Spine v. Brownsville Indep. Sch. Dist.

• Decision Date: 30 April 2014
• Docket Number: NUMBER 13-11-00270-CV
• Court: Texas Court of Appeals
• Parties: SOUTH COAST SPINE & REHABILITATION PA, Appellant, v. BROWNSVILLE INDEPENDENT SCHOOL DISTRICT, HECTOR G. AYALA JR., AND GWENDOLYN S. HAUGHT, Appellees.

SOUTH COAST SPINE & REHABILITATION PA, Appellant, v. BROWNSVILLE INDEPENDENT SCHOOL DISTRICT,HECTOR G. AYALA JR., AND GWENDOLYN S. HAUGHT, Appellees.

NUMBER 13-11-00270-CV

COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG

Delivered and filed: April 30, 2014

On Appeal from the County Court at Law No. 1

of Cameron County, Texas.

MEMORANDUM OPINION

Before Chief Justice Valdez and Justices Garza and Longoria

Memorandum Opinion by Chief Justice Valdez

By three issues, appellant, South Coast Spine & Rehabilitation PA (South Coast) challenges the trial court's granting of a plea to the jurisdiction in favor of appellee, Brownsville Independent School District (BISD), and the dismissal of South Coast'scauses of action against appellee, Gwendolyn S. Haught (Haught).¹ South Coast argues that (1) because BISD was acting in a proprietary capacity by providing its employees with insurance, the trial court erred by finding that BISD had governmental immunity; (2) the trial court erred by finding that BISD did not waive its governmental immunity from South Coast's breach of contract cause of action by entering into a contract to provide its employees with insurance; and (3) the trial court erred by dismissing its claims against Haught. We affirm in part and reverse and remand in part.

I. BACKGROUND

On November 4, 2008, South Coast filed its original petition in this lawsuit. In its amended petition, South Coast alleged that it was entitled to payment for medical services rendered to employees of BISD. It claimed that BISD was liable for the services performed because it was "a third party beneficiary and first party beneficiary by virtue of assignments [South Coast] received from the plaintiffs."

The petition asserted that BISD "offers a 'Brownsville ISD Employee Benefit Plan' for its employees and enrollees. . . . It is believed that the [BISD] employee insurance plan is a written document to determine the rights and responsibilities between BISD and the employees." South Coast then detailed the medical services it provided to twenty-six BISD employees. It listed causes of action for (1) breach of contract, as well as (2) civil conspiracy; (3) concert of action; (4) breach of fiduciary duty; (5) fraud; (6) misrepresentation; (7) promissory estoppel; (8) breach of good faith and fair dealing; and(9) unjust enrichment. In the petition, South Coast explained that there was no contract between it and BISD, but that it

obtained assignments from the patients to directly receive proper reimbursement from BISD or [its third-party administrator]. Pursuant to the policy and admissions by BISD and [its third-party administrator], medical providers are paid by — through [BISD] by the [third-party administrator] for those benefits that qualify and that the employee has assigned to the medical provider.

In the "Notices" section of its petition, South Coast stated, "An 'Assignment of Proceeds, Lien, and Authorization' has been duly executed by all patients and have been forwarded to BISD and [its third-party administrator] under separate cover on May 7, 2009 . . . ." In its First Amended Answer, BISD explained:

Defendant BISD provides medical benefits to its employees pursuant to a self-funded employee medical benefits plan. Such plan is adopted by the Board of Trustees of [BISD] and represents those benefits provided by [BISD] to its employees. The plan is a detailed explanation of benefits and limitations of those benefits. . . . Employees are free to select medical providers of their choosing. When employees select a medical provider, they assign the benefits provided them by [BISD] to that medical provider. The medical provider thereafter treats and bills the patient at its discretion. BISD's commitment is only that it pay the provider the employee's assigned benefits that the employee is entitled to as per the terms and conditions of its benefit plan. . . . [South Coast] judicially admits that it is not in privity of contract with Defendant BISD and that it only receives assigned benefits . . . .

BISD then filed a plea to the jurisdiction arguing that (1) all of South Coast's claims are barred by the doctrine of sovereign immunity, and (2) BISD has not waived immunity to South Coast's claims sounding in contract because "there has been no negotiation between the District and [South Coast] to develop contract terms and there was no intent on the basis of the District to enter in to an agreement with [South Coast]." BISD attached the affidavit of Brett Springston, Interim Superintendent of BISD, in which he stated that, "I verify that at no time has [BISD] ever entered into or negotiated a contract or any otherform of agreement for goods and/or services with [South Coast]." On January 19, 2011, the trial court granted BISD's plea to the jurisdiction.

BISD also filed a motion to dismiss South Coast's claims against the individual defendants under the election of remedies provision of the Texas Torts Claims Act (TTCA). BISD moved to have the claims against the individual defendants dismissed because, "[i]f a suit is filed under this chapter against both a governmental unit and any of its employees, the employees shall immediately be dismissed on the filing of a motion by the governmental unit." See TEX. CIV. PRAC. & REM. CODE ANN. § 101.106(e) (West, Westlaw through 2013 3d C.S). The trial court granted the plea to the jurisdiction and motion to dismiss. This appeal followed.

II. PLEA TO THE JURISDICTION APPLICABLE LAW & STANDARD OF REVIEW

A plea to the jurisdiction challenges the trial court's authority to determine the subject matter of a cause of action. Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex. 1999). Whether a trial court has subject-matter jurisdiction and whether a pleader has alleged facts that affirmatively demonstrate the trial court's subject-matter jurisdiction are questions of law that we review de novo. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004); Tex. Natural Res. Conservation Comm'n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002). The plaintiff has the burden to plead facts affirmatively showing that the trial court has jurisdiction. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).

We construe the pleadings liberally in favor of the pleader, look to the pleader's intent, and accept as true the factual allegations in the pleadings. See Miranda, 133 S.W.3d at 226. If a plea to the jurisdiction challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties when necessary to resolve thejurisdictional issues raised, as the trial court is required to do. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 555 (Tex. 2000) (confining the evidentiary review to evidence that is relevant to the jurisdictional issue). We take as true all evidence favorable to the non-movant and indulge every reasonable inference and resolve any doubts in the non-movant's favor. See Miranda, 133 S.W.3d at 228. If the relevant evidence is undisputed or a fact question is not raised relative to the jurisdictional issue, the trial court rules on the plea to the jurisdiction as a matter of law. Id. If the evidence creates a fact question regarding jurisdiction, the trial court cannot grant the plea, and the issue will be resolved by the fact finder. Id. at 227-28; Galveston Indep. Sch. Dist. v. Clear Lake Rehab. Hosp., L.L.C., 324 S.W.3d 802, 807 (Tex. App.—Houston [14th Dist] 2010, no pet.).

III. GOVERNMENTAL VS. PROPRIETARY FUNCTIONS

By its first issue, South Coast contends that BISD was not entitled to governmental immunity because it was acting in a proprietary capacity by providing its employees with healthcare. South Coast relies primarily on our decision in Casso v. City of McAllen in which we held that the City of McAllen was acting in its proprietary capacity by providing health insurance to its employees. No. 13-08-00618-CV, 2009 WL 781863, at *7 (Tex. App.—Corpus Christi Mar. 26, 2009, pet. denied) (mem. op.). The reasoning and holding in that case, however, related specifically to cities, which Texas courts have held act in both a proprietary and governmental capacity. See, e.g., Braun v. Trustees of Victoria Indep. Sch. Dist., 114 S.W.2d 947, 950 (Tex. Civ. App.—San Antonio 1938, writ ref'd). In contrast, Texas courts have repeatedly held that because they may only act as authorizedby the legislature, school districts only perform governmental functions.² Moreover, in this case, unlike Casso, BISD's provision of health insurance to employees was required by statute and was therefore a governmental action. See TEX. EDUC. CODE ANN. § 22.004 (West, Westlaw through 2013 3d C.S.); cf. Casso, 2009 WL 781863 at *7 ("The City has not cited, nor are we aware of, statutory authority demonstrating that providing health insurance coverage to Casso constituted a governmental function or that the legislature mandated the City to provide Casso with health insurance coverage."). Accordingly, the trial court properly granted BISD's plea to the jurisdiction as to South Coast's tort causes of action. South Coast's first issue is overruled.

IV. WAIVER OF GOVERNMENTAL IMMUNITY UNDER SECTION 271.152

In its second issue, South Coast argues that the trial court erred by granting the plea to the jurisdiction on its breach of contract cause of action because, under section 271.152 of the Texas Local Government Code, BISD waived its governmental immunity by entering into contracts to provide its employees with health insurance. TEX. LOC. GOV'T CODE ANN. §271.152 (West, Westlaw through 2013 3d C.S.). South Coast contends that BISD's waiver applies to its suit because the employees executed assignments of their rights under the insurance contract to South Coast, and because under the benefits plan,medical providers are intended third-party beneficiaries of the contract. BISD responds that (1) under section 271.152, the government cannot waive...