Steven Racciato v. Al Davies

Affirmed and Memorandum Opinion filed August 8, 2006 Affirmed and Memorandum Opinion filed August 8, 2006. In The Fourteenth Court of Appeals ____________ NO. 14-05-00354-CV ____________ STEVEN RACCIATO, Appellant V. AL DAVIES, Appellee On Appeal from the 11th District Court Harris County, Texas Trial Court Cause No. 03-17668 M E M O R A N D U M   O P I N I O N Appellant Steven Racciato, the plaintiff in this fraud suit, appeals the trial court=s judgment in favor of appellee/defendant Al Davies, M.D. At issue is the preservation of error on evidentiary complaints and the propriety of the trial court=s rulings on evidentiary matters. We affirm. I. Factual and Procedural History Sometime in 2000, appellee Al Davies, M.D., a specialist in pulmonary and critical care, agreed to act as a AChief Medical Director@ for CORF Licensing Services (ACLS@), a licensing program for the creation and establishment of a special kind of outpatient rehabilitation facility known as a ACORF,@ an acronym for AComprehensive Outpatient Rehabilitation Facility.@ In early May 2001, CLS ran an advertisement in the Houston Chronicle. The ad captured the attention of appellant Steven Racciato, a health services administrator. Racciato visited the company=s website to gather more information. A few days later, he flew to Phoenix, Arizona to attend a CLS seminar. While there, he received a packet of information which included financial forecasts and other data suggesting that such a business venture could be profitable. The CLS information packet also included a disclaimer that the forecasts are Aestimates of anticipated revenue and operating expenses@ which Aare based on various assumptions regarding future events, which are subject to change.@ Several individuals associated with CLS, including Davies, gave presentations in Phoenix. At the time of his presentation, Davies served as Chief of Clinical Pulmonary and Critical Care Medicine Services and Director of Medical Intensive Care Unit at The Methodist Hospital and as Co-Chief of Pulmonary and Critical Care Medicine and associate professor of internal medicine at Baylor College of Medicine. Based on his personal observations and other data, Davies discussed the medical need for outpatient pulmonary rehabilitation and the number of patients with lung disease. Davies did not make any guarantees of success but allegedly stated that the forecasts in the packet of information were Areasonable and attainable.@ Immediately after returning from the seminar, Racciato called Davies to discuss opening a facility in Houston. Racciato learned that Davies would be out of the office until the end of the week. Without waiting to speak to him, Racciato called CLS and asked CLS to send a contract. On that same day, Racciato applied for a loan to pay the $125,000 licensing fee. The next day, Racciato gave the contract to his lawyer to review. Racciato talked with Davies by phone and arranged to further discuss the venture=s potential. Racciato claims that, during this conversation, Davies assured him that the projections were Areasonable and attainable@ and Avery reasonable and could be anticipated.@ Racciato signed and returned the CLS contract and never spoke to Davies again. Racciato established a CORF and opened it for business in January 2002, after it became certified by Medicare. Less than a year later, after several problems had developed with the facility, Racciato closed the business. The following year, in April 2003, he sued Davies, Baylor College of Medicine, and The Methodist Hospital for damages he allegedly sustained by the failure of the venture. Racciato asserted claims for fraud and negligent misrepresentation. The trial court rendered summary judgment dismissing Racciato=s claims against Baylor College of Medicine and The Methodist Hospital. Racciato=s claims against Davies were tried to a jury that returned a unanimous verdict in favor of Davies on all claims. II. Issues and Analysis Racciato asserts three issues on appeal, all of which involve alleged error by the trial court in excluding evidence. Davies asserts Racciato=s complaints are either waived for failure to properly preserve error in the trial court or are without merit. A. Witnesses Allegedly Precluded from Testifying In his first issue, Racciato contends that the trial court abused its discretion in allegedly Aexcluding testimony of offered witnesses.@ According to Racciato, these witnesses would have corroborated his testimony by testifying that they had similar dealings with Davies. Racciato bases his complaint on the trial court=s granting of Davies=s motion in limine. In granting Davies=s motion in limine, the trial court instructed Racciato and his counsel not to mention certain matters without first obtaining a ruling from the court outside the presence and hearing of the jury and to caution each witness to follow the same instruction. The trial court prohibited Racciato from offering any evidence of other CORFs that had failed or ceased to do business Aabsent a showing that their failure occurred under circumstances substantially similar to those causing the clinic in question to fail.@ A ruling on a motion in limine is not a ruling on admissibility and does not preserve error for appellate review. Hiroms v. Scheffey, 76 S.W.3d 486, 489 (Tex. App.CHouston [14th Dist.] 2002, pet. denied) (holding that the granting of a motion in limine does not preserve error); Waldon v. City of Longview, 855 S.W.2d 875, 880 (Tex. App.CTyler 1993, no writ). To complain on appeal that the trial court erred in excluding this evidence, Racciato, among other things, had to attempt to introduce the evidence in question during trial and obtain an adverse ruling from the trial court excluding the evidence. See Bean v. Baxter Healthcare Corp., 965 S.W.2d 656, 660 (Tex. App.CHouston [14th Dist.] 1998, no pet.). When a complaining party fails to call a witness or obtain a ruling explicitly excluding the witness, error is not preserved. See Hiroms v. Scheffey, 76 S.W.3d at 489; Bean, 965 S.W.2d at 660; Ramirez v. Ramirez, 873 S.W.2d 735, 741 (Tex. App.CEl Paso 1994, no writ). Racciato never offered the witnesses at trial and never obtained a ruling excluding them. On the first day of trial, Racciato testified during his case in chief. During his direct examination, he mentioned other CORFs that had failed, drawing an objection from defense counsel. When the trial court sustained Davies=s objection to Racciato testifying about these matters, Racciato did not offer any other witnesses, nor did the trial court indicate it would exclude other witnesses. After Racciato finished testifying during the second day of trial, Racciato called Davies as an adverse witness. At the start of the third day of trial, Racciato=s counsel was still questioning Davies. Before testimony began on the third day, Racciato informed the trial court of his desire to make two bills of exception. The first bill of exception, which related to this issue, states in relevant part as follows: [Racciato=s Counsel]: Your Honor, during the plaintiff=s case in chief, the defense counsel made an objection to the testimony being given regarding the witnesses that the plaintiff has brought forward, specifically the witnesses named Chuck Duff, Joe Hall, Art Sanders, and Tom Stevens. The objection was is [sic] that their testimony was not relevant. And I think it was another allegation that it was prejudical. What those individuals are going to testify about, they all were involved in other CORFs and they were going to talk about the representations that Davies made to them regarding the patient volume for their clinics and also the rates of reimbursements [sic] that they would receive after they opened their clinic. And they all will testify that they inquired about additional information. And Davies indicated to them at that time that he couldn=t give them any additional information or refer them to any individuals to speak to until after they signed the contract and paid the $125,000 fee. That is the same allegation that my client has here is that Al Davies made the same representations to him. And all of them will testify that the representations were false and that the reasons that their facilities failed as well was because of the lack of patient flow, which Davies had really confirmed to them that the patientCthere was patient flow and that they would not have to worry about the patient flow. . . . And our position is that this testimony is very relevant to our case and also this evidence would not be prejudicial to the defense. [trial court]: Very well. Does that complete your Bill of Exceptions? [Mr. Houston]: My first Bill of Exceptions. At the conclusion of his bill of exception, Racciato did not seek or obtain a ruling, nor did he attempt to call the witnesses he identified in his bill. Under the governing standard, Racciato failed to preserve error on this issue. See Hiroms, 76 S.W.3d at 489; Bean, 965 S.W.2d at 660; Waldon, 855 S.W.2d at 880.[1] Because Racciato did not preserve error, we overrule his first issue. B. Evidence of Conversations with Other CORF Owners In his second issue, Racciato contends that the trial court erred in preventing him during direct examination from testifying about the details of out-of-court conversations he allegedly had with other owners of CLS-affiliated CORFs that failed. During his direct examination, Racciato attempted to testify as to the content of these conversations.[2] After Racciato had finished testifying and during Racciato=s presentation of an informal bill of exceptions, the trial court stated that it would allow Racciato to testify that he based his decisions on conversations with other CORF owners but would not permit Racciato to testify as to the details of these conversations.[3] Presuming, without deciding, that Racciato preserved error as to his second issue, we conclude that the trial court would not have abused its discretion in concluding that Racciato=s testimony regarding out-of-court conversations he allegedly had with other owners of CLS-affiliated CORFs was inadmissible hearsay. See Gee v. Liberty Mut. Ins. Co., 765 S.W.2d 394, 396 (Tex. 1989). Unless expressly excepted or excluded from the general rule by statute or the rules of evidence, hearsay is inadmissible. Tex. R. Evid. 802. Regardless of the trial court=s reason for sustaining an objection, we will uphold a ruling excluding evidence if there is any proper ground that supports the ruling. See State Bar of Texas v. Evans, 774 S.W.2d 656, 658 n.5 (Tex.1989). We conclude that the trial court did not abuse its discretion in preventing appellant from testifying as to the content of any conversations he had with other CORF owners. See Interstate Northborough P=ship v. State, 66 S.W.3d 213, 220 (Tex. 2001) (stating appellate court reviews trial court=s decision to exclude evidence under an abuse of discretion standard of review). Accordingly, we overrule Racciato=s second issue. In his third issue, Racciato contends that the trial court erred in sustaining Davies=s objection to testimony by other CORF owners and conversations that Racciato may have had with them because Davies allegedly Aopened the door@ to this evidence by cross-examining Racciato about whether all of the CORFs in Houston had failed. To preserve error for appellate review of the trial court=s exclusion of evidence, an appellant must (1) attempt during the evidentiary portion of the trial to introduce the evidence, (2) if an objection is lodged, specify the purpose for which the evidence is offered, (3) obtain a ruling from the trial court, and (4) if the judge rules the evidence inadmissible, make a record, through a bill of exceptions, of the evidence the party seeks to admit. See Bean, 965 S.W.2d at 660. Racciato asserts that, even if testimony by other CORF owners and by Racciato about his conversations with these owners were inadmissible, this evidence still should have been admitted because Davies Aopened the door@ to such evidence based on the way he cross-examined Racciato. As to testimony by the CORF owners, as discussed above, Racciato never sought or obtained a ruling by the trial court as to the admissibility of this evidence, nor did he attempt to call these witnesses. Therefore, Racciato did not preserve his third issue as to this evidence. Regarding Racciato=s testimony as to his conversations with other CORF owners, the trial court sustained Davies=s objection and would not allow Racciato to testify to these matters on direct examination, before Davies allegedly Aopened the door.@ However, on appeal, Racciato has not complained of any trial court ruling excluding such evidence after Davies allegedly Aopened the door@ during his cross-examination of Racciato. Therefore, Racciato did not preserve error in this regard. Even if Racciato had preserved error as to the admission of this evidence, the record shows that the cross-examination in question was a response by Davies to Racciato=s testimony on direct examination indicating that all CORFs in Houston had failed. Davies=s cross-examination as to the state of Racciato=s knowledge regarding CORFs that did not fail is not the same as evidence of Racciato=s conversations with CORF owners whose businesses did fail, nor is it evidence of a similar character. Therefore, even if error had been preserved, the trial court did not abuse its discretion in determining that Davies did not Aopen the door.@ See Moore v. Bank Midwest, N.A., 39 S.W.3d 395, 402 (Tex. App.CHouston [1st Dist.] 2001, pet. denied) (holding party had not opened door to otherwise objectionable evidence because party had not introduced the same evidence or evidence of a similar character). Racciato also states that, because Davies=s counsel allegedly painted an incomplete or misleading picture regarding the Brown Rehabilitation Center and the Asthma & Lung Clinic, Racciato was entitled to introduce evidence clarifying or correcting these matters. However, Racciato never offered any testimony regarding these centers, nor did he obtain a ruling as to such evidence or make an offer of proof as to what this testimony would have been. Therefore, Racciato did not preserve error as to this argument. See Bean, 965 S.W.2d at 660. Accordingly, we overrule Racciato=s third issue. We affirm the trial court=s judgment. /s/ Kem Thompson Frost Justice Judgment rendered and Memorandum Opinion filed August 8, 2006. Panel consists of Justices Hudson, Fowler, and Frost. [1] Racciato relies on Durbin v. Dal-Briar Corp., 871 S.W.2d 263, 270B71 (Tex. App.CEl Paso 1994, writ denied), overruled in part on other grounds by Golden Eagle Archery, Inc. v. Jackson, 24 S.W.2d 372 (Tex. 2000). However, in Durbin the trial court unequivocally ruled during trial that it was excluding the evidence in question. See id. Therefore, Durbin is not on point. [2] The following objections were made by Davies during Racciato=s direct examination: [Racciato=s counsel]: Okay. Anything else that led you to believe that Al Davies= [sic] representations to you were false? [Racciato]: None of the clinics in Houston were able to make it. Mine wasn=t the only one that failed. The clinic that Davies had invited me to see, which I eventually did go down and see, that one failed before mine did. And I had spoken with the owner of that clinic very brieflyCI mean, he [Davies=s counsel]: Your Honor, may I approach the bench. [Trial court]: Yes. Okay. Over here. [Bench conference off the record] . . . [Racciato=s counsel]: Do you have any personal knowledge of other facilities in Houston like yours that also failed? [Racciato]: There were three facilitiesC [Davies=s counsel]: ObjectionC [Trial court]: Excuse me. Excuse me. I=ll sustain the objection for grounds previously stated in the motion in limine and in the sidebar a few minutes ago. [Racciato=s counsel]: Your HonorC [Trial court]: Have I made myself clear . . .? [Racciato=s counsel]: You have made yourself clear. [3] The following excerpt sets forth the exchange between Racciato and the trial court in regard to this second bill of exception. [Trial court]: Please proceed with your second. [Racciato=s Counsel]: The second Bill of Exception generally goes specifically strictly [sic] to some testimony that was also excludedCwas ruled on by the Court based on the defendant=s objections that the plaintiff could not discuss information regarding the failure of other CORFs [sic] facilities like the one he owned and operated. Based on my understanding, the basis of this ruling was under Texas Rule of Evidence 403. This testimony is very relevant to the Plaintiff=s case. This testimony is highly relevant in this case because it regards a question of why the plaintiff did not contact the defendant when his business started to fail. Here the defense has attempted to persuade the jury to take the position that it was unreasonable for the plaintiff to have not contacted Davies before he closed the doors to his clinic. The plaintiff will be severally [sic] and unduly prejudiced if he is not permitted to discuss the reasons why he did not contact the defendant, Al Davies, before he closed the doors to his business. The plaintiff=s explanation is that he had discussions with other owners and other facilities, one of which was located directly in the Medical Center and in which the defendant, Al Davies, was very involved. He was informed that the other facilities were going out of business because they did not acquireC [Trial Court]: This is easy. I will let your client say that he based his decisions on conversations with other CORFs [sic] owners. [Racciato=s Counsel]: Thank you, Your Honor. [Trial Court]: But not the details of what they said, just he did it based on his conversations with other CORFs owners.