Humana Insurance Company v. Dolores Mueller

ACCEPTED
04-14-00752-CV
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
2/14/2015 12:45:47 AM
KEITH HOTTLE
CLERK

NO. 04-14-00752-CV

IN THE COURT OF APPEALS FILED IN
FOR THE FOURTH DISTRICT OF TEXAS
4th COURT OF APPEALS
AT SAN ANTONIO SAN ANTONIO, TEXAS
2/17/2015 12:00:00 AM
KEITH E. HOTTLE
Clerk

HUMANA INSURANCE COMPANY,
APPELLANT,

V.

DOLORES MUELLER,
APPELLEE.

On Appeal from the County Court at Law No. 3,
Bexar County, Texas

BRIEF OF APPELLEE DOLORES MUELLER

Stephen G. Nagle
State Bar No. 14779400
sgnagle@lawyernagle.com
1002 West Avenue, Suite 100
Austin, TX 78701
(512) 480-0505 - Telephone
(512) 480-0571 - Facsimile
ATTORNEY FOR APPELLEE DOLORES MUELLER

Oral Argument Not Requested

Humana vs. Mueller, Brief of Appellee
 IDENTITY OF PARTIES AND COUNSEL
HUMANA Insurance Company
Appellant

Counsel for Appellant Lisa P. Alcantar
State Bar No. 24069284
lalcantar@prdg.com
Richard G. Foster
State Bar No. 07295100
rfoster@prdg.com
Porter, Rogers, Dahlman & Gordon, P.C.
745 E. Mulberry Avenue, Suite 450
San Antonio, Texas 78212
Telephone: (210) 736-3900
Facsimile: (210) 736-1992

Appellee Dolores Mueller
Stephen G. Nagle
Counsel for Appellee
State Bar No. 14779400
sgnagle@lawyernagle.com
1002 West Avenue, Suite 100
Austin, TX 78701
(512) 480-0505 - Telephone
(512) 480-0571 - Facsimile

Humana vs. Mueller, Brief of Appellee -i-
 TABLE OF CONTENTS
................................................................................
TABLE OF AUTHORITIES . iii

STATEMENT OF THE CASE. ............................................................................... 1

ISSUES PRESENTED. ............................................................................................ 2

I. STATEMENT OF FACTS. ........................................................................... 2

II. SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

III. ARGUMENTS AND AUTHORITIES. ........................................................ 7

A. This Court has no jurisdiction over an interlocutory appeal by
HUMANA because it is neither a government agency nor a government
employee..
employee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
7

B. HUMANA has no derivative immunity from either suit or liability for
claims arising out of the administration of the SAHA Health Benefits
Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10

C.
C. HUMANA has no derivative immunity from either suit or liability for
bad faith claims handling.
handling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
15

D. HUMANA is not exempt from the Insurance Code and has direct
liability for claims arising out of the administration of the SAHA Health
Benefits Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
16

IV. CONCLUSION............................................................................................ 18
W. CONCLUSION

PRAYER.................................................................................................................
PRAYER 18

CERTIFICATE OF COMPLIANCE......................................................................
COMPLIANCE 20

CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Humana vs. Mueller, Brief of Appellee -ii-
 I. FACTUAL
FACTUALBACKGROUND
BACKGROUND

Since
Since this an interlocutory
this is an interlocutory appeal
appeal from
from an
an Order
Order denying
denying aa Plea
Plea to the

Jurisdiction
Jurisdiction of
of the court below,
the court below, the allegations
allegations of Plaintiff's
Plaintiff’s latest
latest Petition
Petition are

accepted as true for purposes
purposes of
of this
this appeal. Plaintiff’s Third
appeal. Plaintiff's Third Amended
Amended Petition in

this case was the live pleading at the time when the Plea
Plea to
to the
the Jurisdiction
Jurisdiction was heard,

and contains the following:

2010, DOLORES
In 2010, DOLORES MUELLER
MUELLER developed
developedback
back pain
pain and
and other symptoms that

failed to respond to non-surgical
non-surgical treatment. Her treating
treatment. Her treating doctors
doctors recommended
recommended a

“minimally invasive”
"minimally invasive" spinal decompression surgery. Two different
surgery. Two different neurosurgeons

submitted claims to HUMANA for pre-certification approval of this surgery.

HUMANA denied
HUMANA denied pre-certification,
pre-certification,and,
and,by
byaa series
series of
of at letters
at least six letters

spanning the period March 31, 2010, through October 2, 2010, denied coverage for

proposed surgery.
the proposed In its
surgery. In itsdenials,
denials, HUMANA
HUMANA relied
relied upon
upon the
the policy
policy language
language

excluding
excluding “Any
"Any medical treatment,
treatment, procedure,
procedure, drug,
drug, biological
biological product or device

which is experimental, investigational or for research purposes . . .”
."

At the time and
and place
place when
when HUMANA
HUMANA denied
denied pre-certification
pre-certification of the
the proposed
proposed

thoracic spinal decompression surgery, the proposed procedure was not, and could

not reasonably have been considered, experimental, investigational or for research

purposes either generally or within the meaning of [the policy] definition.

At the same time,
time, HUMANA
HUMANA had
had [an
[aninternal]
internal]“Spinal
"Spinal Decompression
Decompression Surgery
Surgery

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 4 of 21
Walker v. Whatley, 318 S.W.3d 541 (Tex. App.—Beaumont 2010, pet. denied)
................................................................ 9

S
STATUTES
TATUTES

TEX. C
TEX. IV. PPRAC.
CIV. RAC. &
&RREM.
EM. CCODE
ODE AANN.
NN. § 51.014
§ 51.014(West
(West2015)
2015) . . . . . . . . . . . 6, 7, 8, 9

TEX. C
TEX. IV. PPRAC.
CIV. RAC. &&RREM.
EM. CCODE
ODE AANN.
NN. § 101.001(2)
§ 101.001(2)(West
(West2015)
2015) . . . . . . . . . . . . . 8

TEX. C
TEX. IV. PPRAC.
CIV. RAC. &
&RREM.
EM. CCODE
ODE AANN.
NN. § 101.0215
§ 101.0215(West
(West2015)
2015) . . . . . . . . . . . . . . 15

TEX. C
TEX. IV. P
Cry. RAC. &
PRAC. & RREM.
EM. CCODE
ODE AANN.
NN. § §
311.023
311.023(West
(West 2015)
2015) . . . . . . . . . . . . . . . 10

TEX. G
TEX. OVT. CCODE
GOVT. ODE AANN.
NN. § §
311.026
311.026(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . . . . . 17

TEX. G
TEX. OVT. CCODE
GOVT. ODE AANN.
NN. § §
2259.037
2259.037(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . 16, 17

TEX. H.
TEX. H. &
& S.
S. C ODE AANN.
CODE NN. § §312.007(a)
312.007(a)(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . . . 9

TEX. IINS.
TEX. NS. CCODE
ODE AANN.
NN. § §541.002
541.002(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

TEX. IINs.
TEX. NS. C ODE AANN.
CODE NN. § §4151.001
4151.001(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . . . . . . 17

TEX. IINS.
TEX. NS. CCODE
ODE AANN.
NN. § §
4151.002
4151.002(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . . . . . . 17

TEX. INS.
TEx. INS. C ODE AANN.
CODE NN. § §4151.006
4151.006(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . . . . . . 17

TEX. L
TEX. OC. GOVT.
Loc. GOVT. C ODE AANN.
CODE NN. Ch.
Ch.172
172(West
(West 2015)
2015) . . . . . . . . . . . . . . . . 11, 12, 17

TEX. L
TEX. OC. GOVT.
Loc. GOVT. CCODE
ODE AANN.
NN. § §172.002
172.002(West
(West 2015)
2015) .. . . . . . . . . . . . . . . . . . . . 12

TEX. L
TEX. OC. GOVT.
Loc. GOVT. C ODE AANN.
CODE NN. Ch.
Ch.271
271(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . . . 6

TEX. L
TEX. OC. GOVT.
Loc. GOVT. C ODE AANN.
CODE NN. § §271.152
271.152(West
(West 2015)
2015) . . . . . . . . . . . . . . . . . . . . . . 12

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 1 of 21
 NO. 04-14-00752-CV

IN THE COURT OF APPEALS
FOR THE FOURTH DISTRICT OF TEXAS
AT SAN ANTONIO

HUMANA INSURANCE COMPANY,

APPELLANT

V.

DOLORES MUELLER,

APPELLEE

On Appeal from the County Court at Law No. 3,
Bexar County, Texas

BRIEF OF APPELLEE DOLORES MUELLER

STATEMENT OF THE CASE

Dolores Mueller works for the San Antonio Housing Authority ("SAHA"), a

local governmental entity that runs subsidized housing programs within the City of
San Antonio. Appellant
Appellant HUMANA
HUMANA administers
administers the health insurance benefit program
program

which SAHA created for its employees.
employees. HUMANA denied certain claims for health
benefits presented by Mueller. HUMANA violated the Insurance Code by making
Mueller. HUMANA
claims decision
the claims decision outside
outside the terms of the policy,
the terms policy, relying on undisclosed
undisclosed and

unreasonable limitations on the medical procedures it would cover.

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 2 of 21
 PROCEDURAL HISTORY

Mueller filed her Original Petition
Mueller against SAHA
Petition against SAHA and HUMANA
HUMANA on March 30,

2012. (CR
2012. (CR 11-15).
11-15). ItItsought
soughtdamages
damagesfor
fordenial
denial of
ofclaims
claims benefits,
benefits, breach
breach of

contract, negligence, and violation of provisions of the Texas
Texas Insurance
Insurance Code.
Code. In the

course of discovery, Ms. Mueller found out, for the first time, that HUMANA had

gone outside the terms of the health
health benefits
benefits policy
policy in
in order
order to
to deny
deny her
herclaims.
claims. As

one consequence
consequence of that discovery, Ms. Mueller non-suited her claims against SAHA,

and elected to proceed solely against
against HUMANA.
HUMANA. (CR 43-49).

Plaintiff’s Third Amended
Plaintiff's Third Amended Petition
Petition was
was in place at the time
time when
when HUMANA’s
HUMANA's

Plea to the Jurisdiction was
was heard,
heard, on
on September
September19,
19,2014.
2014. (CR
(CR 279-285).
279-285). The Plea

sovereign immunity
(CR 55-66) claimed sovereign immunity for
for HUMANA’s
HUMANA's acts administering the

insurance claims process for SAHA and sought
sought dismissal
dismissal of
of the
the lawsuit.
lawsuit. The Bexar

County Court at Law, the Honorable
Honorable Tina
Tina Torres
Tones presiding, denied the plea to the

jurisdiction on October
October 9,
9, 2014. This appeal
2014. (CR 295). This appeal was
was timely
timely filed.

ISSUES PRESENTED

Does this Court have jurisdiction
Does jurisdiction of the appeal
appeal of
of an
an interlocutory
interlocutory Order
Order

denying a Plea to the Jurisdiction, which is brought by an independent contractor to

a political subdivision of the state?

Has HUMANA established that it is entitled to sovereign or official immunity

for its claims handling conduct as a Third Party Administrator?

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 3 of 21
 I. FACTUAL
FACTUALBACKGROUND
BACKGROUND

Since
Since this an interlocutory
this is an interlocutory appeal
appeal from
from an
an Order
Order denying
denying aa Plea
Plea to the

Jurisdiction
Jurisdiction of
of the court below,
the court below, the allegations
allegations of Plaintiff's
Plaintiff’s latest
latest Petition
Petition are

accepted as true for purposes
purposes of
of this
this appeal. Plaintiff’s Third
appeal. Plaintiff's Third Amended
Amended Petition in

this case was the live pleading at the time when the Plea
Plea to
to the
the Jurisdiction
Jurisdiction was heard,

and contains the following:

2010, DOLORES
In 2010, DOLORES MUELLER
MUELLER developed
developedback
back pain
pain and
and other symptoms that

failed to respond to non-surgical
non-surgical treatment. Her treating
treatment. Her treating doctors
doctors recommended
recommended a

“minimally invasive”
"minimally invasive" spinal decompression surgery. Two different
surgery. Two different neurosurgeons

submitted claims to HUMANA for pre-certification approval of this surgery.

HUMANA denied
HUMANA denied pre-certification,
pre-certification,and,
and,by
byaa series
series of
of at letters
at least six letters

spanning the period March 31, 2010, through October 2, 2010, denied coverage for

proposed surgery.
the proposed In its
surgery. In itsdenials,
denials, HUMANA
HUMANA relied
relied upon
upon the
the policy
policy language
language

excluding
excluding “Any
"Any medical treatment,
treatment, procedure,
procedure, drug,
drug, biological
biological product or device

which is experimental, investigational or for research purposes . . .”
."

At the time and
and place
place when
when HUMANA
HUMANA denied
denied pre-certification
pre-certification of the
the proposed
proposed

thoracic spinal decompression surgery, the proposed procedure was not, and could

not reasonably have been considered, experimental, investigational or for research

purposes either generally or within the meaning of [the policy] definition.

At the same time,
time, HUMANA
HUMANA had
had [an
[aninternal]
internal]“Spinal
"Spinal Decompression
Decompression Surgery
Surgery

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 4 of 21
wesiikw.
Westlaw.
Page 11

Not Reported in S.W.3d, 1999 WL 1078697 (Tex.App.-Austin)
(Cite as: 1999 WL 1078697 (Tex.App.-Austin))
(Tex.App.-Austin»

1998).
C
Only the Westlaw citation is currently POWERS.
available. *1 Gregorio appeals from
Gregorio Garza appeals from a sum-
mary judgment
mary judgment that
that he
he take
take nothing
nothing byby his
NOTICE: NOT DESIGNATED FOR PUB- actions
actions against Blue Cross/
against Blue Blue Shield
Cross/ Blue Shield of
LICATION. UNDER TX R RAP RULE Texas,
Texas, Inc.,
Inc., and Group
Group Life and Health In-
47.7, UNPUBLISHED OPINIONS HAVE surance
surance Company
Company ("Appellees").FN'
("Appellees").FNl Garza
Garza
NO PRECEDENTIAL VALUE BUT MAY appeals as well from the trial court's denial of
BE CITED WITH THE NOTATION "(not his
his opposing
opposing motion
motion for
for partial
partial summary
summary
designated for publication)." judgment. We
judgment. We will
will reverse
reverse the
the summary
summary
judgment recovered by Appellees, affirm the
Court of
of Appeals of
of Texas, Austin. trial court judgment denying Garza's motion
Gregorio GARZA, Appellant, for summary
for summary judgment,
judgment, and and remand
remand the
the
v. cause to the trial court.
BLUE CROSS AND BLUE SHIELD OF
TEXAS, INC.; and Group Life & & Health FN1. Garza alleged
FNI. alleged that Group
Group Life
Insurance Company, Appellees. and Health Insurance Company is
Insurance Company is a
"wholly
"wholly owned
owned and controlled
controlled sub-
sub-
No. 03-98-00706-CV.
No.03-98-00706-CV. sidiary of"
of Blue
BlueCross/
Cross/ Blue
Blue Shield
Shield of
Dec. 2, 1999. Texas,
Texas, Inc.
Inc. It appears
appears that
that neither
neither
Appellee denied
Appellee denied the the allegation.
allegation.
From the
From the District
District Court of
of Travis
Travis County,
County, Group
Group Life
Life and
and Health
Health Insurance
Insurance
53rd
53rd Judicial
Judicial District,
District, No. 95-11137;
95-11137; Peter
Peter Company issued the
Company issued the group
group policy
policy
M. Lowry, Judge Presiding. involved in the present litigation; and,
the
the company
company administers
administers aa part
part of
Before
Before Justices
Justices SMITH,
SMITH, YEAKEL
YEAKEL and
and that policy for the Board of of Trustees
Trustees
POWERS.FN·
POWERS.FN* of
of the Employees Retirement System
of
of Texas. Blue Cross/ Blue Shield of
FN* Before
FN* Before John E. Powers,
Powers, Senior
Senior Texas, Inc., administers for the Board
Justice
Justice (retired), Third Court
(retired), Third Court of Ap- another part of the policy.
another part policy. Garza al-
peals, sitting by assignment. See Tex. leged that both insurers,
leged insurers, Group Life
Gov't Code Ann.Ann. §§ 74.003(b)
74.003(b) (West
(West and Health
Health Insurance
Insurance Company
Company and

© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
Humana vs. Mueller, Brief of Appellee page 23 of 29
participant. The
participant. The action
actionMueller
Muellerhas
hasbrought
brought against
against HUMANA
HUMANA is for
for extra-
extra-

contractual damages which have
have resulted
resulted from
fromHUMANA’s
HUMANA's bad faith
faith claims
claims handling
handling

conduct. HUMANA's
HUMANA’sconduct
conductisisclearly
clearlyoutside
outside the
the scope
scope of its delegated authority.

II. SUMMARY
SUMMARYOF
OFTHE
THEARGUMENT
ARGUMENT

jurisdiction in this Court, under 51.014 of the TEx.
In order to create jurisdiction TEX. C IV.
Civ.

P RAC. &
PRAC. &RREM.
EM. CCODE,
ODE, this appeal
this must
appeal mustbebebased
basedupon
uponananassertion
assertionof
ofimmunity
immunity by an

individual who is an officer or employee of the state or a political subdivision of the

HUMANA isis neither
state. HUMANA neither aa local
local government
government agency
agency nor an employee of such an

entity, and therefore this court has no authority to hear this appeal.

Sovereign immunity is a judicially
judicially created
created doctrine.
doctrine. Sovereign immunity has

been waived for SAHA for both immunity from suit and liability for claims where a

suit is brought by its employees seeking to resolve disputes over insurance benefits

Immunity is
provided by SAHA. Immunity is waived
waived because
because these
these are
are suits
suits over
over proprietary
proprietary

functions
functions by
by a city or its affiliated
affiliated agency. Immunity is waived, as well, because
agency. Immunity

these suits arise out of contract claims. Immunity
Immunity for
for those
those claims
claims is
is specifically
specifically

waived Ch.
waived Ch.271,
271,TEx.
TEX.Loc.
LOCGOVT.
. GOVT.CODE.
CODE.

Even if the functions that HUMANA performs might be cloaked in immunity

if done in good faith, by an
an employee
employee of
of aaSAHA,
SAHA, HUMANA
HUMANA does
does not
not have
have immunity
immunity

for its claims handling actions in this case, because HUMANA did not act in good

faith. Further,
Further, specific
specific provisions
provisions of
of the
the Texas Insurance Code govern actors such

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 6 of 21
 HUMANA who
as HUMANA who are
are in the "business
“business of insurance,"
insurance,” and acting as Third
Third Party

Administrators. Even
Administrators. Even if an
an employee
employee of
of the
the State
State might
might be
be immune,
immune, there
there is no

immunity for
immunity private, Third Party
for private, Party Administrators
Administrators whose
whose conduct
conduct is specifically
specifically

regulated by statute.

While the agreement between SAHA and HUMANA provides for indemnity

to HUMANA in connection with HUMANA's exercise of its powers and duties under
HUMANA's exercise

the Agreement, the agreement excepts damages that are attributable to fraud, willful

misconduct, or intentional
misconduct, intentional disregard
disregard on
on the part of HUMANA,
HUMANA, or HUMANA's
HUMANA's failure

Agreement. SAHA
to abide by the Agreement. SAHA remains
remains liable for plan benefits awarded
awarded to a

participant, but
participant, but the action Mueller
Mueller has brought
brought against
against HUMANA
HUMANA is extra-
is for extra-

contractual damages which have resulted from
contractual damages from HUMANA’s
HUMANA's bad faith claims
claims handling
handling

conduct. HUMANA's
HUMANA’sconduct
conductisisclearly
clearlyoutside
outside the
the scope
scope of its delegated authority.

III. ARGUMENT
ARGUMENTAND
AND AUTHORITIES
AUTHORITIES

A. THIS
THISAPPEAL
APPEAL MUST
MUST BE
BE DISMISSED
DISMISSED FOR
FOR LACK OF JURISDICTION

“jurisdiction to consider
This court has "jurisdiction consider immediate
immediate appeals of interlocutory
interlocutory

jurisdiction." Texas A. &
orders only if a statute explicitly provides such jurisdiction.” & M.
M Univ.

System v. Koseoglu, 233 S.W.3d 835, 840 (Tex. 2007).

This appeal has been
been taken
taken under
under Section
Section51.014
51.014of
ofthe
theTEx.
TEX.Civ.
CIV.PRAC.
PRAC. &

R EM. CCODE.
REM. ODE. Section
Section51.014(a)(5)
51.014(a)(5)provides
providesthat
thataa “person”
"person" may
may appeal
appeal from an

interlocutory order of a district court, county court at law, or county court denying a

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 7 of 21
motion for summary
motion summary judgment
judgment “that
"that is
is based
based on an assertion
assertion of immunity
immunity by an

individual who is an officer or employee of the state or a political
political subdivision of

state." [Emphasis added.]
the state.”

Accordingly, this Court lacks jurisdiction over interlocutory appeals taken by

any person who is not an officer
officer or employee
employee of aa qualifying
qualifying government entity. TEX.
TEX.

C IV. PRAC.
Cw. PRAC. &
& RREM.
EM. CCODE
ODE Sec.
Sec.101.001(2)
101.001(2)defines
defines"employee"
"employee"totomean
mean “a
"a person,

including an officer or agent, who is in the paid service of a governmental unit by

competent authority, but does not include an independent contractor, an agent or

employee of an independent contractor . . . ”"

In Cen-Tex Child Care, Inc. v Johnson, 339 S.W.3d 734 (Tex. App.—Fort

Worth 2011, no pet.), Cen-Tex was a private entity working under contract for a state

agency. ItIt provided
provided foster
foster home
home services
services pursuant
pursuant to a contract with the Department

of Family and Protective
Protective Services. After
After aa child
child died
died while
while in a Cen-Tex foster home,

Johnson filed a wrongful death lawsuit
lawsuit against
against Cen-Tex
Cen-Tex and
and others.
others. Cen-Tex moved

to dismiss, on the ground that itit had
had immunity.
immunity. The Court of Appeals
Appeals determined that

it lacked jurisdiction under 51.014(a)(5), because Cen-Texas was not an officer or

employee
employee of the State or any political subdivision
subdivision of the State, but an independent

contractor.

Similarly, in Methodist Hospitals of Dallas v. Miller, No. 05-11-00955-CV;

2012 Tex. App. LEXIS 5455; 2012 WL 2782820 (Tex. App.—Dallas July 10, 2012,
______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 8 of 21
 several police officers who were
no pet.), several were employees
employees of the Methodist
Methodist Hospital
Hospital

System appealed the denial of their Motion for Summary Judgment on the ground of

Their appeal
immunity. Their appeal was dismissed for lack of jurisdiction, because they failed
jurisdiction, because

demonstrate that they were employees
to demonstrate employees of a state
state or
or local
local government
government entity.
entity.

In Walker
Walker v. Whatley, 318 S.W.3d 541 (Tex.
(Tex. App.—Beaumont
App.—Beaumont 2010,
2010, pet.

denied), a private attorney
denied), attorney was
was sued for actions he had
had taken
taken as
as court-appointed
court-appointed

guardian of a person and estate.
estate. He sought immunity because of his appointment by

the Court.
the Court. The
Theappellate
appellate Court
Court ruled
ruled itit did
did not
nothave
havejurisdiction
jurisdiction under
under §

51.014(a)(5)), because the guardian was not an agent of the State.

The present case is different from Klein v. Hernandez, 315 S.W.3d 1 (Tex.

2010). InInthat
thatcase,
case,Klein,
Klein,was
wasaastudent
studentat
at aa private
private medical
medical school who worked as

resident physician
a resident physician at a public
public hospital.
hospital. The
The Texas
Texas Supreme
Supreme Court found that,

pursuantto
pursuant to Section
Section312.007(a)
312.007(a)ofofthe
theTEX.
TEX.H.
H.&& S.
S. CODE,
CODE, Klein
Kleinwas
was aastate
state employee
employee

for purposes
purposes of his work at the
the public
public hospital.
hospital. The
The section,
section, entitled
entitled "Individual
“Individual

Liability,”
Liability," provides: A .. .. .. resident
provides: A resident .. .. .. employee
employee of a medical
medical . . . unit . . . is an

employee of a state agency . . . for
for purposes
purposes of determining
determining the liability, if any, of the

person for the person's
person person's acts or
or omissions
omissions while engaged
engaged in the
the coordinated
coordinated or

cooperative activities of the unit, school,
school, or
or entity.”
entity." He, therefore, was authorized to

take an interlocutory appeal of the denial of an immunity
immunity motion
motion under
under 51.014(a)(5).
51.014(a)(5).

There is no similar statute that would give comfort or immunity to HUMANA.
HUMANA.

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 9 of 21
B. HUMANA HAS NO DERIVATIVE IMMUNITY FROM EITHER SUIT
OR LIABILITY FOR CLAIMS ARISING OUT OF THE
THE ADMINISTRATION
ADMINISTRATION
OF THE SAHA HEALTH BENEFITS PROGRAM.

Sovereign immunity, in Texas, was historically a judicially created doctrine.

first recognized
It was first recognized in
in 1847. The Texas
1847. The Texas Supreme
Supreme Court Hosner v.
Court held, in Hosner

DeYoung, 1 Tex. 764, 769 (1847), that no State can be sued in her own court without

her consent and then only in
in the
the manner
manner indicated
indicated by
bythat
thatconsent
consent...”
..." Consent has

been found in a number of ways. The most
ways. The most obvious one is a statutory waiver, but it

has not been the only one.

contends that
HUMANA essentially contends that SAHA in entirely immune from suit over

claims
claims matters,
matters, and
and that
that it has immunity that is derivative
derivative of SAHA's
SAHA’s immunity.
immunity.

However, if SAHA were completely
However, completely immune
immune from insurance benefits,
from suits for insurance benefits,

benefits which
benefits which it promised and contracted for with its employees,
employees, then
then Plaintiff
Plaintiff would
would

have no remedy at all for denial of her claims for benefits under the health benefits

That is
policy. That is an
an absurd result. Statutory
Statutory construction
construction rules
rules provide that an absurd

result should
result shouldbe
beavoided.
avoided.TEX.
TEX.Civ.
CIV.PRAC.
PRAC. & REM. CCODE,
REM. ODE, Sec.
Sec.311.023.
311.023.Courts
Courts must
must

avoid construction that leads to absurd results. City of Rockwall v. Houston, 246

S.W.3d 621, 625-26 (Tex. 2008).

In order for derivative immunity to apply, there must first be immunity on the

part of the government entity. Local
Local Government
Government entities are empowered to provide

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 10 of 21
health and other
health other insurance
insurance benefits
benefits to their
their employees
employees by the
the Texas
Texas Political
Political

Subdivisions Uniform Group
Subdivisions Uniform Group Benefits
Benefits Program,
Program, established
established in
in Ch.
Ch. 172
172of
ofthe
theTEX.
TEX.

LOC.GOVT.
Loc. GOVT. CCODE.
ODE. ItIt provides
provides that:

subdivision .. . . may
(a) A political subdivision may provide health
health . . . coverage
coverage for

political subdivision . . . . employees, . . . .

(b) The types of coverage
coverage that may be
be provided
provided include
include group health and

accident, group
accident, dental, accidental
group dental, accidental death
death and
and dismemberment,
dismemberment, and

hospital, surgical, and medical expense.

There is no provision in that Code Chapter which clothes any entity in immunity for

payment of benefits contracted for.

It is also true that there is no specific provision in Ch. 172 saying that a local

employee may
government employee may sue,
sue, in
in the event of a dispute, for the benefits which a

political subdivision creates. Nonetheless,
Nonetheless,there
therecan
can be
be no
no doubt
doubt that such a remedy

exists. There
There isis aa specific
specific provision
provision which
which waives
waives immunity
immunity of SAHA for general

contract claims.

WAIVER
WAIVER OF IMMUNITY
IMMUNITY TO SUIT FOR CERTAIN CLAIMS. A local

governmental entity that is authorized by statute or the constitution to

enter
enter into
into a contract
contract and that enters
and that enters into contract subject
into a contract subject to
to this

subchapter waives
subchapter waives sovereign
sovereignimmunity
immunitytotosuit
suit for
for the purpose of
the purpose

adjudicating a claim for breach of the contract, subject to the terms and

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 11 of 21
 conditions of this subchapter.

TEX. LLoc.
TEX. OC. GOVT.
GOVT. C ODE Sec.
CODE Sec.271.152.
271.152.

Supreme Court has
The Texas Supreme has specifically
specifically held
held that
that "by
“by enacting
enacting section
section

271.152, the
271.152, the Legislature
Legislature intended
intended to
to loosen
loosen the
the immunity
immunity bar
bar so
so that local
that all local

government entities that have been given or are given the statutory authority to enter

into contracts shall not be immune from
from suits
suits arising
arising from
from those contracts." Ben Bolt-
those contracts.”

Palito Blanco Consol. Indep. Sch. Dist.
Dist. v.
v.Tex.
Tex.Political
PoliticalSubdivisions
Subdivisions Prop./Cas.
Prop./Cas. Joint

Self-Ins. Fund, 212 S.W.3d 320, 327
327 (Tex.
(Tex. 2006)
2006) (internal
(internal quotations
quotations omitted).
omitted). This

authorizes a claim for benefits, a suit against SAHA.

If HUMANA has derivative immunity from suit for violations
violations of the Insurance
Insurance

Code in this
Code in this case,
case, itit would
would go
go against
againstthe
thepolicy
policyenunciated
enunciatedininTEx.
TEXLoc.
. LOCGOVT.
. GOVT.CODE
CODE

Ch. 172, which authorized the creation of the program that HUMANA
HUMANA administered.
administered.

Sec. 172.002. PURPOSE. The purpose of this chapter is to: . . .

(2) enable the political subdivisions to attract and retain competent and

able employees by providing them with accident and health benefits

coverages
coverages at least equal to those
those commonly
commonly provided
provided in private
private industry;
industry;

If State, County and Municipal employees are not allowed the same remedies

under the Insurance Code as employees in the private sector, they are not equal to

those “provided
"provided in private industry.”
industry."

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 12 of 21
 HUMANA contends
HUMANA contendsthat
that itit seeks
seeks sovereign
sovereign immunity. However, what
immunity. However, what it

actually seeks
actually seeks is the immunity
immunity that might apply to an
an individual
individual employee
employee who

performed claims
performed claims functions
functionsfor
foraa local
local government
governmententity. That is
entity. That is "official"
“official”

Official immunity
immunity. Official immunity applies
applies only
only to (1) discretionary acts of individuals (2)

within the scope of official duties for the state, (3) performed in good faith. City of

Lancaster v. Chambers,
Lancaster Chambers, 883
883 S.W.2d
S.W.2d 650,
650, 653 (Tex. 1994).
653 (Tex. 1994). HUMANA
HUMANA has
has

specifically pleaded
specifically pleaded that
that itit did not have discretion,
discretion, but
but only acted to interpret the

terms. Further,
policy terms. Further, the
the specific
specific allegations
allegations of Plaintiff
Plaintiff are
are that the actions
actions of

HUMANA were
HUMANA were not
not taken
taken in good faith, because they are violations of the Texas

Insurance Code.

Even if HUMANA
Even HUMANA is correct and SAHA has immunity from a lawsuit for

benefits and for violations of the Insurance Code, that immunity does not transfer to

HUMANA. Garza v. Blue
Blue Cross
Cross & Blue Shield of Tex., Cause No. 03-98-00706-CV;
&Blue 03-98-00706-CV;

1997 WL
1997 WL 1078697
1078697 (Tex.
(Tex. App.—Austin
App.—AustinDec.
Dec.2,
2, 1999,
1999, no (mem. op., not
no pet.) (mem.

designated for publication). In Garza, the Plaintiff was an employee of the State of
for publication).

Texas. Through
Texas. Through his
hisemployer,
employer, he
hepurchased
purchased Accidental
Accidental Death
Death and
and Disability
Disability

coverage from Blue Cross and Blue Shield of Texas (BCBSTX).
(AD&D) insurance coverage

He was
was injured
injured and
and lost
lost the
the sight
sight in
in one
one eye. BCBSTX denied
eye. BCBSTX denied the
the claim. Garza
claim. Garza

appealed, won at the administrative level, and then sued BCBSTX for violations of

the Insurance Code.

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 13 of 21
 The District Court granted Summary Judgment to BCBSTX on the ground of

immunity. The
immunity. The Court
Court of Appeals reversed. ItIt wrote,
wrote, concerning
concerning official
official immunity

for a private actor, such as Blue Cross and Blue Shield:

[I]f
LIUthe
thepurposes
purposesof
of the
the [immunity]
[immunity] doctrine
doctrine are
are not
not exposed
exposed to

particular function that might be pertinent,
injury by reason of a particular

[emphasis added.] See Forrester v.
then the exception cannot apply. [emphasis

White, 484 U.S. 219, 227 (1988) ("immunity is justified and defined by

functions itit protects
the functions protects and
and serves,
serves, not
not by person to whom
by the person whom it

See NF Indust. v. Export-Import Bank, 846 F.2d 998,
attaches."). .. .. .. See
attaches.").

1000-01 (5th Cir. 1988) (Defendant "has made no showing here that its

duties require
duties require the
the exercise
exercise ofofgovernmental
governmental policymaking
policymaking as
as

distinguished from insurance policy-writing.").

The present case is distinguishable from Foster
distinguishable from Foster v.
v. Teacher
Teacher Retirement
Retirement System,

S.W.3d 883
273 S.W.3d 883 (Tex.
(Tex. App.
App. Austin
Austin 2008). First, Foster
2008). First, Foster did not
not make
make claims
claims that

Aetna acted outside the contract
contract or
or illegally. “Foster does
illegally. "Foster does not allege unlawful acts

its employees,
by Aetna or its employees, only that Aetna should
should have found her claims
have found claims to be

covered
covered under
under the
the policy.”
policy." Id. at 889. In
In contrast,
contrast, Ms.
Ms. Mueller's
Mueller’s claims
claims are based

exclusively on the fact that HUMANA violated provisions of the Texas Insurance

Code. Second,
Second, Foster
Foster sued
sued aa State
State agency,
agency, not
not aa local
local government
government agency
agency whose

authority derives from a home rule city.
______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 14 of 21
C. HUMANA
HUMANAHAS
HASNO
NODERIVATIVE
DERIVATIVEIMMUNITY
IMMUNITYFROM
FROM EITHER
EITHER SUIT

OR LIABILITY FOR BAD FAITH CLAIMS HANDLING.

Ms. Mueller’s
Mueller's claim is not one for contract benefits. Rather, it is a claim that
benefits. Rather,

HUMANA, as the entity in charge of insurance benefits for SAHA, acted without
HUMANA,

authority and contrary to law - ultra vires. The Texas Supreme Court has held that

there is no immunity for ultra vires acts, because they are outside the scope of the

official's authority. City of El Paso v. Heinrich, 284 S.W.3d
official’s S.W.3d 366
366 (Tex.
(Tex. 2009).
2009). If

HUMANA is acting in the stead of the individual who is the Plan Administrator for

SAHA, then they may be sued just as he might have been sued, had he done the same.

addition, the provision
In addition, provision of insurance
insurance benefits
benefits is aa proprietary
proprietary function.
function.

Governmental functionsare
Governmental functions aredefined
definedin in TEXCiv.
TEx. . CIVPRAC.
. PRAC&
. &REM.
REM.CODE
CODE SSEC.
EC. 101.0215,
101.0215,

which provides
which provides that
that the
the Tort
Tort Claims
Claims Act
Act does
does not
not apply
apply to
to the liability of
the liability of a

municipality for damages
damages arising
arising from
fromits
itsproprietary
proprietaryfunctions.
functions. Proprietary functions

are those which a municipality may, in its discretion, perform in the interest of the

inhabitants of the municipality. The
inhabitants The provision
provisionof
of insurance
insurance to
to employees
employees of
of the a city

or its affiliated
affiliated entities
entities is
is not
not listed
listed in statute. Therefore
in the statute. Therefore the
the provision
provision of

insurance is a proprietary
proprietary function, and HUMANA
HUMANA has
has no immunity
immunity at
at all in this

regard.

In Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006), the Texas Supreme

Court recognized that
Court recognized that cities
cities have
have no
no immunity
immunity for
for tortious
tortious conduct related
related to a

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 15 of 21
proprietary function. Id.
Id. at
at 343.
343. SAHA
SAHAisisaa creation
creation of
of the
the City of San Antonio, and

therefore, logically,
therefore, logically, it also has no immunity
immunity for
for tortious
tortious conduct
conduct related
related to
to proprietary
proprietary

functions. The
Theconduct
conductfor
for which
which Mueller
Mueller seeks
seeks is
is tortious,
tortious, in that it violates specific

statutory guidelines.

D. HUMANA IS NOT EXEMPT FROM THE INSURANCE CODE AND
HAS DIRECT
HAS DIRECT LIABILITY
LIABILITY FOR CLAIMS ARISING
FOR CLAIMS ARISING OUT OF THE
OUT OF THE
ADMINISTRATION OF THE SAHA HEALTH BENEFITS PROGRAM.

Plaintiff has sued under Chs.
Chs. 541
541 and
and 542
542 of
of the
theInsurance
InsuranceCode.
Code.TEX.
TEX.INS.
INS.

C ODE Sec.
CODE Sec.541.002
541.002defines
defines"Person"
"Person"as
as“an
"anindividual,
individual, corporation,
corporation, association, . .

other legal
. society, or other legal entity engaged insurance . .. ."
engaged in the business of insurance .” The

chapter
chapter then goes on to define
define various
various unfair
unfair methods
methods of competition
competition and claims

handling. Plaintiff
handling. Plaintiff has
has sued
sued HUMANA
HUMANA as aa person
person who
who has
has violated
violated these
these

provisions.

HUMANA contends
HUMANA contends that
that the
the Texas
Texas Insurance
Insurance Code
Code does
does not
not apply
apply to the

HUMANA’s actions in this, because HUMANA was acting for a self-funded Plan
HUMANA's

created
created by aa local
local government
government entity.
entity.HUMANA
HUMANAcites
citesTEx.
TEXGOVT.
. GOVT.CODE
CODE Sec.

2259.037. ItIt provides
provides that
that "The
"The Insurance
Insurance Code
Code and other laws of this state relating

to the provision or regulation of insurance do not
not apply
apply to
to (1)
(1) an agreement entered

into under this subchapter; the proceeds
subchapter; or (2) the proceeds of
of public
public securities issued under this

However,the
subchapter." However, theauthority
authorityto
to provide
provide Group
Group Benefits
Benefits Plans
Plans is
is not found in

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 16 of 21
this section, but in Ch. 172, discussed
discussed supra. Tex.
Tex. Govt. Code Sec. 2259.037 merely

creates another mechanism for accomplishing the end set out in Ch. 172, Tex. Loc.

Govt. Code. Further,
Further, while
while aa self-funded
self-funded Plan
Plan might not be subject to the Insurance

Code, there is another,
another, more specific provision of the Texas Codes which brings

administrators such as HUMANA
administrators HUMANA specifically
specifically within
within the
the provisions
provisions of the Insurance

Code. That
ThatisisTEX.
TEX.INS.
INS. C ODE Sec.
CODE Sec.4151.001,
4151.001,which
which provides:
provides:

In this chapter: meansaa person
"Administrator"means
chapter: (1) "Administrator" person who, in connection

with ... health benefits ... adjusts or settles claims for residents of this

state.

is an
There is an exemption
exemptionofofsorts,
sorts,ininTEX.
TEX.INS.
INS. CODE
CODE Sec.
Sec. 4151.002.
4151.002.

A person is not an
an administrator
administrator ifif the
the person
person is:
is: . . .. (17) a self-insured

political subdivision; ...

There is no exemption for an administrator hired by a self-insured political

subdivision. Rather,
subdivision. Rather,there
thereare
are specific
specific provisions
provisions that
that the Commissioner of Insurance
Insurance

rules governing
may adopt rules governingAdministrators.
Administrators.TEX.
TEXINS.
. INS.CODE
CODE Sec.
Sec. 4151.006.
4151.006.

Ordinary principles of statutory construction require this result, as well. TEx.
TEX.

GOVT. CCODE
GOVT. ODE Sec.
Sec.311.026
311.026provides
providesthat
that“If
"Ifaageneral
general provision
provision conflicts
conflicts with
with a

special or local provision, the provisions shall be construed,
provisions shall construed, if possible, so that effect

is given to both.” In case
both." In case of an irreconcilable conflict, "the
“the special or local provision

prevails as an exception to the general provision, unless the general provision is the

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 17 of 21
later enactment and the manifest intent
intent is
is that
that the
the general
general provision
provision prevail.”
prevail." Here,

it is possible
possible to construe the self-funded
self-funded Plan as not subject to the Insurance
Insurance Code, but

to have the Third Party Administrator
Administrator be
be subject
subject to
to the
the Code. If, however,
Code. If, however, that is

considered
considered an irreconcilable conflict,
an irreconcilable conflict, the Insurance Code
the Insurance Code Section
Section governing
governing

Administrators is
Administrators is more
more specific
specific than
than the section authorizing
authorizing the creation
creation of self-

funded insurance plans, and should prevail.

VI. CONCLUSION

is undisputed
It is undisputed that
that HUMANA
HUMANA is neither a government
is neither government entity
entity nor
nor an

employee
employee of
of aa government
government entity. Therefore, its
entity. Therefore, its interlocutory
interlocutory appeal
appeal must be

Alternatively, HUMANA
dismissed. Alternatively, HUMANA has not conclusively demonstrated
demonstrated that it is

entitled to either sovereign or official
official immunity.
immunity. The County Court's order should

be affirmed, and this case remanded for trial.

PRAYER

WHEREFORE, PREMISES
WHEREFORE, PREMISES CONSIDERED,
CONSIDERED, Appellee MUELLER respectfully

requests that this Court dismiss HUMANA’s appeal for
HUMANA's appeal for lack of jurisdiction, or affirm

the decision of the Court below, and grant Appellee such other and further relief to

which she may show herself entitled.

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 18 of 21
 Respectfully submitted,
Digitally signed by: Stephen
Stephe G. Nagle
DN: CN = Stephen G. Nagle
email = sgnagle@lawyernagle.
n G. com C = US O = Nagle Law
Firm OU = Attorney
Date: 2015.02.14 00:17:29 -
Nagle 06'00'

Stephen G. Nagle
State Bar No. 14779400
sgnagle@lawyernagle.com
1002 West Avenue, Suite 100
Austin, TX 78701
(512) 480-0505 - Telephone
(512) 480-0571 - Facsimile
ATTORNEY FOR APPELLEE MUELLER

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 19 of 21
 CERTIFICATE OF COMPLIANCE
Pursuant
Pursuant to
to Tex.
Tex. R. App. P. 9.4, I certify
R. App. certify by
by my
my signature
signature above that this

Appellant's Brief
Appellant's contains 4641 words.
Brief contains words. This
This is
is aacomputer-generated
computer-generated document
document

created in Corel Word Perfect, using 14-point typeface for all text, except for footers

which are in 12-point typeface. In
In making
making this
this certificate
certificate of compliance,
compliance, I am relying

on the word count provided by the software used to prepare the document.

CERTIFICATE OF SERVICE
By my signature above, I certify that a copy of the foregoing instrument was

served upon the attorneys
attorneys of record
record of all parties to the above cause as indicated
indicated

below in accordance
accordance with
with Rule
Rule 9.5(b),
9.5(b), Tex.
Tex. R. App. P., on this 13th day of February,
2015.

Via Electronically Filing

Richard G. Foster
rfoster@prdg.com
Lisa P. Alcantar
lalcantar@prdg.com
Porter, Rogers, Dahlman & Gordon, P.C.
Trinity Plaza II
745 E. Mulberry Ave, Suite 450
San Antonio, Texas 78212

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 20 of 21
 NO. 04-14-00752-CV

IN THE COURT OF APPEALS
FOR THE FOURTH DISTRICT OF TEXAS
AT SAN ANTONIO

HUMANA INSURANCE COMPANY,

APPELLANT,

V.

MUELLER,

APPELLEE.

On Appeal from the County Court at Law No. 3,
Bexar County, Texas

Brief of Appellee Mueller

Appendix Table of Contents

1.
1 Indemnity language from the Administrative Services Agreement
Agreement. . . . . . 22
22

2. Garza v. Blue Cross and Blue Shield of Texas..
Texas. . . . . . . . . . . . . . . . . . . 23-29
23-29

______________________________________________________________________________
Humana Ins. Co. vs. Mueller, Brief of Appellee - p. 21 of 21
 ARTICLE XIII
Hold Harmless

13.1 The Client agrees to indemnify
indemnify and hold the Plan Manager harmless harmless against
against any
any and
and all loss, liability,
or damage (including payment of of reasonable attorney's fees) which the Plan Manager may incur by
reason offailure
of failure of
of the Client or its employees, agents or representatives to abide by the provisions of
the Plans or this Agreement
Agreement or or to
to administer
administerthe thePlans
Plansororassets
assetsand
andfunds
fundsofofthe
the Plans
Plans in
in a prudent and
proper manner; failure of of the Plans or documents describing the Plan prepared prepared or adopted by the Plan
sponsor to comply withwith applicable
applicable laws;
laws; fraud,
fraud, embezzlement,
embezzlement, willful
willful misconduct,
misconduct, or intentional
intentional
disregard on the part of of the
the Client
Client or or its
its employees,
employees, agents
agents oror representatives;
representatives; disputes concerning
denials
denials of benefits
benefits or or benefit
benefit payments
payments made madeby by or
or at
at the
the direction
direction of the Client
Client or the
the Plan
Plan
Administrator;
Administrator; oror actions
actionstaken
takenby bythe
thePlan
PlanManager
Manageratatthe
thedirection
direction of
ofthe
the Client or the Administrator.

13.2 The Plan Manager
Manager agrees
agrees to indemnify
indemnify and
and hold the Client harmless
harmless against anyany and all loss, liability,
or damage (including
(including payment
payment of of reasonable
reasonable attorney's fees) which the Client may incur by reason of
the failure of
of the employees,
employees, agents
agentsororrepresentatives
representativesof
ofthe
the Plan
Plan Manager
Manager to to abide by this Agreement,
or fraud, embezzlement,
embezzlement, willful
willfulmisconduct
misconductororintentional
intentionaldisregard
disregardononthe
thepart
part of
ofthe Plan Manager or
its employees, agents, or representatives.
representatives. TheThePlan
PlanManager
Managerwill
willnot beliable
notbe liableon
on account
account of
of actions or
inaction undertaken by
inaction undertaken by itit in good faith
faith and
and performed
performed in accordance
accordance with the provisions
provisions of this
Agreement or for the cost of of benefits under the Plan which are claimed or awarded to a Participant.

13.3 The obligations under
under this
this Article
Article XIII
XIII shall
shall continue
continue beyond
beyond the
the term
term of
ofthis
this Agreement
Agreement as
as to
to any
any act
or omission which occurred during the term of of this Agreement.

ARTICLE XIV
Taxes and Assessments

14.1 tax or other
If a tax other assessment, including a premium tax, with respect to the Plan (other than an income
tax with respect to the fees earned by the Plan Manager) is imposed upon the Plan Manager, the Plan
Manager
Manager willwill provide
provide written
written notification
notificationtotothe
theClient
Clienttogether
togetherwith
withaa copy
copy of
of the
the tax
tax bill
bill or
assessment within ten (10)
( l 0) business days of
of receipt.

14.2 If the Plan Manager pays the tax or assessment, the Client shall reimburse the Plan Manager for any
amounts
amounts paid plus reasonable
reasonable out-of-pocket
out-of-pocket expenses
expenses immediately upon notification
immediately upon notification by the Plan
Manager that the tax has been paid.

ARTICLE XV
Defense of Actions

15.1 The Client and the Plan Manager
Manager agree to cooperate with respect to (a) the determination, settlement
and defense
defense of
of any and
and all
all claims
claims for
for benefits
benefits undertaken
undertaken by the Plan Manager
Manager pursuant
pursuant to this
Agreement, and (b) the settlement ofof and conduct of of a defense against any claim for benefits which
has been denied,
denied, which
which may
may include
include attending
attending hearings and trials
hearings and assisting in securing
trials and assisting securing the
attendance of
of witnesses and giving ofof evidence.

15
HIC 000818
HIC 000818
Humana vs. Mueller, Brief of Appellee 80
page 22 of 29
wesiikw.
Westlaw.
Page 11

Not Reported in S.W.3d, 1999 WL 1078697 (Tex.App.-Austin)
(Cite as: 1999 WL 1078697 (Tex.App.-Austin))
(Tex.App.-Austin»

1998).
C
Only the Westlaw citation is currently POWERS.
available. *1 Gregorio appeals from
Gregorio Garza appeals from a sum-
mary judgment
mary judgment that
that he
he take
take nothing
nothing byby his
NOTICE: NOT DESIGNATED FOR PUB- actions
actions against Blue Cross/
against Blue Blue Shield
Cross/ Blue Shield of
LICATION. UNDER TX R RAP RULE Texas,
Texas, Inc.,
Inc., and Group
Group Life and Health In-
47.7, UNPUBLISHED OPINIONS HAVE surance
surance Company
Company ("Appellees").FN'
("Appellees").FNl Garza
Garza
NO PRECEDENTIAL VALUE BUT MAY appeals as well from the trial court's denial of
BE CITED WITH THE NOTATION "(not his
his opposing
opposing motion
motion for
for partial
partial summary
summary
designated for publication)." judgment. We
judgment. We will
will reverse
reverse the
the summary
summary
judgment recovered by Appellees, affirm the
Court of
of Appeals of
of Texas, Austin. trial court judgment denying Garza's motion
Gregorio GARZA, Appellant, for summary
for summary judgment,
judgment, and and remand
remand the
the
v. cause to the trial court.
BLUE CROSS AND BLUE SHIELD OF
TEXAS, INC.; and Group Life & & Health FN1. Garza alleged
FNI. alleged that Group
Group Life
Insurance Company, Appellees. and Health Insurance Company is
Insurance Company is a
"wholly
"wholly owned
owned and controlled
controlled sub-
sub-
No. 03-98-00706-CV.
No.03-98-00706-CV. sidiary of"
of Blue
BlueCross/
Cross/ Blue
Blue Shield
Shield of
Dec. 2, 1999. Texas,
Texas, Inc.
Inc. It appears
appears that
that neither
neither
Appellee denied
Appellee denied the the allegation.
allegation.
From the
From the District
District Court of
of Travis
Travis County,
County, Group
Group Life
Life and
and Health
Health Insurance
Insurance
53rd
53rd Judicial
Judicial District,
District, No. 95-11137;
95-11137; Peter
Peter Company issued the
Company issued the group
group policy
policy
M. Lowry, Judge Presiding. involved in the present litigation; and,
the
the company
company administers
administers aa part
part of
Before
Before Justices
Justices SMITH,
SMITH, YEAKEL
YEAKEL and
and that policy for the Board of of Trustees
Trustees
POWERS.FN·
POWERS.FN* of
of the Employees Retirement System
of
of Texas. Blue Cross/ Blue Shield of
FN* Before
FN* Before John E. Powers,
Powers, Senior
Senior Texas, Inc., administers for the Board
Justice
Justice (retired), Third Court
(retired), Third Court of Ap- another part of the policy.
another part policy. Garza al-
peals, sitting by assignment. See Tex. leged that both insurers,
leged insurers, Group Life
Gov't Code Ann.Ann. §§ 74.003(b)
74.003(b) (West
(West and Health
Health Insurance
Insurance Company
Company and

© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
Humana vs. Mueller, Brief of Appellee page 23 of 29
 Page 2

Not Reported in S.W.3d, 1999 WL 1078697 (Tex.App.-Austin)
(Cite as:
as: 1999 WL 1078697 (Tex.App.-Austin))
Blue
Blue Cross/
Cross! Blue
Blue Shield
Shield of
of Texas,
Texas, official
official immunity
immunity andand moved
moved for summary
summary
Inc., were
Inc., were insurance
insurance companies
companies li- judgment on that ground.
judgment ground. Garza moved for
censed
censed toto do business in Texas.
Texas. The partial summary judgment on the ground that
allegation was not denied. Because of his
his actions were not,
actions were not, as
as a matter
matter ofof law,
law,
the foregoing
foregoing allegations
allegations and appar-
appar- barred
barred by the doctrine
doctrine ofof official
official immunity.
immunity.
ent identity of
of interests involved, and In a single judgment, the trial court sustained
to obtain some clarity in ourour discus-
discus- Appellees' motion and
Appellees' motion and denied
denied Garza's
Garza's mo-
mo-
sion, we will refer to the two insurers tion, ordering that he take nothing based on
collectively as "Appellees." the doctrine of
of official immunity.

THE CONTROVERSY Garza appeals now
Garza appeals now on three issues:
issues: (1)
Appellees insured Garza,
Appellees insured Garza, aa state
state em-
em- appellees did not establish as a matter of law
ployee, under a group
ployee, group accidental-death
accidental-death and the elements
elements ofof official
official immunity;
immunity; (2) affi-
affi-
dismemberment
dismemberment policy policy administered
administered by by davits
davits filed in support
support ofof Appellees'
Appellees' motion
motion
Appellees
Appellees under the provisions
provisions of the Texas are incompetent proof because, among other
Employees Uniform Group Insurance Bene- things, they do
things, they do not
not show
show the
the entirety
entirety of a
fits Act. See Tex.
Tex. Ins.Code Ann.Ann. art. 3.50-2
3.50-2 government contract under which Appellees
(West 1981 & Supp.1999) (the "Act"). After
1981 & claim official immunity; and (3) there was no
losing his sight in one eye due to an accident, summary judgment "evidence" showing as a
Garza made a claim
Garza made claim for
for benefits
benefits under the matter
matter of lawlaw that
that Appellees'
Appellees' conduct
conduct in-in-
policy. Appellees
policy. opposed the claim. Garza
Appellees opposed Garza volved
volved government
government discretion,
discretion, an essential
essential
ultimately prevailed in
ultimately prevailed in aacontested-case
contested-case element ofof the defense of
of official immunity.
proceedingunder
proceeding under section
section5B 5B of
of the
the Act,
Act,
conducted
conducted by by an administrative
administrative law judge
judge For reasons that will appear
reasons that appear below,
below, we
employed by the State Office of of Administra- will sustain Garza's position on the first two
tive
tive Hearings.
Hearings. Appellees
Appellees paidpaid the benefits
benefits issues; consequently, we need not address his
claimed.
claimed. Garza thereafter sued Appellees in third issue. We will
will discuss
discuss separately
separately Gar-
the present cause, seeking additional sums on za's appellate complaint directed at the denial
allegations of breach of of contract, negligence of
of his motion for partial summary judgment.
and gross negligence, and statutory causes of
action
action authorized
authorized byby the
the Texas
Texas Insurance
Insurance DISCUSSION AND HOLDINGS
Code and the Texas Business and Commerce The
The doctrine
doctrine of
of official
official immunity
immunity pro-
pro-
Code. tects the interests of
of government
government by protect-
ing its officers and employees from suits and
Against Garza's causes of
of action, Appel- liabilities based on actions taken by them in
liabilities based
lees interposed
lees the affirmative
interposed the affirmative defense
defense of the good-faith
good-faith performance
performance of of discretionary
discretionary

© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
Humana vs. Mueller, Brief of Appellee page 24 of 29
 Page 3

Not Reported in S.W.3d, 1999
1999 WL 1078697 (Tex.App.-Austin)
(Cite as: 1999 WL 1078697 (Tex.App.-Austin))
(Tex.App.-Austin»
duties coming within the scope of their offi- independent administrators and managers managers
cial authority.
authority. See
See Kassen
Kassen v.v. Hatley,
Hatley, 887 of
of the programs authorized under this Act.
S.W.2d
S.W.2d 4, 8 (Tex.1994).
(Tex.l994). Where official im- The independent administrator so selected
munity protects a government officer or em- by the trustee shall assist the trustee to in-
ployee, the government entity for which they sure
sure the proper
proper administration
administration of the Act Act
act derives immunity therefrom by operation and the coverages,
coverages, services,
services, andand benefits
benefits
of the
the respondeat
respondeat superior
superior principle. See provided for
provided for or authorized
authorized by the Act and
Dewitt v.
Dewitt v. Harris
Harris County,
County, 904
904 S.W.2d
S.W.2d 650,
650, shall
shall be paid by the trustee
trustee ... Also, as an
653
653 54
54 (Tex.1995); City of
(Tex.1995); City of Houston
Houston v.v. Kil- agency
agency of the State
State of
of Texas,
Texas, thethe trustee
trustee
burn, 849 S.W.2d 810, 812 (Tex.1993).
(Tex. 1993). This shall have full power and authority to enter
derived immunity is not to be confused with interagency contracts
into interagency contracts with
with anyany de-
de-
the government entity's sovereign immunity, partment the State of Texas. The inter-
partment of the
which
which protects
protects the
the government
government entity
entity di-
di- agency contracts shall ... define the services
rectly. See Kassen, 887 S.W.2d at 8. to be performed by the departments for the
trustee. The trustee
trustee. The trustee shall have full power power
*2 The
The Board
Board of Trustees
Trustees of the Em-
Em- and authority to promulgate
promulgate all rules, reg-
ployees Retirement System
ployees Retirement System of Texas,
Texas, a unit ulations,
ulations, plans,
plans, procedures,
procedures, and and orders
orders
of state government, acts as "trustee" under
government, acts reasonably necessary to
reasonably necessary to implement
implement and and
the Act. See Act § 3(a)(11).
3(a)(II). Section 4 of
of the carry out the purposes
carry purposes andand provisions
provisions of
Act provides as follows:
follows: this Act in all its particulars,....
particulars, ....

The administration and implementation
implementation of Act § 4 (emphasis added).
this Act are vested solely in the trustee. As
it shall deem necessary to insure the proper Section 4, on its face,
Section 4, face, contemplates
contemplates that
administration
administration ofof this Act and the insurance the trustee, an artificial person, shall exercise
coverages,
coverages, services,
services, and benefits provided its exclusive
exclusive power
power of of administration
administration and and
for or authorized by this Act, the trustee, as implementation through rulemaking
implementation through rulemaking and and
an agency ofof the State of
of Texas, shall have through
through contracts with others,
contracts with others, namely:
namely: (1)
full power and authority to hire employees. contracts
contracts with
with employees;
employees; (2) (2) interagency
interagency
The
The duties
duties of such
such employees
employees and
and their
their contracts with other departments of of the state;
compensation shall be determined
compensation shall and as-
determined and and (3)
(3) competitive-bid
competitive-bid contracts with "in-
contracts with
signed by the trustee. The trustee may, on a dependent
dependent administrators
administrators and and managers"
managers"
competitive
competitive bidbid basis,
basis, contract with
with a who
who "act for" and "assist the trusteetrustee to in-
qualified, experienced firm
qualified, experienced firm of
of group
group in- sure" proper administration
administration of of the
the Act and
and
administeringfirm
surance specialists or an administering firm the coverages,
the coverages, services,
services, and
and benefits
benefits pro-
pro-
who shall act for
for the trustee in a capacity as vided
vided thereunder.
thereunder. ItIt is undisputed
undisputed that Ap- Ap-

© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
Humana vs. Mueller, Brief of Appellee page 25 of 29
 Page 4

Not Reported in S.W.3d, 1999 WL 1078697 (Tex.App.-Austin)
(Cite as: 1999 WL 1078697 (Tex.App.-Austin))
(Tex.App.-Austin»
pellees entered into a contract falling within cian
cian Services
Services Co.,Co. , 977
977 S.W.2d
S.W.2d 829,829, 832
832
the
the third class
class of
of contracts,
contracts, and and basebase their
their (Tex.App.-Fort Worth 1998,
(Tex.App.-Fort Worth 1998, pet.
pet. denied);
denied);
claim ofof official immunity on section 4 of of the Knowles v. City of
Knowlesv. ofGranbury, 953 S.W.2d 19,
Act and the terms of of their
their contract
contract as inde-inde- 24 (Tex.App.-Fort Worth 1997, pet. denied);
pendent
pendent administrator.
administrator. It It is also
also undisputed
undisputed and Puthoffv.
Puthoff v. Ancrum, 934 S.W.2d 164, 169
that the trustee
trustee is aa government
government entity entity and
and (Tex.App.-Fort Worth 1996, writ denied). FN2
denied).FN2
that Appellees
Appellees are private
private corporations
corporations en-
gaged in the business of of insurance in addition FN2.
FN2. In In relation
relation toto the
the doctrine
doctrine of
to their
their work
work as as independent
independent administrator
administrator sovereign immunity,
immunity, it has been said
under the contract. numerous times that the government's
immunity from
immunity from suit does not extend
extend
Because Appellees
Because Appellees are are not
not themselves
themselves to an
an independent
independent contractor
contractor doing
doing
government officers or employees, it appears work for the state, but a private
private per-
at first blush that they could not meet the first son contracting
contracting with government
government to
prerequisite forfor invocation
invocation of the doctrine of perform services
perform services shares
shares the govern-
govern-
official
official immunity;
immunity; that doctrine is generally generally ment's
ment's immunity
immunity whenwhen the govern-
govern-
not available to private persons because liti- ment directs
directs and controls the details
details
gation against them does not have the effect of
of his work. See,
See, e.g.,
e.g. , K.D.F.
K.D.F. v..
v.. Rex,
Rex,
of frustrating
frustrating or or disrupting
disrupting government
government 878 S.W.2d 589, 597
878 S.W.2d 589, 597 (Tex.l944);(Tex.1944);
functions
functions and discouraging
discouraging efficient and ef- TRST Corpus
TRST Corpus v. v. Financial
Financial Center,
Center,
fective
fective public service-the purposes underly- 1999
1999 Tex.App.
Tex.App. LEXIS LEXIS 5826 5826
ing the doctrine. See WyattWyatt v. Cole, 504 U.S. (Tex.App.-Houston
(Tex.App.-Houston [14th [14th Dist.]
Dist.] Au-
158,
158, 168
168 69 69 (1992).
(1992). But But itit isissometimes
sometimes gust
gust 5,5, 1999); Lyons v.
1999); Lyons v. Lindsey
Lindsey
necessary
necessary or convenient for government en- Morden Claims
Morden Claims Management,
Management, 958
tities
tities to contract
contract with
with private
private persons
persons to S.W.2d
S.W.2d 86, 86, 91
91 (Tex.App.-El
(Tex.App.-El Paso Paso
perform duties
perform duties that the government
government entities
entities 1998), motion
motion forfor rehearing
rehearing over-
over-
are legally
legally required
required to perform,
perform, perhaps by ruled, 985
985 S.W.2d
S.W.2d 86 (1999);
(l999); Gon-
the terms ofof a statute or a court order. In those zales v.
zales v. Heard,
Heard, Goggan,
Goggan, BlairBlair & &
exceptional circumstances the
exceptional circumstances the private
private con- Williams, 923 923 S.W.2d
S.W.2d 764, 764, 766766
tracting parties may be entitled to invoke the (Tex.App.-Corpus
(Tex.App.-Corpus ChristiChristi 1996,
1996, writ
doctrine
doctrine of official
official immunity.
immunity. See See e.g.,
e.g., Ea- denied); Perser
Perser v.
v. City
City ofofArlington,
Arlington,
gon v. City ofofElk City, 72 F.3d 1480, 1489 148990 90 738 S.W.2d 783, 784 (Tex.App.-Fort
(10th
(lOth Cir.1996); Williams v. O'Leary,
Cir.1996); Williams O'Leary, 55 Worth 1987, writ denied).
Worth denied). One deci-
F.3d 320,
F.3d 320, 323
323 24 (7th(7th Cir.1955).
Cir.l955). This This ex-
ex- sion, Bennack Flying
Flying Service
Service v.
v. Bal-
ception to the general rule is the basis of de- boa, 1999
1999 Tex.App.
Tex.App. LEXISLEXIS 47574757
cision in Guerrero
Guerrero v. v. Tarrant County Morti- (Tex.App.-Corpus
(Tex.App.-Corpus Christi Christi June
June 24,24,

© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
Humana vs. Mueller, Brief of Appellee page 26 of 29
 Page 5

Not Reported in S.W.3d, 1999 1999 WL 1078697 (Tex.App.-Austin)
(Tex.App.·-Austin)
(Cite as: 1999 WL 1078697 (Tex.App.-Austin))
(Tex.App.-Austin»
1999),
1999), appears
appears to to apply these sover- obligations
obligations and and rights
rights asas independent
independent ad-ad-
eign-immunity distinctionsin
eign-immunity distinctions in the
the ministrator in the resulting contract,
contract, he does
context
context of an an official-immunity
official-immunity de- not swear that the attached pages set forth the
fense. entirety
entirety of Appellees' obligations
obligations and rights
under the resulting contract, if if we understand
*3 We
We turn then then toto determine
determine whether
whether correctly the tenor of of his affidavit.
Appellees
Appellees established
established the the aforesaid
aforesaid excep-
excep-
tion as a matter of of law, which they claim by FN3.
FN3. In his his motion
motion for for summary
summary
citation to Guerrero,
Guerrero, Knowles, and Puthoff. judgment, Garza
judgment, Garza pointed
pointed out these
these
We conclude
We conclude the summary
summary judgment proof omissions
omissions fromfrom the verified
verified copies,
copies,
fails in that regard. stating
stating that
that the omission
omission maymay have
have
been intentional because the contract
Appellees' contract with the trustee is not actually
actually arrived
arrived at by Appellees
Appellees and
and
found in the
found the summary
summary judgment
judgment record.F"
record.FN3 the trustee covered only
The record does does include
include verified
verified fragments
fragments health-benefit claims
health-benefit claims andand stated that
of
of two other documents. The first is a copy of Appellees were
Appellees were "independent
"independent con-con-
a "Request for Proposal" issued by the Em- tractors" whose employees would not
ployees Retirement
ployees Retirement SystemSystem of Texas,
Texas, per-
per- be considered employees of the State
taining
taining toto aa proposed
proposed contract
contract toto provide
provide of Texas
Texas or or the
the Employees
Employees Retire-
Retire-
services
services as an anindependent
independent administrator
administrator ment System of of Texas. Garza did not,
under section 4 of the Act. The document is however, file
however, file in the summary
summary judg-
verified
verified by by anan affidavit
affidavit to to which
which itit is
is at-
at- ment record aa verified
ment record verified copy
copy of the
the
tached. The first
tached. The first twenty-six pages of the
twenty-six pages the entire
entire contract, the "Request
contract, the "Request forfor
document are omitted from the verified copy, Proposal," or Appellees' response. He
however, and the affiant's oath extends only
however, stated,
stated, however, that the contract
however, that contract it-
to the
the pages
pages attached
attached to his his affidavit.
affidavit. The
The self document."
self was a "public document."
record also contains what is represented to be
a copy of Appellees' response to the "Request In sum,
sum, thethe summary
summary judgment
judgment record
record
for Proposal." According
According to to the affiant who does not establish directly (by a verified copy
verified the attached
verified the attached copy,
copy, it isis Appellees'
Appellees' of the contract itself) nor indirectly
indirectly (by ref-
response
response to to the "Request for Proposal"
Proposal" and erence
erence to to the
the proposal
proposal and
and response)
response) the
the
was accepted
was accepted by by the
the System
System as as a basis
basis for
for complete terms
terms of the contract made by Ap-
their
their resulting contract. The
resulting contract. The copy
copy of thisthis pellees and the trustee whereunder the former
document
document also also appears
appears to to be
be only
only aa part
part of acts as
as independent
independent administrator.
administrator. Because
Because
Appellees' response.
Appellees' response. And And while
while the affiant
affiant of this deficiency
deficiency in the record,
record, one
one cannot
cannot
declares that the copy sets
declares that sets forth
forth Appellees'
Appellees' determine
determine as as aa matter
matter of law the nature
nature or

© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
Humana vs. Mueller, Brief of Appellee page 27 of 29
 Page 6

Not Reported in S.W.3d, 1999 WL 1078697 (Tex.App.-Austin)
(Cite as: 1999 WL 1078697 (Tex.App.-Austin))
(Tex.App.-Austin)
relevancy
relevancy of of Appellees' duties under
Appellees' duties under the
the that
that any
any ofof their
their functions
functions as as independent
independent
contract, which of them are governmental in administrator
administrator are are pertinent
pertinent to to these
these allega-
allega-
nature and represent duties that the trustee is tions; much less have they shown that these
legally required
legally required to to perform,
perform, or whether the functions
functions are are functions
functions thethe trustee
trustee was itself
trustee retained a duty to perform itself any
trustee retained legally required to perform. In these circum-
particular duties. stances, cannot be
stances, it cannot be said as
as a matter of law
that Appellees
Appellees established
established their
their affirmative
affirmative
Given the foregoing
foregoing omissions from the defense of of official immunity. See NF Indust.
summary judgment record one cannot know v.
v. Export
Export Import
Import Bank,
Bank, 846 846 F.2d
F.2d 998,
998,
whether the purposes of the official immun- 1000-01
1000-01 (5th (5th Cir.1988)
Cir.1988) (Defendant
(Defendant "has "has
ity doctrine are at risk by reason of
doctrine are of Garza's
Garza's made no showing here that its duties require
causes
causes of action.
action. And if the purposes of the the exercise
exercise of of governmental
governmental policymaking
policymaking
doctrine are not exposed to injury by reason as
as distinguished
distinguished from from insurance
insurance poli- poli-
of a particular
particular function
function that might be perti- cy-writing.").
cy-writing. ").
nent, then the
nent, the exception
exception cannot
cannot apply.
apply. See
Forrester v. White,
White, 484 U.S. 219, 227 (1988) *4 We hold accordingly
accordingly and reverse the
( "immunity
"immunity is justified and defined
defined by the summary judgment that
summary judgment that Garza take nothing
nothing
functions it protects
protects andand serves, not by the
serves, not by his actions against Appellees.
person to whom it attaches."). Moreover, the
immunity attaches to
immunity attaches to private
private persons
persons with
with There remains the
There remains the issue
issue of whether
whether the
respect to only those acts for which the gov- trial court erred
trial erred in
in denying
denying Garza's
Garza's motion
motion
ernment entity would have been immune had for summary judgment.
it performed
performed themthem directly
directly instead
instead of con-
con-
tracting
tracting for
for their
their performance
performance by private
private The
The first
first ground urged by
ground urged by Garza
Garza in his
persons. See Eagon,
Eagon. 72 F.3d at 1489. motion for summary judgment was was that Ap-
pellees were not, as a matter of of law, entitled
Notwithstanding any
Notwithstanding any deficiency
deficiency min the to invoke
invoke the the official-immunity
official-immunity defense be-
summary judgment record, it appears that all cause they were not not government
government employees
employees
of Garza's causes of action pertain, on their or officers.
officers. What
What we we have
have said
said above
above in in
face at least, to Appellees' responsibilities as connection with Appellees' opposing motion
Garza's
Garza's insurer-that
insurer-that Appellees
Appellees failed
failed is sufficient
sufficient to demonstrate
demonstrate that Garza was
promptly
promptly to to payor
pay or settle his claim after lia- not entitled to judgment as a matter of of law on
bility had become reasonably
bility reasonably clear and that this ground.
ground. The record simply does not jus-
they engaged
engaged in unfair or deceptive
deceptive acts or tify a determination
determination as as a matter of law law that
that
practices
practices inin the business
business of
of insurance.
insurance. Ap- the exception to the general rule does or does
pellees have not shown,
shown, as a matter
matter of
oflaw,
law, not apply.

© 2014 Thomson Reuters. No Claim to Orig. US Gov. Works.
Humana vs. Mueller, Brief of Appellee page 28 of 29
 Page 7

Not Reported in S.W.3d, 1999 1999 WLWL 1078697
1078697 (Tex .App.-Austin)
(Tex.App.-Austin)
(Cite as: 1999 WL 1078697 (Tex.App.-Austin))
(Tex.App.-Austin)
We
We hold the trial
hold the trial court did not
court did not err
err in
in
Garza urged in his
Garza urged his second
second ground
ground that
that denying Garza's motion for partial summary
there
there was "no "no evidence"
evidence" that that governmental
governmental judgment.
discretion,
discretion, an an essential element of the offi-
essential element
cial-immunity defense,
defense, "was involved in the For the reasons
For reasons given,
given, we reverse
reverse the
the
acts
acts made
made the basisbasis ofof plaintiffs
plaintiffs petition,
petition, judgment recovered by Appellees, affirm the
which involved negligence and other torts in denial of
of Garza's motion for partial summary
the business of insurance." He contends now judgment, and
judgment, and remand
remand the
the cause
cause to the trial
that the record contains no such evidence and court.
the trial court erred because it was required,
in this state
state ofof the
the record,
record, to to grant
grant Garza's
Garza's Tex.App.-Austin,1999.
motion. See Tex.R. Civ. P. 166a(i).166a(i). Garza
Garza v.v. Blue
Blue Cross
Cross and
and Blue
Blue Shield
Shield of
Texas, Inc.
We are not prepared to say, as a matter of Not Reported in S.W.3d, 1999
1999 WL 1078697
1078697
law,
law, that none of the the duties
duties evidently
evidently re- (Tex.App.-Austin)
quired ofof Appellees as independent adminis-
trators "involved" acts
trators "involved" acts made
made the the basis
basis of END OF DOCUMENT
Garza's causes of action.
Garza's causes action. For example,
example, the
"Request
"Request for for Proposal"
Proposal" and and Appellees'
Appellees' re-
sponse thereto, although fragmentary, set out
certain
certain duties
duties Appellees
Appellees were were required
required to
perform in connection
perform connection withwith contested-case
contested-case
proceedings
proceedings such such as as that
that which
which preceded
preceded
payment of Garza's claim. claim. The verified cop-
ies of
of these
these documents,
documents, whilewhile notnot evidence
evidence
sufficient to establish the entirety of Appel-
lees' contract with the trustee, are some evi-
dence
dence ofof Appellees'
Appellees' duties
duties as as independent
independent
administrator.
administrator. One cannot say with assurance
that
that Appellees'
Appellees' duties
duties inin connection
connection withwith
Garza's
Garza's contested-case
contested-case proceeding
proceeding had had
nothing to do with the delays in payment of
which he complains in his petition. Evidence
justifying a conclusion
conclusion of that that kind
kind is not to
be found in the summary judgment record.

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Humana vs. Mueller, Brief of Appellee page 29 of 29