SE Texas Record

Friday, November 15, 2019

Orthopedic group official loses fraud claim bid in appeals court

State Court

By Charmaine Little | Aug 7, 2019

Justice Russell Lloyd, Court of Appeals for the First District of Texas

HOUSTON -- A former orthopedic group official lost her fraud claim in the Texas First District Court of Appeals July 30. 

Justice Russell Loyd wrote the opinion. Justices Sarah Beth Landau and Julie Countiss concurred. 

Peggy Pierce was sued for breach of fiduciary duty and fraud by Dr. Gregory Stocks in Harris County District Court.  Stocks is an orthopedic surgeon for Fondren Orthopedic Group (FOG). Pierce was brought on as FOG’s administrator in 1993 and promoted to its chief operating officer in 2017.

 Along with her responsibilities, she helped Stocks with financial advice over the years. In 2018 she refused requests to supply financial information to FOG’s partners, and FOG launched an investigation into her conduct, the suit alleges, and she was placed on a leave of absence before being fired. Pierce filed a charge of discrimination with the Texas Workforce Commission and the Employment Opportunity Commission. 

While she sued FOG and Fondren Orthopedic Group, Ltd (FOLTD) for disability, sex and age discrimination as well as retaliation and breach of contract, Stocks ultimately sued Pierce for breach of fiduciary duty and fraud. Pierce tried to get the court to dismiss his claim under the Texas Citizens Participation Act, stating that it was in response to her lawsuit, but Stocks said that he sufficiently stated his claim against Pierce. The lower court denied her motion and the appeals court affirmed.

Although Pierce stated, “the subjective motivation behind the filing of Stocks' lawsuit is relevant to whether he filed his suit ‘in response to’ Pierce’s federal lawsuit and, therefore, is discoverable independent of the mediation procedure,” according to the lawsuit, the appeals court noted that Stocks did not attend the mediation. Meaning “the statements whose relevancy is allegedly established because they reveal his subjective motivation were not made by him,” the court added.

Pierce also argued that Stocks’ lawsuit stems from her lawsuit against FOG, but the court said that simply arguing that point is not enough to fulfill the requirements of the “preponderance-of-the-evidence standard” to show that the Texas Citizens Participation Act applies.

In the end, Pierce could not properly and successfully prove that Stocks' lawsuit was in direct relation, much less an infringement on her right to file a complaint against FOG. 

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