Farmers Tex. Cnty. Mut. Ins. Co. v. Beasley

• Court: Texas Supreme Court
• Writing for the Court: Justice Green delivered the opinion of the Court.
• Citation: Farmers Tex. Cnty. Mut. Ins. Co. v. Beasley, 598 S.W.3d 237 (Tex. 2020)
• Decision Date: 27 March 2020
• Docket Number: No. 18-0469,18-0469
• Parties: FARMERS TEXAS COUNTY MUTUAL INSURANCE COMPANY, Petitioner, v. Rodney BEASLEY, Respondent

598 S.W.3d 237

FARMERS TEXAS COUNTY MUTUAL INSURANCE COMPANY, Petitioner,

v.Rodney BEASLEY, Respondent

No. 18-0469

Supreme Court of Texas.

Argued November 5, 2019

OPINION DELIVERED: March 27, 2020

Thomas F. Loose, Paul F. Schuster, Locke Lord LLP, Dallas, for Petitioner.

Gregory D. Smith, Nolan Duane Smith, Smith Legal, PLLC, Ronald Stephen Vickery, Vickery Law Firm, Tyler, L. Boyd Smith Jr., The Boyd Smith Law Firm, PLLC, Walter Perry Zivley Jr., Chandler Mathis & Zivley PC, Houston, for Respondent.

Beth E. Klusmann, Assistant Solicitor General, Kyle D. Hawkins, Solicitor General, Warren Kenneth Paxton, Jeffrey C. Mateer, First Asst. Attorney General, Office of the Attorney General, Austin, for Amicus Curiae State of Texas.

Justice Green delivered the opinion of the Court.

In this case we must decide whether an injured plaintiff had standing to bring suit against his personal injury protection (PIP) policy insurer after the insurer paid the incurred medical expenses pursuant to the PIP policy, but the amount the PIP insurer paid was the negotiated rate between the plaintiff's health care insurer and the medical providers—not the medical providers’ list rate. The trial court concluded that the plaintiff did not suffer any threatened or actual harm when the PIP insurer paid the amount of medical expenses that the plaintiff's medical insurer actually paid the medical providers pursuant to an agreement with those providers. The court of appeals reversed, holding that the plaintiff's allegation in his petition that the PIP insurer breached the terms of the PIP policy was sufficient to invoke the trial court's jurisdiction. 578 S.W.3d 98, 105–06 (Tex. App.—Tyler 2018, pet. granted). We disagree with the court of appeals and conclude that the plaintiff is unable to show that he suffered any actual or threatened harm as a result of the PIP insurer's payments under the PIP policy. Accordingly, we reverse the judgment of the court of appeals and dismiss the plaintiff's suit for want of jurisdiction.

I. Background

On October 20, 2007, Rodney Beasley was injured in a car accident in Anderson County, Texas. Beasley sought treatment for his injuries and received medical bills from physicians and a rehabilitation center, the list rates of which totaled $2,662.54. At the time of the accident, Beasley had health insurance through BlueCross BlueShield (BCBS). BCBS had negotiated reimbursement rates with Beasley's medical providers and paid the medical providers pursuant to those rates. The total amount BCBS paid Beasley's medical providers was $1,068.90. After BCBS paid the negotiated rates for Beasley's care, his medical providers did not attempt to recover, or hold him liable for, the difference between the providers’ list rates and the negotiated rates that BCBS actually paid. Accordingly, Beasley was not personally responsible for any out-of-pocket medical costs associated with his accident.

In addition to health insurance, Beasley had a PIP policy through Farmers Texas County Mutual Insurance Company (Farmers).¹ The PIP policy stated that Farmers would "pay Personal Injury Protection benefits because of bodily injury: 1. resulting from a motor vehicle accident; and 2. sustained by a covered person." The policy went on to specify that the "Personal Injury Protection benefits consist of: 1. Reasonable expenses incurred for necessary medical and funeral services." Beasley's PIP policy had a maximum coverage amount of $2,500. Nearly three years after the accident, Beasley made a PIP claim to Farmers based on the medical providers’ list rates. The medical provider statements that Beasley presented to Farmers showed that the providers had agreed to accept from BCBS the negotiated rates as full payment for the medical care provided to Beasley—$1,068.90. Beasley was not liable for any difference between the providers’ list rates and what BCBS actually paid the providers pursuant to its negotiated rates. As a result, Farmers paid Beasley $1,068.90.

Beasley contacted Farmers and demanded an additional payment of $1,431.10—the difference between what Farmers paid Beasley and the PIP policy maximum. Farmers maintained that because the PIP policy covered "reasonable expenses incurred for necessary medical and funeral services," it did not owe Beasley anything beyond what was incurred—the $1,068.90 that BCBS paid Beasley's medical providers. Farmers also asked Beasley to provide records of any additional medical expenses that were incurred relating to his automobile accident, and Beasley provided none.

Beasley sued Farmers, alleging breach of contract, Texas Insurance Code violations, and Texas Deceptive Trade Practices Act violations. Beasley claimed that Farmers "arbitrarily reduced [Beasley's] benefits because of health benefits paid under [his] independently obtained health insurance, thereby violating the express terms of the [PIP policy]." He sought to recover the difference between what Farmers paid him and the PIP policy maximum of $2,500. Farmers responded to Beasley's claims with a general denial and a plea to the jurisdiction, arguing that Beasley lacked standing to sue Farmers under the PIP policy because Beasley alleged no actual or threatened injury. Specifically, Farmers argued that the PIP policy authorized payment for medical expenses incurred, and Farmers paid Beasley for all of the medical expenses he incurred, which were the expenses BCBS paid to Beasley's medical providers. According to Farmers, the medical expenses incurred were not the providers’ list rates—they were what the providers accepted as full payment from BCBS. Farmers argued that Allstate Indemnity Co. v. Forth , 204 S.W.3d 795 (Tex. 2006) (per curiam), and Haygood v. De Escabedo , 356 S.W.3d 390 (Tex. 2011), are controlling in this case and stand for the proposition that a PIP beneficiary may not collect the difference between medical providers’ list rates and what a health insurer actually paid when the providers accepted the health insurer's payment as full payment.

The trial court granted Farmers's plea to the jurisdiction and dismissed Beasley's suit. On appeal, Beasley argued that he had established a justiciable claim—that "he was personally aggrieved when Farmers paid him an inadequate PIP benefit." Specifically, Beasley contended that his allegation that Farmers's payments were not reasonable was sufficient to establish standing and invoke the trial court's subject matter jurisdiction. Beasley argued that courts should not look beyond the allegations to the merits of a case when making a standing determination. The court of appeals agreed with Beasley and concluded that his allegations were sufficient to establish standing to sue Farmers under the PIP policy. 578 S.W.3d at 105–06. In reaching this conclusion, the court of appeals distinguished Beasley's case from Forth on the basis that, unlike Beasley, "Forth was not making a claim for monetary damages"—Forth was seeking injunctive relief and sought to require "Allstate to conduct an independent payment review of the reasonableness of the medical expenses Allstate paid." Id. at 103–04 (discussing Forth , 204 S.W.3d at 795 ).

II. Standard of Review

We review questions of standing de novo. Tex. Dep't of Transp. v. City of Sunset Valley , 146 S.W.3d 637, 646 (Tex. 2004). This is because standing is a component of subject matter jurisdiction. See Austin Nursing Ctr., Inc. v. Lovato , 171 S.W.3d 845, 849 (Tex. 2005) (citations omitted) ("Without standing, a court lacks subject matter jurisdiction to hear the case."); see also W. Wendell Hall & Ryan G. Anderson, Standards of Review in Texas, 50 ST. MARY'S L.J. 1099, 1244 (2019) (citations omitted) ("The de novo standard of review applicable to subject-matter jurisdiction applies to standing as well...."). Because a plea to the jurisdiction raises a question of standing, we also review a plea to the jurisdiction de novo. See Presidio Indep. Sch. Dist. v. Scott , 309 S.W.3d 927, 929 (Tex. 2010) (citations omitted) ("We review a trial court's order granting or denying a plea to the jurisdiction de novo."). In applying a de novo standard of review to a standing determination, reviewing courts "construe the pleadings in the plaintiff's favor, but we also consider relevant evidence offered by the parties." In re H.S. , 550 S.W.3d 151, 155 (Tex. 2018) (citations omitted).

III. Analysis

Farmers's principal argument is that the court of appeals erred in failing to follow our opinion in Forth , and therefore failed to apply this Court's standing jurisprudence. See Forth , 204 S.W.3d 795. From Farmers's view, the facts in Forth are essentially the facts here, so the Court should follow the holding in Forth and conclude that Beasley lacks standing. See id. at 795–96. Meanwhile, Beasley contends that Forth is distinguishable from his case, and to the extent that it is indistinguishable, it should not be relied on at this juncture. We disagree with Beasley and conclude that Forth controls in deciding Beasley's standing.

A. Standing Jurisprudence

Standing is a threshold requirement to maintaining a lawsuit. See Heckman v. Williamson Cty. , 369 S.W.3d 137, 150 (Tex. 2012) (citations omitted) ("Standing is a constitutional prerequisite to suit. A court has no jurisdiction over a claim made by a plaintiff who lacks standing to assert it."). To establish standing in Texas, a plaintiff must allege "a concrete injury ... and a real controversy between the parties that will be resolved by the court." Id. at 154. Specifically, the plaintiff must allege a threatened or actual injury—it may not be hypothetical. See Forth , 204 S.W.3d at 796 ; see also DaimlerChrysler Corp. v. Inman , 252 S.W.3d 299, 304–05 (Tex. 2008) (citations omitted) ("For standing, a plaintiff must be personally aggrieved; his alleged injury must be concrete and particularized, actual or imminent, not hypothetical.").

In determining whether a plaintiff has alleged a concrete injury sufficient to meet the...