Court Opinion

ID: 3117150
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:49:16.987292+00
Date Added: 2024-06-11T08:36:09.671196
License: Public Domain

NO. 07-09-00163-CV

                             IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                        PANEL D

                                    MARCH 12, 2010

                        POTTER COUNTY, TEXAS AS PLAN
                        ADMINISTRATOR FOR THE HEALTH
                     BENEFITS PLAN FOR THE EMPLOYEES OF
                       POTTER COUNTY, TEXAS, APPELLANT

                                             v.

                             RONDA TUCKNESS AND
                         MICHAEL TUCKNESS, APPELLEES

              FROM THE 47TH DISTRICT COURT OF POTTER COUNTY;

                  NO. 96,379-A; HONORABLE PAT PHELAN, JUDGE

Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.

                                        OPINION

      Appellant Potter County brings this interlocutory appeal from an order denying its

plea to the jurisdiction.1 The County contends it is immune from suit in the underlying

action to recover health care benefits brought by appellees Ronda Tuckness and her

husband Michael Tuckness. Finding the County’s governmental immunity has not been

waived, we will reverse the order of the trial court and render judgment dismissing the

Tucknesses= case for want of jurisdiction.

      1
          See Tex. Civ. Prac. & Rem. Code Ann. ' 51.014(a)(8) (Vernon 2008).
                                         Background

       According to the live petition of the Tucknesses,2 Mrs. Tuckness is employed by

the County and covered by its AEmployee Health Benefit Plan.@3                 She purchased

additional health care coverage under the plan for Mr. Tuckness.                 Mr. Tuckness

sustained a back injury and was scheduled for surgery. In a letter to Mrs. Tuckness

dated prior to the scheduled surgery, the third party Aplan supervisor@ certified the

medical necessity of the intended hospitalization.4 After the surgery, the County denied

Mr. Tuckness’s claim for reimbursement of the surgery’s cost, finding the plan’s

exclusion for occupational sicknesses and injuries sustained in the course of

employment was applicable.5

       2
         In reviewing a trial court=s ruling on a plea to the jurisdiction, we take all factual
allegations pled as true, unless jurisdictionally relevant evidence was offered. Bland
Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). All facts recited in this
opinion are from appellees= live petition, including its attached exhibits, unless otherwise
noted.
       3
        The plan document, attached to the Tucknesses’ original petition designates
the County as Anamed fiduciary and plan administrator.@
       4
           The letter also provided, AIf the claims and/or medical records do not support
the initial information, the certification is not valid.@ The letter further stated that benefits
or payments were not guaranteed and benefits were based on the employee=s eligibility
status at the time charges were incurred.
       5
           The Tucknesses’ pleadings refer to the plan’s exclusion paragraph reading:

       The following exclusions and limitations apply to expenses incurred by all
       Covered Persons:
       ***
       Charges for any services or supplies provided in connection with an
       occupational sickness or an injury sustained in the scope of and in the
       course of any employment whether or not benefits are or could be
                                               2
        The plan document specified a two-tier review procedure for coverage disputes

before Alegal action is brought.@ The Tucknesses exhausted the review procedure and

filed suit against the County seeking a declaratory judgment. They sought declarations

that:

        Ronda Tuckness, was at all times pertinent hereto a Participant in the
        Plan. . . . Plaintiff, Michael Tuckness was at all times pertinent hereto a
        Dependent for purposes of coverage under the Plan as defined by the
        Plan terms, conditions and/or definitions. Plaintiff, Michael Tuckness, did
        not have any spinal exclusions in effect Under (sic) any term or condition
        of the Plan . . . which would prohibit denial of the claim as a pre-existing
        condition. Plaintiff, Michael Tuckness, was not in the course and scope of
        employment [at the time of injury] with any person and/or entity. Plaintiff,
        Michael Tuckness= . . . injury should be a covered medical charge under
        the terms and/or conditions of the [Plan]. Plaintiffs have complied with the
        terms and conditions of the Plan and all conditions precedent have been
        performed for payment of benefits under the [Plan].

In the prayer, the Tucknesses requested a declaration that, AMichael Tuckness=s injury

and subsequent surgery were not work related or an occupational injury and that [the

County] pay all reasonable and necessary medical expenses related [to Mr. Tuckness=s

condition] . . . in accordance with the terms and conditions of the Plan. In addition, your

Plaintiffs ask for . . . actual damages in the amount of $34,872.78 for medical

expenses.@

        The County interposed the affirmative defense of governmental immunity and

filed a plea to the jurisdiction asserting the trial court lacked subject-matter jurisdiction.

The Tucknesses filed a traditional motion for partial summary judgment challenging the

        provided under Workers’ Compensation.

                                              3
County=s claim of governmental immunity. Following recusal of the sitting judge, an

assigned judge granted the Tucknesses= motion for partial summary judgment and

overruled the County=s plea to the jurisdiction. This interlocutory appeal by the County

followed.

                                          Issues

       Through three issues the County urges its immunity from suit for the declaratory

relief sought by the Tucknesses. The Tucknesses respond that immunity was expressly

waived by the terms of the plan and statute and impliedly waived by the conduct of the

County.

                                         Analysis

       A plea to the jurisdiction of the trial court based on governmental immunity

challenges the subject-matter jurisdiction of the trial court. State v. Holland, 221 S.W.3d
639, 642 (Tex. 2007).     Whether the trial court lacks subject-matter jurisdiction is a

question of law we review de novo.       Id.       ASovereign immunity and its counterpart,

governmental immunity, exist to protect the State and its political subdivisions from

lawsuits and liability for money damages.@ Mission Consol. Indep. Sch. Dist. v. Garcia,

253 S.W.3d 653, 655 (Tex. 2008); Reata Constr. Corp. v. City of Dallas, 197 S.W.3d
371, 374 (Tex. 2006).6 Sovereign and governmental immunities encompass two distinct

principles, immunity from suit and immunity from liability.        Texas Dep’t of Parks &

       6
        We refer to the immunity asserted by the County as governmental immunity.
Houston Mun. Empl. Pension Sys. v. Ferrell, 248 S.W.3d 151, 154 n.2 (Tex. 2007)
(governmental immunity protects counties).

                                               4
Wildlife v. Miranda, 133 S.W.3d 217, 224 (Tex. 2004); Channelview Indep. Sch. Dist. v.

A.R.C.I., Ltd., 199 S.W.3d 556, 559 (Tex.App.BHouston [1st Dist.] 2006, no pet.).

Immunity from liability is an affirmative defense subject to waiver, but immunity from suit

deprives a court of subject-matter jurisdiction. Miranda, 133 S.W.3d at 224.

          Because immunity from suit affects the court=s jurisdiction, it is properly raised in

a plea to the jurisdiction. Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696

(Tex. 2003). A plea to the jurisdiction may be presented as either an attack on the

sufficiency of the pleadings, as the County does here, or an evidentiary attack on the

existence of jurisdictional facts. See Miranda, 133 S.W.3d at 226-27. We liberally

construe the plaintiff=s petition, looking to the pleader=s intent. Holland, 221 S.W.3d at

642-43.

          Waiver by Request for Declaratory Relief

          As a general proposition, governmental immunity is not a bar to suits seeking a

declaration of a party=s rights under a statute or regulation. See Tex. Educ. Agency v.

Leeper, 893 S.W.2d 432, 446 (Tex. 1994) (in suit challenging construction of

compulsory school-attendance law by state officials, governmental immunity did not bar

claim for declaratory relief). The County contends this exception is not applicable here

because the Tucknesses did not seek a statutory interpretation but employed an action

for declaratory relief to obtain a contract interpretation that would compel a particular

action.

          The Uniform Declaratory Judgment Act is a remedial statute designed Ato settle

and to afford relief from uncertainty and insecurity with respect to rights, status, and
                                                5
other legal relations.@ Tex. Civ. Prac. & Rem. Code Ann. ' 37.002(b) (Vernon 2008);

Texas Natural Res. Conservation Comm=n v. IT-Davy, 74 S.W.3d 849, 855 (Tex. 2002).

In relevant part, the act provides:

       A person interested under a . . . written contract . . . or whose rights,
       status, or other legal relations are affected by a statute, municipal
       ordinance, contract, or franchise may have determined any question of
       construction or validity arising under the instrument, statute, ordinance,
       contract or franchise and obtain a declaration of rights, status, or other
       legal relations thereunder.

Tex. Civ. Prac. & Rem. Code Ann. ' 37.004(a) (Vernon 2008). Seeking declaratory

relief does not alter the underlying nature of a suit or confer jurisdiction on a court where

none otherwise exists. IT-Davy, 74 S.W.3d at 855.

       In Federal Sign v. Tex. Southern Univ., the court held Awe distinguish suits to

determine a party=s rights against the State from suits seeking damages.@ 951 S.W.2d
401, 405 (Tex. 1997). Cases of the first type seek a declaration that state officers acted

without legal or statutory authority and seek to compel conduct conforming to law. IT-

Davy, 74 S.W.3d at 855. Generally, cases of this class are not barred by governmental

immunity.7 Cases of the second type seek declarations establishing contract validity,

       7
          But cases involving such an “ultra vires” act may yet implicate governmental
immunity through the remedy sought. See City of El Paso v. Heinrich, 284 S.W.3d 366,
373-74 (Tex. 2009). In City of Houston v. Williams, retired firefighters sought a
declaration of rights under a statute concerning amounts deducted from payments they
received on termination of employment. 216 S.W.3d 827, 828 (Tex. 2007). In finding
no waiver of immunity by the city, the court noted the only claimed injury occurred in the
past and the only plausible remedy was money damages. Id. at 828-29. Thus,
                                             6
enforcing contract performance, or imposing contractual liabilities. Claims of this nature

are unenforceable because their attempted effect is control of state action by imposing

liability on the State.   IT-Davy, 74 S.W.3d at 855-56.       Specifically, Aprivate parties

cannot circumvent the State=s sovereign immunity from suit by characterizing a suit for

money damages, such as a contract dispute, as a declaratory-judgment claim.@ Id. at

856.

       Here, the Tucknesses seek enforcement of a contract and recovery of damages

rather than a declaration of rights under a statute or constitutional provision. Their suit

attempts to adjudicate a breach of contract claim, nothing more. Immunity from suit was

not waived simply because the Tucknesses couched their claim as one for declaratory

relief. See IT-Davy, 74 S.W.3d at 860.

       Waiver by Contract

       As noted, the plan document specified a two-tier review process before initiation

of “any legal action.” Thus, argue the Tucknesses, the County contracted for a legal

remedy after the exhaustion of administrative claim review procedures.                 It is

unnecessary to, and we do not, interpret the meaning and effect of the plan document=s

remedies section because even accepting the interpretation given it by the Tucknesses,

there is no waiver of governmental immunity.         It is correct that the State waives

immunity from liability on its contracts with a private party as if it were a private party.

Gen. Servs. Comm=n v. Little-Tex Insulation Co., 39 S.W.3d 591, 594 (Tex. 2001). But

Aretrospective monetary claims are generally barred by immunity@ even though the suit
seeks a declaration of rights under a statute. See Heinrich, 284 S.W.3d at 374.

                                             7
waiver of immunity from suit for a claimed breach of contract requires a clear and

unambiguous expression by the Legislature. Travis County v. Pelzel & Assocs., 77
S.W.3d 246, 248 (Tex. 2002).       It has long been settled in Texas that Ait is the

Legislature=s sole province to waive or abrogate sovereign immunity.@ Federal Sign,
951 S.W.2d at 409 (citing authorities). Legislative consent to suits against the State

may be granted by statute or resolution. Gen. Serv. Comm=n, 39 S.W.3d at 594; Tex.

Civ. Prac. & Rem. Code Ann. ' 107.001-.005 (Vernon 2005 & Supp. 2009) (resolution).

      The County’s plan language dealing with “any legal action” has no greater effect

as a waiver of immunity from suit than the similar language in the Texas Natural

Resource Conservation Commission’s contract in IT-Davy, 74 S.W.3d at 851 (contract’s

remedies section stated claims or disputes would be decided by arbitration or in court).

The court rejected a waiver-of-immunity-by-contract contention there, again pointing out

that waivers of immunity from suit in contract claims are made only by the Legislature.

Id. at 858. Absent express legislative authorization, the County could not contract to

waive its immunity from suit.

      Waiver by Other Conduct

      The County accepted premiums paid on the plan for Mr. Tuckness and the plan

supervisor submitted the previously noted letter to Mrs. Tuckness. The Tucknesses

claim the conduct of the County brings their facts within the so-called Awaiver by

conduct exception@ to governmental immunity. In a footnote in Federal Sign the court

stated, AThere may be. . . circumstances where the State may waive its immunity by

conduct other than simply executing a contract so that it is not always immune from suit
                                           8
when it contracts.@ 951 S.W.2d at 408 n.1. But if additional8 such circumstances exist

under current law,9 the nature of the conduct necessary to bring a contract case within

the contemplated exception is uncertain. In IT-Davy, the court was asked to carve out a

waiver by conduct exception. 74 S.W.3d at 856-57. It declined, reaffirming Athat it is the

Legislature=s sole province to waive or abrogate sovereign immunity.@ Id. That and

other decisions have made clear that a governmental entity does not waive immunity

from suit based on breach of a contract simply by accepting benefits under the contract.

See Tex. A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex. 2007) (listing cases);

Tooke v. City of Mexia, 197 S.W.3d 325, 343 (Tex. 2006) (rejecting contention city’s

partial performance of contract waived immunity). In Pelzel & Assocs., the court found

Travis County did not waive its immunity from suit by retaining part of its payment

pursuant to the late-completion liquidated damages clause of a construction contract.
77 S.W.3d at 252. The supreme court again found the circumstances insufficient to

show a waiver of immunity in Catalina Development, Inc. v. County of El Paso, 121

    8
       The court has held that, by filing suit, a governmental entity waives immunity from
suit as to certain counterclaims. Reata, 197 S.W.3d at 376-77. It also has held that, by
settling a claim for which it has waived immunity, a governmental entity waives immunity
for a suit to enforce the settlement. Texas A & M UniversityBKingsville v. Lawson, 87
S.W.3d 518, 521 (Tex. 2002) (plurality op.). Neither case has application here.
    9
       The Austin Court of Appeals recently declined to adopt a waiver by conduct
theory, citing the footnote in Federal Sign, 951 S.W.2d at 408 n.1, to note that the
supreme court “once hinted that it might recognize waiver by conduct in the context of a
contract claim” but that “it has since declined to judicially adopt this doctrine in light of
the legislature’s creation of an administrative remedy for breach-of-contract claims”
under chapter 2260 of the Government Code. Employees Retirement System of Texas
v. Putnam, LLC, 294 S.W.3d 309, 327 (Tex.App.BAustin 2009, no pet.) (op. on reh=g)
(citing IT-Davy, 74 S.W.3d at 857). See also Tooke v. City of Mexia, 197 S.W.3d 325,
342 (Tex. 2006), (listing recent years’ legislative waivers of immunity from suit on
contract claims, and referring to its “larger, more consistent legislative scheme for
handling contract claims”).
                                             9
S.W.3d 704, 705-06 (Tex. 2003), holding the county’s conduct merely was that

associated with creation of its contract.10

       The Tucknesses’ pleadings in this case seek a resolution of their disagreement

with the County that Mr. Tuckness’s back injury was incurred in the course of his

employment and thus excluded from coverage under the County’s plan. Despite its

equities, at bottom the case involves no more than a contract dispute. See Pelzel &

Assocs., 77 S.W.3d at 252 (county did not waive immunity by invoking contract’s

express terms); IT-Davy, 74 S.W.3d at 861 (Hecht, J., concurring) (finding parties had

“legitimate disagreement” over price to be paid for extra work, and suit involved “nothing

more than an ordinary contract dispute”).

       Waiver by Statute

       The Tucknesses cite Local Government Code section 271.152 as a basis for

waiver of immunity from suit. Chapter 271 waives a local governmental unit=s sovereign

immunity to suit for a claim that it breached a properly executed and authorized contract

for providing goods or services to the local governmental entity. Tex. Local Gov=t Code

Ann. ' 271.152 (Vernon 2005). But a county is excluded from the coverage of Chapter

271 because its definition of Alocal governmental entity@ expressly excludes a county.

Tex. Local Gov=t Code Ann. ' 271.151(3) (Vernon 2005). Accordingly, Chapter 271 has

no application here.

       10
           But see Texas Southern University v. State Street Bank & Trust Co., 212
S.W.3d 893 (Tex.App.--Houston [1st Dist.] 2007, pet. denied) (op. on reh’g) (affirming
trial court’s denial of plea to jurisdiction based on “extraordinary factual circumstances”
set forth in pleadings and university’s conduct that “lured” plaintiff into contract).
                                              10
       Incurable by Amendment

       A plaintiff is generally entitled to a reasonable opportunity to amend its petition

Aunless the pleadings affirmatively negate the existence of jurisdiction.@ Koseoglu, 233
S.W.3d at 839. But here, as in Koseoglu, remanding the case for a chance to amend

would serve no legitimate purpose.      The claim of the Tucknesses is for breach of

contract. This fact, and the immunity of the County, will not change by an amended

pleading alleging more facts. See Id., 233 S.W.3d at 840; Miranda, 133 S.W.3d at 227

(A[i]f the pleadings affirmatively negate the existence of jurisdiction, then a plea to the

jurisdiction may be granted without allowing the plaintiffs an opportunity to amend@).

                                       Conclusion

       We conclude the County’s governmental immunity from the underlying suit has

not been waived. We therefore reverse the order of the trial court denying the County=s

plea to the jurisdiction and render judgment dismissing the Tucknesses= case against

the County for want of jurisdiction.

                                                        James T. Campbell
                                                            Justice

                                            11