Court Opinion

ID: 2863656
Source: CourtListenerOpinion
Date Created: 2015-09-05 23:51:17.939148+00
Date Added: 2024-06-11T10:07:48.396756
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                       NO. 03-01-00149-CV

             EduCare Community Living - Normal Life of North Texas, Appellant

                                                 v.

            Texas Department of Mental Health and Mental Retardation, Appellee

       FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
             NO. GN003263, HONORABLE PAUL DAVIS, JUDGE PRESIDING

                After the Hearings Office of the Texas Department of Mental Health and Mental

Retardation (“MHMR”) dismissed an appeal pertaining to an audit dispute, EduCare Community

Living - Normal Life of North Texas (“EduCare”) sought judicial review of the administrative order

by filing an action against MHMR in district court. EduCare appeals from the order granting

MHMR’s plea to the jurisdiction. Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8) (West Supp.

2001). In two issues, EduCare argues it is entitled to judicial review arising from an inherent right

to judicial review based on due process under the United States and Texas Constitutions1 and a

statutory right, namely, section 2001.171 of the Administrative Procedure Act. Tex. Gov’t Code

Ann. § 2001.171 (West 2000). We reverse the district court’s order granting MHMR’s plea to the

jurisdiction, and remand the cause for further proceedings.

   1
       See U.S. Const. amend. XIV, § 1; Tex. Const. art. I, § 19.
                                        BACKGROUND

                 MHMR conducted an audit of EduCare’s Home and Community-based Services

(“HCS”) program2 and determined that $135,689.12 in HCS program services claimed to be provided

by EduCare could not be verified. EduCare claimed that records housed at an off-site storage facility

would substantiate its claims for those services. Despite submitting the records to MHMR that were

absent during the audit, EduCare received a letter from MHMR demanding recoupment of

$174,862.55. 3

                 In response to the demand letter, EduCare requested a hearing with the MHMR

Hearings Office. An Administrative Law Judge issued an order on August 14, 2000, advising the

parties that a hearing was scheduled for October 12, 2000. Pursuant to that order, EduCare was

required to submit, by August 24, 2000, a written statement of the specific relief requested and the

reasons EduCare was entitled to such relief. 4 EduCare did not respond to the order until September

6, 2000.

                 Meanwhile, on Friday, September 1, 2000, MHMR filed a Motion to Dismiss based

on EduCare’s failure to file the written statement as directed by the ALJ. See 25 Tex. Admin. Code

§ 411.156(g)(1) (West 2001). Immediately upon receiving a copy of the dismissal motion on

September 1, 2000, EduCare forwarded the document to its counsel. On Tuesday, September 5,

   2
     State regulations governing the HCS programs are located in the Texas Administrative Code.
See generally 25 Tex. Admin. Code §§ 409.100-.120 (West 2000).
   3
     Of the $174,862.55 claimed by MHMR to be owed, $135, 689. 12 represents the allegedly
unverified program services.
  4
      The order also required EduCare to specify the dates it was notified of the agency’s action and
to identify EduCare’s legal representatives.

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2000, the same day EduCare’s counsel received it, the ALJ granted the pending motion. The

following day, EduCare filed its written statement and response to the motion.

               Subsequently, EduCare filed a Motion for Rehearing of the Order of Dismissal.

EduCare’s motion was denied by the ALJ. EduCare then filed a petition for judicial review. MHMR

filed a plea to the jurisdiction which was granted by the district court. The case was dismissed and

this appeal followed.

                                   STANDARD OF REVIEW

               A plea to the jurisdiction challenges a district court’s subject matter jurisdiction.

Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). Because subject matter

jurisdiction poses a question of law, we review rulings on pleas to the jurisdiction de novo. See

Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). The nature of the issues raised

in the plea determines the scope of review. Id. Thus, we may look beyond the pleadings and are

required to do so when necessary to resolve the jurisdictional issues raised. Id.

               The plaintiff bears the burden of pleading facts that show the district court has subject

matter jurisdiction. Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).

Unless the defendant pleads and proves that the plaintiff’s allegations were fraudulently made to

confer jurisdiction, they are accepted as true. Continental Coffee Prods. Co. v. Cazarez, 937 S.W.2d
444, 449 (Tex. 1996). However, if the face of the petition does not affirmatively demonstrate a lack

of jurisdiction, the district court must liberally construe the plaintiff’s allegations in favor of

jurisdiction. Texas Ass’n of Bus., 852 S.W.2d at 446; Peek v. Equipment Serv. Co., 779 S.W.2d 802,

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804 (Tex. 1989). We must therefore determine whether EduCare pleaded facts sufficient to allege

that the district court had jurisdiction to review the administrative order.

                                           DISCUSSION

               Judicial review of administrative orders is permissible where (i) provided for by

express statutory provisions, (ii) the order adversely affects a vested property interest, or (iii) the

order is violative of some other constitutional right. Continental Cas. Ins. Co. v. Functional

Restoration Assocs., 19 S.W.3d 393, 397 (Tex. 2000); Stone v. Texas Liquor Control Bd., 417
S.W.2d 385, 385-86 (Tex. 1967).

               In its first issue, EduCare argues that it is entitled to judicial review based on its

inherent right to due process under the United States and Texas Constitutions. See U.S. Const.

amend. XIV, § 1; Tex. Const. art. I, § 19. Specifically, EduCare contends that the administrative

order requires EduCare to repay HCS funds to which it was legitimately entitled. EduCare concludes

that, because the order adversely affects its property interest in the monies paid for HCS services

provided, it has an inherent right to judicial review based on due process.

               Relying in part on Chemical Bank & Trust Co. v. Falkner, 369 S.W.2d 427, 433 (Tex.

1963), and Brazosport Sav. & Loan Ass’n. v. American, 342 S.W.2d 747, 750 (Tex. 1961), this

Court has previously stated that when some action by an administrative agency affects a vested

property right, the affected party may invoke an inherent right of judicial review. Continental Cas.

Ins. Co. v. Function Restoration Assocs., 964 S.W.2d 776, 779 (Tex. App.—Austin 1998), rev’d on

other grounds, 19 S.W.3d 393 (Tex. 2000); see also generally Southwest Airlines Co. v. Texas High-

Speed Rail Auth., 867 S.W.2d 154 (Tex. App.—Austin 1993, writ denied). For a property right to

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vest, the supreme court has reasoned, “[i]t must have become a title, legal or equitable, to the present

or future enjoyment of property, or to the present or future enforcement of a demand, or a legal

exemption from the demand of another.” National Carloading Corp. v. Phoenix-El Paso Express,

Inc., 176 S.W.2d 564, 570 (Tex. 1943).

                In Continental Casualty, this Court examined whether a vested property interest

existed in “the money that the Commission’s hearing officer ordered Continental to pay” the

defendants. Continental Cas. Ins. Co., 964 S.W.2d at 782. We concluded that the hearing officer’s

decision, which affirmed an administrative order authorizing medical treatment, affected a vested

property interest. Id.

                Here, an administrative order dismissing EduCare’s dispute effectively made EduCare

liable to MHMR for the full amount of $174,862.55. Of that amount, EduCare alleges in its petition

that $135,689.12 reflects funds received for HCS program services allegedly provided. The dispute

between the parties is whether the services were actually rendered. This Court need not reach the

merits of this dispute, as the question we are called upon to decide is whether the facts pleaded are

sufficient to support subject matter jurisdiction in the district court. We hold that they are.

               EduCare’s petition alleges that the administrative order affected a vested property

right and, therefore, that it has an inherent right to judicial review. Because we must liberally

construe the petition in favor of jurisdiction, we find EduCare pleaded facts alleging a vested property

interest in $135,689.12 for services provided sufficient to confer subject matter jurisdiction. Further,

this finding disposes of the need to address EduCare’s second issue claiming a statutory right to

review.

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                                          CONCLUSION

               Having determined that EduCare has alleged an inherent right to judicial review based

upon a vested property right, we are satisfied appellant’s petition affirmatively demonstrates subject

matter jurisdiction. Accordingly, we reverse the district court order granting MHMR’s plea to the

jurisdiction and remand the cause for further proceedings.

                                               Jan P. Patterson, Justice

Before Justices Kidd, B. A. Smith and Patterson

Reversed and Remanded

Filed: September 20, 2001

Do Not Publish

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