Mills v. Fletcher

229 S.W.3d 765, 2007 Tex. App. LEXIS 3723, 2007 WL 1423883

• Court: Court of Appeals of Texas
• Decided: May 16, 2007
• Docket: 04-06-00345-CV
• Status: Published

Opinions

OPINION

Opinion by

KAREN ANGELINI, Justice.

This appeal arises from a personal injury lawsuit brought by Appellee Kevin Fletcher against Appellant Alisa Mills. At trial, the jury awarded Fletcher $1,551.00 in past medical expenses. On appeal, Mills argues that pursuant to section 41.0105 of the Texas Civil Practice and Remedies Code, the amount of Fletcher’s award for past medical expenses should have been reduced because his medical providers accepted lesser amounts for their services from his health insurance company, thereby “writing off’ the balance due from Fletcher. Because we agree that section 41.0105 requires such a reduction, we reverse the trial court’s judgment and remand the cause for entry of judgment consistent with this opinion.

Discussion

Section 41.0105 of the Texas Civil Practice and Remedies Code, titled “Evidence Relating to Amount of Economic Damages,” provides the following:

In addition to any other limitation under law, recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.

Tex. Civ. Piiac. & Rem.Code Ann. § 41.0105 (Vernon Supp.2006) (emphasis added). Here, Mills argues that the “written-off’ or adjusted amounts were neither actually paid nor actually incurred by or on behalf of Fletcher. As such, Mills argues that pursuant to section 41.0105, Fletcher was not entitled to recover the written-off amounts.¹ In response, Fletcher argues that he “incurred” the medical charges at the time of his doctor’s visit and that any amounts later written off do not affect the charges that he “incurred.”

According to the Code Construction Act, when interpreting a statute, “[wjords and phrases shall be read in context and construed according to the rules of grammar and common usage.” Tex. Gov’t Code Ann § 311.011(a) (Vernon 2005); see Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 651 (Tex.2006) (“Ordinarily, the truest manifestation of what legislators intended is what lawmakers enacted, the literal text they voted on.”). Additionally, “[wjhenever possible, we construe statutes as written, but where the enacted language is nebulous, we may cautiously consult legislative history to help divine legislative intent.” Alex Sheshunoff, 209 S.W.3d at 652.

In support of her interpretation, Mills cites to definitions found in common dictionaries:

Incur: To become liable or subject to; to bring down upon oneself (as in “incur expenses”). Webster’s Ninth New Collegiate Dictionary, at 611 (1984).

Incur: To acquire or come into (something usually undesirable); to sustain; to become liable or subject to as a result of one’s actions; to bring upon oneself. The American Heritage Dictionary of the English Language (4th ed. online).

Incur: To suffer or bring on oneself (a liability or expense). Black’s Law Dictionary 782 (8th ed.2004).

Thus, Mills argues that “the word incur, in legal parlance, means simply ‘to become liable to pay.’ ” And, according to Mills, because the amounts were written off or adjusted by the medical providers, Fletcher will never have to pay the amounts written off.

Additionally, Mills emphasizes that pursuant to rules of grammar, the word “actually” modifies both “paid” and “incurred.” As such, “actually incurred” must necessarily be a limitation on expenses “incurred.” That is, if “incurred” is a big circle, “actually incurred” must necessarily refer to a smaller circle within that big circle. In contrast, Fletcher argues in his brief that “actually incurred” refers to those expenses that have been charged but not paid. We agree with Mills’s interpretation.

Here, the statute uses the word “incurred” twice: “recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.” Tex. Civ. PeaC. & Rem.Code Ann. § 41.0105 (Vernon Supp.2006) (emphasis added). In referring to “incurred” the second time, the Legislature chose to modify “incurred” with the word “actually.” As such, “incurred” must mean something different than “actually incurred.” And, the word “actually” modifying “incurred,” as well as the phrase “[i]n addition to any other limitation under law,” shows an intent by the Legislature to limit expenses simply “incurred.” Thus, in construing this statute, we believe that “medical or healthcare expenses incurred” refers to the “big circle” of medical or healthcare expenses incurred at the time of the initial visit with the healthcare provider, while, as applied to the facts presented here, “actually incurred” refers to the “smaller circle” of expenses incurred after an adjustment of the healthcare provider’s bill.

In contrast, Fletcher’s interpretation of “actually incurred” does not limit the phrase “incurred” in any manner. We, however, believe that by modifying “incurred” with the word “actually” the Legislature did intend to limit expenses “incurred.”

We also note that both parties point to legislative history in support of their respective interpretations. Mills emphasizes that section 41.0105 was part of House Bill 4’s tort reform legislation, which was enacted “to bring more balance to the Texas civil justice system, reduce litigation costs, and address the role of litigation in society.” House Comm, on State Affairs, Bill Analysis, Tex. H.B. 4, 78th Leg., R.S. (2003).² As such, Mills argues that we must construe section 41.0105 with this general intent in mind.

In support of his interpretation, Fletcher points to an exchange between Senators Hinojosa and Ratliff during the Senate’s debate of House Bill 4, which he argues shows that the person who drafted the bill intended that the word “incurred” be synonymous with the word “charged.” Additionally, Fletcher emphasizes that, although earlier versions of the bill would have eliminated the collateral source rule, those versions were amended to delete this language. As such, Fletcher argues that we should not interpret section 41.0105 to violate the collateral source rule.³

However, given the plain meaning of section 41.0105’s language, we need not consider legislative history here. See Alex Sheshunoff, 209 S.W.3d at 652 (explaining that only when the enacted language is “nebulous” should a court “cautiously con-suit legislative history to help divine legislative intent”). Indeed, the Texas Supreme Court has emphasized that if the “text is unambiguous, we must take the Legislature at its word and not rummage around in legislative minutiae.” Id. at 652 n. 4.

We, therefore, hold that section 41.0105 limits a plaintiff from recovering medical or health care expenses that have been adjusted or “written off.”

In his cross-point on appeal, Fletcher contends that if section 41.0105 is construed to allow a defendant the right to offset charges that were written off by a medical provider because of its contract with a health insurance company, then section 41.0105 is unconstitutional under the Texas Constitution.

First, Fletcher urges a violation of substantive due process. In making a substantive due process determination, we look at whether the statute has a reasonable relation to a proper legislative purpose, and whether it is arbitrary or discriminatory. Garza-Vale v. Kwiecien, 796 S.W.2d 500, 505 (Tex.App.-San Antonio 1990, writ denied).

It is Fletcher’s position that, if defendants are allowed to benefit from medical provider write-offs, then the statute’s “sole purpose would be to discriminate against financially responsible injured parties by taking away their benefits or rights they acquired under their health insurance policy, and give that right or benefit to a wrongdoer, thus treating the financially responsible injured party differently than a financially irresponsible party.” According to Fletcher, this will result in people either foregoing health insurance or not submitting their bills to their health insurance company for fear that the defendant will benefit from their health insurance coverage. And, argues Fletcher, this will result in a loss of medical care to injured parties and the nonpayment of medical bills. It does not seem likely, however, that the Legislature considered the possibility that people will risk not having their medical bills covered by insurance just to make sure that a defendant from whom they may recover will not benefit from their health insurance coverage. It is more likely that the Legislature’s purpose was to develop a statutory scheme that would allow neither the injured plaintiff nor the responsible defendant to benefit from the medical provider’s write-off. In the end, regardless of whether an injured plaintiff is covered by health insurance or whether some of his bills are written off because of contracts with health insurance carriers, the injured plaintiff will still be able to recover from the defendant the amount paid to his medical provider. Thus, the statute has a reasonable relation to a proper legislative purpose, and it is not arbitrary or discriminatory.

Second, Fletcher urges a violation of the open courts provision of the Texas Constitution. To establish an open courts violation, a litigant must show he has a cognizable common law cause of action that is being restricted and that the restriction is unreasonable or arbitrary when balanced against the purpose and basis of the statute. Rose v. Doctors Hosp., 801 S.W.2d 841, 843 (Tex.1990). Here, section 41.0105 in no way restricts a common law cause of action. A plaintiff still has access to the courts to bring a common law cause of action against a negligent defendant for injuries sustained in an accident. By allowing the defendant an offset for a medical provider’s write-off due to a contract with the plaintiffs insurance carrier, the Legislature has only limited the damages a plaintiff may recover. As stated above, the plaintiff will still be able to recover the amount paid to his medical provider. We, therefore, find no open courts violation.

Lastly, Fletcher contends section 41.0105 is unconstitutionally vague. Fletcher urges that because there is a dispute over the statute’s meaning, it is necessarily vague and a violation of due process.

A statute is unconstitutionally vague if the persons regulated by it are exposed to risk or detriment without fair warning of the nature of the proscribed conduct. Raitano v. Tex. Dep’t of Pub. Safety, 860 S.W.2d 549, 551 (Tex.App.Houston [1st Dist.] 1993, writ denied). We scrutinize civil statutes less severely than criminal statutes because the consequences of imprecision are not as severe. Zaborac v. Tex. Dep’t of Pub. Safety, 168 S.W.3d 222, 225 (Tex.App.-Fort Worth 2005, no pet.). A due process violation occurs only when conduct is stated in such vague terms that people of common intelligence must guess at what is required. Raitano, 860 S.W.2d at 551.

We do not find section 41.0105 to be unconstitutionally vague. First, there is no conduct proscribed by section 41.0105. Second, the mere fact that the parties disagree as to its meaning does not mean we must necessarily guess at its meaning. We have interpreted the meaning of section 41.0105 by applying rules of statutory construction and by considering the plain meaning of section 41.0105. Thus, Fletcher’s constitutional challenges must fail.

Conclusion

Because section 41.0105 prevents Fletcher from recovering amounts “written off’ by a healthcare provider, we reverse and remand the cause for entry of judgment consistent with this opinion.

STEVEN C. HILBIG, Justice (concurring in judgment only).

Dissenting opinion by CATHERINE STONE, Justice.

1 . We note that in response to Mills's issues on appeal, Fletcher argues that Mills’s bill of exceptions at trial was insufficient to show that Fletcher will never be liable for the written-off amounts. We disagree. In her bill of exceptions, Mills introduced Defendant's Exhibits two 2 and 3. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 577 (Tex.2006) ("The purpose of a bill of exceptions is to allow a party to make a record for appellate review of matters that do not otherwise appear in the record, such as evidence that was excluded."). These exhibits were copies of bills from Fletcher’s health care providers, showing the adjustments made and the resulting balance of "$0.00.” We believe that these exhibits were sufficient. Zero means zero — ■ Fletcher no longer owes any money to his health care providers.

2 . This document is available at http://www. legis.state.tx.us/tlodocs/78R/analysis/pdl7HB 00004S.pdf.

3 . Our interpretation clearly does violate the collateral source rule. The theory behind the collateral source rule is that a wrongdoer should not have the benefit of insurance independently procured by the injured party, and to which the wrongdoer was not privy. Brown v. Am. Transfer & Storage Co., 601 S.W.2d 931, 934 (Tex.1980). Thus, "[t]he collateral source rule bars a wrongdoer from offsetting his liability by insurance benefits independently procured by the injured party." Mid-Century Ins. Co. v. Kidd, 997 S.W.2d 265, 274 (Tex. 1999) (emphasis added). Here, the insurance adjustments or amounts “written off” are a benefit that a patient receives only as a result of procuring healthcare insurance. And, pursuant to our interpretation of section 41.0105, Mills (the "wrongdoer”) will have the benefit of those adjustments made as the result of Fletcher having paid premiums and carrying health insurance. The Legislature, however, has the power to enact a statute that abrogates the collateral source rule, and we believe that the plain language of section 41.0105 shows the Legislature’s intent to do so here.