JAMES T. WORTHEN, Chief Justice.
Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation (BCBS), seeks to dissolve a temporary injunction requiring it to place East Texas Medical Center (ETMC) in its preferred
ETMC is the only not for profit, full service, acute care hospital in the State of Texas that is not in BCBS's PPO network. ETMC has annually sought to become a member of BCBS's PPO network since 1993, but has been continually rebuffed by BCBS. On June 2, 2015, ETMC filed suit against BCBS seeking damages for breach of its duties to ETMC and for interference with prospective business relations and economic advantage.
On July 30 and September 24, 2015, respectively, Moody's Investor Services and Fitch Ratings downgraded ETMC's bond ratings. Both Moody's and Fitch stated ETMC's "outlook remains negative." Both rating agencies described declining revenues and patient volumes as the reason for their downgrades. Specifically, Moody's stated that these declines were "amplified by ETMC's longstanding out-of-network status with all major commercial insurance companies."
Following these two bond downgrades, ETMC filed an amended petition seeking a temporary injunction requiring BCBS to put ETMC in its PPO network. On November 10, the trial court held a six hour hearing on this request. ETMC's balance sheet, part of the documentary evidence admitted at the hearing, showed ETMC had $286,857,000.00 cash and cash equivalents on hand as of September 30, 2015. Further evidence showed ETMC had a $140,594,000.00 cash surplus above its bond covenant requirement.
Byron Hale, chief financial officer for ETMC, testified that ETMC lost $16,000,000.00 dollars in FY 2015. He testified that ETMC would not be able to continue its current level of services unless the trial court required BCBS to put ETMC in its PPO network immediately. Dr. Steven Rydzak, chairman of ETMC's department of medicine and a member of its board of directors, testified that "it's inevitable that ETMC Tyler will fail unless relief is imminent." Immediately upon conclusion of the hearing, the trial court rendered an order granting the temporary injunction, which in pertinent part states as follows:
BCBS timely filed an accelerated appeal of the temporary injunction to this court.
BCBS argues in one issue that ETMC failed to produce probative evidence establishing a probable, imminent, and irreparable injury before the scheduled trial on the merits in November 2016. Therefore, BCBS argues that the trial court abused its discretion when it impermissibly altered the status quo between the parties by granting the temporary injunction.
To obtain a temporary injunction, the applicant must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex.2002). A temporary injunction's purpose is to preserve the status quo of the litigation's subject matter pending a trial on the merits. Id. In this context, the status quo is the last, actual, peaceable, noncontested status between the parties to the controversy that preceded the pending suit. See In re Newton, 146 S.W.3d 648, 651 (Tex.2004); Cannan v. Green Oaks Apts., Ltd., 758 S.W.2d 753, 755 (Tex.1988).
There are two general types of temporary injunctions: prohibitive and mandatory. RP & R, Inc. v. Territo, 32 S.W.3d 396, 400 (Tex.App.-Houston [14th Dist.] 2000, no pet.). A prohibitive injunction forbids conduct, and a mandatory injunction requires it. Lifeguard Benefit Servs. v. Direct Med. Network Sols., Inc.,
The decision to grant or deny a temporary injunction lies in the sound discretion of the trial court. Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex.1993). A reviewing court should reverse an order granting injunctive relief only if the trial court abused that discretion. Butnaru, 84 S.W.3d at 204. The trial court does not abuse its discretion if some evidence reasonably supports the trial court's decision. Id. More specifically, the trial court does not abuse its discretion when it bases its decision on conflicting evidence, or when some evidence of substantive and probative character exists to support its decision. Wright v. Sport Supply Grp., Inc., 137 S.W.3d 289, 292 (Tex.App.-Beaumont 2004, no pet.); Grubaugh v. Tex. Emp'rs Ins. Ass'n, 677 S.W.2d 812, 814 (Tex.App.-Fort Worth 1984, writ dism'd). An abuse of discretion arises when the trial court misapplies the law to the established facts of the case or when it concludes that the movant has demonstrated a probable injury or a probable right to recovery, and the conclusion is not reasonably supported by the evidence. Tri-Star Petroleum Co. v. Tipperary Corp., 101 S.W.3d 583, 587 (Tex. App.-El Paso 2003, pet. denied).
The Texas Rules of Evidence permit opinion testimony from lay witnesses as well as expert witnesses. See TEX. R. EVID. 701, 702. The personal experience and knowledge of a lay witness may establish that the witness is capable, without qualification as an expert, of expressing an opinion on a subject outside the realm of common knowledge. Hathcock v. Hankook Tire Am. Corp., 330 S.W.3d 733, 747 (Tex.App.-Texarkana 2010, no pet.). It is only where the fact finder may not fully understand the evidence or be able to determine the fact in issue without the assistance of someone with specialized knowledge that a witness must be qualified as an expert. Id.
Texas courts regularly allow business owners and company officers to testify as lay witnesses, based on knowledge derived from their positions and any other relevant experience. See, e.g., Am. Heritage, Inc. v. Nev. Gold & Casino, Inc., 259 S.W.3d 816, 827 (Tex.App.-Houston [1st Dist.] 2008, no pet.) (former chief financial officer testified about lost profits); Lamajak, Inc. v. Frazin, 230 S.W.3d 786, 797 (Tex.App.-Dallas 2007, no pet.) (business owner testified about value of services he provided to retail chain); SAS & Assoc., Inc. v. Home Mktg. Servicing, Inc., 168 S.W.3d 296, 302 (Tex.App.-Dallas 2005, pet. denied) (sole shareholder, director, and officer testified about reasonable cost of repairing company's damaged personal property).
In this case, testimony was provided by Byron Hale, ETMC's chief financial officer, and Dr. Steven Rydzak, chairman of ETMC's department of medicine and a member of its board of directors. At the temporary injunction hearing, ETMC did not qualify either witness as an expert. Hale's and Dr. Rydzak's testimony concerned their knowledge of ETMC's operations and financial condition rather than their specialized knowledge, skill, experience, training, or education. Therefore, we conclude that both witnesses testified as lay witnesses.
"Rationally based" means that the opinion must be one that a person could normally form from observed facts. Ethicon, Inc. v. Martinez, 835 S.W.2d 826, 831 (Tex.App.-Austin 1992, writ denied). When an opinion is not rationally based on a witness's perception, the purported evidence is only speculation. Havner v. E-Z Mart Stores, Inc., 825 S.W.2d 456, 465 (Tex.1992). Speculative testimony has no probative value. See Coastal Transport Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 233 (Tex.2004); see also Nat. Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150, 156 (Tex.2012) (applying Coastal to lay witness testimony). "Speculate" means "to take to be true on the basis of insufficient evidence." Bd. of Trustees of Fire & Police Retiree Health Fund v. Towers, Perrin, Forster & Crosby, Inc., 191 S.W.3d 185, 194 (Tex.App.-San Antonio 2005, pet. denied).
Between the years of 1993 and 2015, there was no contract allowing ETMC to be a part of BCBS's PPO network. That was the status quo. When the trial court entered a temporary mandatory injunction requiring BCBS to put ETMC in its PPO network, it altered the status quo. The issuing of a temporary mandatory injunction altering the status quo is proper only if a mandatory order is necessary to prevent irreparable injury or extreme hardship. Tri-Star Petroleum Co., 101 S.W.3d at 592. When asked at oral argument what evidence it had produced at the temporary injunction hearing to support the granting of the temporary injunction, ETMC pointed to the following opinion testimony offered by Hale and Dr. Rydzak:
ETMC was required to show that it would suffer a probable, imminent, and irreparable injury prior to November 2016 by either having to close the hospital or cut services. But neither Hale nor Dr. Rydzak specifically opined that ETMC would close or cut services before November 2016. Thus, ETMC's proof of probable, imminent, and irreparable injury is lacking. But even if we assume that Hale's and Dr. Rydzak's testimony expresses an opinion that one of those events will occur prior to November 2016, their opinions would not be probative evidence because they are speculative. See Justiss, 397 S.W.3d at 156-57.
Hale's testimony was that ETMC had lost $16,000,000.00 in FY 2015-an average of $1,333,000.00 per month. Certainly, this is a trend that ETMC cannot continue indefinitely. In other testimony, Hale related that ETMC's bond ratings had been downgraded and its debt coverage ratio had to be at 110% but had dropped from 2.2 in 2013 to 1.8 in 2014. He also testified that ETMC had done everything possible to reduce the cost of its operation to offset the reduced revenue, which included reducing some services the previous year. However, ETMC's own financial data shows that it had a cash cushion of $140,594,000.00 above its bond covenant requirement, as of September 30, 2015.
We cannot say that, based on these facts, a person would normally conclude that ETMC will have to close or cut services before the November 2016 trial date. Therefore, any such opinion would be speculative because it is not rationally based on the witnesses' perceptions. Consequently, the opinion has no probative value.
ETMC has not presented any probative evidence of probable, imminent, and irreparable injury prior to November 2016. Accordingly, we hold that the trial court abused its discretion in issuing the temporary injunction. BCBS's sole issue is sustained.
Having held that ETMC failed to produce evidence of a probable, imminent, and irreparable injury before November 2016, we need not address the first two elements necessary to obtain a temporary injunction. See RP & R, Inc., 32 S.W.3d at 401. The temporary injunction of November 10, 2015 is immediately dissolved, and the case is remanded to the trial court for further proceedings.
