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South Coast Spine & Rehabilitation, PA v. Brownsville Independent School District

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

September 12, 2019


          On appeal from County Court at Law No. 1 of Cameron County, Texas.

          Before Justices Benavides, Hinojosa, and Perkes



         In this contract dispute between an out-of-network medical provider and a self-insured school district, we previously held that appellant South Coast Spine & Rehabilitation, PA, (South Coast) could sue appellee Brownsville Independent School District (BISD) as an assignee under BISD's Employee Benefit Plan (Plan). South Coast Spine & Rehab. PA v. Brownsville Indep. Sch. Dist., No. 13-11-00270-CV, 2014 WL 1789546, at *3-5 (Tex. App.-Corpus Christi-Edinburg Apr. 30, 2014, no pet.) (mem. op.). In doing so, we rejected BISD's argument that a written contract between BISD and South Coast was required to waive BISD's immunity under Chapter 271 of the Texas Local Government Code. See id. at *3 ("In its plea to the jurisdiction, BISD asserted that it did not waive its immunity from the breach of contract action because it never entered into a contract with South Coast.") (emphasis added). On remand, the trial court granted BISD's request for a directed verdict based on the absence of a written contract between South Coast and BISD. We reverse and remand.

         I. Background

         South Coast filed suit seeking payment for out-of-network medical services provided to twenty-seven BISD employees. Before performing these services, South Coast confirmed with BISD's third-party administrator, American Administrative Group (AAG), that each patient was eligible to receive benefits under the Plan. Each patient executed an "Assignment of Proceeds, Lien, and Authorization," assigning to South Coast the patient's benefits under the Plan. South Coast submitted claims for these twenty-seven patients and AAG refused payment, in whole or in part, on all of the claims. In addition to BISD, South Coast named the twenty-seven patients as defendants, seeking payment from the patients to the extent the services were not covered under the Plan. South Coast's claims sounded in both tort and contract.

         In its answer, BISD made the following admissions:

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 Brownsville Independent School District and represents those benefits provided by [BISD] to its employees. The plan is a detailed explanation of benefits and limitation of those benefits and includes but is not limited to, restrictive parameters such as co-payments, co-insurance, limitation of coverage, limitation of procedures, preferred provider networks, etc. Employees are free to select medical providers of their choosing. When employees select a medical provider, they assign the benefits provided to them by [BISD] to the 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.

         BISD subsequently filed a plea to the jurisdiction, arguing it was immune from all of South Coast's claims. BISD also filed a motion to dismiss the claims against its employees under the election-of-remedies provisions of the Texas Tort Claims Act (TTCA). See Tex. Civ. Prac. & Rem. Code Ann. § 101.106(e).

         The trial court granted both motions, and we affirmed in part, and reversed and remanded in part, holding BISD and the individuals were immune from the tort claims, but not the contract claims. South Coast, 2014 WL 1789546, at *3-9. As to the contract claim against BISD, we concluded that "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." Id. at *3 (citing Tex. Loc. Gov't Code Ann. § 271.152). We rejected BISD's argument that there must be a written contract between South Coast and BISD; instead, we held that South Coast "has a right to sue as an assignee that was intended under the employee benefits plan." Id. at *5 (citing First- Citizens Bank & Trust Co. v. Greater Austin Area Telecomms. Network, 318 S.W.3d 560, 568 (Tex. App.-Austin 2010, no pet.)).

         On remand, a jury trial was commenced. After South Coast rested, BISD moved for a directed verdict in open court, arguing that "[b]ecause BISD never agreed, either by agreement or practice, to enter into a contract with [South Coast], we believe that that negates the existence of a contract." The trial court agreed, granting a directed verdict for BISD because "there was no contract [between BISD and South Coast]." This appeal ensued.[1]

         II. Standard of Review

         When a trial court grants a directed verdict, we review the evidence in the light most favorable to the nonmovant and disregard any contrary evidence. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 82-83 (Tex. 2000). If there was "some evidence" to raise an issue of material fact on the question presented, the directed verdict was improperly granted. Id. at 83.

         III.Discus ...

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