Tag Archives: settlement

2002 – Reviving the Cullen Davis Case

In August of 1976, a lone gunman dressed in black entered the mansion owned by millionaire oilman T. Cullen Davis and shot four people, including Davis’ estranged wife Priscilla, who had legal possession of the home at the time, according to the terms of their pending divorce proceedings.  Two people survived the shootings, but Priscilla’ daughter, Andrea Willborn, and her boyfriend, Stan Farr, did not.

Cullen Davis, who was then said to be worth approximately $400 million, was indicted for the murders.  The next year, after a change of venue moved the case to Amarillo, Texas, Davis, at the time reported to be the “the richest man to stand trial on murder charges,” was acquitted of murder in one of the most notorious and globally-televised events of the decade. (Davis was also later acquitted of murder-for-hire charges in a separate case where it was alleged that he attempted to arrange for the presiding judge of his divorce action to meet an untimely and violent death as well.)

Davis was never tried in Farr’s death, but in 1990, he agreed to settle the wrongful death civil action which had been filed on behalf of Farr’s two teenage children.  In the settlement agreement, Davis agreed to pay the children $250,000.  The agreed judgment based on the settlement was entered on February 15, 1990, but the settlement was amended three years later to include a provision requiring Davis to pay the balance of the judgment by 1997.  The judgment was never paid.

On September 27, 2002, the children, who were by this time adults, filed a suit to recover the debt in the 352nd District Court, Judge Bonnie Sudderth presiding.  Davis responded by claiming that the statute of limitations barred the children’s claims against him – that he no longer legally owed the judgment because the children had waited too long to collect it.

Davis argued that the original judgment had become “dormant” on February 14, 2000 (ten years after the original judgment was signed) because the children had not sought a writ of execution of the judgment during the 10-year period of time. Texas law provides that judgments become dormant after 10 years if no writ of execution is issued.

However, Texas law also provides that a dormant judgment may be “revived” by filing a lawsuit on the debt if not brought later than the second anniversary of the date the judgment becomes dormant.  The problem, Davis pointed out, was that the children waited two years and seven months to bring the debt action, and, therefore, he contended, the debt was no longer owed.

The Farr children sought summary judgment, asking Judge Sudderth to rule that their claims were not time-barred, since they were both minors at the time the settlement was entered into.   Texas law stops the clock on limitations during a child’s minority years, if they are under the age of 18 at the time a cause of action accrues.

Judge Bonnie Sudderth agreed with the Farr children that their claims against Davis were not time-barred.  The effect of Judge Sudderth’s ruling affirmed that Davis still owed the Farr children $125,000 each, plus interest as provided by law.

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1998 – HMO Class Action Lawsuit

Four hundred Tarrant County doctors filed a class action lawsuit against Harris HMO, alleging that the physician payment system in its plan violated Texas insurance laws.  In the lawsuit, which was filed in the 352nd District Court, the physicians asked Judge Bonnie Sudderth to issue a temporary injunction preventing the HMO from enforcing monetary penalties against doctors who overspent their budget in issuing prescriptions to patients. 

The law in Texas at the time the case was filed provided that managed care entities could not establish physician payment systems which created financial incentives to limit medically necessary care to patients.

At the temporary injunction hearing, the undisputed evidence established that physicians who spent less than budgeted amounts received bonuses from the HMO, while doctors who exceeded their budgets were penalized.  At that point in time, the HMO had imposed millions of dollars in fines against the physicians who had exceeded established budgets.  The doctors argued that they shouldn’t be forced to choose between their bottom lines and their patients’  best interests. 

In issuing the requested injunction, Judge Sudderth found that the HMO’s practices resulted in the denial of medically necessary care to patients.  “These denials include circumstances of cherry-picking, patient-dumping … and outright denials of treatment, referrals and prescriptions,” Judge Sudderth explained, in ruling in favor of the requested injunction. 

A few months later, the Texas Insurance Department levied an $800,000 fine against the HMO for violations of state insurance regulations that prohibit health plans from using financial incentives to encourage doctors to withhold medically necessary care.  Shortly thereafter, the HMO announced its plan to do away with the caps on prescription spending in physician contracts and to compensate the doctors who had been fined for exceeding their budgets.  Within a few days of this announcement, the parties entered into settlement negotiations which resulted in the eventual settlement of the lawsuit.

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