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’ 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

5802501

THIRD COURT OF APPEALS

AUSTIN, TEXAS

6/24/2015 11:26:16 AM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 6/24/2015 11:26:16 AM JEFFREY D. KYLE Clerk
-iIDENTITY OF PARTIES AND COUNSEL

Appellant

The United Healthcare Choice Plus 

Plan for City of Austin Employees

Trial and Appellate Counsel

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 

Appellant

The City of Austin

Trial and Appellate Counsel

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

Appellee

Charles Lesniak

Trial and Appellate Counsel

Amar Raval

araval@plummerlawyers.com

James C. Plummer

jplummer@plummerlawyers.com

PLUMMER & KUYKENDALL

4203 Montrose Blvd., Suite 270

Houston, Texas 77006

(713) 522-2887
-iiTABLE OF CONTENTS 

TABLE OF CONTENTS.......................................................................................... ii

INDEX OF AUTHORITIES.....................................................................................iv

STATEMENT OF THE CASE..................................................................................1

APPELLANTS’ STATEMENT REGARDING ORAL ARGUMENT....................1

ISSUE PRESENTED.................................................................................................1

1. Whether the Trial Court erred in denying Appellants’ plea 

to the jurisdiction. ......................................................................................................1

STATEMENT OF FACTS ........................................................................................2

A. The Plan. ..........................................................................................2

B. Appellee’s Claims. ................................................................................3

SUMMARY OF ARGUMENT.................................................................................4

ARGUMENT.............................................................................................................5

A. Standard of Review on Appeal..............................................................5

B. Governmental Immunity. ......................................................................5

C. The Plan is Immune From Suit and Liability........................................7

D. Appellee Has Not Pled a Valid Waiver of Immunity. ..........................8

1. The Proprietary/Governmental Function Distinction Does 

Not Apply....................................................................................8

2. Appellee did not plead a valid waiver of immunity under 

Chapter 271...............................................................................10

PRAYER..................................................................................................................10
-iiiCERTIFICATE OF COMPLIANCE ................................................................................ 12

CERTIFICATE OF SERVICE.......................................................................................... 12

APPENDIX
-ivINDEX OF AUTHORITIES

Page(s)

CASES

Anderson v. City of San Antonio,

120 S.W.3d 5 (Tex. App.—San Antonio 2003, pet. denied).................................. 5

Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Texas Political 

Subdivisions Prop./Cas. Joint Self-Ins. Fund,

212 S.W.3d 320 (Tex. 2006).................................................................................. 5, 7

City of Georgetown v. Lower Colorado River Authority,

413 S.W.3d 803 (Tex. App.—Austin 2013, pet. dism’d)....................................... 9

City of San Antonio ex rel. City Pub. Serv. Bd. v. Wheelabrator Air Pollution 

Control, Inc.,

381 S.W.597 (Tex. App.—San Antonio 2012, pet. denied)................................... 8

Dallas County Mental Health and Mental Retardation v. Bossley,

968 S.W.2d 339 (Tex. 1998)...................................................................................... 5

East Houston Estate Apartments, LLC v. City of Houston,

294 S.W.3d 723 (Tex. App.—Houston [1st Dist.] 2009, no pet.) ....................... 10

Foster v. Teacher Ret. Sys.,

273 S.W.3d 883 (Tex. App.—Austin 2008, no pet.)............................................... 8

Gay v. City of Wichita Falls,

457 S.W.3d 499 (Tex. App.—El Paso 2014, no pet.)..................................... 7, 8, 9

General Services Com’n v. Little-Tex Insulation Co., Inc.,

39 S.W.3d 591 (Tex. 2001) ........................................................................................ 6

Gentilello v. University of Texas Southwestern Health Systems,

2014 WL 1225160 (Tex. App.—Dallas, 2014)........................................................ 6

Humana Ins. Co. v. Mueller,

2015 WL 1938657, No. 04-14-752-CV (Tex. App.—San Antonio, April 

29, 2015, no pet. h.)..................................................................................................... 9

Lubbock County Water Control & Imp. Dist. v. Church & Akin, L.L.C.,

442 S.W.3d 297 (Tex. 2014).................................................................................... 10
-vMayhew v. Town of Sunnyvale,

964 S.W.2d 922 (Tex.1998)....................................................................................... 5

Republic Power Partners, L.P. v. City of Lubbock,

424 S.W.3d 184 (Tex. App.—Amarillo 2014, no pet.)....................................... 8, 9

Richardson Hosp. Auth. v. Duru,

387 S.W.3d 109 (Tex. App.—Dallas 2012, no pet.)............................................... 7

State v. Lueck,

290 S.W.3d 876 (Tex. 2009)...................................................................................... 5

Tex. Natural Res. Conservation Comm’n v. IT-Davy,

74 S.W.3d 849 (Tex. 2002) ........................................................................................ 5

Texas Ass’n of Bus. v. Texas Air Control Bd.,

852 S.W.2d 440 (Tex. 1993)...................................................................................... 6

Texas Dep’t of Parks and Wildlife v. Miranda,

133 S.W.3d 217 (Tex. 2004).................................................................................. 5, 6

Texas Dept. of Pub. Safety v. Int’l Capital Corp.,

40 S.W.3d 687 (Tex. App.—Austin 2001, no pet.)................................................. 5

Texas Dept. of Transportation v. Jones,

8 S.W.3d 636 (Tex. 1999) .......................................................................................... 7

Tooke v. City of Mexia,

197 S.W.3d 325 (Tex. 2006).................................................................................. 5, 7

University of Tex. Med. Branch v. York,

871 S.W.2d 175 (Tex.1994)....................................................................................... 6

STATUTES

Tex. Civ. Prac. & Rem. Code § 51.014 .......................................................................... 1

Texas Loc. Gov’t Code § 271.151 ............................................................................ 2, 10

Texas Loc. Gov’t Code § 271.152 .............................................................................. 4, 8

Texas Gov’t Code § 2259.001 ................................................................................. 4, 7, 9
-viTexas Gov’t Code § 2259.002 ................................................................................. 4, 7, 9

Texas Gov’t Code § 2259.031 ..................................................................................... 2, 7
JOINT APPELLANTS’ BRIEF - Page 1

STATEMENT OF THE CASE

This is a suit for benefits under a self-funded health plan established by the 

City of Austin for its eligible employees. [C.R. 29-30.] Appellants The United 

Healthcare Choice Plus Plan for the City of Austin (the “Plan”) and the City of 

Austin (the “City”) filed a joint plea to the jurisdiction based on sovereign 

immunity, inasmuch as the City and the Plan are governmental entities. [C.R. 29.] 

The Trial Court denied the plea, and Appellants appealed pursuant to Tex. Civ. 

Prac. & Rem. Code § 51.014. [C.R. 206-208, 210.] 

APPELLANTS’ STATEMENT REGARDING ORAL ARGUMENT

Appellants believe that, given the importance of the issues presented by this 

appeal, oral argument would aid the Court’s decision making process.

ISSUE PRESENTED

1. Whether the Trial Court erred in denying Appellants’ plea to the 

jurisdiction. 
JOINT APPELLANTS’ BRIEF - Page 2

STATEMENT OF FACTS

A. The Plan.

The City of Austin is a local governmental entity as defined by the Local 

Gov’t Code § 271.151. The Plan is a self-funded plan solely funded by the City of 

Austin and created pursuant to Texas Gov’t Code § 2259.031. [C.R. 30.] The 

terms of the Plan are set forth in the “Summary Master Benefit Plan Documents” 

(the “SPDs”), effective January 1, 2013, and January 1, 2014. [C.R. 30.]

The Plan provides:

1.1 Purpose 

The City has contracted with United HealthCare 

Services, Inc. (UnitedHealthcare), a private healthcare 

claims administrator, to administer this Plan and process 

the payment or reimbursement of specified expenses 

incurred by eligible Covered Persons. 

***

1.13 Interpretation of Benefits 

The Plan Administrator has the sole and exclusive 

discretion to do all of the following: 

1. Interpret Benefits under the Plan. 

2. Interpret the other terms, conditions, limitations, 

and exclusions set out in the Plan Document. 

3. Make factual determinations related to the Plan 

and its Benefits. 

4. The Plan Administrator may, in certain 

circumstances, for purposes of overall cost savings 

or efficiency, in its sole discretion, offer Benefits 
JOINT APPELLANTS’ BRIEF - Page 3

for services that would otherwise not be Covered 

Services. The fact that the Plan Administrator 

does this in any particular case shall not in any 

way be deemed to require the Plan Administrator 

to do so in similar cases. 

[C.R. 93-94.] Further, the Plan sets forth a remedy in the event a claim for benefits 

is denied, namely, a member has two levels of appeal: an internal appeal to the 

Plan Administrator and, if the first appeal is denied, a second, external appeal to an 

Independent Review Organization unaffiliated with the Plan or the City. [C.R. 89-

93.] 

B. Appellee’s Claims.

Appellee is an employee of the City of Austin and a qualified member of the Plan. 

[C.R. 30.] Appellee’s daughter underwent treatment in 2013 and 2014, and 

submitted claims to the Plan related to this treatment. [C.R. 30-31.] The Plan 

Administrator denied some of the claims because the services in question were not 

medically necessary. [Id.] Appellee appealed through each level provided by the 

Plan, and the original denial was upheld. [C.R. 3-5.] Appellee filed suit against 

Appellants seeking benefits under the Plan. [C.R. 3.] Appellants filed a joint plea 

to the jurisdiction, which the Trial Court denied. [C.R. 29, 206.]
JOINT APPELLANTS’ BRIEF - Page 4

SUMMARY OF ARGUMENT

Appellants have governmental immunity from Appellee’s claims. Absent 

legislative waiver, governmental immunity deprives the trial court of jurisdiction to 

hear Appellee’s claims, and no such waiver exists. Appellee bears the burden of 

pleading a valid waiver of immunity, and he has not done so. Specifically, 

Appellee pled that the City was engaged in a proprietary function, however, the 

distinction between proprietary and governmental functions on which Appellee 

relies has been abolished by Tex. Local Gov’t Code § 271.152, and the legislature 

has stated expressly that a municipality does not waive immunity by establishing a 

self funded plan. See Tex. Gov’t Code §§ 2259.001, 2259.002. Appellee also 

pled, in the alternative, that Appellants waived immunity pursuant to Section 

271.152. This argument fails because Appellee is not suing under a contract that 

provided services to a governmental entity. This Court should reverse the order of 

the Trial Court and dismiss Appellee’s claims with prejudice.
JOINT APPELLANTS’ BRIEF - Page 5

ARGUMENT

A. Standard of Review on Appeal.

A trial court's ruling on a plea to the jurisdiction is reviewed under a de novo

standard of review. Anderson v. City of San Antonio, 120 S.W.3d 5, 7 (Tex. 

App.—San Antonio 2003, pet. denied); Texas Dept. of Pub. Safety v. Int’l Capital 

Corp., 40 S.W.3d 687, 688 (Tex. App.—Austin 2001, no pet.); Mayhew v. Town of 

Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998).

B. Governmental Immunity.

Absent legislative waiver, governmental immunity shields governmental 

entities, including municipalities, from suit for common law and statutory claims. 

See, e.g., Tooke v. City of Mexia, 197 S.W.3d 325, 332 (Tex. 2006); Ben BoltPalito Blanco Consol. Indep. Sch. Dist. v. Texas Political Subdivisions Prop./Cas. 

Joint Self-Ins. Fund, 212 S.W.3d 320, 327 (Tex. 2006) (holding that immunity 

extended to self-funded plans or cooperative insurance entities created by 

governmental entities); Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74 

S.W.3d 849, 853-55 (Tex. 2002); Dallas County Mental Health and Mental 

Retardation v. Bossley, 968 S.W.2d 339, 341-42 (Tex. 1998); see also State v. 

Lueck, 290 S.W.3d 876, 880 (Tex. 2009). Governmental immunity from suit 

deprives the trial court of subject matter jurisdiction and, thus, is properly asserted 

in a plea to the jurisdiction. Texas Dep’t of Parks and Wildlife v. Miranda, 133 
JOINT APPELLANTS’ BRIEF - Page 6

S.W.3d 217, 225-226 (Tex. 2004). When subject matter jurisdiction is contested, 

“[t]he trial court must determine at its earliest opportunity whether it has the 

constitutional or statutory authority to decide the case before allowing the litigation 

to proceed.” Id. at 226. Whether the trial court has subject matter jurisdiction is a 

question of law subject to de novo appeal. Id.

Appellee bears the burden to allege facts that affirmatively demonstrate the 

trial court’s jurisdiction to hear a case. Texas Ass’n of Bus. v. Texas Air Control 

Bd., 852 S.W.2d 440, 443 (Tex. 1993). If the pleadings affirmatively negate the 

existence of jurisdiction, the plea to the jurisdiction may be granted without 

allowing the plaintiff an opportunity to amend. Texas Dept. of Parks and Wildlife 

v. Miranda, 133 S.W.3d 217, 226, 227 (Tex. 2004).

The State’s consent may be alleged either by reference to a statute or by 

pleading express legislative permission. General Services Com’n v. Little-Tex 

Insulation Co., Inc., 39 S.W.3d 591, 594 (Tex. 2001). Texas does not recognize the 

doctrine of waiver of governmental immunity by conduct. Gentilello v. University 

of Texas Southwestern Health Systems, 2014 WL 1225160, at *5 (Tex. App.—

Dallas, 2014) (“In summary, the Texas Supreme Court has never ruled that a 

doctrine of waiver of governmental immunity by conduct exists.”). Legislative 

consent to sue must be made in “clear and unambiguous language.” University of 

Tex. Med. Branch v. York, 871 S.W.2d 175, 177 (Tex.1994). Absent this consent, 
JOINT APPELLANTS’ BRIEF - Page 7

the trial court lacks a jurisdictional basis to hear the claim. Texas Dept. of 

Transportation v. Jones, 8 S.W.3d 636, 638-39 (Tex. 1999). Here, Appellee failed 

to allege a valid waiver of immunity, and the Trial Court therefore erred in denying 

Appellants’ plea to the jurisdiction.

C. The Plan is Immune From Suit and Liability.

The City is a governmental entity immune from suit, absent legislative 

waiver. See, e.g., Ben Bolt-Palito Blanco Consol. Indep. Sch. Dist. v. Texas 

Political Subdivisions Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 327 (Tex. 

2006). The Plan, as an entity created by the City pursuant to authority granted by 

Texas Gov’t Code § 2259.031, is likewise immune. Id. A municipality does not 

waive immunity by providing benefits to its employees, whether through as selffunded plan or otherwise. See Tex. Gov’t Code §§ 2259.001, 2259.002 (stating 

that a municipality does not waive immunity by establishing a self-funded plan); 

see also Gay v. City of Wichita Falls, 457 S.W.3d 499, 505 (Tex. App.—El Paso 

Aug. 13, 2014, no pet.) (holding that a city was immune from suit when it provided 

benefits to its employees, citing Texas Gov’t Code Chapter 271 and Tooke v. City 

of Mexia, 197 S.W.3d 325, 332 (Tex. 2006). Appellants did not waive immunity 

by offering benefits to eligible employees of the City and their dependents. 

Richardson Hosp. Auth. v. Duru, 387 S.W.3d 109, 113 (Tex. App.—Dallas 2012, 

no pet.) (holding that a municipality did not waive immunity by offering insurance 
JOINT APPELLANTS’ BRIEF - Page 8

to employees, because such contracts did not fall within the waiver of immunity in 

Tex. Local Gov’t Code § 271.152); Foster v. Teacher Ret. Sys., 273 S.W.3d 883, 

886 (Tex. App.—Austin 2008, no pet.) (holding that a state agency did not waive 

immunity by providing benefits via a self-funded plan). Accordingly, Appellants 

are immune from suit, and this Court should reverse the Trial Court’s ruling and 

enter judgment dismissing Appellee’s claims.

D. Appellee Has Not Pled a Valid Waiver of Immunity.

In his amended petition, Appellee asserts that (1) Appellants were not 

entitled to immunity because they were performing a proprietary function, and (2) 

in the alternative, Appellants waived their immunity pursuant to Section 271.152, 

because the documents establishing the Plan constitute a contract under which 

services were provided to the City. Appellee has failed to plead a valid waiver of 

immunity, and this Court should reverse the Trial Court and dismiss his claims.

1. The Proprietary/Governmental Function Distinction Does Not Apply.

The legislature, in enacting Texas Local Government Code Chapter 271, 

refused to apply the distinction between proprietary and governmental functions to 

claims for breach of contract, and it therefore has no application here. See 

Republic Power Partners, L.P. v. City of Lubbock, 424 S.W.3d 184, 190-191 (Tex. 

App.—Amarillo 2014, no pet.); Gay v. City of Wichita Falls, 457 S.W.3d 499, 505 

(Tex. App.—El Paso 2014, no pet.); City of San Antonio ex rel. City Pub. Serv. Bd. 
JOINT APPELLANTS’ BRIEF - Page 9

v. Wheelabrator Air Pollution Control, Inc., 381 S.W.597, 605 (Tex. App.—San 

Antonio 2012, pet. denied).

Further, the legislature has expressly stated that the establishment of a selffunded plan does not waive Appellants’ immunity. See Tex. Gov’t Code §§ 

2259.001, 2259.002 (stating that a municipality does not waive immunity by 

establishing a self-funded plan); see also Humana Ins. Co. v. Mueller, 2015 WL 

1938657, No. 04-14-752-CV (Tex. App.—San Antonio, April 29, 2015, no pet. h.) 

(holding that establishing a self-funded plan did not waive immunity of a 

governmental entity).

Appellee’s reliance, in his pleadings in the Trial Court, on City of 

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

Austin 2013, pet. dism’d) is misplaced. First, City of Georgetown involved a 

contract between a city and its electrical supplier. Id. This case, in contrast 

involves a suit against a self-funded plan established by the City for its employees, 

and the legislature has stated expressly that a municipality does not waive 

immunity by establishing a self-funded plan. See Gov’t Code § 2259.002. Second, 

the distinction between proprietary and governmental functions relied on in City of 

Georgetown has been rejected by numerous courts since, and is no longer valid. 

See, e.g., Republic Power, 424 S.W.3d at 184; Gay, 457 S.W.3d at 505.
JOINT APPELLANTS’ BRIEF - Page 10

2. Appellee did not plead a valid waiver of immunity under Chapter 271.

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. Tex. Loc. Gov’t Code § 271.151. The contract at issue 

in this case does not provide for services to a local governmental entity, and 

Appellants did not allege or show that any services were provided to the City 

pursuant to the Plan. Accordingly, Appellants did not waive immunity. See, e.g., 

Lubbock County Water Control & Imp. Dist. v. Church & Akin, 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.). Inasmuch as Appellee was not providing 

services to the City under the contract sued on, the Plan is not a contract subject to 

section 271.151. Id.

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’ BRIEF - Page 11

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’ BRIEF - Page 12

CERTIFICATE OF COMPLIANCE

This document complies the word-count limitations of Rule 9.4(i)(3) 

because it contains 1,922 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

CERTIFICATE OF SERVICE

On the 24th day of June, 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
APPENDIX