Texas Appeals Court Reverses $50M Judgment in Hospital Land Purchase Dispute

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Hicks Thomas LLP’s Robin Harrison wins rare bench trial reversal over invalid theory of liability

A Texas appeals court in Houston has reversed a lower court’s judgment of more than $50 million in a dispute over a land purchase and lease for a Katy hospital. The 14th Court of Appeals ordered a new trial, ruling that the judgment could have been based on unsupported theories of liability.

The case involved Katy Pin Oak Hospital, which ultimately failed and produced numerous lawsuits and counterclaims. The 61st District Court in Harris County had awarded more than $50 million to Pankaj Shah, an investor and doctor involved in Apex Katy Physicians LLC, which acted as landlord for the project. Mr. Shah and Apex had filed claims for alleged wrongdoing against the owners of the hospital and Turnaround Management Group, the consulting business that set up the hospital deal.

The owners of Turnaround Management argued on appeal that the awarded damages were not linked to specific causes of action and that Mr. Shah’s claims were not supported by trial evidence. The appeals court agreed, saying at least one of the theories of liability was invalid.

Robin L. Harrison of Houston-based Hicks Thomas LLP won the appeal for Turnaround and its parties along with trial counsel and attorney Douglas R. Little.

“I think the outcome will be much better the second time around, if there is a second trial,” said Mr. Harrison. “To get a large punitive damages award in a non-jury trial is unusual and, in this case we believe, entirely unwarranted.”

Mr. Harrison said he believes the decision is the first time a state appeals court has applied the 2000 Texas Supreme Court ruling in Crown Life Insurance Co. v. Casteel in a bench trial. In that case, the justices reversed a judgment from a jury verdict, saying they could not determine if the verdict, which included several different claims, was based on an invalid theory of liability.

Founded in 1997, Texas-based Hicks Thomas LLP is a premier litigation firm representing plaintiffs and defendants across the nation. With offices in Houston, Amarillo, and Sacramento, California, the firm provides in-depth experience in cases involving oil and gas, environmental, complex commercial, toxic tort, construction, products liability, corporate governance, securities, banking, insurance coverage, transportation, trade secrets and business litigation. Visit the firm at http://www.hicks-thomas.com.

The case is Zaidi et al. v. Shah et al., case number 14-14-00855-CV, in the Texas Court of Appeals for the Fourteenth District.

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