Opinion issued August 1, 2024
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-21-00727-CV ——————————— MOLINA HEALTHCARE OF TEXAS, INC., Appellant V. ACS PRIMARY CARE PHYSICIANS SOUTHWEST, PA AND EMERGENCY SERVICES OF TEXAS, PA, Appellees
On Appeal from the 113th District Court Harris County, Texas Trial Court Case No. 2017-777084
MEMORANDUM OPINION
This case involves a dispute over reimbursement rates for doctors who
provided out-of-network emergency medical care to a health insurance company’s
insureds. Appellees ACS Primary Care Physicians Southwest, PA and Emergency Services of Texas, PA (collectively, “the providers”) asserted claims against
appellant Molina Healthcare of Texas, Inc. (“Molina”) for a violation of Insurance
Code section 1271.155(a) relating to payment for emergency care performed by non-
network physicians, violation of the Insurance Code’s prohibition against unfair
claim settlement practices, breach of an implied-in-fact contract, and quantum
meruit.
A jury found in favor of the providers on all their asserted claims and awarded
damages. The trial court entered judgment on the jury verdict and awarded the
providers approximately $1.6 million in actual damages and $3.1 million in treble
damages under the Insurance Code. The parties agreed to submit the issue of
attorney’s fees to the trial court, and the court awarded approximately $5.1 million
in trial-level attorney’s fees and $430,000 in conditional appellate attorney’s fees.
While this case was pending on appeal, the Texas Supreme Court issued an
opinion holding that (1) no private right of action exists under Insurance Code
section 1271.155(a), (2) emergency care providers may not use the prohibitions
against unfair settlement practices under Insurance Code chapter 541 to raise a claim
that an insurance company underpaid reimbursement rates under section
1271.155(a), and (3) emergency care providers cannot maintain a claim against an
insurance company for quantum meruit. See Tex. Med. Res., LLP v. Molina
Healthcare of Tex., Inc., 659 S.W.3d 424 (Tex. 2023). The parties agree that as a
2 result of this decision, the providers cannot recover under these three claims, and
these claims are therefore no longer at issue in this appeal.
In its remaining two arguments, Molina contends that (1) the providers’ claim
for breach of an implied contract is an impermissible repackaging of claims the
Texas Supreme Court has held cannot be brought against insurers and no evidence
supports this claim because there is no evidence of a meeting of the minds, no
evidence of consideration, and no evidence of breach of an implied contract; and
(2) the providers cannot recover attorney’s fees on their claim for breach of an
implied contract.
We reverse and render judgment.
Background
A. Relationship Between the Parties and the Relevant Regulatory Scheme
Molina is a health maintenance organization (“HMO”) that offers a variety of
health insurance plans to its insureds, including commercial plans through the
federal exchange established by the Patient Protection and Affordable Care Act
(“ACA”). Molina’s ACA plans are the health insurance plans involved in this case.
ACS Primary Care Physicians Southwest, PA (“ACS”) is a “professional
emergency medicine services group practice” that staffs emergency departments at
hospitals and medical centers throughout Texas, including eight hospitals in the
Memorial Hermann system in the Houston area. Emergency Services of Texas, PA
3 (“Emergency Services”) staffs emergency departments at hospitals primarily in the
El Paso area. Neither ACS nor Emergency Services has an express contract with
Molina setting out agreed reimbursement rates for emergency care provided to
Molina’s insureds. The providers are therefore “out of network” with Molina.
Both federal and state law require hospitals to provide stabilizing emergency
care for patients regardless of the patient’s insurance status or ability to pay. See 42
U.S.C. § 1395dd(b), (c); TEX. HEALTH & SAFETY CODE §§ 241.027–.028, 311.022;
Tex. Med. Res., 659 S.W.3d at 427. Insurance Code section 1271.155(a) provides
that an HMO such as Molina “shall pay for emergency care performed by non-
network physicians or providers at the usual and customary rate or at an agreed rate.”
TEX. INS. CODE § 1271.155(a). The statute does not define “usual and customary
rate.” The HMO’s health care plan must provide coverage for “necessary emergency
care,” including “the treatment and stabilization of an emergency medical
condition.” Id. § 1271.155(b). The health care plan “shall comply with this section
regardless of whether the physician or provider furnishing the emergency care has a
contractual or other arrangement with the [HMO] to provide items or services to
covered enrollees.” Id. § 1271.155(e).
In 2019, the Texas Legislature amended multiple provisions of the Insurance
Code to address, among other things, how to resolve payment disputes between out-
of-network emergency care providers and HMOs. See Tex. Med. Res., 659 S.W.3d
4 at 428. The new provisions include “a mandatory binding arbitration process for
disputes between an insurer and an out-of-network emergency-care physician over
the amount the insurer must pay the physician for care rendered to an individual
enrolled in the insurer’s plan.” Id.; see TEX. INS. CODE §§ 1467.081–.089. An out-
of-network provider or an insurance company may not file suit for an out-of-network
claim until after the conclusion of the arbitration proceeding on the issue. Tex. Med.
Res., 659 S.W.3d at 428–29; TEX. INS. CODE § 1467.085(a). This arbitration process,
however, only applies to health care services rendered on or after January 1, 2020.
Tex. Med. Res., 659 S.W.3d at 429; Act of May 24, 2019, 86th Leg., R.S., ch. 1342,
§ 5.01, 2019 Tex. Gen. Laws 3940, 3963. It is undisputed that this lawsuit does not
involve health care services rendered on or after January 1, 2020. At the time the
providers rendered the services at issue in this dispute, no court had opined on the
remedies available to an out-of-network provider alleging underpayment by an
HMO for emergency care services.
B. Procedural Background
The providers filed the underlying lawsuit in November 2017. The providers
alleged that between January 2016 and August 2019, they provided emergency
medical services to Molina insureds, and they directly billed Molina for payment of
over 13,000 claims arising from these services. The providers billed Molina
$19,373,648.
5 Molina determined that all claims at issue involved medically necessary,
covered health care services, and therefore the claims were payable. However,
Molina allegedly paid the providers “at rates substantially less than both [the
providers’] billed charges and the ‘usual and customary rate’ in [the providers’]
geographic area.” Molina paid the providers $2,115,932. The providers alleged that
they had suffered damages “in an amount equal to the difference between the
amounts allowed as payable by Molina and the lesser of [the providers’] charges and
the ‘usual and customary rate’ for professional emergency medicine services in the
same geographic area, plus [the providers’] loss of use of that money.”
The providers asserted several causes of action against Molina. They first
alleged that Molina had violated Insurance Code section 1271.155(a). Molina and
the providers had not agreed to a specific rate for claims for emergency services, so
Molina was required to pay the providers “either their billed charges or the ‘usual
and customary rate’ in their geographic area for the emergency medicine services
provided” to Molina’s insureds. However, Molina instead paid the providers “at
rates substantially below both [the providers’] billed charges and the ‘usual and
customary rate’ for the emergency medical services” provided to the insureds.
The providers further alleged that Molina had engaged in unfair claims
settlement practices under the Insurance Code by (1) underpaying the providers’
claims and thus failing to attempt in good faith to effectuate a prompt, fair, and
6 equitable settlement of claims with respect to which Molina’s liability had become
reasonably clear; and (2) refusing to pay claims without conducting a reasonable
investigation with respect to the reimbursement rates for the claims. See TEX. INS.
CODE § 541.060(a)(2)(A), (a)(7). The providers sought actual damages for this cause
of action and also alleged that Molina had knowingly violated the Insurance Code,
entitling the providers to treble damages.
The providers also asserted a claim for breach of an implied-in-fact contract.
They alleged that they were obligated under law “to provide emergency medicine
services to all patients presenting at the emergency departments they staff, including
Molina patients,” and Molina was obligated by law to pay “for emergency care
performed by non-network physicians or providers at the usual and customary rate
or at an agreed rate.” The providers “appropriately billed Molina” for emergency
services rendered to Molina insureds “based on Molina’s implied agreement to
reimburse [the providers] for those services at rates that complied with Texas law.”
The providers had a “reasonable expectation and understanding” that Molina would
reimburse them “at rates in accordance with the standards established under Texas
law,” but Molina instead breached the parties’ implied agreement by reimbursing
the providers at rates substantially lower than the “usual and customary rate.”
7 In addition, the providers asserted a claim for “unjust enrichment/breach of
implied-in-law contract.”1 The providers alleged that they conferred a benefit on
Molina by providing emergency services to Molina’s insureds, and Molina owes its
insureds an obligation to pay the providers for covered medical services received by
the insureds. Through the providers’ provision of emergency medical services,
Molina “fulfills its obligations” to its insureds. However, despite knowing that the
providers expected to be paid “at rates in accordance with the standards established
under Texas law,” Molina unjustly enriched itself by refusing to pay the providers
at those rates.
A jury trial on the providers’ claims occurred in June 2021. The providers
presented evidence that they are affiliated with a company called TeamHealth.
TeamHealth has a number of different entities under its umbrella, but its overarching
purpose is to provide administrative services to physician groups. 2 TeamHealth
1 On appeal, the parties refer to this claim as a claim for quantum meruit, and we adopt the parties’ terminology for this claim. See Pepi Corp. v. Galliford, 254 S.W.3d 457, 460 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (stating that while unjust enrichment “is an independent cause of action,” plaintiff’s claim that opposing party was unjustly enriched by retaining benefits of services rendered by plaintiff “can also be the basis for a quantum meruit cause of action, rather than a separate claim in itself”). 2 The precise organizational structure of the TeamHealth family of companies and the ownership of the providers is not relevant to disposition of this appeal. For the sake of this appeal, it suffices to state that TeamHealth took care of most administrative responsibilities for the providers, including contracting with insurance companies, coding of medical services, invoicing, and handling payment disputes. 8 employees, for instance, were the ones involved with setting the prices for the
providers’ billed charges and trying to negotiate a contract with Molina for
reimbursement rates so the providers could be “in network.”
Generally, TeamHealth used a national database called FAIR Health to set
their billed charges. FAIR Health is a database created by a nonprofit organization
to collect health insurance claims information and pricing for different medical
services from across the country. TeamHealth tried to set their charges for medical
services “based on the FAIR Health 80th percentile of charges in the Marketplace.”
A TeamHealth employee testified that while TeamHealth considered these charges
reasonable, it sometimes agreed to discount their charges in order to become “in
network” with a particular insurance company. TeamHealth attempted to negotiate
a contract between Molina and the providers, proposing that Molina reimburse the
providers at 325% of the Medicare rates for emergency care services provided to
Molina insureds, but Molina would not offer more than 130% of Medicare.
TeamHealth characterized this rate as “a fraction” of what similarly situated
insurance companies agreed to pay as reimbursement, and it did not sign a contract
with Molina.
Molina employees testified that they generally start negotiations with
providers at 100% of the Medicare rates, which Molina believed was a reasonable
rate. When Molina could not reach an agreement with a provider, Molina’s
9 reimbursement rates for out-of-network physicians and providers was based on the
median of Molina’s “contracted provider network” within a specific service area.3
Molina did not take the charges billed by providers into consideration when setting
its out-of-network reimbursement rates. A Molina employee testified that the
providers’ billed charges were “not really relevant” because providers can increase
their prices at any time, and these prices are “an arbitrary number” and are “really
not the market rate.” Molina argued that its reimbursement rates, which were closely
tied to the Medicare rate, satisfied the requirement that it pay out-of-network
providers the “usual and customary” rate.
The providers vehemently contested this argument by Molina and asserted
that their billed charges established the “usual and customary” rate. The providers’
damages expert, an economist, conducted several different statistical analyses and
ultimately concluded that Molina had underpaid the providers by $11.1 million.
Specifically, Molina had underpaid ACS by $9,727,296 and Emergency Services by
$1,326,450. Although this expert was not asked to opine on whether the providers’
billed charges “were an appropriate measure of damages under Texas law,” she was
3 Molina considered a federal regulation known as the “Greatest of Three” in setting its out-of-network reimbursement rates. Under this regulation, which was promulgated pursuant to the Affordable Care Act, HMOs can look to three different options in setting their out-of-network reimbursement rates for emergency care: (1) the median of the HMO’s in-network negotiated rates, (2) the usual method used to calculate their rates for out-of-network services, and (3) the Medicare rate. See 45 C.F.R. § 147.138(b)(3)(i)(A)–(C). 10 asked to calculate, for both providers, the difference between the amount the
provider billed and the amount Molina paid the provider. These amounts equaled
$15,332,215 for ACS and $1,925,501 for Emergency Services. The providers
requested that the jury award these last two amounts as actual damages for several
of the damages questions.
After the parties rested, Molina moved for directed verdict on each of the
providers’ claims. With respect to the providers’ claim for breach of an implied
contract, Molina asserted several reasons why a directed verdict was proper,
including that there was “no evidence of a meeting of the minds between the parties.”
Molina argued that the reimbursement rate “is an essential term of the contract” and
no contract can exist “without agreement on an essential term,” but the evidence
“conclusively establishes the plaintiffs and defendants never agreed on a
reimbursement rate.” The trial court denied the request for a directed verdict on this
claim.
The trial court submitted fourteen questions to the jury in the written charge.4
The jury found in favor of the providers on their claims for violation of Insurance
4 Molina objected to submission of each question in the charge. With respect to the question on implied contract, Molina argued that “there is no evidence to support any of the elements of an enforceable contract,” including a meeting of the minds. Molina also objected on the following basis: Defendant objects to the instruction concerning the lack of agreement on price and presumes price on the ground that the instruction is defective and represents an incorrect statement of the law. A 11 Code section 1271.155(a), violation of the unfair settlement practices provisions of
Insurance Code chapter 541, and quantum meruit. For each of these claims, the jury
awarded ACS $1,398,742.86 and Emergency Services $188,206.40 in actual
damages. The jury further found that Molina knowingly committed the unfair
settlement practices, and it awarded ACS $12,500,000 and Emergency Services
$5,000,000 in additional damages for both knowing violations.
With respect to the providers’ claim for breach of an implied contract, the jury
found that the providers and Molina agreed that Molina would pay the providers for
medical services rendered to Molina’s insureds, but Molina failed to comply with
these agreements. As damages, the jury again awarded ACS $1,398,742.86 and
Emergency Services $188,206.40. The providers moved for the trial court to enter
reasonable price cannot be presumed when price is an essential element of the purported contract over which the parties unsuccessfully negotiated. Molina submitted proposed jury questions related to this claim, including a question asking whether the providers and Molina “agree[d] on the reimbursement rate” at which Molina would pay the provider for any emergency care the provider rendered to Molina’s insureds. Molina also requested an instruction, based on language from a San Antonio Court of Appeals case, that if the provider and Molina “discussed, but did not agree on, the reimbursement rate” that Molina would pay, the jury “cannot imply a reimbursement rate into any implied contract between the parties.” See MGR, Inc. v. Geico Cas. Co., No. 04-18-00452-CV, 2019 WL 573968, at *2–3 (Tex. App.—San Antonio Feb. 13, 2019, no pet.) (mem. op.) (concluding that no evidence existed of mutual assent to pay “reasonable and necessary cost of repairs”). The trial court overruled Molina’s objections, and it denied Molina’s requested submissions. 12 judgment on the jury verdict, arguing that they were entitled to recover damages on
each of their claims.
The parties agreed to submit the question of attorney’s fees to the trial court.
In their motion for entry of judgment, the providers requested that the trial court
award them over $5.6 million in trial-level attorney’s fees and over $400,000 in
conditional appellate attorney’s fees. The providers also filed a separate motion for
attorney’s fees. The providers supported their request for attorney’s fees with
extensive billing records and invoices. Molina opposed the providers’ request for
attorney’s fees.
The trial court signed a final judgment on September 27, 2021. Molina moved
for judgment notwithstanding the verdict and to modify the final judgment. Among
other arguments, Molina argued that there was legally insufficient evidence to
support the providers’ breach of an implied-in-fact contract claim because there was
no evidence the parties agreed on the rate to be paid to the providers, an essential
term of the contract.
The trial court signed an amended final judgment on December 30, 2021.
After reciting the findings by the jury, the trial court awarded $1,398,742.86 in actual
damages to ACS and $188,206.40 in actual damages to Emergency Services. The
court awarded $2,797,485.72 to ACS and $376,412.80 to Emergency Services as
additional damages for Molina’s knowing violations of Insurance Code chapter 541.
13 The court also awarded pre-judgment interest on actual damages, $5,128,733.19 in
trial-level attorney’s fees, pre-judgment interest “of attorney’s fees paid prior to
entry of judgment,” $434,431 in conditional appellate attorney’s fees, court costs,
and post-judgment interest. The court further ordered that if the providers’ chapter
541 claims are reversed on appeal, the providers should be awarded “the next highest
recovery under [the providers’] remaining theories as found by the jury.”
This appeal followed.
C. The Texas Supreme Court’s Decision in Texas Medicine Resources, LLP v. Molina Healthcare of Texas, Inc.
At the time this case was pending in the trial court, other state and federal
courts in Texas were also considering the issues raised in this case: specifically,
whether Insurance Code section 1271.155(a) creates a private right of action for out-
of-network emergency care providers to sue HMOs for alleged underpayment of
reimbursement rates and whether the care providers can pursue remedies such as a
suit for violation of Insurance Code chapter 541 or a suit for quantum meruit.
Federal district courts in Texas reached conflicting decisions on whether the
language of section 1271.155(a) created a private right of action for non-network
physicians and providers. Two judges in the Northern District of Texas ruled that
section 1271.155(a) did not create a private right of action.5 See Apollo MedFlight,
5 The court in Apollo MedFlight also ruled that because the emergency care provider had no right of action under Insurance Code 1271.155(a), the defendant insurer 14 LLC v. Bluecross Blueshield of Tex., No. 2:18-CV-166-Z-BR, 2019 WL 4894263,
at *3 (N.D. Tex. Oct. 4, 2019); Angelina Emergency Med. Assocs. PA v. Health Care
Serv. Corp., 506 F. Supp. 3d 425, 436 (N.D. Tex. 2020). A judge in the Southern
District of Texas, however, concluded otherwise and ruled that the Texas Legislature
intended for section 1271.155(a) to create a private cause of action. ACS Primary
Care Physicians SW., P.A. v. UnitedHealthcare Ins. Co., 514 F. Supp. 3d 927, 936–
39 (S.D. Tex. 2021), rev’d, 60 F.4th 899 (5th Cir. 2023). In light of the earlier
decisions from the Northern District of Texas that reached a different result, the
Southern District certified an immediate interlocutory appeal of the issue to the Fifth
Circuit. See ACS Primary Care Physicians SW., P.A. v. UnitedHealthcare Ins. Co.,
No. 4:20-CV-01281, 2021 WL 6617719, at *1 (S.D. Tex. Feb. 10, 2021) (order).
The Fifth Circuit accepted the appeal and certified the question to the Texas Supreme
Court. See ACS Primary Care Physicians SW., P.A. v. UnitedHealthcare Ins. Co.,
26 F.4th 716, 719–20 (5th Cir. 2022).
could not be liable to the care provider for unfair settlement practices under Insurance Code chapter 541, and therefore the plaintiff lacked standing to pursue that claim. See Apollo MedFlight, LLC v. Bluecross Blueshield of Tex., No. 2:18- CV-166-Z-BR, 2019 WL 4894263, at *3 (N.D. Tex. Oct. 4, 2019); see also Angelina Emergency Med. Assocs. PA v. Health Care Serv. Corp., 506 F. Supp. 3d 425, 437 (N.D. Tex. 2020) (reasoning that plaintiff emergency care providers lacked standing to bring chapter 541 claims because such claims belonged to patients and are not assignable under Texas law). The court in Angelina Emergency Medical Associates also ruled that the emergency care providers could not successfully maintain a quantum meruit claim against the insurers because the care providers did not render medical care for the benefit of the defendant insurers. See 506 F. Supp. 3d at 431–32. 15 Meanwhile, in state court, the Dallas Court of Appeals also addressed this
question. See Tex. Med. Res., LLP v. Molina Healthcare of Tex., Inc., 620 S.W.3d
458 (Tex. App.—Dallas 2021), aff’d, 659 S.W.3d 424 (Tex. 2023). In that case, the
doctors provided emergency care to nearly 4,000 Molina insureds throughout 2017
and 2018 but allegedly were not reimbursed at the doctors’ “usual and customary
rate.” Id. at 462. The doctors asserted claims against Molina for violation of section
1271.155(a), violation of Insurance Code chapter 541, quantum meruit, and
declaratory relief. Id. Molina filed a plea to the jurisdiction, arguing that the doctors
lacked standing to bring claims under the Insurance Code and that the doctors’
quantum meruit claim failed because no direct relationship existed between the
doctors and Molina. Id. The trial court granted Molina’s plea to the jurisdiction and
dismissed the doctors’ claims. Id. at 463.
Ultimately, the Dallas Court concluded that section 1271.155(a) “does not
create a private right of action in favor of non-network physicians or providers.” Id.
at 468. The court further held that chapter 541 did not apply to the doctors because
they were not Molina’s insureds or beneficiaries; their claim under that chapter was
predicated on a violation of section 1271.155(a), which was “jurisdictionally
unsupported”; and chapter 541 claims were not assignable from Molina’s insureds
to the doctors. Id. at 468–69. The Dallas Court also held that the doctors’ claim for
quantum meruit failed because that claim sought “to enforce the same payment
16 obligations [the doctors] cannot enforce under the emergency care statute,” and the
court would not allow a claim in equity “that merely repackages a statutory claim
the legislature declined to create.” Id. at 470. Additionally, the court held that the
trial court’s dismissal of the quantum meruit claim was proper because the doctors’
allegations did not “establish that they rendered valuable services to Molina,” and
any benefit to Molina from providing emergency care to Molina’s insureds was “too
indirect and attenuated to support a quantum meruit claim.” Id. at 470–71.
The Texas Supreme Court granted review of the Dallas Court’s decision and
consolidated the appeal with the certified question from the Fifth Circuit in ACS
Primary Care Physicians Southwest, P.A. v. UnitedHealthcare Insurance Co. The
court held that the language of section 1271.155(a) does not clearly imply a private
cause of action for damages, and therefore the doctors could not maintain this claim
against Molina. See Tex. Med. Res., 659 S.W.3d at 436. With respect to the doctors’
quantum meruit claim, the Texas Supreme Court agreed with the Dallas Court of
Appeals that the doctors could not establish that their efforts in providing emergency
care to Molina’s insureds were undertaken for Molina. Id. at 436–37. Finally, with
respect to the doctors’ unfair settlement practices claim under Insurance Code
chapter 541, the court noted that “failing to attempt a good-faith settlement is only
unfair ‘with respect to a claim by an insured or beneficiary,’” and the doctors did not
qualify as either an insured or a beneficiary. Id. at 438. The court further reasoned
17 that in light of its holding that the doctors could not recover the difference between
the payment they received and the “usual and customary rate” in a private cause of
action under section 1271.155(a), “it would be odd indeed if they could potentially
recover three times that amount by pleading the same claim under Chapter 541.”6 Id.
As discussed above, the jury in this case found in favor of the providers on
each of the four claims that they asserted: (1) a claim for violation of Insurance Code
section 1271.155(a); (2) a claim for violation of the unfair settlement provisions in
Insurance Code chapter 541; (3) a claim for quantum meruit; and (4) a claim for
breach of an implied-in-fact contract. The trial court entered judgment on the verdict
and awarded the providers damages under the chapter 541 theory, which yielded the
greatest recovery to the providers. While this case was pending on appeal, the Texas
Supreme Court held, in a legally and factually indistinguishable case, that (1) section
1271.155(a) does not create a private right of action; (2) emergency care providers
cannot maintain a chapter 541 action for unfair settlement practices against
insurance companies for allegedly underpaying reimbursement amounts under
6 The Texas Supreme Court also held that claims under chapter 541 were “personal to the insured” and may not be assigned, and therefore the doctors could not rely on assignments of the insureds’ benefits, allegedly completed during the patient-intake process. Tex. Med. Res., LLP v. Molina Healthcare of Tex., Inc., 659 S.W.3d 424, 438–39 (Tex. 2023). The court also noted that the doctors were not suing Molina “for engaging in unfair settlement practices with respect to claims by Molina’s insureds,” but were instead alleging that Molina “engaged in unfair practices with respect to claims asserted by them, and those claims are not actionable under Section 541.060(a).” Id. at 439. 18 section 1271.155(a); and (3) emergency care providers cannot maintain a claim for
quantum meruit against insurance companies because they cannot establish that they
rendered services for the benefit of the insurance companies. Molina and the
providers agree that the providers’ only cause of action that potentially survives the
Texas Supreme Court’s decision in Texas Medicine Resources is the providers’
claim for breach of an implied-in-fact contract.7 We therefore turn to that claim.
Implied-in-Fact Contract
In its fourth issue, Molina argues that the providers cannot recover for breach
of an implied-in-fact contract. Molina argues that, first, this claim is merely an
impermissible repackaging of the providers’ section 1271.155(a) claim, which the
Texas Supreme Court has held is not viable. Second, Molina argues that an implied
contract cannot exist when an essential term—here, the reimbursement rate—is
disputed. Finally, Molina argues that legally insufficient evidence supports the jury’s
findings on this claim because the providers presented no evidence of a meeting of
the minds on the reimbursement rate, no evidence of consideration, and no evidence
of breach of an implied contract.
7 We therefore need not address Molina’s first, second, and third issues, all of which challenge the jury’s findings on the section 1271.155(a), chapter 514, and quantum meruit claims. 19 A. Standard of Review
In conducting a legal sufficiency review, we consider whether the evidence at
trial would enable a reasonable and fair-minded jury to reach the verdict under
review. Gunn v. McCoy, 554 S.W.3d 645, 658 (Tex. 2018). Evidence is legally
insufficient to support a jury finding when (1) the record discloses a complete
absence of evidence of a vital fact; (2) the court is barred by rules of law or evidence
from giving weight to the only evidence offered to prove a vital fact; (3) the evidence
offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence
establishes conclusively the opposite of a vital fact. Bustamante v. Ponte, 529
S.W.3d 447, 455–56 (Tex. 2017).
The record contains more than a scintilla of evidence when the evidence rises
to a level that enables reasonable and fair-minded people to differ in their
conclusions. Gunn, 554 S.W.3d at 658; King Ranch, Inc. v. Chapman, 118 S.W.3d
742, 751 (Tex. 2003) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d
706, 711 (Tex. 1997)). “Conversely, the record contains less than a scintilla when
the evidence offered to prove a vital fact’s existence is ‘so weak as to do no more
than create a mere surmise or suspicion.’” Gunn, 554 S.W.3d at 658 (quoting King
Ranch, 118 S.W.3d at 751). We must consider the record evidence in the light most
favorable to the party in whose favor the verdict has been rendered, and we indulge
20 every reasonable inference deducible from the evidence in that party’s favor. Id.
(quoting Bustamante, 529 S.W.3d at 456).
When, as here, a party properly preserves error by objecting to submission of
a particular question in the court’s jury charge, we evaluate the sufficiency of the
evidence against the charge the trial court should have given. Berkel & Co.
Contractors, Inc. v. Lee, 612 S.W.3d 280, 284 (Tex. 2020); see St. Joseph Hosp. v.
Wolff, 94 S.W.3d 513, 530 (Tex. 2002).
B. Governing Law
An express contract exists when the terms of the contract are explicitly
established by the parties. Pearl Res. LLC v. Charger Servs., LLC, 622 S.W.3d 106,
116 (Tex. App.—El Paso 2020, pet. denied); E-Learning LLC v. AT&T Corp., 517
S.W.3d 849, 858 (Tex. App.—San Antonio 2017, no pet.). An implied-in-fact
contract, on the other hand, derives its terms “from the acts and conduct of the parties
thereto.” Pearl Res., 622 S.W.3d at 116; see Haws & Garrett Gen. Contractors, Inc.
v. Gorbett Bros. Welding Co., 480 S.W.2d 607, 609 (Tex. 1972) (stating that
implied-in-fact contracts “arise[] from the acts and conduct of the parties, it being
implied from the facts and circumstances that there was a mutual intention to
contract”).
The elements of an express contract and an implied-in-fact contract are
identical. E-Learning, 517 S.W.3d at 858; Plotkin v. Joekel, 304 S.W.3d 455, 476
21 (Tex. App.—Houston [1st Dist.] 2009, pet. denied). To establish formation of an
express or implied contract, the plaintiff must prove: (1) an offer; (2) an acceptance;
(3) a meeting of the minds; (4) each party’s consent to the terms; and (5) execution
and delivery of the contract with the intent that it be mutual and binding. Plotkin,
304 S.W.3d at 476 (quoting DeClaire v. G&B McIntosh Fam. Ltd. P’ship, 260
S.W.3d 34, 44 (Tex. App.—Houston [1st Dist.] 2008, no pet.)). The “real difference”
between express and implied contracts “is in the character and manner of proof
required to establish them.” Id. at 476–77 (quoting Haws & Garrett Gen.
Contractors, 480 S.W.2d at 609); see Mann Frankfort Stein & Lipp Advisors, Inc. v.
Fielding, 289 S.W.3d 844, 850 (Tex. 2009) (“The difference between contracts
formed through express promises and those formed through implied promises is the
means by which the contracts are formed.”).
Both express and implied contracts require a showing of mutual agreement.
but with an implied contract, this “is inferred from the circumstances.” Plotkin, 304
S.W.3d at 477; see also Fielding, 289 S.W.3d at 850 (“Regardless of whether a
contract is based on express or implied promises, mutual assent must be present.”);
Excess Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tools,
Inc., 246 S.W.3d 42, 49 (Tex. 2008) (stating that “meeting of the minds” is essential
element of implied-in-fact contract) (quotations omitted). With an implied contract,
mutual assent is “inferred from the circumstances.” Plotkin, 304 S.W.3d at 477
22 (quoting Haws & Garrett Gen. Contractors, 480 S.W.2d at 609); see Fielding, 289
S.W.3d at 850 (“In the case of an implied contract, however, mutual assent is
inferred from the circumstances.”). “A meeting of the minds is implied from and
evidenced by the parties’ conduct and course of dealing.” E-Learning, 517 S.W.3d
at 858; see Ervin v. Mann Frankfort Stein & Lipp CPAs, L.L.P., 234 S.W.3d 172,
183 (Tex. App.—San Antonio 2007, no pet.) (“The determination of whether there
is a meeting of the minds must be based upon objective standards of the parties’
actions, not on their alleged subjective states of mind.”).
To be enforceable, a contract must address all essential and material terms
with a reasonable degree of certainty and definiteness. Fischer v. CTMI, L.L.C., 479
S.W.3d 231, 237 (Tex. 2016) (internal quotation omitted); see T.O. Stanley Boot Co.
v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992) (“The material terms of the
contract must be agreed upon before a court can enforce the contract. Where an
essential term is open for future negotiation, there is no binding contract.”). An
agreement’s “essential terms” are “those that parties would reasonably regard as
‘vitally important ingredient[s]’ of their bargain.” Dallas/Fort Worth Int’l Airport
Bd. v. Vizant Techs., LLC, 576 S.W.3d 362, 368–69 (Tex. 2019) (quoting Fischer,
479 S.W.3d at 237). “Whether particular terms are essential generally depends on
the specific contract at issue.” Id. at 369. Typically, the “essential terms” of a
contract include “the time of performance, the price to be paid, . . . [and] the service
23 to be rendered.” City of Houston v. Williams, 353 S.W.3d 128, 138–39 (Tex. 2011)
(quoting Kirby Lake Dev. Ltd. v. Clear Lake City Water Auth., 320 S.W.3d 829, 838
(Tex. 2010)).
A contract must “at least be sufficiently definite to confirm that both parties
actually intended to be contractually bound.” Cadence Bank, N.A. v. Elizondo, 642
S.W.3d 530, 534 (Tex. 2022) (quoting Fischer, 479 S.W.3d at 237). The contract
also must be sufficiently definite to “enable a court to understand the parties’
obligations” and to “give an appropriate remedy if they are breached.” Id. (quoting
Fischer, 479 S.W.3d at 237).
C. Whether the Providers Can Recover on Their Claim for Breach of Implied-In-Fact Contract
1. Preservation of Error
On appeal, Molina argues that it and the providers “do not deal with each other
voluntarily.” Instead, all instances in which Molina was required to reimburse the
providers for emergency medical care rendered to Molina’s insureds were
“compelled transactions,” and an implied contract cannot exist when the essential
term—the reimbursement rate—is disputed in a compelled transaction. In response,
the providers contend that Molina did not argue in the trial court that “the
‘compelled’ nature of the parties’ transaction rendered price the ‘only essential term
remaining,’” and therefore Molina did not preserve this issue for our review.
24 Although Molina did not use the phrase “compelled transaction” in the trial
court, it did argue during its motion for a directed verdict that the existence of
preexisting statutory obligations did not imply a contract. It further argued that the
jury could not imply agreement on a reasonable price when the parties negotiated on
price but failed to reach an agreement on that issue. Molina argued that “[t]his is not
a situation in which the parties simply didn’t talk about price and agreed that they
would enter into a transaction.” Instead, because the parties specifically negotiated
and did not reach an agreement, a price could not be implied, “and there’s no basis
for an implied-in-fact contract claim.” Molina also objected on this basis during the
charge conference when it objected to submission of Question 10 and its
accompanying instruction relating to formation of an implied contract by arguing
that there was no evidence to support any elements of an enforceable implied
contract—including no evidence of a meeting of the minds—and arguing that a
reasonable price could not be presumed when the parties unsuccessfully negotiated
over that matter.
We therefore conclude that Molina properly preserved this issue for appellate
review. See C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 786 (Tex. App.—
Houston [1st Dist.] 2004, no pet.) (stating that legal sufficiency challenge can be
preserved in several ways, including by motion for directed verdict and by objection
to submission of issue to jury).
25 2. Evidence of a Meeting of the Minds
Molina argues that the parties did not agree on the rate at which Molina would
reimburse the providers for emergency care provided to Molina’s insureds, an
essential term of any purported implied agreement. Therefore, there was no evidence
of a meeting of the minds, a required element for any contract, express or implied.
Molina argues that because there was no evidence of a meeting of the minds, the
trial court should have granted Molina’s motion for directed verdict, and the question
whether the parties had an implied contract should not have been submitted to the
jury.
The providers, on the other hand, argue that while a meeting of the minds is
necessary to form a binding contract, a specific dollar amount is not required for the
contract to be enforceable. See Penwell v. Barrett, 724 S.W.2d 902, 905 (Tex.
App.—San Antonio 1987, no writ); see also David J. Sacks, P.C. v. Haden, 266
S.W.3d 447, 450 (Tex. 2008) (per curiam) (“[T]he absence of a fixed total price for
services does not indicate a failure of the parties to reach a meeting of the minds
with regard to the essential terms of the contract.”). “Where the parties have done
everything else necessary to make a binding agreement for the sale of goods or
services, their failure to specify the price does not leave the contract so incomplete
that it cannot be enforced. In such a case it will be presumed that a reasonable price
was intended.” David J. Sacks, P.C., 266 S.W.3d at 450 (quotations omitted). We
26 disagree with the providers that this is a situation in which it can be implied that the
parties agreed on a “reasonable price,” or on the “usual and customary” rate to use
the language of section 1271.155(a).8
In David J. Sacks, P.C., which involved payment for legal services, Haden
hired David Sacks and his law firm as appellate counsel in a pending matter, and the
parties signed a written engagement letter. Id. at 448. The letter set out Sacks’ scope
of work, which was the writing of an appellant’s brief and a reply brief, with a future
decision about “who should argue the case” if the Fifth Circuit granted oral
argument; his usual hourly rate of $300 per hour; a statement that his “rate for this
particular matter will be $200.00 per hour”; the rates of other lawyers and paralegals
in his firm; and Haden’s responsibility for payment of all costs and expenses as
incurred. Id. at 448–49. The letter requested that Haden pay a $10,000 retainer to be
applied to fees and expenses. Id. at 449. Haden signed the agreement, but he changed
the retainer amount from $10,000 to $5,000. Id. When he submitted a $5,000
payment, he included a letter referencing a telephone conversation with Sacks in
which the parties allegedly agreed to reduce the retainer amount to $5,000. Id. After
8 In the jury charge for the implied contract question, the trial court instructed the jury that “[t]he parties may have reached an agreement even if they did not agree on the price Molina would pay the Plaintiffs.” The court further instructed that if the jury “find[s] that the parties otherwise agreed that Molina would pay the Plaintiffs but did not agree on the price, you may presume that the parties intended that Molina would pay Plaintiffs a reasonable price for the Plaintiffs’ services.” 27 completing work for Haden, Sacks sought payment of his attorney’s fees, requesting
that Haden pay an outstanding balance of over $35,000. Id. Haden only paid an
additional $5,000, asserting that he had “‘made it clear’ that $5,000 was all he could
afford to spend.” Id.
The Texas Supreme Court addressed whether Haden raised a fact issue on
whether a meeting of the minds existed between the parties when they entered into
the fee agreement. Id. at 450. The court stated:
A meeting of the minds is necessary to form a binding contract. However, the absence of a fixed total price for services does not indicate a failure of the parties to reach a meeting of the minds with regard to the essential terms of the contract. Where the parties have done everything else necessary to make a binding agreement for the sale of goods or services, their failure to specify the price does not leave the contract so incomplete that it cannot be enforced. In such a case it will be presumed that a reasonable price was intended. Though Sacks did not specify an exact total price for his services, the specified hourly rates confirm that the parties agreed that Sacks would charge and Haden would pay a reasonable price. The contract was explicit as to the services to be rendered and the manner that would be used in determining the price, and was therefore sufficiently clear to demonstrate a meeting of the minds between the parties as to all essential terms of the contract.
Id. (citations and quotations omitted).
We do not believe that this case is comparable to David J. Sacks, P.C. In that
case, the parties negotiated and signed a written engagement letter for the provision
of legal services. Id. at 448. That letter set out the scope of the attorneys’ work, the
hourly rates for personnel in the office, the client’s responsibility for payment of
28 expenses, and the requirement that the client pay an amount as a retainer to be
applied against fees and expenses. Id. at 448–49. A disagreement between the parties
arose with respect to the amount that the client would pay for the legal services
rendered. Id. at 449. Despite this disagreement, it was clear that the parties had
intended to form a contractual relationship. The parties did not agree on the total
amount of legal fees that the client would be responsible for paying, but they had
“done everything else necessary to make a binding agreement for the sale of goods
or services.” Id. at 450. As a result, a “reasonable price” would be implied, and the
contract was enforceable because the terms were “sufficiently clear to demonstrate
a meeting of the minds between the parties as to all essential terms of the contract.”
Id.
By contrast, this case does not present a situation in which the providers and
Molina “have done everything else necessary to make a binding agreement for the
sale of goods or services” but simply did not specify the price, or the reimbursement
rate. See id. Instead, the evidence shows that the parties reached no agreement. The
parties negotiated, but they could not agree on the reimbursement rate to be paid. As
a result, they did not sign a contract, and the providers remained out-of-network with
Molina.
At trial, three issues related to the providers’ implied-in-fact contract claim
were undisputed. First, it was undisputed that under federal and state law, the
29 providers had an obligation to render stabilizing emergency care to any patient who
presented at their facilities, including Molina’s insureds, regardless of the patient’s
insurance status or ability to pay. Second, it was undisputed that Texas law required
Molina, an HMO, to “pay for emergency care performed by non-network physicians
or providers at the usual and customary rate or at an agreed rate.” See TEX. INS. CODE
§ 1271.155(a). Third, it was undisputed that the providers and Molina did not have
an express contract between them, and therefore the providers were “out of network”
What constituted a “usual and customary rate” for emergency medical
services, on the other hand, was disputed at trial. The parties have not agreed on this
issue at any point in the trial proceedings or on appeal.9
The evidence at trial included testimony concerning negotiations between the
providers—through their affiliated entity TeamHealth—and Molina. Kent Bristow,
the senior vice president over revenue management at TeamHealth, testified that
TeamHealth’s goal is to help their “doctor groups,” such as the providers, become
“in network” with insurance companies. TeamHealth has successfully negotiated
such contracts in the past, and with respect to the providers specifically, the vast
9 As an illustration, the providers’ counsel and Ben Lynam, the chief actuary for Molina’s parent company, conducted an impromptu negotiation during Lynam’s trial testimony. Counsel asked Lynam: “Are you willing to sign us up at 80 percent of our billed charges?” Lynam stated, “I’m ready to sign you up at 150 percent of Medicare.” Counsel responded, “No, sir. We don’t work for pennies, sir.” 30 majority of claims arising during the three-year time period at issue in this case were
“directly paid under a contract.” Bristow testified that TeamHealth has accepted
lower reimbursement rates in exchange for the benefits that arise from being “in
network” with an insurance company, such as patient satisfaction and certainty about
the rate the doctor groups will be paid. He stated that TeamHealth does not
deliberately try to prevent its doctor groups from “going in network,” and he has
negotiated in-network contracts with HMOs that offer ACA plans, like Molina does.
The record contains an email exchange between Mark Kline, a TeamHealth
vice president, John McGuinness, Molina’s former chief operating officer and vice
president of network strategy, and Anthony Tyms, Molina’s director of contracting.
In December 2017, Kline emailed McGuinness and Tyms and stated:
[T]hank you for sharing your template contract language as a starting point. As I mentioned on the call, it probably makes the most sense to come to agreement on fee schedules/reimbursement rates before spending a lot of time negotiating contract language. To that end, I am proposing a three year deal @ 325% of current Medicare, effective February 1, 2018 for 1 year, with a 5% escalator each year for the next two years (effective 2/1/19 and 2/1/20, respectively). Please let me know if you would like to discuss any aspect of this proposal. Once we agree on rates, we will plan to move forward with review and negotiation of contract language.
Several days later, McGuinness responded. He stated:
The rate as presented is well above any contract we have in place with like providers for this line of business. For Molina our HIX product [ACA plans] is an extension of our Medicaid line of business, affording Molina the opportunity to retain members who may lose coverage
31 under Medicaid. I can offer 130% of Current Year Medicare for 2018 with a 5% inflator for 2019 and 2020.
Bristow testified that over the course of a year, his department at TeamHealth
tried to negotiate an in-network contract for the providers with Molina. Molina’s
“final offer was just a little above what they had been paying [the providers], just a
little over the Medicare rates.” The reimbursement rates proposed by Molina were
“a fraction” of what similar-sized health plans were paying out-of-network
emergency care providers.10 “[A]t the end of the day,” Molina and the providers
were “too far apart” to reach a contractual agreement, with Bristow characterizing
Molina as being unwilling “to move to what we thought was an appropriate and
reasonable [reimbursement] level.”
Molina asked Bristow about the emails between Kline and McGuinness.
Bristow testified that TeamHealth was willing to discount its preferred
reimbursement rate of 900% of Medicare to 325% of Medicare “to see if we could
get in network with this health plan at these rates.” TeamHealth was not willing to
consider a lower reimbursement rate. With respect to Molina’s proposed
reimbursement rate, this amount “was not close to where we had been pursuing
Molina for over a year and trying to negotiate.” Bristow testified that Molina “had
10 Specifically, Bristow testified that Molina paid “about 10 to 11 percent of [the providers’] charges,” but other similarly situated health plans were paying between “75 and a hundred percent of [the providers’] charges.” Bristow agreed with Emergency Services’ counsel that Molina’s reimbursement rates were “the lowest.” 32 barely moved on their offer relative to what they had been paying us and what they
had been talking with us before,” and this proposed rate was “well below what we
contracted with other health plans in the market.”
The evidence at trial therefore reflected that although the providers and
Molina attempted to negotiate a contract, they were unable to agree on the
reimbursement rate. This is an essential term of a contract between an emergency
care provider and a health insurance company, perhaps even the most important
term. See Vizant Techs., 576 S.W.3d at 368–69 (“An agreement’s essential terms are
those that parties would reasonably regard as vitally important ingredients of their
bargain.”) (quotations and alteration omitted). As Bristow testified, negotiating
contracts and becoming “in network” with an insurance company brings certainty to
the parties’ relationship. When a contract governs the relationship between an
emergency care provider and an insurance company, the provider “know[s] we’re
going to get paid and when we’re going to get paid. We know the rate that we’re
going to get paid.” The benefits of being “in network” can motivate a provider to
accept a lower reimbursement rate for its services. Here, however, although the
parties tried to negotiate a contract, they were unsuccessful because they could not
agree on the reimbursement rate, or the “price” of the contract. The parties’
negotiating history therefore does not support a conclusion that the parties had a
33 meeting of the minds about the amount to be paid to the providers for emergency
services rendered to Molina’s insureds.
Bristow also specifically testified about the providers’ implied-in-fact
contract claim. Bristow agreed with Molina’s counsel that “there’s obviously no
written contract between these companies” and “there is no place that someone could
go if they wanted to know what the terms of this contract were to be memorialized.”
He further agreed that the providers were not alleging that they had an oral
agreement with Molina covering reimbursement rates.
However, Bristow testified that he believed the providers and Molina had an
implied contract, with the “evidence of coverage that the Molina members have that
covers emergency medicine services” acting as the basis for the implied contract.
Molina’s counsel and Bristow had a lengthy exchange concerning this theory, with
Bristow repeatedly referring to the providers’ statutory obligation to treat all patients
who presented at their facilities in need of stabilizing emergency care, and Molina’s
corresponding statutory obligation to reimburse the providers. For example, Bristow
testified:
Q. It takes two to agree to a contract, right? Molina has to agree to this contract, correct? A. The implied-in-fact contract— Q. Yes or no? Two have to agree to the contract? A. Yes. And that—they did that through their evidence of coverage.
34 .... Q. Now, the facts—I want to make sure I understand and that we’re talking about the same thing. The law requires hospitals to treat patients when they come in, correct, when they come into the emergency department? A. But, also, our physician providers as well. Q. Well, let’s say that’s the case. I’m not going to argue with you. The physicians have to treat Molina’s members. The [federal] law, EMTALA, requires them to do that, right? A. Yes. Q. Okay. A separate law, 1271.155, which the jury’s all seen in opening statements, compels Molina to reimburse at the usual and customary rate, correct? A. Yes. Q. Okay. And your evidence that “We agreed to enter into a contract with you” is based solely and exclusively on the fact that you [the providers] are compelled by law to treat patients and we [Molina] are compelled by law to pay the usual and customary rate. And by that, you say, “Ha. Now we’ve agreed to a contract that you’re bound to, and you’ve got to pay billed charges.” That’s your contract claim, right? A. No. That’s not the sole reason, I believe, that there’s an implied- in-fact contract. It goes way beyond that, and the fact— .... Q. Did Molina ever express to you orally that it was willing to pay your billed charges? A. They never—I never heard them verbalize that, no. Q. In fact, they verbalized the exact opposite of that when Mr. McGuinness told Mr. Kline that that amount is far in excess of what they pay, even the 325, right? You don’t dispute that Molina told you that? A. No.
35 Q. Okay. Was there ever a time when Molina paid a higher amount in order to get you to treat these patients, and then they pulled the rug out from underneath you and cut the reimbursement rate and started paying you less? A. No. Q. They have always paid the same amount, right? A. I think effectively, yes.
The providers argue on appeal that their implied agreement with Molina is
sufficiently definite to be enforceable because Molina’s payment for the providers’
services is determinable by an “external standard”: Insurance Code section
1271.155(a), which requires reimbursement for emergency care services by non-
network physicians and providers to be at the “usual and customary rate or at an
agreed rate.” See TEX. INS. CODE § 1271.155(a); see Penwell, 724 S.W.2d at 905
(stating—in case in which parties allegedly agreed in oral contract that purchase
price of property would be “that value given the property by an appraiser”—that
“[w]hen an agreement provides a standard to be applied in determining price, the
contract is sufficiently definite to be enforceable.”). The providers further argue that
Molina admitted at trial that it “agreed to pay [the providers] at the usual and
customary rate,” and they point to Bristow’s testimony.
We do not agree with the providers that Bristow’s testimony is some evidence
of an implied agreement between the parties. Molina has never denied, nor could it
credibly do so, that section 1271.155(a) requires it to reimburse non-network
36 physicians and providers for emergency care at the “usual and customary rate or at
an agreed rate.” See TEX. INS. CODE § 1271.155(a). But that is an obligation imposed
by the Texas Legislature. Just as state and federal law requires the providers to
provide stabilizing emergency care to any patient who presents at their facilities,
regardless of the patient’s insurance status or ability to pay, the Insurance Code
requires Molina, as an HMO, to reimburse non-network emergency care providers
at the “usual and customary rate or at an agreed rate.” See id. Molina acknowledging
that this is a statutory obligation imposed upon it as an HMO doing business in Texas
does not transform this obligation into the basis for an implied contract claim.
Holding otherwise—and concluding that the respective statutory obligations of the
parties suffice to establish a “meeting of the minds” that can support a cause of action
for breach of an implied contract—would mean that every HMO operating in Texas
has an implied contract with every out-of-network provider that renders emergency
care to the insurance company’s insureds in Texas.
The providers and Molina tried to reach an express contract to bring the
providers into Molina’s network, but they were unsuccessful because they could not
agree on the reimbursement rate, an essential term of such an agreement. Their
relationship thus remained governed by various federal and state statutory
obligations. Section 1271.155(a) requires Molina to reimburse out-of-network
providers at the “usual and customary rate,” but the statute provides no guidance on
37 what constitutes such a rate. There is no evidence in the record that the providers
and Molina ever agreed on what a “usual and customary” reimbursement rate might
be. In fact, the evidence is to the contrary: that they disagreed on this point
throughout the trial proceedings.
We conclude that the providers produced no evidence of a meeting of the
minds between them and Molina sufficient to form an implied contract. See
Bustamante, 529 S.W.3d at 455–56 (stating that evidence is legally insufficient to
support jury finding when record discloses complete absence of evidence of vital
fact); E-Learning, 517 S.W.3d at 858 (“A meeting of the minds is implied from and
evidenced by the parties’ conduct and course of dealing.”). Because the providers
did not present legally sufficient evidence to support an essential element of a claim
for breach of an implied contract, we hold that the trial court erred by denying
Molina’s motion for directed verdict on this claim and submitting this claim to the
jury. See Plotkin, 304 S.W.3d at 476 (requiring meeting of minds as essential
element of express or implied contract); see also Alanis v. US Bank Nat’l Ass’n, 489
S.W.3d 485, 503 (Tex. App.—Houston [1st Dist.] 2015, pet. denied) (stating that
directed verdict is proper when “the evidence offered on a cause of action is
insufficient to raise an issue of fact”).
38 We sustain Molina’s fourth issue.11
Conclusion
We reverse the judgment of the trial court and render judgment that the
providers take nothing on their claims against Molina.
April L. Farris Justice
Panel consists of Chief Justice Adams and Justices Guerra and Farris.
11 Because we sustain Molina’s fourth issue and conclude that legally sufficient evidence did not support the providers’ claim for breach of an implied contract— the providers’ only claim remaining after the Texas Supreme Court’s decision in Texas Medicine Resources—we need not address Molina’s fifth issue concerning the propriety of the trial court’s award of attorney’s fees because the providers no longer prevail on any of their causes of action. See Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 483–84 (Tex. 2019) (stating that generally, in Texas, each party must pay their own attorney’s fees, although prevailing party may recover fees from opposing party when authorized by statute or by contract). 39