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.

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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

FIGARI + DAVENPORT, LLP

901 Main Street, Suite 3400

Dallas, Texas 75202

(214) 939-2000 

(214) 939-2090 (Fax)

ATTORNEYS FOR APPELLANT 

THE UNITED HEALTHCARE CHOICE PLUS 

PLAN FOR CITY OF AUSTIN EMPLOYEES

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

(512) 974-2918

(512) 974-1311 (Fax)

ATTORNEYS FOR APPELLANT

CITY OF AUSTIN

ACCEPTED

03-15-00309-CV

6335946

THIRD COURT OF APPEALS

AUSTIN, TEXAS

8/3/2015 4:23:28 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 8/3/2015 4:23:28 PM JEFFREY D. KYLE Clerk
-iTABLE OF CONTENTS 

TABLE OF CONTENTS............................................................................................i

INDEX OF AUTHORITIES..................................................................................... ii

ARGUMENT.............................................................................................................1

A. Introduction. ..........................................................................................1

B. Appellants are immune from suit..........................................................1

C. Section 271.152 does not waive Appellee’s immunity.........................3

PRAYER....................................................................................................................4

CERTIFICATE OF COMPLIANCE.........................................................................6
-iiINDEX OF AUTHORITIES

Page(s)

CASES

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 Boerne,

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

STATUTES

Tex. Gov’t Code § 271.152................................................................................1, 3, 4

Tex. Gov’t Code § 2259.002..........................................................................1, 2, 3, 4
JOINT APPELLANTS’ REPLY BRIEF PAGE 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 Austin. 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 not 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 that 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 a 
JOINT APPELLANTS’ REPLY BRIEF PAGE 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 plan. 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 address 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 the 
JOINT APPELLANTS’ REPLY BRIEF PAGE 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 immunity.

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 entity. [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. 

Services 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’ REPLY BRIEF PAGE 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 Chapter 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 Boerne, 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 Court reverse the 

Trial Court’s order denying Appellants’ plea to the jurisdiction and render 

judgment dismissing Appellee’s claims.
JOINT APPELLANTS’ REPLY BRIEF PAGE 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

FIGARI & DAVENPORT, L.L.P.

901 Main Street, Suite 3400

Dallas, Texas 75202

Tel: (214) 939-2000 

Fax: (214) 939-2090

ATTORNEYS FOR THE UNITED HEALTHCARE 

CHOICE PLUS PLAN FOR CITY OF AUSTIN 

EMPLOYEES

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

ATTORNEYS FOR CITY OF AUSTIN
JOINT APPELLANTS’ REPLY BRIEF PAGE 6

CERTIFICATE OF COMPLIANCE

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 exempted by Rule 9.4(i)(1).

/s/ Lance V. Clack

 Lance V. Clack
JOINT APPELLANTS’ REPLY BRIEF PAGE 7

CERTIFICATE OF SERVICE

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

PLUMMER & KUYKENDALL

4203 Montrose Blvd., Suite 270

Houston, Texas 77006

Attorney for Plaintiff

/s/ Lance V. Clack

 Lance V. Clack