NO. 03

- 15

- 00309

- CV
CITY OF AUSTIN and THE UNITED HEALTHCARE CHOICE PLUS PLAN FOR CITY OF AUSTIN EMPLOYEES, Appellants, v. CHARLES LESNIAK, Appellee. § § § § § § § § § § IN THE THIRD

COURT OF APPEALS IN

AUSTIN, TEXAS

JOINT APPELLANTS’ REPLY BRIEF

ORAL ARGUMENT IS REQUESTED Andrew G. Jubinsky Texas Bar No. 11043000 andy.jubinsky@figdav.com Lance V. Clack Texas Bar No. 24040694 lance.clack@figdav.com
F IGARI + D AVENPORT , LLP 901 Main Street, Suite 3400 Dallas, Texas 75202 (214) 939

- 2000 (214) 939

- 2090 (Fax)
A TTORNEYS F OR A PPELLANT T HE U NITED H EALTHCARE C HOICE P LUS P LAN F OR C ITY O F A USTIN E MPLOYEES Andralee Cain Lloyd State Bar No. 24071577 andralee.lloyd@austintexas.gov Megan Mosby State Bar No. 24073392 megan.mosby@austintexas.gov
C ITY OF A USTIN

– L AW D EPARTMENT P. O. Box 1546 Austin, Texas 78767

- 1546 (512) 974

- 2918 (512) 974

- 1311 (Fax)
A TTORNEYS FOR A PPELLANT C ITY OF A USTIN ACCEPTED 03-15-00309-CV 6335946 THIRD COURT OF APPEALS

AUSTIN, TEXAS 8/3/2015 4:23:28 PM JEFFREY D. KYLE

CLERK- i
TABLE OF CONTENTS
T ABLE OF CONTENTS

................................ ................................ ............................ i I NDEX OF AUTHORITIES

................................ ................................ ..................... ii A RGUMENT

................................ ................................ ................................ ............. 1 A. I ntroduction.

................................ ................................ .......................... 1
B. A ppellants are immune from suit.

................................ ......................... 1 C. S ection 271.152 does not waive Appellee’s immunity.

........................ 3
P RAYER

................................ ................................ ................................ .................... 4 CERTIFICATE OF COMPLIANCE

................................ ................................ ......... 6- ii
INDEX OF AUTHORITIES Page(s) C ASES Bailey v. City of Austin , 972 S.W.2d 180 (Tex. App.

— Austin 1998, pet. denied)

................................ ..... 2 City of Georgetown v. Lower Colorado River Authority , 413 S.W.3d 803 (Tex. App.

— Austin 2013, pet. dism’d)

................................ ..... 2 City of San Antonio v. City of B oerne , 111 S.W.3d 22 (Tex. 2003)

................................ ................................ ................... 4 East Houston Estate Apartments, LLC v. City of Houston , 294 S.W.3d 723 (Tex. App.

— Houston [ 1st Dist.] 2009, no pet.)

........................ 4 Gates v. City of Dallas , 704 S.W.2d 737 (Tex. 1986)

................................ ................................ ................ 2 Humana Ins. Co. v. Mueller , 2015 WL 1938657, No. 04

- 14

- 752

- CV (Tex. App.

— San Antonio, April 29, 2015, no pet. h.)

................................ ................................ .............................. 2 Lubbock County Water Control & Imp. Dist. v. Church & Akin, L.L.C. , 442 S.W.3d 297 (Tex. 2014)

................................ ................................ ............ 3 , 4 S TATUTES Tex. Gov’t Code § 271.152

................................ ................................ ................ 1 , 3 , 4 Tex. Gov’t Code § 2259.002

................................ ................................ .......... 1 , 2 , 3 , 4JOINT APPELLANTS’ RE PLY BRIEF P AGE 1 ARGUMENT A. Introduction
. In his brief, Appellee argues that (1) providing benefits to city employees is a proprietary function, for which there is no immunity, and (2) even if immunity exists, it is waived by Tex. Local Gov’t Code §271.152 . Appellee’s first argument ignores the application of Tex. Gov’t Code § 2259.002 , which is fatal to Appellee’s position, and his second argument fails because this suit does not arise from services provided to the City of Au stin. The Trial Court’s ruling should be reversed, and judgment rendered in favor of Appellants.
B. Appellants are immune from suit
. Appellee concedes the City of Austin is a qualifying governmental entity with immunity [Appellee’s Brief, p. 7], and does n ot dispute that the Plan, which is
a self

- funded benefit plan established by the City of Austin, is likewise immune. Instead, Appellee argues that the City of Austin engaged in a proprietary function for which there is no immunity. Appellee’s argument t hat providing benefits pursuant to a self

- funded plan is a proprietary function is incorrect. The legislature has made clear that a municipality has immunity from claims for benefits under a self

- funded plan: “[t]he establishment and maintenance of a self

- insurance program by aJOINT APPELLANTS’ RE PLY BR IEF P AGE 2 governmental unit is not a waiver of immunity or of a defense of the governmental unit or its employees.” Tex. Gov’t Code § 2259.002

. The cases Appellee relies on for the proposition that providing benefits to employees pursuant to a self

- funded benefit plan is a proprietary function, Bailey v. City of Austin , 972 S.W.2d 180 (Tex. App.

— Austin 1998, pet. denied) and Gates v. City of Dallas , 704 S.W.2d 737 (Tex. 1986) , were decided before Section
2259.002 was enacted in 1999. These cases have been superseded by statute, and are no longer good law. Further, the clear applicability of Section 2259.002 distinguishes this case from City of Georgetown v. Lower Colorado River Authority , 413 S.W.3d 803 (Tex. App.

— Austin 2013, pet. dism’d) , which involved an agreement between a city and a power company, and was not governed by
Section 2259.002 or any similar statute. More recent cases make clear that a municipality has immunity from claims for benefits brought pursuant to a self

- funded pl an. Humana Ins. Co. v. Mueller , 2015 WL 1938657, No. 04

- 14

- 752

- CV (Tex. App.

— San Antonio, April 29, 2015, no pet. h.)

. Tellingly, Appellee does not even cite Section 2249.002 or argue that it is inapplicable to this case. Appellee likewise fails to addr ess the opinion in
Mueller , 2015 WL 1938657 , which correctly applied Section 2259.002 and held that a governmental entity, and its self

- funded plan, is immune from any suits for benefits brought pursuant to the plan. Even if Appellee’s argument regarding theJOINT APPELLANTS’ RE PLY BRIEF P AGE 3 applicability of the proprietary/governmental function distinction is accepted, a municipality clearly has immunity for claims arising from the provision of benefits pursuant to a self

- funded plan. Id.
C. Section 271.152 does not waive Appellee’s i mmunity
. Appellee concedes that, in order to plead a valid waiver of immunity under Chapter 271 , Appellee must show that the contract provides for the provision of goods and services to the local governmental e ntity. [Appellee’s Brief, p. 7

- 8.] Appellee argues that the Plan provides for services to the City of Austin because (1) Appellee provided services to the City of Austin, and (2) the Plan provides
benefits to the City of Austin, employees of the City of Austin, and their dependents. [Appellee’s Brief, p. 10.] These services are insufficient to bring the contract within the scope of
Section 271.152 . First, to the extent Appellee provides services to the City of Austin, he does not do so pursuant to the Plan. Stated differently, the Plan does not provide for the provision of any services by Appellee. Second, to the extent the Plan provides services to the City of Austin, they are not the subject of suit.
Se rvices provided to employees of the City of Austin and their dependants are not services provided to the governmental entity. None of the provided services identified by Appellee are sufficient to waive immunity for this suit under Section
271.152

. See, e.g., Lubbock County Water Control & Imp. Dist. v. Church & Akin,JOINT APPELLANTS’ RE PLY BRIEF P AGE 4 L.L.C. , 442 S.W.3d 297, 303 (Tex. 2014) (holding that the provision of services to a water district’s constituents did not constitute the provision of services to the water district, and therefore immunity was not waived under Cha pter 271 ); East Houston Estate Apartments, LLC v. City of Houston , 294 S.W.3d 723, 726 (Tex. App.

— Houston [ 1st Dist.] 2009, no pet.) . Appellee makes no effort to distinguish
Church & Akin or East Houston Estate , both of which are fatal to his claim. Finally, Appellee again fails to recognize the impact of Section 2259.002

. If Appellee’s argument regarding Section 271.152 was accepted, every governmental entity would waive immunity when it established a self

- funded plan, and Section
2259.002 would be rendered a nullity. This is not the law. City of San Antonio v. City of B oerne , 111 S.W.3d 22 (Tex. 2003) (holding that the purpose of statutory construction is to give effect to every part). Appellee has failed to plead or articulate a valid waiver of immunity.
PRAYER For the foregoing reasons, Appellants request that this Co urt reverse the Trial Court’s order denying Appellants’ plea to the jurisdiction and render judgment dismissing Appellee’s claims.JOINT APPELLANTS’ RE PLY BRIEF P AGE 5 Respectfully submitted,

By: /s/ Lance V. Clack Andrew G. Jubinsky Texas Bar No. 11043000 andy.jubinsky@figdav.com Lance V. Clack Texas Bar No. 24040694 lance.clack@figdav.com
F IGARI & D AVENPORT , L.L.P. 901 Main Street, Suite 3400 Dallas, Texas 75202 Tel: (214) 939

- 2000 Fax: (214) 939

- 2090
A T TORNEYS FOR THE U NITED H EALTHCARE C HOICE P LUS P LAN FOR C ITY OF A USTIN E MPLOYEES

KAREN M. KENNARD, CITY ATTORNEY MEGHAN L. RILEY, CHIEF LITIGATION By: /s/ Megan Mosby Andralee Cain Lloyd State Bar No. 24071577 andralee.lloyd@austintexas.gov Megan Mosby State Bar No. 24073392 megan.mosby@austintexas.gov City of Austin

– Law Department P. O. Box 1546 Austin, Texas 78767

- 1546 Tel: (512) 974

- 2918 Fax: (512) 974

- 1311
A TTORNEYS FOR C ITY OF A USTINJOINT APPELLANTS’ RE PLY BRIEF P AGE 6 CERTIFICATE OF COMPL IANCE This document complies the word

- count limitations of Rule 9.4(i)(3) because it contains 877 words as calculated per the word processing program used for its preparation, excluding any parts exe mpted by Rule 9.4(i)(1). /s/ Lance V. Clack Lance V. ClackJOINT APPELLANTS’ RE PLY BRIEF P AGE 7 CERTIFICATE OF SERVI CE On the 3rd day of August , 2015, a true and correct copy of the foregoing document was served on counsel as follows: Via E
- Service Amar Raval araval@plummerlawyers.com James C. Plummer jplummer@plummerlawyers.com P LUMMER & K UYKENDALL 4203 Montrose Blvd., Suite 270 Houston, Texas 77006 Attorney for Plaintiff /s/ Lance V. Clack Lance V. Clack