Jones v. Foundation Surgery Affiliates of Brazoria County

In Jones v. Foundation Surgery Affiliates of Brazoria County, 403 S.W.3d 306, 312-18 (Tex. App.--Houston 1st Dist. 2012, pet. denied), the Houston First District Court of Appeals applied Tex. Bus. Orgs. Code section 152.303 in the medical malpractice context. There, the court of appeals rejected the defendant partnership's argument that it was "impossible" for one of its partners, a doctor, to have been "acting in the ordinary course of the Partnership's business" when he operated on the plaintiff merely "because the Partnership was forbidden by law from practicing medicine." Id. at 312; see Tex. Bus. Orgs. Code Ann. 152.303(a)(1). The partnership argued that "its business was merely to provide a facility with a nursing staff, technical staff, scrub techs, supplies, equipment, and a business staff where its partner-surgeons could perform their cases." Jones, 403 S.W.3d at 314. But the court of appeals noted that the partnership's filings with the Texas Secretary of State, as well as its own Subscription Agreement, stated that "the Partnership's business is outpatient ambulatory surgery." Id. at 315. The court found this to be more than a scintilla of evidence that the doctor was, in fact, acting in the ordinary course of the partnership's business when he operated on the plaintiff. Id. at 314. The court found that the partnership's argument "contradicts the express language of the Subscription Agreement and of the Partnership's registration documents and the plain language of the controlling law." Id. at 315. The Jones court also rejected the partnership's argument that summary judgment was proper because the doctor's actions were not "authorized by the Partnership." Id.; see Tex. Bus. Orgs. Code Ann. 152.303(b). The partnership contended that the doctor's actions were not authorized because: (1) "the Partnership was prevented by law from controlling the treatment decisions made by the doctor, as statutorily required for authorization of his acts," see Tex. Bus. Orgs. Code Ann. 152.055(a) (West, Westlaw through ch. 46, 2015 R.S.); (2) "the summary judgment evidence showed that the Partnership authorized only medical treatment within the scope of reasonable care and the doctor's acts were outside the scope of authorized care." Jones, 403 S.W.3d at 315. The court held that, while section 152.055(b) of the business organizations code prohibits physician-partners from "exercising control over another physician-partner's clinical authority granted by their respective licenses," that prohibition is limited to "treatment decisions made by the practitioner." Id. at 316 (citing Tex. Bus. Orgs. Code Ann. 152.055(b)). Further, the court noted that subsection (a) of the statute provides that "persons licensed as doctors of medicine . . . may create a partnership that is jointly owned by those practitioners to perform a professional service that falls within the scope of practice of those practitioners." Id. at 316 (citing Tex. Bus. Orgs. Code Ann. 152.055(a)). The court held: By omitting the limitation set out in (b) and omitting reference to (a) altogether, the Partnership makes it appear, falsely, that physicians may not form a partnership to perform a professional service within the scope of the practices of each of the partners because to do so would be to "exercise control over the other's clinical authority granted by their respective licenses." Tex. Bus. Orgs. Code Ann. 152.055(b). This construction of section 152.055 contradicts the plain language of section 152.055(a), which specifically permits the formation of a partnership of medical practitioners "to perform a professional service that falls within the scope of practice of those practitioners." Id. 152.005(a). Jones, 403 S.W.3d at 316-17. The court additionally noted that the plaintiff had produced evidence that, pursuant to the partnership's Subscription Agreement, the partnership had expressly authorized the doctor to perform surgery on the plaintiff. Id. at 317. Finally, the Jones court rejected the argument that the doctor's authorization was only limited to surgeries "within a reasonable standard of care," finding that the partnership had authorized the doctor to perform outpatient surgery and that, "having granted the permission, the Partnership was potentially liable for the manner in which that surgery was performed . . . ." Id. at 318. The court held: "The notion that partnerships can be held liable for the acts of their partners within the ordinary course of the business of the partnership only when those acts cannot, as a matter of law, result in liability because they satisfy a standard of reasonable professional care is a contradiction in terms. On this theory, no partnership can ever be held liable for the wrongful acts of any of its partners in providing the professional services the partnership was organized to perform since it is only organized to perform non-wrongful acts." Id.