TMA and Others Ask for Reversal of Ruling That Allows Texas Negligence Case to Proceed in New Mexico

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Law Feature — November 2015

Tex Med. 2011;111(11):57-60.

By Joey Berlin
Reporter

A doctor sued for negligence for a procedure he performed in Texas will have to defend himself under the law of … New Mexico?

Right now, that's the situation in which Eldo Frezza, MD, finds himself. The bariatric surgeon faces several similar suits filed not in Texas, where he performed surgery on the patients, but in New Mexico, where the plaintiffs live. One of those suits, courtesy of plaintiff Kimberly Montaño, has reached the New Mexico Supreme Court after lower courts ruled New Mexico law should apply to the case.

The reason, in short, is this: The courts, thus far, have held Ms. Montaño's injuries "manifested themselves" in New Mexico, making that state the "place of the wrong" where the law should apply — even though Dr. Frezza operated on and treated Ms. Montaño while working as a state employee for Texas Tech University Health Sciences Center (TTUHSC) in Lubbock.

The Frezza v. Montaño case is sounding alarms all over Texas' medical community, conjuring fears that if the Supreme Court upholds the application of New Mexico law, it could have a significant impact on Texas doctors who operate near the state's vast borders and treat out-of-state patients. 

"I do think that's a dangerous precedent to set, especially in the rural parts of New Mexico where we don't have a lot of health care providers, and people need to go to Texas to be treated," said Dana Hardy, a Santa Fe, N.M., attorney representing Dr. Frezza.

 As a Texas physician subject to New Mexico law, Dr. Frezza and other Texas state employees wouldn't have immunity from being sued for work in the course of their state employment, as they do under Texas law. He also wouldn't enjoy protections of tort reform the Texas Legislature passed in 2003. (See "Tort Reform Gets Results.")

The case caught attention from members of the El Paso County Medical Society (EPCMS), whose physicians often care for out-of-state patients.

Juan Escobar, MD, immediate past president of EPCMS, wrote a guest column in the El Paso Times in August urging the Supreme Court to rule in favor of Dr. Frezza. Dr. Escobar wrote if the high court upholds the appeals court's decision, it would open the door for New Mexico-licensed attorneys to file suits on behalf of New Mexico patients against a host of El Paso physicians and practices.

"The consequences will be higher liability insurance premiums, increased costs of practicing defensive medicine, and reluctance of new physicians to relocate or stay in the area because of its proximity to New Mexico," he wrote. "In turn, this will increase the cost of providing care and reduce access for our patients in our already underserved region." 

At press time, the Texas Alliance for Patient Access (TAPA) planned to submit a friend-of-the-court brief to the Supreme Court on behalf of Dr. Frezza's effort to stop New Mexico law from applying to the case. The Texas Medical Association, concerned about the implications of the case, brought it to the attention of TAPA and other organizations. TMA was to sign on to the friend-of-the-court brief, along with the New Mexico State Medical Society, the American Medical Association, and other organizations, including some county medical societies. 

Mike Hull, an attorney for TAPA, says allowing the suit against Dr. Frezza to go forward under New Mexico law would take Texas physicians back to the pre-tort reform "bad old days."

"At least from my perspective, the question is not, 'Can New Mexico do this?' They have the power. It's whether they should," Mr. Hull said.

The Choice-of-Law Battle

Ms. Montaño's case is one of five suits plaintiffs filed against Dr. Frezza for his bariatric surgeries, but the Supreme Court's decision in the Montaño case will likely decide the application of law for the others. Ms. Hardy says a district court heard two of the other cases together and ruled in Dr. Frezza's favor on jurisdiction, but the New Mexico Court of Appeals ruled that additional information was necessary to determine whether New Mexico courts have jurisdiction over Dr. Frezza. The remaining two cases are on hold, awaiting the Supreme Court's decision.

Dr. Frezza performed bariatric surgery on Ms. Montaño in February 2004, and Ms. Montaño went back to see him in Lubbock for follow-up care and treatment, according to court documents. Ms. Montaño's insurer, Lovelace Insurance Co., told her Dr. Frezza was the only bariatric surgeon for whom Lovelace would provide coverage, her filings claim.

Her initial complaint says she suffered severe abdominal pain after her procedure, but Dr. Frezza assured her it was normal. She claims in 2010 another Lubbock physician conducted tests on Ms. Montaño, found gastrointestinal bleeding from a tangled network of sutures, and performed corrective surgery.

In 2011, Ms. Montaño sued Dr. Frezza for medical negligence, violation of the New Mexico Unfair Practices Act, and lack of informed consent. She also sued Lovelace for breach of contract, negligent referral, and violation of the Unfair Practices Act. Her filings claim Dr. Frezza was "incompetent to provide surgery and was a menace to his patients" who deliberately misled Ms. Montaño about the extent of the damage he did to her in surgery.

Ms. Hardy told Texas Medicine Dr. Frezza was not available for an interview due to the pending litigation, but she says the doctor's handling of each patient met the standard of care.

"I think all of the cases involved [have] similar allegations, and it's our position that those are anticipated and potential complications of these types of surgeries," she said.

But the cases haven't even gotten that far because before the merits come into play, the courts must first settle on which state's law applies.

"Jurisdiction" and "choice of law" are different, Ms. Hardy explains. While jurisdiction involves a determination of whether Dr. Frezza has enough of a presence in New Mexico for a state court there to issue an order to him, choice of law involves the issue of which state's law should apply. As it hears a case, one state can recognize and apply another state's law.

Dr. Frezza filed a motion to dismiss the initial claim on choice-of-law grounds, claiming Texas law and the Texas Tort Claims Act (TTCA) should apply to the claims against him. The motion cited New Mexico case law that held, "the substantive rights of the parties are governed by the law of the place where the wrong occurred." Because the alleged negligence occurred in Lubbock, Dr. Frezza's filing argued, Texas law should apply.

The filing also notes that under TTCA, a government employee has immunity from a lawsuit the plaintiff could have brought if the alleged misconduct happened in the course of the employee's government employment.

Ms. Montaño claims New Mexico law applied, in part, because Dr. Frezza "had a contract with Lovelace to provide medical services to New Mexico patients, and because New Mexico's choice-of-law rule holds that the injury was completed in New Mexico, making New Mexico law applicable."

The district court denied Dr. Frezza's motion and another attempt to dismiss the case, leading to an appeal.

In a decision the Court of Appeals issued in March, the court notes in previous cases, the New Mexico Supreme Court had endorsed the place-of-the-wrong rule in deciding which state law to use. But the Court of Appeals says the place-of-the-wrong rule "may give way when policy considerations outweigh its application."

The district court determined that Ms. Montaño's injuries had "manifested themselves in New Mexico" and concluded that New Mexico law applies to the case as a result. Court of Appeals Judge Michael C. Bustamante wrote his court "perceive(d) no error" in that analysis.

On the issue of whether to apply Texas' immunity law to Dr. Frezza's case, the Court of Appeals ultimately decided that applying TTCA would violate New Mexico public policy and decided it was appropriate to use the New Mexico Tort Claims Act "to provide the contours — or measure — of the immunity Dr. Frezza should enjoy in New Mexico courts." Using New Mexico law assures out-of-state parties don't get greater protections than the state provides to its own employees and government agencies, Judge Bustamante wrote.

If Ms. Montaño ultimately wins her suit, application of New Mexico law would bring the potential for a considerably higher monetary judgment against Dr. Frezza. The medical tort reforms the Texas Legislature passed in 2003 cap noneconomic damages at $250,000 for physicians. In New Mexico, the cap for nonmedical, non-property damages against a government employee is $400,000. 

The Office of the Attorney General of Texas got involved on Dr. Frezza's behalf, petitioning the New Mexico Supreme Court in May to review the appeals court decision. The Supreme Court granted that petition on June 19.

"[The Court of Appeals' analysis] will … strangely allow New Mexico tort defendants to avoid application of New Mexico law whenever a plaintiff's injuries manifest outside of New Mexico, even if the harm occurred here," Texas Assistant Attorney General Jose L. Valtzar wrote.

Access Worries

Although Dr. Frezza is no longer affiliated with TTUHSC — he now practices general surgery in Laredo — Joanna Harkey, an attorney for Texas Tech University System, says the university is following the case "because of the affect it's going to have on our other physicians and because, quite frankly, we don't carry enough insurance coverage for any of our physicians to be sued in New Mexico."

Ms. Harkey says the Court of Appeals decision to keep the case in New Mexico was a huge surprise.

"We've had cases filed in New Mexico before," she said. "We always … got them transferred. If it was a federal case, we could get it transferred to a Texas federal court [without] a question about the fact that Texas law would apply.

"We knew that our physicians never practiced there, never had a license there, never treated the patients in New Mexico," she said about the Frezza case. "And [we] just assumed that as soon as we filed our motion to dismiss, we would be out of those cases."

Mr. Hull says the appeals court applied New Mexico law "to a Texas doctor providing services in a Texas facility" because from a public policy standpoint, "New Mexico law was better for the New Mexico plaintiff."

"While I appreciate the court's concern about the remedy for this one plaintiff, the court's analysis effectively said that because, in its view, the remedy is better for this one person, under New Mexico law, access to care for all New Mexico residents should be decreased," Mr. Hull said.

Ms. Hardy says the sides will complete briefing on the case in early November, and the Supreme Court usually sets oral arguments four to eight weeks after that. She says the court then typically takes six to 12 months to issue its decision.

Joey Berlin can be reached by phone at (800) 880-1300, ext. 1393, or (512) 370-1393; by fax at (512) 370-1629; or by email.

SIDEBAR

Tort Reform Gets Results

In 2003, the Texas Legislature passed comprehensive liability tort reform, featuring a $750,000 total cap on noneconomic damages. Since then, the state has seen record numbers of new physicians, and the Texas Medical Board and other groups have tracked other positive markers for medical care and liability protection, including:   

  • In 2014, Texas had 54,942 physicians with in-state licenses — nearly 17,000 more than it had in 2003, and 8,251 more physicians than population growth could account for. 
  • Texas had 3,994 newly licensed physicians in 2014 — the most in any year on record and nearly 1,500 more than in 2003. 
  • This year, the Texas Medical Liability Trust paid a dividend to its renewing policyholders for the 11th year in a row, including 10-percent dividend payouts in 2014 and 2015.
  • Rural Texas counties have added more specialists, with 55 rural counties adding at least one emergency physician and 23 rural counties adding at least one cardiologist since 2003.   

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June 16, 2016

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Joey Berlin

Associate Editor

(512) 370-1393
JoeyBerlinSQ

Joey Berlin is associate editor of Texas Medicine. His previous work includes stints as a reporter and editor for various newspapers and publishing companies, and he’s covered everything from hard news to sports to workers’ compensation. Joey grew up in the Kansas City area and attended the University of Kansas. He lives in Austin.

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