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
JOINT APPELLANTS’ REPLY BRIEF PAGE 1
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
JOINT APPELLANTS’ REPLY BRIEF PAGE 2
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,
JOINT APPELLANTS’ REPLY BRIEF PAGE 3
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.
Finally, Appellee again fails to recognize the impact of Section 2259.002. If
Appellee’s argument regarding Section 271.152 was accepted, every governmental
entity would waive immunity when it established a self-funded plan, and Section
2259.002 would be rendered a nullity. This is not the law. City of San Antonio v.
City of Boerne, 111 S.W.3d 22 (Tex. 2003) (holding that the purpose of statutory
construction is to give effect to every part). Appellee has failed to plead or
articulate a valid waiver of immunity.
PRAYER
For the foregoing reasons, Appellants request that this Court reverse the
Trial Court’s order denying Appellants’ plea to the jurisdiction and render
judgment dismissing Appellee’s claims.
JOINT APPELLANTS’ REPLY BRIEF PAGE 4
Respectfully submitted,
By: /s/ Lance V. Clack
Andrew G. Jubinsky
Texas Bar No. 11043000
andy.jubinsky@figdav.com
Lance V. Clack
Texas Bar No. 24040694
lance.clack@figdav.com
FIGARI & DAVENPORT, L.L.P.
901 Main Street, Suite 3400
Dallas, Texas 75202
Tel: (214) 939-2000
Fax: (214) 939-2090
ATTORNEYS FOR THE UNITED HEALTHCARE
CHOICE PLUS PLAN FOR CITY OF AUSTIN
EMPLOYEES
KAREN M. KENNARD, CITY ATTORNEY
MEGHAN L. RILEY, CHIEF LITIGATION
By: /s/ Megan Mosby
Andralee Cain Lloyd
State Bar No. 24071577
andralee.lloyd@austintexas.gov
Megan Mosby
State Bar No. 24073392
megan.mosby@austintexas.gov
City of Austin – Law Department
P. O. Box 1546
Austin, Texas 78767-1546
Tel: (512) 974-2918
Fax: (512) 974-1311
ATTORNEYS FOR CITY OF AUSTIN
JOINT APPELLANTS’ REPLY BRIEF PAGE 5
CERTIFICATE OF COMPLIANCE
This document complies the word-count limitations of Rule 9.4(i)(3)
because it contains 877 words as calculated per the word processing program used
for its preparation, excluding any parts exempted by Rule 9.4(i)(1).
/s/ Lance V. Clack
Lance V. Clack
JOINT APPELLANTS’ REPLY BRIEF PAGE 6
CERTIFICATE OF SERVICE
On the 3rd day of August, 2015, a true and correct copy of the foregoing
document was served on counsel as follows:
Via E-Service
Amar Raval
araval@plummerlawyers.com
James C. Plummer
jplummer@plummerlawyers.com
PLUMMER & KUYKENDALL
4203 Montrose Blvd., Suite 270
Houston, Texas 77006
Attorney for Plaintiff
/s/ Lance V. Clack
Lance V. Clack
JOINT APPELLANTS’ REPLY BRIEF PAGE 7