09-28 23:12:27.897774+00
Date Added: 2024-06-11T08:38:33.782470
License: Public Domain

NUMBERS              13-13-00659-CV
                                           13-13-00660-CV
                                           13-13-00661-CV

                            COURT OF APPEALS

                  THIRTEENTH DISTRICT OF TEXAS

                    CORPUS CHRISTI - EDINBURG

FATIH OZCELEBI, M.D.,                                                       Appellant,

                                           v.

K.V. CHOWDARY, M.D., INDIVIDUALLY AND D/B/A
VALLEY GASTROENTEROLOGY CLINIC, P.A., AND
VALLEY GASTROENTEROLOGY CLINIC, P.A.,                                       Appellees.

               On appeal from the County Court at Law No. 7
                        of Hidalgo County, Texas.

                         MEMORANDUM OPINION

  Before Chief Justice Valdez and Justices Rodriguez and Longoria
            Memorandum Opinion by Justice Rodriguez

      Appellant, Fatih Ozcelebi, M.D., appeals the trial court’s grant of a partial summary

judgment in favor of appellees, K.V. Chowdary, M.D., individually and doing business as
Valley Gastroenterology Clinic, P.A., (Dr. Chowdary) and Valley Gastroenterology Clinic,

P.A. (VGC). The trial court purported to sever the claims subject to its partial summary

judgment, thereby creating a final and appealable order. Because we agree with Dr.

Ozcelebi that the trial court improperly severed the claims before us, we reverse the trial

court’s severance order without reaching the merits of the summary judgment and

remand to the trial court.

                                   I.      FACTUAL BACKGROUND

        Dr. Ozcelebi came to the United States from Turkey to attend medical school.

Upon graduation he was required, pursuant to his J-1 exchange visa, to return to Turkey

for a period of two years. Seeking a waiver of this requirement, Dr. Ozcelebi applied and

was hired to work with Dr. Chowdary at VGC. An employment agreement was entered

into by the parties which stipulated that Dr. Ozcelebi was to work as a primary care

provider in Hidalgo and Starr Counties.

        Dr. Ozcelebi worked at VGC for a year and a half. Dr. Ozcelebi contends that

while at VGC he was not working as a primary care physician in a medically underserved

area as required by his visa and his employment affidavit. Instead, Dr. Ozcelebi claims

he worked primarily as a gastroenterologist in McAllen, Texas. Dr. Ozcelebi made a

number of complaints regarding his work for Dr. Chowdary at VGC, including alleged non-

compliance with the J-1 visa waiver requirements.

        It is undisputed that by October of 1997 the relationship between Dr. Chowdary

and Dr. Ozcelebi had deteriorated.1 Dr. Ozcelebi brought a number of complaints to Dr.

        1 It is also undisputed that by September of 1997 Dr. Ozcelebi had taken significant steps to open
his own practice in Hidalgo County.
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Chowdary’s attention in early October of 1997. Dr. Ozcelebi claimed that he sought

resolution of his complaints or a release from the employment agreement. A verbal

altercation ensued.   It has been Dr. Chowdary’s position throughout these proceedings

that Dr. Ozcelebi voluntarily terminated his employment at VCG effective October 3, 1997.

Dr. Ozcelebi claims that on that day he wrote Dr. Chowdary a certified letter stating he

was not resigning and that he would continue working for Dr. Chowdary at VGC.

       Dr. Ozcelebi was not present at work for at least the next two business days—he

alleges that he had previously notified Dr. Chowdary that he would be out of the office for

those days. Dr. Ozcelebi contends that he returned to VGC and attempted to perform

his duties as a VGC employee. He claims that he continued to arrive at the clinic and

the hospital during his regularly scheduled times, but noted that he did not see any

patients or perform any surgeries. Dr. Chowdary did not pay Dr. Ozcelebi’s salary after

October 3, 1997. According to the parties, on October 14, 1997, Dr. Chowdary and Dr.

Ozcelebi had a second confrontation at VGC. Dr. Chowdary asked Dr. Ozcelebi to leave

the premises. Dr. Ozcelebi alleges that Dr. Chowdary assaulted him during the October

14th altercation.

                              II.    PROCEDURAL HISTORY

       Dr. Chowdary filed suit against Dr. Ozcelebi on October 24, 1997 for damages

related to Dr. Ozcelebi’s alleged breach of contract. Dr. Ozcelebi answered asserting

numerous defenses to Dr. Chowdary’s breach of contract claim and seeking equitable

relief in the form of rescission of the contract. Dr. Ozcelebi also counterclaimed for

violations under Racketeer Influenced and Corrupt Organizations Act (RICO), the Texas

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Free Enterprise and Anti-Trust Act (FEAT), the Employee Retirement Income Security

Act (ERISA), and for breach of contract, fraud, invasion of privacy, assault, and malicious

prosecution.

        In April of 2013, Dr. Chowdary filed a partial motion for traditional summary

judgment against Dr. Ozcelebi. Dr. Chowdary sought traditional summary judgment on

issues for which he bore the burden of proof at trial, including breach of contract and his

requested contractual damages and breach of fiduciary duty. Dr. Chowdary also sought

traditional summary judgment on Dr. Ozcelebi’s RICO and FEAT claims and on Dr.

Ozcelebi’s contractual defenses of unenforceability and illegality, all of which were

stricken via a previous sanction order. 2                 Finally, Dr. Chowdary sought traditional

summary judgment on Dr. Ozcelebi’s claim under ERISA that he was contractually

entitled to participate in a profit-sharing plan on the basis that it was subject to federal

preemption.3 The trial court granted Dr. Chowdary’s partial summary judgment against

Dr. Ozcelebi in an order dated September 27, 2013 and a supplemental order dated

October 4, 2013. The trial court rendered summary judgment on Dr. Chowdary’s breach

of contract claim and Dr. Ozcelebi’s claims and defenses that were subject to the prior

          2 Because we determine that the trial court disposed of Dr. Ozcelebi’s RICO and FEAT claims and

his contractual defenses of unenforceability or illegality via its prior sanction order for the purposes of the
litigation between the parties, those claims and defenses were not before the court when Dr. Chowdary
filed his partial motion for summary judgment and are not considered for the purpose of this appeal.

        3 Dr. Chowdary also sought a no-evidence motion for summary judgment on Dr. Ozcelebi’s claims
and defenses. However, Dr. Chowdary only specifically addressed Dr. Ozcelebi’s alleged claim for false
imprisonment or false arrest on no-evidence grounds. While the trial court granted Dr. Chowdary’s no-
evidence motion as to the false imprisonment or false arrest claim, the record before this Court does not
indicate that Dr. Ozcelebi pled a cause of action for false imprisonment or false arrest at the time the
summary judgment was granted.
                                                      4
sanction order, and purported to sever those claims from the remaining causes of action,

arguably making it final and appealable.

       Dr. Ozcelebi raises nine issues on appeal. Because we determine Dr. Ozcelebi’s

ninth issue is dispositive, we do not address the other issues raised.   See TEX. R. APP.

P. 47.1.

                              III.   IMPROPER SEVERANCE

       By his ninth issue, Dr. Ozcelebi contends the trial court abused its discretion when

it severed the claims subject to its order granting Dr. Chowdary’s motion for partial

summary judgment. Specifically, Dr. Ozcelebi contends that the trial court’s order splits

a single cause of action and separates claims and counterclaims into separate suits even

though they are based on the same factual matters.

       A.     Standard of Review

       Trial courts have broad authority in the administration of their dockets pursuant to

Texas Rule of Civil Procedure 41; their decisions to grant or deny a severance will not be

reversed on appeal absent an abuse of discretion. TEX. R. CIV. P. 41; Liberty Nat'l Fire

Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex.1996). The trial court’s discretion is not

without limits. Nicor Exploration Co. v. Fla. Gas Transmission Co., 911 S.W.3d 479,

482–83 (Tex. App.—Corpus Christi 1995, writ denied); see also Dalisa, Inc. v. Bradford,

81 S.W.3d 876, 879 (Tex. App—Austin 2002, pet. ref’d). Theirs is “a sound and legal

discretion within limits created by the circumstances of the particular case.” Dalisa, 81
S.W.3d at 879 (quoting Womack v. Berry, 291 S.W.2d 677, 683 (Tex. 1956)). Such

                                            5
discretion may not be exercised contrary to legal rules and principles applicable in the

particular case. Id.

       B.     Applicable Law

       “The longstanding rule in Texas is that appeals are allowed only from final orders

or judgments.” Duncan v. Calhoun County Nav. Dist., 28 S.W.3d 707, 709 (Tex. App.—

Corpus Christi 2000, pet. denied); see Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272

(Tex. 1992). The trial court’s severance order makes the judgment in the severed portion

of the case final for purposes of our appellate jurisdiction—regardless of whether the

severance was proper. See Nicor Exploration, 911 S.W.3d at 482–83; In re Henry, 388
S.W.3d 719, 725 (Tex. App.—Houston [1st Dist.] 2012, pet. denied) (orig. proceeding)

(citing Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001)). “The propriety of

the severance may be raised by the parties on appeal and the case may be reversed on

the ground that the severance should not have been granted.” Nicor Exploration, 911
S.W.3d at 482–83 (quoting Rutherford v. Whataburger, Inc., 601 S.W.2d 441, 443 (Tex.

Civ. App.—Dallas 1980, writ ref'd n.r.e.)).

       Rule 41 of the Texas Rules of Civil Procedure states that “[a]ny claim against a

party may be severed and proceeded with separately.” TEX. R. CIV. P. 41. The Texas

Supreme Court has held that the controlling reasons for severing a case are to “do justice,

avoid prejudice, and further convenience.” In re State, 355 S.W.3d 611, 613–14 (Tex.

2011) (citing F.F.P. Oper. Partners v. Duenez, 237 S.W.3d 680, 693 (Tex. 2007); Guar.

Fed. Savs. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990) (op. on

reh'g)); Duncan, 28 S.W.3d at 709; Nicor Exploration Co., 911 S.W.2d at 482. In light of

                                              6
these fundamental principles, the Texas Supreme Court has enumerated several

requirements for a proper severance: (1) does the controversy involve more than one

cause of action; (2) is the severed claim the proper subject of a lawsuit if asserted

independently of the other claims; and (3) does the severed claim involve the same facts

and issues such that it is interwoven with the remaining actions. In re State, 355 S.W.3d

at 614; Guaranty Fed., 793 S.W.2d at 658; Dalisa, 81 S.W.3d at 879–80. Practically, a

severance divides a lawsuit into two or more independent suits adjudicated by distinct

and separate judgments. See Van Dyke v. Boswell, O'Toole, Davis & Pickering, 697
S.W.2d 381, 383 (Tex. 1985); Kansas Univ. Endowment Ass’n v. King, 350 S.W.2d 11,

19 (Tex. 1961); Dalisa, 81 S.W.3d at 879.

        However, as a general and overarching rule, “[s]everance of a single cause of

action into two parts is never proper” and constitutes an abuse of discretion.4 See Pierce

v. Reynolds, 329 S.W.2d 76, 79 & n.1 (Tex. 1959); Duncan, 28 S.W.3d at 710.

Severance should not be granted for the purpose of enabling the litigants to obtain an

early appellate ruling on the trial court's determination of one phase of the case. See

Pierce, 329 S.W.2d at 79 & n.1; Dalisa, 81 S.W.3d at 879–80 (recognizing that the Texas

Rules of Civil Procedure do not contemplate the severance of one cause of action into

two or more parts); Duncan, 28 S.W.3d at 710; see also Pustejovsky v. Rapid-American

Corp., 35 S.W.3d 643, 647 (Tex. 2000) (“The reason for the [single action] rule lies in the

necessity for preventing vexatious and oppressive litigation, and its purpose is

       4 “A ‘cause of action’ consists of a plaintiff’s primary right to relief and the defendant’s action or

omission that violates that right.” Duncan v. Calhoun County Nav. Dist., 28 S.W.3d at 707, 710 (Tex.
App.—Corpus Christi 2000, pet. denied).
                                                     7
accomplished by forbidding the division of a single cause of action so as to maintain

several suits when a single suit will suffice.”); c.f., Saxer v. Nash Philips-Copus Co. Real

Estate, 678 S.W.2d 736, 739 (Tex. App.—Tyler 1984, writ ref’d n.r.e.) (“Although a

severance is sometimes ordered merely to expedite appellate review of a partial summary

judgment, that reason alone is not grounds to find an abuse of discretion if the claim is

properly severable.”) (emphasis added). “The severance of a single cause of action will

ultimately result in two judgments that cannot stand independently of each other.”

Duncan, 28 S.W.3d at 709. This creates two final judgments subject to appeal, creates

two appellate records, prevents an appellate court from reviewing the whole controversy

at one time, and instead creates separate and distinct appellate issues. See King, 350
S.W.2d at 19 (recognizing that each severed cause terminates into a “separate, final and

enforceable judgment”).

       The rule allowing partial summary judgment allows the trial court to dispose of

certain issues without adjudicating the rights of the parties on the entire case—thereby

simplifying the issues for trial. See Duncan, 28 S.W.3d at 710; see also TEX. R. CIV. P.

166a. However, severance is not appropriate for a partial motion for summary judgment

unless the factors enumerated by the Texas Supreme Court are met. See In re State,
355 S.W.3d at 613–14. Though the propriety of a severance must be reviewed on a

case-by-case basis, when the severed and unsevered claims arise out of the same

transaction or occurrence and the facts necessary to show liability and damages with

regard to the claims are roughly the same, severance is improper. See State Dep’t of

Hwys. & Pub. Transp. v. Cotner, 845 S.W.2d 818, 819 (Tex. 1993); Nicor Exploration Co.,

                                             8
911 S.W.2d at 482; see also Hummell v. Medaphis Phys. Serv. Corp., No. 13-97-00148-

CV, 1998 WL 35277043, at *3 (Tex. App.—Corpus Christi Mar. 5, 1998, no pet.) (mem.

op.).

        It is not uncommon to see a severance ordered after the trial court grants a partial

summary judgment. See Duncan, 28 S.W.3d at 710 (“This court has seen an increasing

number of severances ordered after the granting of a partial summary judgment.”).

However, severance of the portion of a lawsuit subject to a partial summary judgment is

not proper when it amounts to the splitting of a single cause of action. See Duncan, 28
S.W.3d at 710. This in no way affects the trial court’s ruling on the motion for summary

judgment, it merely requires the parties to wait for a final judgment before filing an appeal.

See Nicor Exploration Co., 911 S.W.2d at 482–83. The partial summary judgment may

be appealed when, but not before, it is merged into a final judgment disposing of the

whole case. See id.; see also Rutherford 601 S.W.2d at 443.

        C.      Discussion

        Because it is dispositive of our analysis of this claim, we first address whether the

trial court improperly severed a cause of action into two separate suits.5 To determine

whether the trial court abused its discretion by severing claims subject to its partial

summary judgment order, we must first determine which claims were severed and which

claims remain before the trial court.6 The trial court granted summary judgment explicitly

        5  The severance order, included in the trial court’s order granting summary judgment, stated that
“[t]he [c]court hereby SEVERS the claims on which judgment is granted above from the remainder of the
case, except as otherwise provided above.” This Order therefore constitutes a final and appealable
judgment.”

        6   To determine the current posture of the case, we review the live pleadings of the parties and the
trial court’s judgment on Dr. Chowdary’s partial motion for summary judgment. The appellate record
                                                     9
finding Dr. Ozcelebi liable to Dr. Chowdary for a breach of fiduciary duty and contractual

damages; thus, implicitly finding Dr. Ozcelebi breached the contract and Dr. Chowdary

did not.7 The trial court’s order stated, in part, that:

        That [Dr. Ozcelebi] breached fiduciary duties owed to VGC as his employer.
        This is a declaratory judgment, and the issue of damages resulting from
        such breach will be carried with the remainder of the case.

        [Dr. Ozcelebi] owes $250,000 to VGC as a minimum amount due for breach
        of contract, plus prejudgment interest in the maximum amount provided by
        law, plus attorney[‘]s fees. . . . Attorney’s fees are recoverable on this
        claim, and the [c]ourt enters a declaratory judgment that they shall be
        awarded. The amount of attorney’s fees at this time be carried with the
        remainder of the case, . . . .

        That [Dr. Ozcelebi] contractually agreed to and owes further damages to
        VGC for violating the non-compete agreement regarding Hidalgo and Starr
        Counties of $240,000—payable and accrued in $10,000 installments each
        month for 24 months for violating the non-compete provision—in the event
        that the [c]ourt or jury finds that Doctor Ozcelebi “voluntarily” terminated the
        Agreement with VGC.[8]

Still pending before the trial court are Dr. Chowdary’s claims for consequential damages,

mental anguish damages, exemplary damages, and attorneys’ fees, Dr. Ozcelebi’s

indicates that Dr. Chowdary’s live pleadings consist of his original petition, his first supplemental petition,
his second supplemental petition his original answer to Dr. Ozcelebi’s counterclaims, and his “clarification
of pleadings, including nonsuit of certain claims.” Dr. Ozcelebi’s live pleadings consist of his fifth amended
petition and counterclaims, his seventh amended original answer, his supplemental affirmative defenses,
his second supplemental affirmative defenses, and his third supplemental affirmative defenses.

         7 Because the trial court granted summary judgment on specific grounds, we look only to those

grounds enumerated in the judgment on appeal. See State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374,
380 (Tex. 1993). We do not imply any finding not specifically included in the trial court’s judgment. See
Great-Ness Prof. Srvs., Inc. v. First Nat’l Bank of Louisville, 704 S.W.2d 916, 918 (Tex. App.—Houston
[14th Dist.] 1986, no writ); see also 301 White Oak Ranch, Ltd. v. Oaks of Trinity Homeowner’s Assn., No.
13-14-00383-CV, 2015 WL 5321281, at *2 (Tex. App.—Corpus Christi Sept. 10, 2015, no pet. h.) (mem.
op.) (recognizing that the “system of appellate review, as well as judicial economy, is better served when
we only consider those summary judgment issues contemplated and ruled on by the trial court”).

        8By the trial court’s supplemental order, it found “as a matter of law that Fatih Ozcelebi voluntarily
terminated his Employment Agreement with VGC, and it grants summary judgment on that issue.”
                                                     10
contractual defenses, including the contractual defense of rescission, and Dr. Ozcelebi’s

assault, invasion of privacy, fraud, and malicious prosecution counterclaims.

      The trial court severed the implicit finding of liability and the explicit finding of

contractual damages on Dr. Chowdary’s breach of contract claim from the remaining

alleged damages and fees and further split a determination of liability on Dr. Chowdary’s

breach of fiduciary duty claim from the damages, if any, to be awarded. See Pierce, 329
S.W.2d at 79 & n.1; Dalisa, 81 S.W.3d at 880; Duncan, 28 S.W.3d at 710. The current

judgment would entitle Dr. Chowdary to recover $490,000 plus prejudgment interest

pursuant to the liquidated damage provision and the non-compete provision, and a

subsequent judgment would entitle Dr. Chowdary, if at all, to consequential damages,

mental anguish damages, exemplary damages, and attorneys’ fees, plus prejudgment

interest pursuant to the same contract and the same contract dispute. Additionally, the

severance order divided Dr. Ozcelebi’s contractual defenses, including his equitable

pleading for contractual rescission, from the underlying breach of contract case. And the

trial court’s order severed Dr. Chowdary’s breach of fiduciary duty cause of action into

two separate suits.

      This constitutes a clear example of a severance order splitting a cause of action:

the liability determination and one measure of damages of Dr. Chowdary’s breach of

contract claim are before us and Dr. Chowdary’s pending claim for consequential

damages, attorney’s fees, and Dr. Ozcelebi’s defenses to the same remain pending

before the trial court. See Pierce, 329 S.W.2d at 79 & n.1; Dalisa, 81 S.W.3d at 879–80;

Duncan, 28 S.W.3d at 710. Additionally, the trial court divided Dr. Chowdary’s breach of

                                           11
fiduciary duty claim when it separated its liability determination from potential damages.

The severance created two independent lawsuits which will have two separate final and

appealable judgments and two separate appeals. See Van Dyke, 697 S.W.2d at 383;

Beckham Grp., P.C. v. Synder, 315 S.W.3d 244, 245 (Tex. App.—Dallas 2010, no pet.).

        Not only does this result create judicial inefficiency, it also prevents meaningful

appellate review. See Guar. Fed., 793 S.W.2d at 658. The piecemeal litigation created

as a result of the severance order prevents this Court from effectively reviewing the trial

court’s judgments on liability and damages because they are contained in separate

lawsuits. See id. For instance, should Dr. Ozcelebi later appeal the trial court’s entry

of attorneys’ fees against him on the breach of contract claim, we would have no ability

to determine whether the fee award was correct and would be limited to reviewing the

amount of attorneys’ fees only. Further, Dr. Ozcelebi would be prevented from having

this Court review the merits of his contractual defenses, including recission, when

determining Dr. Chowdary’s breach of contract claim because they would be subject to a

separate appeal. Such a result is not in the interest of justice or convenience and is

contrary to principles of judicial economy. See id.

        The trial court improperly divided Dr. Chowdary’s breach of contract cause of

action into two separate lawsuits when a single suit would have sufficed.9 See Pierce,

        9  Dr. Chowdary contends that Dr. Ozcelebi requested the severance and therefore, under the
theory of “invited error” cannot now complain of the severance on appeal. See Tittizer v. Union Gas Corp.,
171 S.W.3d 857, 862 (Tex. 2005) (recognizing that “a party cannot complain on appeal that the trial court
took a specific action that the complaining party requested, a doctrine commonly referred to as the ‘invited
error’ doctrine”). Dr. Chowdary did not cite to the record in support of this contention, and after a review
of the record this Court found no instance in which Dr. Ozcelebi requested a severance. In fact, Dr.
Ozcelebi repeatedly contended in his motion for new trial and other post judgment filings that the severance
was granted in error, and the proposed order, submitted by Dr. Chowdary, contained the severance
provision.
                                                    12
329 S.W.2d at 79 & n.1; Dalisa, 81 S.W.3d at 879; Pustejovsky, 35 S.W.3d 647. It also

improperly divided Dr. Chowdary’s breach of fiduciary duty cause of action. We therefore

determine that the trial court abused its discretion when it severed the determination of

liability and contractual damages on the underlying breach of contract cause of action

from the remainder of the alleged claims for breach of contract damages and attorneys’

fees, Dr. Ozcelebi’s defenses to the same, and the breach of fiduciary duty claim from

any alleged damages. See Pierce, 329 S.W.2d at 79 & n.1; Dalisa, 81 S.W.3d at 880;

Duncan, 28 S.W.3d at 710; see also TEX. R. APP. P. 47.1. We do not address the merits

of Dr. Ozcelebi’s appeal because we find that the trial court improperly severed a cause

of action, and therefore this matter is not ripe for our review. See Duncan, 28 S.W.3d at

708–09.

      We sustain Dr. Ozcelebi’s ninth issue. Having determined severance in the court

below was improper, we do not reach the remaining issues. See TEX. R. APP. P. 47.1;

Nicor Exploration Co., 911 S.W.2d at 482–83.

                                  IV.    CONCLUSION

      The order severing the trial court’s partial summary judgment is reversed and the

cause remanded for further proceedings in accordance with this opinion.

                                                             NELDA V. RODRIGUEZ
                                                             Justice

Delivered and filed the
15th day of October, 2015.

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