TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-03-00183-CV
Brandon Perez, by and through his next friend, Debra Perez, Individually and on behalf of similarly situated individuals, Appellant
v.
Blue Cross Blue Shield of Texas, Incorporated, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT NO. GN102756, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING
OPINION
In this insurance case, we must decide whether articles 21.21-6 and 21.21-8 of the
insurance code allow a cause of action for denial of health insurance coverage to an individual with
Down Syndrome. Appellant Brandon Perez, by and through his next friend, Debra Perez,
individually and on behalf of similarly situated individuals, appeals the district court’s grant of
summary judgment in favor of appellee Blue Cross Blue Shield of Texas (“BCBSTX” or “Blue
Cross”). Perez contends in five issues that the district court erred because (i) although he now has
health insurance through another insurance company, his causes of action are not moot; (ii) he has
valid claims under articles 21.21-6 and 21.21-8 of the insurance code; (iii) the denial of coverage was not based on the affirmative defense of “sound actuarial principles”; and (iv) the affidavit of Blue
Cross’s actuarial expert should have been excluded. For the reasons set forth below, we affirm the
order of the district court granting Blue Cross’s motion for summary judgment and denying Perez’s
motions for summary judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The pertinent facts of this case are not in dispute. In August 2000, Debra Perez
applied for an individual Blue Cross health insurance policy for herself and her twelve-year-old son,
Brandon Perez. She stated on the application that Brandon has Down Syndrome1 but is “very, very
healthy.” Blue Cross provided coverage for Debra but excluded Brandon from the policy because
of his diagnosis of Down Syndrome. Debra requested reconsideration of the decision, asking why
Blue Cross never requested copies of Brandon’s medical records or interviewed his doctor. She
enclosed with her request a letter from Miguel Ibarra, M.D., Brandon’s doctor for ten years, who
stated that Brandon did not require any more medical care than any other healthy boy his age. Blue
Cross did not reconsider the application. In an internal e-mail some months later, a Blue Cross
representative wrote that “[w]e did not request any medical information on Brandon because Down’s
Syndrome is an automatic decline in our Underwriting Guidelines.”
1 Down Syndrome is a “syndrome of mental retardation associated with a variable constellation of abnormalities caused by representation of at least a critical portion of chromosome 21 three times instead of twice in some or all cells,” including a broad short skull, rounded small ears, and broad hands with short fingers. See Stedman’s Medical Dictionary 1386 (5th Lawyer’s ed. 1982).
2 Brandon, through his mother, filed suit in Travis County on behalf of himself and a
putative class of all persons denied health insurance “based on a Down Syndrome diagnosis.”2 Perez
sought a declaratory judgment that Blue Cross’s practice of denying coverage to “healthy persons
with Down Syndrome” violates, among other statutes, articles 21.21-6 and 21.21-8 of the insurance
code and section 17.46(b)(12) of the deceptive trade practices act (DTPA). See Tex. Ins. Code Ann.
arts. 21.21-6, -8 (West Supp. 2004); Tex. Bus. & Com. Code Ann. § 17.46(b)(12) (West Supp.
2004).3 Perez further sought to enjoin Blue Cross from denying health insurance coverage to
“individuals diagnosed with Down Syndrome.”
Both Perez and Blue Cross filed traditional motions for summary judgment. Perez
contended that he was entitled to summary judgment because Blue Cross did not raise the affirmative
defense that its decision to deny coverage was based on “sound underwriting or actuarial principles
reasonably related to actual or anticipated loss experience.” Tex. Ins. Code Ann. art. 21.21-6, § 4(a).
Blue Cross raised the affirmative defense in an amended answer and asserted that it was entitled to
summary judgment because: Perez’s claims were moot because he obtained health insurance
through another insurance company; Perez did not have valid causes of action under articles 21.21-6
and 21.21-8 of the insurance code; and the denial of health insurance coverage was justified because
2 Because no class certification hearing was held, this appeal is limited to Perez’s individual suit. 3 Because the substance of the statutes relevant to this case has not changed in recent legislative sessions, for convenience we will refer to the current codes.
3 it was based on sound underwriting or actuarial principles reasonably related to actual or anticipated
loss experience.
Perez then filed a no-evidence motion for summary judgment on the ground that Blue
Cross presented no evidence of its affirmative defense, in part because Blue Cross’s actuarial expert,
Jay Ripps, did not support his conclusions in his affidavit with actuarial data and based his
conclusions on “additional materials provided to me by counsel.” The district court granted Blue
Cross’s motion for summary judgment, denied Perez’s motions for summary judgment, and
overruled Perez’s objection to the Ripps affidavit. Perez appeals the grant of summary judgment in
favor of Blue Cross, the failure to exclude the Ripps affidavit, and the denial of his own motions for
summary judgment.
ANALYSIS
Whether Perez’s Claims are Moot
In his first issue, Perez contends that the district court erred in granting summary
judgment because his claims are not moot. Blue Cross argues that this case is moot because Perez
has obtained health insurance through another insurer. We disagree with Blue Cross. Under the
mootness doctrine, appellate courts may only determine cases in which an actual controversy exists.
See Camarena v. Texas Employment Comm’n, 754 S.W.2d 149, 151 (Tex. 1988); University
Interscholastic League v. Buchanan, 848 S.W.2d 298, 304 (Tex. App.—Austin 1992, no writ). In
general, a case becomes moot when the issues presented are no longer “live” or the parties lack a
legally cognizable interest in the outcome. See United States Parole Comm’n v. Geraghty, 445 U.S.
4 388, 396 (1980). Here, Perez retains a legally cognizable interest in the outcome were a court to
issue an injunction that Blue Cross discontinue its practice of denying health insurance coverage to
people with Down Syndrome. Furthermore, Perez has a live claim for actual damages. Because his
causes of action are not moot, we sustain Perez’s first issue.
Admissibility of Blue Cross’s Actuarial Expert Witness Affidavit
In his fifth issue, Perez asserts that the district court erred by failing to exclude the
affidavit of Jay Ripps, Blue Cross’s actuarial expert witness. Perez contends that Ripps’s reliance
on “additional materials provided to me by counsel” is improper summary judgment proof because
it cannot be readily controverted. See Tex. R. Civ. P. 166a(c).
The standard for the admissibility of expert testimony is the same on summary
judgment as at trial. See United Blood Servs. v. Longoria, 938 S.W.2d 29, 30 (Tex. 1997). In
determining whether the testimony is admissible, the trial court does not determine whether the
expert’s conclusions are correct, but only whether the analysis used to reach the conclusions is
reliable. Gammill v. Jack Williams Chevrolet, 972 S.W.2d 713, 720 (Tex. 1998). As an appellate
court, we do not consider the admissibility or inadmissibility of the evidence de novo. Instead, we
review the trial court’s decision under an abuse of discretion standard, inquiring whether the trial
court acted without reference to any guiding rules or principles. See Longoria, 938 S.W.2d at 31;
E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 558 (Tex. 1995).
To constitute competent summary judgment evidence, affidavits must be made on
personal knowledge, setting forth such facts as would be admissible in evidence, and must
5 affirmatively show that the affiant is competent to testify to matters stated therein. Tex. R. Civ. P.
166a(f); Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996). Expert testimony must be
comprised of more than conclusory statements and must be specific. See Wadewitz v. Montgomery,
951 S.W.2d 464, 466 (Tex. 1997). Additionally, the expert’s affidavit must rest on a reliable
foundation. Robinson, 923 S.W.2d at 556-57.
Perez did not contest Ripps’s qualifications. His chief objection was that Ripps relied
on unidentified “additional materials” that could not be controverted and were not of the type
reasonably relied upon by experts in his field. Our examination of the affidavit reveals that although
Ripps listed “additional materials provided to me by counsel” in his general statement of documents
upon which he relied, he specifically identified the particular source or sources for each of his
opinions. For example, for his opinion that Down Syndrome leads to associated medical expenses,
he identified the affidavits of Golder Wilson, M.D. and Benjamin Carnovale, M.D. For many other
conclusions, he stated that his opinions were “[b]ased on my review of the affidavits of Dr. Benjamin
Carnovale, Dr. Golder Wilson, and Mr. David Wilson, and on Actuarial Standard and Actuarial
Statement.” Ripps had previously identified the last two documents in full. The Actuarial Standard,
which “articulate[s] actuarial principles for the actuarial profession in the United States,” was based
on the Actuarial Statement, which Ripps assisted in drafting when he was chair of the American
Academy of Actuaries’ Committee on Risk Classification. We cannot say that these documents were
not of the type reasonably relied upon by experts in his field.
“Could have been readily controverted” does not mean that the summary judgment
evidence could have been easily and conveniently rebutted, but rather signifies that the testimony
6 could have been effectively countered by opposing evidence. Casso v. Brand, 776 S.W.2d 551, 558
(Tex. 1989). That Ripps tied each of his opinions to specific documents gave Perez a sufficient basis
on which to present opposing evidence. Accordingly, we do not find that the district court abused
its discretion in admitting the Ripps affidavit. We overrule Perez’s fifth issue.
Summary Judgment Standard of Review
Perez’s remaining issues pertain to the parties’ cross-motions for summary judgment.
Blue Cross filed a traditional motion for summary judgment that included an assertion of an
affirmative defense, whereas Perez filed both traditional and no-evidence motions. The standards
for review of a traditional summary judgment are well established: the movant must show there is
no genuine issue of material fact and that it is entitled to judgment as a matter of law; in deciding
whether there is a disputed material fact issue precluding summary judgment, the court must take
evidence favorable to the nonmovant as true; and the court must indulge every reasonable inference
in favor of the nonmovant and resolve any doubts in the nonmovant’s favor. See Cathey v. Booth,
900 S.W.2d 339, 341 (Tex. 1995); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.
1985). A defendant moving for summary judgment must disprove at least one essential element of
each of the plaintiff’s theories of recovery or conclusively establish each element of an affirmative
defense to prevail. See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999);
Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 282 (Tex. 1996). The plaintiff, as
nonmovant as to defendant’s affirmative defense, does not have any burden of proof unless the
7 defendant proves conclusively all elements of its affirmative defense. See Rhone-Poulenc, 997
S.W.2d at 222-23.
A party seeking a no-evidence summary judgment must assert that no evidence exists
as to one or more of the essential elements of the nonmovant’s claims on which it would have the
burden of proof at trial. Holmstrom v. Lee, 26 S.W.3d 526, 530 (Tex. App.—Austin 2000, no pet.).
Once the movant specifies the elements on which there is no evidence, the burden shifts to the
nonmovant to raise a fact issue on the challenged elements. Tex. R. Civ. P. 166a(i). The nonmovant
is not required to marshal its proof,4 but it must point out evidence that raises a fact issue. Id. 166a(i)
cmt. To raise a genuine issue of material fact, the nonmovant must set forth more than a scintilla
of probative evidence to support each challenged element of the claims on which the nonmovant has
the burden of proof at trial. See id. 166a(i); Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706,
711 (Tex. 1997). If the evidence supporting a finding rises to a level that would enable reasonable,
fair-minded persons to differ in their conclusions, then more than a scintilla of evidence exists.
Havner, 953 S.W.2d at 711. Less than a scintilla of evidence exists when the evidence is “so weak
as to do no more than create a mere surmise or suspicion” of fact, and the legal effect is that there
is no evidence. Jackson v. Fiesta Mart, 979 S.W.2d 68, 70 (Tex. App.—Austin 1998, no pet.)
(quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). If the nonmovant fails to
present evidence raising a genuine issue of material fact as to the challenged element, the trial court
must grant the motion. Tex. R. Civ. P. 166a(i). A no-evidence summary judgment is essentially a
4 To “marshal one’s evidence” means to arrange all of the evidence in the order that it will be presented at trial. In re Mohawk Rubber Co., 982 S.W.2d 494, 498 (Tex. App.—Texarkana 1998, orig. proceeding).
8 directed verdict granted before trial, to which we apply a legal sufficiency standard of review.
Jackson, 979 S.W.2d at 70.
Generally, a party cannot appeal the denial of a motion for summary judgment
because it is an interlocutory order and thus not appealable. See Cincinnati Life Ins. Co. v. Cates,
927 S.W.2d 623, 625 (Tex. 1996). However, when both parties move for summary judgment and
the district court grants one motion and denies the other, the unsuccessful party may appeal both the
prevailing party’s motion and the denial of its own. See Holmes v. Morales, 924 S.W.2d 920, 922
(Tex. 1996). We will review the summary judgment evidence presented by both sides, determine
all questions presented, and render such judgment as the trial court should have rendered.
Commissioners Court v. Agan, 940 S.W.2d 77, 81 (Tex. 1997). We are required to consider all
summary judgment grounds the trial court ruled on that are preserved for appellate review and are
necessary for final disposition of the appeal. Cates, 927 S.W.2d at 625-26. In reviewing a summary
judgment in which the trial court has not provided the specific basis for its decision, we must review
each argument asserted in the motion and affirm the trial court’s judgment if any of these arguments
is meritorious. See Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995). We review the
trial court’s decision to grant summary judgment de novo. Natividad v. Alexsis, Inc., 875 S.W.2d
695, 699 (Tex. 1994).
Cause of Action under Article 21.21-6 of the Insurance Code
In his third issue, Perez asserts that he has a valid cause of action under article 21.21-
6 of the insurance code. Tex. Ins. Code Ann. art. 21.21-6. Although Perez agrees with Blue Cross
9 that article 21.21-6 does not provide for a private right of action because only the insurance
commissioner may assess penalties under this provision, see id. § 5(a), he nevertheless contends that
he may assert a claim under article 21.21-6 by way of insurance code article 21.21-8 and the DTPA
“laundry list.” See id. art. 21.21-8; Tex. Bus. & Com. Code Ann. § 17.46(b) (West Supp. 2004).
This requires us to apply principles of statutory construction.
Statutory construction is a question of law, which we review de novo. Texas Dep’t
of Transp. v. Needham, 82 S.W.3d 314, 318 (Tex. 2002). We must ascertain and give effect to the
legislature’s intent for the provision we are construing. See Fleming Foods v. Rylander, 6 S.W.3d
278, 284 (Tex. 1999); Union Bankers Ins. Co. v. Shelton, 889 S.W.2d 278, 280 (Tex. 1994); Calvert
v. Texas Pipe Line Co., 517 S.W.2d 777, 780 (Tex. 1974). The legislature’s intent should be
determined by reading the language used in the particular statute and construing the statute in its
entirety. See In re Bay Area Citizens Against Lawsuit Abuse, 982 S.W.2d 371, 380 (Tex. 1998);
Taylor v. Firemen’s & Policemen’s Civil Serv. Comm’n, 616 S.W.2d 187, 190 (Tex. 1981). Further,
we should read every word, phrase, and expression in a statute as if it were deliberately chosen, and
presume the words excluded from the statute are done so purposefully. See Gables Realty Ltd.
P’ship v. Travis Cent. Appraisal Dist., 81 S.W.3d 869, 873 (Tex. App.—Austin 2002, pet. denied);
City of Austin v. Quick, 930 S.W.2d 678, 687 (Tex. App.—Austin 1996) (citing Cameron v. Terrell
& Garrett, Inc., 618 S.W.2d 535, 540 (Tex. 1981)), aff’d, 7 S.W.3d 109 (Tex. 1999); see also 2A
Norman J. Singer, Sutherland Statutory Construction § 47.25 (6th ed. 2000) (stating that there is
generally an inference that omissions from a statute are intentional).
10 Article 21.21-6 does not on its face provide a private cause of action. See Tex. Ins.
Code. Ann. art. 21.21-6. Unlike article 21.21-8, article 21.21-6 is silent on the availability of a
private civil remedy for an alleged violation. Compare id. with id. art. 21.21-8. Section five of
article 21.21-6 addresses remedies for its violation, speaking only to administrative remedies that
the insurance commissioner may pursue: “any legal entity . . . found to be in violation . . . is subject
to the sanctions authorized by Chapter 82 of this code or administrative penalties authorized by
Chapter 84 of this code. The commissioner may also utilize the cease and desist procedures
authorized by Chapter 83 of this code.” Id. art. 21.21-6, § 5.
By analogy, article 21.21-2 of the insurance code, prohibiting unfair claim settlement
practices, also does not explicitly provide for a private cause of action; instead, it outlines detailed
administrative remedies that the commissioner may pursue. See id. art. 21.21-2 (West Supp. 2004).
The supreme court has held that article 21.21-2 does not create a private cause of action for
violations of that article. Allstate Ins. Co. v. Watson, 876 S.W.2d 145, 148-49 (Tex. 1994); see also
American Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 847 n.11 (Tex. 1994) (Article 21.21-2
is “subject to enforcement only by the State Board of Insurance.”). The reasoning of Allstate applies
because article 21.21-6, while not spelling out specific administrative remedies, incorporates
remedies set forth in chapters 82, 83, and 84 of the insurance code. Tex. Ins. Code Ann. art. 21.21-6,
§ 5(a). Thus, we rely on Allstate to hold that there is no private cause of action available under
article 21.21-6.
We now turn to our examination of article 21.21-6 and its relationship with article
21.21-8. Under article 21.21-6, entitled “Unfair Discrimination,” “[n]o person shall engage in any
11 practice of unfair discrimination which is defined in this article or is determined pursuant to this
article to be a practice of unfair discrimination in the business of insurance.” Id. § 1. Unfair
discrimination includes “refusing to insure . . . because of disability or partial disability.” Id. § 3(c).
Article 21.21-8 provides that “[n]o person shall engage in any unfair discrimination by making or
permitting any unfair discrimination between individuals of the same class and of essentially the
same hazard.” Id. art. 21.21-8, § 2.
Perez contends that a violation of article 21.21-6 is a violation of article 21.21-8
because (i) both provisions were enacted in the same legislative session and refer to each other; (ii)
21.21-8, being more general, encompasses the more specific article 21.21-6; and (iii) the legislature
intended both statutes to address the same types of problems by entitling them both “Unfair
Discrimination” and applying both to insurers. Blue Cross disputes that Perez may bring a cause of
action under article 21.21-6 and counters that even if Perez may bring a claim under this provision,
Blue Cross’s decision not to insure was not a violation because it was “based upon sound
underwriting or actuarial principles reasonably related to actual or anticipated loss experience.” Id.
art. 21.21-6, § 4(a) (affirmative defense to allegation of unfair discrimination).
As to Perez’s first argument, the provisions do not refer to each other. Without such
a cross-reference or some demonstration in the legislative history of an interrelationship, we cannot
say that the remedy in article 21.21-8 encompasses that in article 21.21-6 simply because the
provisions were enacted in the same legislative session. If anything, the opposite is true because,
as discussed below, the statutes offer different remedies. Concerning Perez’s second argument,
assuming without deciding that article 21.21-8 is more general than article 21.21-6, it is a well-
12 settled principle of statutory construction that a more specific statute controls over a more general
one. See, e.g., Columbia Hosp. Corp. of Houston v. Moore, 92 S.W.3d 470, 473 & n.19 (Tex. 2003).
As to Perez’s third argument, our examination of the statutes and their legislative
history does not lead us to conclude that one may bring a private cause of action through article
21.21-6 by way of article 21.21-8. The fact that article 21.21-8 provides for a private cause of action,
see id. art. 21.21-8, § 3, whereas article 21.21-6 allows only a public remedy, see id. art. 21.21-6, § 5,
belies the suggestion that one provision encompasses the other. This distinction is borne out by the
legislative history. The caption for article 21.21-6, enacted as part of a bill providing public
remedies, reads that the act relates “to certain acts of unfair discrimination in the business of
insurance . . . providing administrative remedies.” Act of June 8, 1995, 74th Leg., R.S., ch. 415, § 1,
1995 Tex. Gen. Laws 3005, 3005 (emphasis added). Article 21.21-8 was enacted in a separate
chapter containing consumer protection provisions. The caption reads that the act relates “to civil
remedies for deceptive, unfair, or discriminatory practices.” Act of June 8, 1995, 74th Leg., ch. 414,
§ 18, 1995 Tex. Gen. Laws 2988, 3003 (emphasis added). We are also mindful of our holding that
the definitions of “unfair discrimination” in the two provisions are not interchangeable. See Cortez
v. Progressive County Mut. Ins. Co., 61 S.W.3d 68, 73 (Tex. App.—Austin 2001), pet. granted,
judgm’t vacated pursuant to settlement (“[W]hile article 21.21-6 prohibits discrimination based on
differential treatment of members of different classes, article 21.21-8 prohibits discrimination based
on differential treatment between individual members within the same class.”). Accordingly, we
hold that Perez may not bring a private cause of action under article 21.21-6 by way of article 21.21-
8.
13 Perez also asserts that he may bring a cause of action under article 21.21-6 through
the DTPA laundry list. Blue Cross does not contend that the DTPA has no application, only that
Perez has no claim under the DTPA because he is not a consumer. A consumer under the DTPA is
a person who seeks or acquires goods or services by purchase or lease. See Tex. Bus. & Com. Code
Ann. § 17.45(4) (West 2002). However, because the record does not demonstrate that Blue Cross
presented this argument to the trial court, it is waived for purposes of appeal.
Assuming without deciding that the DTPA does apply, there was no evidence of a
DTPA violation: Perez argues that Blue Cross’s discrimination violated an “unlisted practice” in
the DTPA laundry list. The supreme court has held, however, that although the laundry list is not
exclusive for DTPA purposes, it is exclusive for deceptive trade practices claims through article
21.21 of the insurance code. Watson, 876 S.W.2d at 149. More importantly, Perez’s petition
referred specifically and only to section 17.46(b)(12) of the laundry list, which requires evidence of
“representing that an agreement confers or involves rights, remedies, or obligations which it does
not have or involve, or which are prohibited by law.” Tex. Bus. & Com. Code Ann. § 17.46(b)(12).
There is no evidence that Blue Cross made any such representations. In the application for health
insurance, Blue Cross made no promise that it would provide coverage. It instead declared that
“This application does not provide coverage of any kind unless approval is provided by Blue Cross
and Blue Shield of Texas, Inc.” Having found that Perez cannot bring a private cause of action under
article 21.21-6 by way of article 21.21-8 and did not present evidence of a DTPA violation, we need
not address Blue Cross’s contention that it established its affirmative defense as to Perez’s article
21.21-6 claim. We overrule Perez’s third issue.
14 Cause of Action under Article 21.21-8 of the Insurance Code
In his second issue, Perez contends he has a valid cause of action under article 21.21-
8. This provision states that “[n]o person shall engage in any unfair discrimination by making or
permitting any unfair discrimination between individuals of the same class and of essentially the
same hazard.” Tex. Ins. Code Ann. art. 21.21-8, § 2. Perez argues that because the relevant class
is either “the average person” or “all twelve-year-old boys,” Blue Cross engaged in unfair
discrimination by refusing to insure someone within the class who has Down Syndrome. Blue Cross
counters that Perez may not maintain an action under article 21.21-8 because he did not satisfy the
statutory requirement of sustaining economic damages. See id. § 3(a). Blue Cross, however, did not
raise this argument in the trial court; therefore, we may not consider it.
Blue Cross further contends that refusal to insure does not constitute unfair
discrimination under article 21.21-8 because section two of the provision does not include the phrase
“refusing to insure.” See id. § 2. However, under section four, entitled “Affirmative Defenses,” an
insurance company is not in violation of section two if a “refusal to insure,” among other actions,
“is based upon sound actuarial principles.” Id. § 4. Thus, reading sections two and four together,
as we must, article 21.21-8 prohibits an insurance company’s refusal to insure one person of the
“same class and of essentially the same hazard” as another person who receives coverage.
Blue Cross next contends that, because only persons with Down Syndrome constitute
“individuals of the same class and of essentially the same hazard,” it did not unfairly discriminate
in declining to insure all persons within that class. Blue Cross argues in the alternative that it proved
as a matter of law that its refusal to insure was based on “sound actuarial principles,” an affirmative
15 defense to a claim under article 21.21-8. Id. Even assuming that the relevant class is either “the
average person” or “all twelve-year-old boys,” as Perez proposes, Blue Cross’s conduct did not
constitute unfair discrimination under article 21.21-8. Unfair discrimination occurs when an
insurance company treats a person differently, without justification, than another person not only of
the same class but also “of essentially the same hazard.” Id. § 2 (emphasis added).
Here, both sides presented evidence that a person with Down Syndrome is not of
essentially the same hazard as a person without the disability. The affidavit of Golder Wilson, M.D.,
Perez’s medical expert, alone establishes that persons with Down Syndrome have up to a fifty
percent incidence of heart problems, seventy percent incidence of vision and hearing deficits, and
ninety percent incidence of periodontal disease. He further stated that “over 50 percent of
individuals with Down Syndrome have medically uneventful lives,” which implies that a large
percentage has increased medical risks. The affidavit of Benjamin Carnovale, M.D., Blue Cross’s
medical expert, establishes that people with Down Syndrome “frequently have a lowered resistance
to infection,” “are at greater risk from autoimmune diseases,” and are more likely to suffer seizures
than people without Down Syndrome. With those statistics, we cannot say that a person with Down
Syndrome is of essentially the same hazard as a person without the disability.
Therefore, we conclude that Blue Cross’s refusal to insure Perez because he has
Down Syndrome did not constitute unfair discrimination under article 21.21-8 between individuals
of the same class and essentially the same hazard. If the relevant class is all persons, both parties
presented sufficient proof that persons with Down Syndrome have greater medical risks than the
average person and therefore are not of the same hazard as the average person. If the relevant class
16 is all persons with Down Syndrome, then Blue Cross did not unfairly discriminate because it treated
all persons within that class and hazard in the same manner. We overrule Perez’s second issue. In
light of our disposition of Perez’s second and third issues concerning his causes of action under
articles 21.21-6 and 21.21-8, we need not address whether Blue Cross’s denial of coverage was
based on sound actuarial principles. We affirm the order of the district court granting Blue Cross’s
motion for summary judgment and denying Perez’s motions for summary judgment.
CONCLUSION
Perez’s claims are not moot simply because he has since obtained health insurance
from another insurance company. He retains a legally cognizable interest, at the least, in his claim
for injunctive relief that Blue Cross discontinue the practice of declining to insure people with Down
Syndrome. Further, we do not find that the district court abused its discretion in admitting the
affidavit of Blue Cross’s actuarial expert witness. Although the expert relied generally, in part, on
“additional materials provided to me by counsel,” he tied each of his opinions to specific documents.
We cannot say that the specific documents on which he relied were not of the type reasonably relied
upon by experts in his field.
Perez may not maintain a cause of action under article 21.21-6 of the insurance code
because (i) the statute provides only for a public remedy; (ii) the statute does not tie in with article
21.21-8 to create a private right of action; and (iii) Perez did not present sufficient proof of a cause
of action under the DTPA laundry list by way of article 21.21-6. See Tex. Ins. Code Ann. arts.
21.21-6, -8; Tex. Bus. & Com. Code Ann. § 17.46(b). Perez additionally may not maintain a cause
17 of action under article 21.21-8 because Blue Cross’s policy of declining to insure all persons with
Down Syndrome does not unfairly discriminate between persons of the same class and of essentially
the same hazard. See Tex. Ins. Code Ann. art. 21.21-8, § 2. For these reasons, we affirm the order
of the district court granting Blue Cross’s motion for summary judgment and denying Perez’s
Jan P. Patterson, Justice
Before Chief Justice Law, Justices B. A. Smith and Patterson
Affirmed
Filed: December 18, 2003