the United Healthcare Choice Plus Plan for City of Austin Employees and the City of Austin v. Charles Lesniak
Opinion
ACCEPTED
03-15-00309-CV
6335946
THIRD COURT OF APPEALS
AUSTIN, TEXAS
8/3/2015 4:23:28 PM
JEFFREY D. KYLE
CLERK
NO. 03-15-00309-CV
CITY OF AUSTIN and THE UNITED § IN THE THIRD FILED IN 3rd COURT OF APPEALS
HEALTHCARE CHOICE PLUS PLAN § AUSTIN, TEXAS FOR CITY OF AUSTIN EMPLOYEES, § 8/3/2015 4:23:28 PM § JEFFREY D. KYLE Appellants, § COURT OF APPEALS Clerk IN
v. § §
CHARLES LESNIAK, § §
Appellee. § AUSTIN, TEXAS
JOINT APPELLANTS’ REPLY BRIEF
ORAL ARGUMENT IS REQUESTED
Andrew G. Jubinsky Andralee Cain Lloyd Texas Bar No. 11043000 State Bar No. 24071577 andy.jubinsky@figdav.com andralee.lloyd@austintexas.gov Lance V. Clack Megan Mosby Texas Bar No. 24040694 State Bar No. 24073392 lance.clack@figdav.com megan.mosby@austintexas.gov
FIGARI + DAVENPORT, LLP CITY OF AUSTIN – LAW DEPARTMENT 901 Main Street, Suite 3400 P. O. Box 1546 Dallas, Texas 75202 Austin, Texas 78767-1546 (214) 939-2000 (512) 974-2918 (214) 939-2090 (Fax) (512) 974-1311 (Fax)
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLANT THE UNITED HEALTHCARE CHOICE PLUS CITY OF AUSTIN PLAN FOR CITY OF AUSTIN EMPLOYEES
TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................i INDEX OF AUTHORITIES..................................................................................... ii ARGUMENT .............................................................................................................1 A. Introduction. ..........................................................................................1
B. Appellants are immune from suit. ......................................................... 1 C. Section 271.152 does not waive Appellee’s immunity. ........................ 3
PRAYER ....................................................................................................................4 CERTIFICATE OF COMPLIANCE ......................................................................... 6
-i-
INDEX OF AUTHORITIES
Page(s)
CASES
Bailey v. City of Austin, 972 S.W.2d 180 (Tex. App.—Austin 1998, pet. denied) ..................................... 2 City of Georgetown v. Lower Colorado River Authority, 413 S.W.3d 803 (Tex. App.—Austin 2013, pet. dism’d) ..................................... 2 City of San Antonio v. City of Boerne, 111 S.W.3d 22 (Tex. 2003)...................................................................................4
East Houston Estate Apartments, LLC v. City of Houston, 294 S.W.3d 723 (Tex. App.—Houston [1st Dist.] 2009, no pet.) ........................ 4 Gates v. City of Dallas, 704 S.W.2d 737 (Tex. 1986) ................................................................................2 Humana Ins. Co. v. Mueller, 2015 WL 1938657, No. 04-14-752-CV (Tex. App.—San Antonio, April 29, 2015, no pet. h.) ..............................................................................................2 Lubbock County Water Control & Imp. Dist. v. Church & Akin, L.L.C., 442 S.W.3d 297 (Tex. 2014) ............................................................................3, 4
STATUTES Tex. Gov’t Code § 271.152................................................................................1, 3, 4 Tex. Gov’t Code § 2259.002..........................................................................1, 2, 3, 4
-ii-
ARGUMENT
A. Introduction.
In his brief, Appellee argues that (1) providing benefits to city employees is a proprietary function, for which there is no immunity, and (2) even if immunity exists, it is waived by Tex. Local Gov’t Code §271.152. Appellee’s first argument ignores the application of Tex. Gov’t Code § 2259.002, which is fatal to Appellee’s position, and his second argument fails because this suit does not arise from services provided to the City of Austin. The Trial Court’s ruling should be reversed, and judgment rendered in favor of Appellants. B. Appellants are immune from suit.
Appellee concedes the City of Austin is a qualifying governmental entity with immunity [Appellee’s Brief, p. 7], and does not dispute that the Plan, which is a self-funded benefit plan established by the City of Austin, is likewise immune. Instead, Appellee argues that the City of Austin engaged in a proprietary function for which there is no immunity.
Appellee’s argument that providing benefits pursuant to a self-funded plan is a proprietary function is incorrect. The legislature has made clear that a municipality has immunity from claims for benefits under a self-funded plan: “[t]he establishment and maintenance of a self-insurance program by a
governmental unit is not a waiver of immunity or of a defense of the governmental unit or its employees.” Tex. Gov’t Code § 2259.002.
The cases Appellee relies on for the proposition that providing benefits to employees pursuant to a self-funded benefit plan is a proprietary function, Bailey v. City of Austin, 972 S.W.2d 180 (Tex. App.—Austin 1998, pet. denied) and Gates v. City of Dallas, 704 S.W.2d 737 (Tex. 1986), were decided before Section 2259.002 was enacted in 1999. These cases have been superseded by statute, and are no longer good law. Further, the clear applicability of Section 2259.002 distinguishes this case from City of Georgetown v. Lower Colorado River Authority, 413 S.W.3d 803 (Tex. App.—Austin 2013, pet. dism’d), which involved an agreement between a city and a power company, and was not governed by Section 2259.002 or any similar statute.
More recent cases make clear that a municipality has immunity from claims for benefits brought pursuant to a self-funded plan. Humana Ins. Co. v. Mueller, 2015 WL 1938657, No. 04-14-752-CV (Tex. App.—San Antonio, April 29, 2015, no pet. h.). Tellingly, Appellee does not even cite Section 2249.002 or argue that it is inapplicable to this case. Appellee likewise fails to address the opinion in Mueller, 2015 WL 1938657, which correctly applied Section 2259.002 and held that a governmental entity, and its self-funded plan, is immune from any suits for benefits brought pursuant to the plan. Even if Appellee’s argument regarding the
applicability of the proprietary/governmental function distinction is accepted, a municipality clearly has immunity for claims arising from the provision of benefits pursuant to a self-funded plan. Id. C. Section 271.152 does not waive Appellee’s immunity.
Appellee concedes that, in order to plead a valid waiver of immunity under Chapter 271, Appellee must show that the contract provides for the provision of goods and services to the local governmental entity. [Appellee’s Brief, p. 7-8.] Appellee argues that the Plan provides for services to the City of Austin because (1) Appellee provided services to the City of Austin, and (2) the Plan provides benefits to the City of Austin, employees of the City of Austin, and their dependents. [Appellee’s Brief, p. 10.]
These services are insufficient to bring the contract within the scope of Section 271.152. First, to the extent Appellee provides services to the City of Austin, he does not do so pursuant to the Plan. Stated differently, the Plan does not provide for the provision of any services by Appellee. Second, to the extent the Plan provides services to the City of Austin, they are not the subject of suit. Services provided to employees of the City of Austin and their dependants are not services provided to the governmental entity. None of the provided services identified by Appellee are sufficient to waive immunity for this suit under Section 271.152. See, e.g., Lubbock County Water Control & Imp. Dist. v. Church & Akin,
L.L.C., 442 S.W.3d 297, 303 (Tex. 2014) (holding that the provision of services to a water district’s constituents did not constitute the provision of services to the water district, and therefore immunity was not waived under Chapter 271); East Houston Estate Apartments, LLC v. City of Houston, 294 S.W.3d 723, 726 (Tex. App.—Houston [1st Dist.] 2009, no pet.). Appellee makes no effort to distinguish Church & Akin or East Houston Estate, both of which are fatal to his claim.
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