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Court of Appeals of Texas, Austin.

Brian MANLEY, Chief of Austin Police Department; Brian Manley, Individually; Commander Mark Spangler, Austin Police Department; Lt. Jerry Bauzon, Austin Police Department; Officer Benjamin Bloodworth, Austin Police Department; Officer Collin Fallon, Austin Police Department; Sgt. Eric Kilcollins, Training Coordinator, Austin Police Academy; and Officer Shand, Lead Instructor, Stress Reaction Training, Austin Police Academy, Appellants

v.

Christopher WISE, Appellee

NO. 03-21-00120-CV

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Filed: February 24, 2022

FROM THE 98TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-20-004731, THE HONORABLE JESSICA MANGRUM, JUDGE PRESIDING

Attorneys & Firms

Paul Matula, for Appellants.

Chris Jackson, Anselmo Aguirre, for Appellee.

Before Justices Goodwin, Triana, and Kelly

MEMORANDUM OPINION

Gisela D. Triana, Justice

*1 Appellee Christopher Wise filed suit against the City of Austin; the Austin Police Department (APD); Brian Manley, who was at the time Chief of Police for APD; and six other APD officers, alleging that the defendants were responsible for serious injuries that Wise had sustained during APD cadet training. The defendants filed an amended plea to the jurisdiction and motion to dismiss, asserting in part that dismissal of Wise’s claims against the individually named defendants was required under the election-of-remedies provisions in the Texas Tort Claims Act. See Tex. Civ. Prac. & Rem. Code § 101.106(e), (f). Following a hearing, the district court granted the plea and motion with respect to the City of Austin and APD, dismissing Wise’s claims against those defendants, but denied the plea and motion with respect to the individually named defendants (appellants). On appeal, appellants argue that the district court erred in not dismissing Wise’s claims against them. We will reverse and render judgment dismissing those claims.

BACKGROUND

Wise, a former cadet in the Austin Police Academy, alleged that on October 1, 2018, he was engaged in “a very strenuous series of physical exercises in an activity entitled Stress Reaction Training.” The training was scheduled from 2:00 p.m. to 4:00 p.m. on a day when the high temperature in Austin was approximately 88 degrees and the relative humidity was approximately 94% at 2:24 p.m., with a heat index of 100 degrees. The cadets were required to perform these training exercises “in heavy clothing while wearing a service belt which held various items of equipment.” According to Wise,

It is common knowledge that under such circumstances, hydration is one of the foremost considerations and absolutely necessary to avoid heat related injury or illness. The stated policy of the Austin Police Department was to encourage and not discourage the cadets from drinking water at any time during these activities. Despite the stated policy, instructors did discourage the cadets from drinking water except at designated intervals. It was not within the authority of the Defendants to violate the stated policy of the Austin Police Department.

Wise alleged that each of the individually named defendants was “superior in rank to each of the cadets” and was, “in some capacity, a supervisor of the cadets and of the Stress Reaction Training and each was responsible to implement the stated policies of the Austin Police Department.” Wise further alleged that each of the individually named defendants “failed to implement the stated policies with respect to ensuring that the cadets remained properly hydrated while engaging in strenuous exercise during the Stress Reaction Training on October 1, 2018.”

Wise was one of nine cadets who required medical attention during the training and one of five cadets who were transported to various hospitals. Wise was “hospitalized after he became incoherent and unable to walk at approximately 4:45 p.m.” and “became incapacitated about an hour and a half after the first three cadets required medical attention and the first nine emergency vehicles began arriving at the Academy.” Wise claimed that “[a]t no time during that 90-minute interval did the Stress Reaction Training instructors stop discouraging the cadets from drinking water except at designated intervals.”

*2 Wise alleged that the individually named defendants “intentionally prevented and intentionally failed to permit the cadets to remain properly hydrated and/or failed to ensure that the cadets remained properly hydrated” and that “[t]he acts complained of were not done in good faith and were not within the scope of Defendants’ employment.” According to Wise, the defendants “witnessed eight cadets becoming incapacitated as a result of heat and hydration illness or injury before [Wise]” was injured and “also saw eight emergency vehicles respond to these emergencies.” Thus, Wise claimed, “the individual Defendants had not only subjective awareness that injuries had occurred and would continue to occur as a result of this practice, they had actual, objective and irrefutable evidence that such injuries had occurred and would continue to occur before [Wise] became incapacitated.” Wise alleged that despite this knowledge, “the Defendants continued to discourage drinking water until after [Wise]’s injury.”

Wise further alleged that he “had already sustained heat exhaustion when Defendants became aware of his condition,” but they “did not summon medical help at that time.” Consequently, “[f]or the next several minutes, [Wise]’s condition deteriorated from simple heat exhaustion” to additional, more serious injuries, including heat stroke. Wise claimed that “the Defendants knew that the Plaintiff had already suffered an injury and that he would suffer additional injuries unless he received immediate medical attention” and that, “[d]espite this knowledge, Defendants failed and refused to summon medical help promptly.” According to Wise, “[t]his failure was a proximate cause of the Plaintiff’s injuries for which he here sues the Defendants jointly and severally.”

In his petition, Wise also sought a declaratory judgment against the City of Austin and APD relating to the workers’ compensation benefits that he had received as a result of his injuries. Wise claimed that the City or APD “will assert a Workers’ Compensation lien and / or a subrogation claim on the Plaintiff’s recovery, if any, from the individual Defendants,” and thus he sought a declaration “as to whether or not the City of Austin is entitled to claim a lien and / or assert a subrogation claim, and if so, in what amount.” Wise explained that he “does not seek damages from the City of Austin arising from the ultra vires acts of the individual Defendants” but “simpl[y] requests for the City of Austin and the Austin Police Department to state the amount, if any, which the Plaintiff will owe to either or both units of government if he obtains a recovery from the individual Defendants.”

The defendants filed various responsive pleadings that included an amended plea to the jurisdiction and motion to dismiss. The defendants asserted in their plea and motion that by suing Manley in his official capacity as Chief of Police for APD, Wise had in effect sued the City. By doing so, the defendants claimed, Wise had sued both the City and its employees (the APD officers) in tort, which entitled the employees to dismissal of the tort claims against them under Section 101.106(e) of the Texas Tort Claims Act (TTCA). See Tex. Civ. Prac. & Rem. Code § 101.106(e). The defendants also moved for dismissal under Section 101.106(f) of the TTCA, which provides that if certain statutory requirements (discussed below) are satisfied, then “[o]n the employee’s motion, the suit against the employee shall be dismissed unless the plaintiff files amended pleadings dismissing the employee and naming the governmental unit as defendant on or before the 30th day after the date the motion is filed.”1 Id. § 101.106(f). Regarding Wise’s separate claim for declaratory relief under the Texas Uniform Declaratory Judgment Act (UDJA), the defendants argued that the City’s immunity had not been waived; that even if the City’s immunity had been waived, Wise’s claim against the City was not ripe for adjudication because the City had not yet asserted a subrogation claim; and that APD should be dismissed from the suit because it was a department of the City and not a separate legal entity that could sue or be sued.

*3 Following a hearing, the district court granted the defendants’ amended plea to the jurisdiction and motion to dismiss with respect to the City and APD, dismissing Wise’s claims against those defendants without leave to amend. The district court denied the amended plea to the jurisdiction and motion to dismiss with respect to appellants, the individually named defendants. This appeal followed.

STANDARD OF REVIEW

“Sovereign immunity protects the state and its various divisions, such as agencies and boards, from suit and liability, whereas governmental immunity provides similar protection to the political subdivisions of the state, such as counties, cities, and school districts.” Travis Cent. Appraisal Dist. v. Norman, 342 S.W.3d 54, 57–58 (Tex. 2011). An assertion of governmental immunity implicates the trial court’s jurisdiction and thus is properly asserted in a plea to the jurisdiction.2 Tarrant Regional Water Dist. v. Johnson, 572 S.W.3d 658, 664 (Tex. 2019); Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225–26 (Tex. 2004). “The trial court’s ruling on the plea is reviewed de novo on appeal.” Johnson, 572 S.W.3d at 664. We similarly review de novo a trial court’s denial of a government employee’s motion to dismiss based on claims of governmental immunity. See Garza v. Harrison, 574 S.W.3d 389, 400 (Tex. 2019).

“When a plea to the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts that affirmatively demonstrate the court’s jurisdiction to hear the cause.” Miranda, 133 S.W.3d at 226. “We construe the pleadings liberally in favor of the plaintiffs and look to the pleaders’ intent.” Id. “If the pleadings do not contain sufficient facts to affirmatively demonstrate the trial court’s jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiffs should be afforded the opportunity to amend.” Id. at 226–27. However, “[i]f the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend.” Id. at 227.

DISCUSSION

*4 The TTCA “provides a limited waiver of immunity for certain suits against governmental entities and caps recoverable damages.” Mission Consol. Indep. Sch. Dist. v. Garcia, 253 S.W.3d 653, 655 (Tex. 2008) (citing Tex. Civ. Prac. & Rem. Code § 101.023). However, “under the common law, ‘public employees (like agents generally) have always been individually liable for their own torts, even when committed in the course of employment,’ and to the extent the employee is not entitled to official immunity, the employee’s liability could be established in a suit against the employee individually.” Garza, 574 S.W.3d at 399 (quoting Franka v. Velasquez, 332 S.W.3d 367, 382 (Tex. 2011)). Thus, “[a]fter the Tort Claims Act was enacted, plaintiffs often sought to avoid the Act’s damages cap or other strictures by suing governmental employees, since claims against them were not always subject to the Act.” Garcia, 253 S.W.3d at 656. “To prevent such circumvention, and to protect governmental employees, the Legislature created an election-of-remedies provision,” section 101.106 of the TTCA, that “forces a plaintiff to decide at the outset whether an employee acted independently and is thus solely liable, or acted within the general scope of his or her employment such that the governmental unit is vicariously liable” for the employee’s tortious conduct. Id. at 656–57. “Because the decision regarding whom to sue has irrevocable consequences, a plaintiff must proceed cautiously before filing suit and carefully consider whether to seek relief from the governmental unit or from the employee individually.” Id. at 657.

In this case, appellants argue that Wise’s claims must be dismissed under Section 101.106(e) and Section 101.106(f) of the TTCA. Section 101.106(e) provides that “[i]f a suit is filed under this chapter against both a governmental unit and any of its employees, the employees shall immediately be dismissed on the filing of a motion by the governmental unit.” Tex. Civ. Prac. & Rem. Code § 101.106(e). Appellants assert that this provision applies because Wise sued Manley in his official capacity as Chief of Police of APD and that as a result, Wise’s suit was brought against the City of Austin. See Texas A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 844 (Tex. 2007) (“A suit against a [governmental] official in his official capacity ... actually seeks to impose liability against the governmental unit rather than on the individual specifically named and ‘is, in all respects other than name, .. a suit against the [governmental] entity.’ ” (quoting Kentucky v. Graham, 473 U.S. 159, 165 (1985))). Thus, in appellants’ view, Wise sued both the individually named officers and the City, which would mandate the dismissal of the officers from the suit immediately upon the City’s filing of the motion to dismiss. In response, Wise argues that he sued Manley only in his individual capacity and that his suit against the City was limited to his UDJA claim. Thus, in Wise’s view, Section 101.106(e) does not apply.

However, we need not decide whether Section 101.106(e) applies here because we conclude that dismissal was required under Section 101.106(f), which provides:

If a suit is filed against an employee of a governmental unit based on conduct within the general scope of that employee’s employment and if it could have been brought under this chapter against the governmental unit, the suit is considered to be against the employee in the employee’s official capacity only. On the employee’s motion, the suit against the employee shall be dismissed unless the plaintiff files amended pleadings dismissing the employee and naming the governmental unit as defendant on or before the 30th day after the date the motion is filed.

Tex. Civ. Prac. & Rem. Code § 101.106(f). “More succinctly, a defendant is entitled to dismissal upon proof that the plaintiff’s suit is (1) based on conduct within the scope of the defendant’s employment with a governmental unit and (2) could have been brought against the governmental unit under the Tort Claims Act.” Laverie v. Wetherbe, 517 S.W.3d 748, 752 (Tex. 2017).

Scope of employment

We first address whether the suit was based on conduct within the “scope of employment” of the APD officers. For purposes of the TTCA, “ ‘[s]cope of employment’ means the performance for a governmental unit of the duties of an employee’s office or employment and includes being in or about the performance of a task lawfully assigned to an employee by competent authority.” Tex. Civ. Prac. & Rem. Code § 101.001(5). The term is defined “broadly.” Garza, 574 S.W.3d at 400; see Tex. Gov’t Code § 311.005(13) (“ ‘Includes’ and ‘including’ are terms of enlargement and not of limitation or exclusive enumeration, and use of the terms does not create a presumption that components not expressed are excluded.”). “Conduct falls outside the scope of employment when it occurs ‘within an independent course of conduct not intended by the employee to serve any purposes of the employer.’ ” Garza, 574 S.W.3d at 400 (quoting Alexander v. Walker, 435 S.W.3d 789, 792 (Tex. 2014)).

*5 “[T]he critical inquiry is whether, when viewed objectively, ‘a connection [exists] between the employee’s job duties and the alleged tortious conduct.’ ” Id. at 401 (quoting Laverie, 517 S.W.3d at 753). “Simply stated, a governmental employee is discharging generally assigned job duties if the employee was doing his job at the time of the alleged tort.” Id. “For purposes of section 101.106(f), the employee’s state of mind, motives, and competency are irrelevant so long as the conduct itself was pursuant to the employee’s job responsibilities.” Id. The inquiry calls for “an objective assessment of whether the employee was doing her job when she committed an alleged tort, not her state of mind when she was doing it.” Laverie, 517 S.W.3d at 753. Thus, a connection between the employee’s job duties and the alleged tortious conduct exists “even if the employee performs negligently or is motivated by ulterior motives or personal animus so long as the conduct itself was pursuant to her job responsibilities.” Id.

Here, Wise alleged that during the training exercises that resulted in his injuries, each of the individually named defendants was “superior in rank to each of the cadets” and was, “in some capacity, a supervisor of the cadets and of the Stress Reaction Training, and each was responsible to implement the stated policies of the Austin Police Department,” but that each “failed to implement the stated policies with respect to ensuring that the cadets remained properly hydrated while engaging in strenuous exercise during the Stress Reaction Training on October 1, 2018.” Wise further alleged that the officers “intentionally prevented and intentionally failed to permit the cadets to remain properly hydrated and/or failed to ensure that the cadets remained properly hydrated” during the training. These allegations conclusively establish that “a connection exists” between the officers’ job duties, specifically their supervision of the cadets’ training exercises, and the alleged tortious conduct, i.e., their alleged failure to ensure that the cadets remained properly hydrated during the training. See Garza, 574 S.W.3d at 394 (concluding that requisite connection existed between police officer’s job responsibility to make arrests and his allegedly tortious conduct in fatally shooting suspect during arrest). Moreover, because Wise’s allegations conclusively prove the requisite “connection” between the officers’ job duties and the tortious conduct, a remand to allow Wise the opportunity to replead would be inappropriate here.3 See Clint Indep. Sch. Dist. v. Marquez, 487 S.W.3d 538, 559 (Tex. 2016) (“Generally, remand is a mechanism for parties, over whose claims the trial court may have jurisdiction, to plead facts tending to establish that jurisdiction, not for parties, over whose claims the trial court does not have jurisdiction, to plead new claims over which the trial court does have jurisdiction.”)

Wise argues that “[i]t is ludicrous to suggest that intentional injuries inflicted on Wise by the Appellant Officers” were done in the scope of their employment with the City. However, this Court has held that “intentional torts can fall within the scope of employment” for purposes of Section 101.106(f). McFadden v. Olesky, 517 S.W.3d 287, 297 (Tex. App.—Austin 2017, pet. denied); see also Fink v. Anderson, 477 S.W.3d 460, 467–69 (Tex. App.—Houston [1st Dist.] 2015, no pet.) (explaining that intentional torts of assault, theft, fraud, slander, and malicious prosecution can fall within employee’s “scope of employment”); Lopez v. Serna, 414 S.W.3d 890, 894 (Tex. App.—San Antonio 2013, no pet.) (concluding that intentional tort of theft was within scope of employment of prison officers who allegedly confiscated plaintiff’s property). The inquiry focuses not on whether the tort was intentional but on whether the employees were “doing their job” at the time of the alleged tort, as the officers were doing here. See Garza, 574 S.W.3d at 401; Laverie, 517 S.W.3d at 753; see also Alexander, 435 S.W.3d at 790, 792 (concluding that intentional torts allegedly committed by officers in course of arresting plaintiff, including assault, were committed within scope of officers’ employment).

*6 Wise argues in the alternative that “whether or not the acts complained of were outside the general scope of employment, they were ultra vires, and so are actionable against the defendants in their individual capacities.” See City of Houston v. Houston Mun. Emps. Pension Sys., 549 S.W.3d 566, 576 (Tex. 2018) (“Plaintiffs in ultra vires suits must ‘allege, and ultimately prove, that the officer acted without legal authority or failed to perform a purely ministerial act.’ ” (quoting City of El Paso v. Heinrich, 284 S.W.3d 366, 372 (Tex. 2009))). We disagree. “[U]ltra vires suits do not attempt to exert control over the state—they attempt to reassert the control of the state” by “requir[ing] state officials to comply with statutory or constitutional provisions” going forward. Heinrich, 284 S.W.3d at 372. Consequently, “ultra vires claimants are only entitled to prospective relief.” Houston Mun. Emps. Pension Sys., 549 S.W.3d at 576. “If the injury has already occurred and the only plausible remedy is monetary damages, an ultra vires claim will not lie.” Id. Wise’s suit against the officers is not seeking to bring the officers into compliance with the law. Rather, Wise is seeking from the officers only monetary damages for an injury that has already occurred. Such relief is not available in an ultra vires suit. See Lopez, 414 S.W.3d 895; see also Williams v. Valdez, No. 05-18-00213-CV, 2020 WL 2897181, at *3 (Tex. App.—Dallas June 3, 2020, no pet.) (mem. op.) (rejecting plaintiff’s premise that “section 101.106(f) does not apply because he has asserted an ultra vires claim”; concluding that “despite [plaintiff’s] description of his claim, he has not asserted an ultra vires claim and instead has asserted an intentional tort claim for which he seeks monetary damages from [the defendant]”).

Whether the claims “could have been brought” under the TTCA

We next address Section 101.106(f)’s requirement that the claims “could have been brought” under the TTCA. A claim “could have been brought under the Act” when the “claim is in tort and not under another statute that independently waives immunity.” Franka, 332 S.W.3d at 381 (holding that employee does not have to first prove that employer immunity has been waived under the TTCA to establish that he is entitled to dismissal under section 101.106). A tort is defined in part as “a breach of a duty that the law imposes on persons who stand in a particular relation to one another.” Tort, Black’s Law Dictionary (10th ed. 2014). Wise’s claims against the officers, who Wise acknowledges in his petition were “employees of the City of Austin Police Department” at the time of his injuries, allege that the officers breached a duty that they owed to the cadets as their supervising officers. Thus, Wise’s allegations against the officers are claims in tort and thus “could have been brought” against the City under the TTCA. See Franka, 332 S.W.3d at 381; see also Garcia, 253 S.W.3d at 659 (“Because the Tort Claims Act is the only, albeit limited, avenue for common-law recovery against the government, all tort theories alleged against a governmental unit, whether it is sued alone or together with its employees, are assumed to be ‘under [the Tort Claims Act]’ for purposes of section 101.106.”).

In sum, the undisputed allegations conclusively establish that section 101.106(f) applies to Wise’s suit against the officers and that the officers were entitled to be dismissed from the suit on that basis. See Garza, 574 S.W.3d at 406; Alexander, 435 S.W.3d at 792; McFadden, 517 S.W.3d at 298; see also Miranda, 133 S.W.3d at 227 (when pleadings affirmatively negate jurisdiction, “plea to the jurisdiction may be granted without allowing the plaintiffs an opportunity to amend”). Accordingly, to comply with section 101.106(f), Wise was required to dismiss the officers from his suit and name the governmental unit as the defendant for his tort claims “on or before the 30th day after the date the motion is filed.” See Tex. Civ. Prac. & Rem. Code § 101.106(f). Wise failed to do so. Consequently, the district court erred in denying appellants’ amended plea to the jurisdiction and motion to dismiss with respect to the individually named officers.

CONCLUSION

*7 We reverse the district court’s order denying appellants’ amended plea to the jurisdiction and motion to dismiss and, because Wise is not entitled to replead for the reasons discussed above, render judgment dismissing Wise’s claims against the individually named officers.4

Footnotes

1

Wise amended his pleadings twice but did not dismiss the officers from the suit in either his first or second amended petition, and by the time Wise filed his second amended petition, more than thirty days had passed since the filing of the motion to dismiss.

2

We note that in this appeal, appellants are not asserting the common-law doctrine of official immunity but instead are invoking the statutory right to dismissal under the election-of-remedies provisions of the TTCA. Official immunity is an affirmative defense that “shields government officials from personal liability for discretionary acts in good faith and within the scope of their authority.” Railroad Comm’n v. Gulf Energy Expl. Corp., 482 S.W.3d 559, 567 (Tex. 2016) (citing Ballantyne v. Champion Builders, Inc., 144 S.W.3d 417, 424 (Tex. 2004)). In contrast, Section 101.106(e) of the TTCA provides for “immediate dismissal” of governmental employees from a suit filed “against both a governmental unit and any of its employees” upon filing of a motion to dismiss by the governmental unit, Tex. Civ. Prac. & Rem. Code § 101.106(e), and Section 101.106(f) of the TTCA, if applicable, “essentially prevents an employee from being sued at all for work-related torts and instead provides for a suit against the governmental employer,” Garza v. Harrison, 574 S.W.3d 389, 400 (Tex. 2019). In short, by moving for dismissal of the officers under the election-of remedies provisions of the TTCA, “defendants [are] asserting claims of governmental immunity,” Franka v. Velasquez, 332 S.W.3d 367, 371 n.9 (Tex. 2011), not official immunity.

3

Remand would also be inappropriate because Wise already had an opportunity to replead and in fact repleaded twice after appellants filed their plea to the jurisdiction and motion to dismiss. See Clint Indep. Sch. Dist. v. Marquez, 487 S.W.3d 538, 558–59 (Tex. 2016) (“Appellate courts generally must remand a case to afford parties an opportunity to cure jurisdictional defects in their pleadings when the parties did not have that opportunity in the first instance because the jurisdictional issue arose for the first time on appeal.”).

4

Appellants have filed a motion to strike the appendix to Wise’s brief, arguing that it contains documents that are outside of the record, were not considered by the district court in its ruling, and thus may not be considered by this Court on appeal. We have not considered in our analysis any documents outside of the record and dismiss appellants’ motion as moot.

Court of Appeals of Texas, Austin.

PHI AIR MEDICAL, LLC, Appellant

v.

TEXAS MUTUAL INSURANCE COMPANY, Hartford Underwriters Insurance Company, TASB Risk Management Fund, Transportation Insurance Company, Truck Insurance Exchange, Twin City Fire Insurance Company, Valley Forge Insurance Company, Zenith Insurance Company, and Texas Department of Insurance, Division of Workers Compensation, Appellees

NO. 03-17-00081-CV

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Filed: February 3, 2022

ON REMAND

FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-15-004940, THE HONORABLE JAN SOIFER, JUDGE PRESIDING

Attorneys & Firms

Shelby Leigh O’Brien, Craig T. Enoch, Austin, Amy L. Prueger, for Appellant.

James M. Loughlin, Austin, for Appellees Truck Insurance Exchange, Transportation Insurance Company, Zenith Insurance Company, Valley Forge Insurance Company, Twin City Fire Insurance Company, TASB Risk Management Fund.

Lisa A. Bennett, for Appellee Texas Department of Insurance, Division of Workers’ Compensation.

P. M. Schenkkan, Mary Barrow Nichols, Austin, Matthew Baumgartner, Bryan W. Jones, for Appellee Texas Mutual Insurance Company.

Before Justices Goodwin, Baker, and Kelly

OPINION

Thomas J. Baker, Justice

*1 This case—before us again, this time on remand from the Texas Supreme Court—involves judicial review of decisions by the Texas Department of Insurance, Division of Workers Compensation (the Division), about the amount of reimbursement from insurers1 to which PHI Air Medical, LLC, is entitled for providing air-ambulance services to injured workers who are covered under the Texas Workers’ Compensation Act (the TWCA or Act). See generally Tex. Lab. Code §§ 401.001419.007. The Texas Supreme Court reversed our holding that certain provisions of the Act and the Division’s regulations prescribing reimbursement amounts are preempted by the federal Airline Deregulation Act (ADA), see 49 U.S.C. § 41713, and remanded the cause to us to consider the issues we did not previously address, see PHI Air Medical, LLC v. Texas Mutual Insurance Company, 549 S.W.3d 804, 816 (Tex. App.—Austin 2018), rev’d, 610 S.W.3d 839, 843 (Tex. 2020). For the following reasons, we will affirm the portion of the trial court’s judgment determining that the ADA does not preempt any of the challenged TWCA provisions but reverse its remaining judgment and remand this cause to the trial court for further proceedings.

REGULATORY FRAMEWORK

PHI provides emergency air-ambulance services and is licensed as an air carrier by the Federal Aviation Administration and as an air taxi by the United States Department of Transportation, subjecting it to federal oversight. See, e.g., 49 U.S.C. § 41712(a) (prohibiting air carriers from engaging in unfair, deceptive, or anti-competitive practices). As a provider of emergency medical services (EMS), PHI is also subject to state regulation. See, e.g., 25 Tex. Admin. Code § 157.36(b) (2021) (Dep’t of State Health Servs., Criteria for Denial and Disciplinary Actions for EMS Personnel and Applicants and Voluntary Surrender of a Certificate or License) (providing reasons for which EMS certification may be suspended or revoked, including for failure to respond to calls while on duty or for discriminating against patients, including based on their ability to pay). Furthermore, when PHI transports an injured worker in Texas who is covered by workers’ compensation insurance, the TWCA governs its payment for the services. See generally Tex. Lab. Code §§ 401.001–419.007.

In enacting the TWCA, in 1913, the legislature attempted to balance two competing interests: providing compensation for injured employees and protecting employers from the costs of litigation. Texas Mut. Ins., 610 S.W.3d at 843 (citing SeaBright Ins. v. Lopez, 465 S.W.3d 637, 642 (Tex. 2015)). A balance was struck by permitting workers to “recover from subscribing employers without regard to the workers’ own negligence” while “limiting the employers’ exposure to uncertain, possibly high damages awards permitted under the common law.” Id. In 1989, the legislature “revamped” the TWCA, creating what is now the Division to implement and enforce the Act’s provisions. Id. The Act is the exclusive remedy for an employee’s non-intentional, “work-related injuries” and exempts the employer, its agents, and its employees from common-law liability claims based on negligence or gross negligence. See Tex. Lab. Code § 408.001; Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex. 1985).

*2 Among other provisions, the Act provides PHI—as a healthcare provider that treats injured, covered workers—with a direct statutory claim for reimbursement for its services from a workers’ compensation insurer. See Tex. Lab. Code § 408.027(a). Under the Act, providers may contract with insurers to determine the amount of reimbursement, see id. § 413.011(d-4), but when (as here) there is no contract between the provider and insurer, the Act strictly regulates the amount that insurers must pay healthcare providers for treating workers injured on the job, delegating the promulgation of “fee guidelines” to the Division, see id. § 413.011; 28 Tex. Admin. Code §§ 134.1 (2021) (Tex. Dep’t of Ins., Med. Reimbursement), .203 (2021) (Tex. Dep’t of Ins., Med. Fee Guidelines for Pro. Servs.).2 When the Division has not adopted an applicable guideline for a particular service, the insurer must reimburse the provider a “fair and reasonable” amount. See Tex. Lab. Code § 413.011(d); 28 Tex. Admin. Code § 134.1(a), (e)–(f). If the insurer does not reimburse the full amount of the provider’s billed charges, the provider generally may not “balance bill” its customer—the covered worker—for the unpaid portion. See Tex. Lab. Code § 413.042 (“A health care provider may not pursue a private claim against a workers’ compensation claimant for all or part of the cost of a health care service provided to the claimant by the provider unless ... the injury is finally adjudicated not compensable under this subtitle[.]”).3 A provider dissatisfied with the amount an insurer pays may seek review by the Division. See id. § 413.031(a) (specifying procedures for resolution of medical-fee disputes between providers and insurers). In turn, a party who disagrees with the Division’s ruling is entitled to a contested-case hearing conducted by the State Office of Administrative Hearings (SOAH) and, ultimately, judicial review. Id. § 413.031(k), (k-1).

PROCEDURAL BACKGROUND

This lawsuit arises from PHI’s provision of transport to thirty-three covered workers between 2010 and 2012 but represents only “a fraction of the air ambulance fee disputes pending agency review.” See Texas Mut. Ins., 610 S.W.3d at 844. A dispute arose between PHI and Insurers beginning in 2012 when PHI and other air-ambulance providers began filing fee disputes (commonly called requests for medical-fee dispute resolution (MFDR)) with the Division, seeking to recover the full amount of their billed charges rather than the lower reimbursement rate of 125% of the Medicare rate for air-ambulance services that Insurers had been paying, purportedly following the Division’s fee guidelines. Before the Division, PHI argued that the ADA preempted the TWCA’s reimbursement provisions, the effect of which, it argued, was to require Insurers to pay PHI its billed charges in full. See Morales v. Trans World Airlines, Inc., 504 U.S. 374, 386–88 (1992) (holding that ADA preempts state laws and regulations “relating to rates” of any air carrier); see also 49 U.S.C. § 41713 (“Preemption of authority over prices, routes, and service”). The Division dismissed the thirty-three fee disputes, citing its lack of jurisdiction because of ADA preemption.

Insurers requested a contested-case hearing at SOAH for review of the Division’s determination. See Tex. Lab. Code § 413.0312(e). The SOAH administrative law judge (ALJ) determined that the ADA does not preempt the reimbursement provisions because the McCarran-Ferguson Act (MFA) reverse-preempts the ADA by “explicitly reserv[ing] the regulation of insurance to the states and provid[ing] that any federal law that infringes upon that regulation is preempted by the state insurance laws, unless the federal law specifically relates to the business of insurance.” See 15 U.S.C. § 1012(b) (“No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance ... unless such Act specifically relates to the business of insurance.”). SOAH remanded the dispute to the Division for a determination on the merits.

Following remand, the Division rejected PHI’s renewed argument about ADA preemption, agreed with the ALJ’s reverse-preemption determination, and considered the disputes on their merits. The Division issued decisions in each of the thirty-three disputes determining that the “fair and reasonable” standard applied—rather than the lower 125%-of-Medicare standard for which Insurers advocated—and that PHI’s full billed charges were, on the basis of the factual record, fair and reasonable, and Insurers were thus required to pay the charges in full. See 28 Tex. Admin. Code § 134.1(f) (outlining “fair and reasonable” standard).

*3 Insurers requested another contested-case hearing at SOAH, and the ALJ consolidated the thirty-three cases for an evidentiary hearing and de novo review. In his final decision and order, the ALJ noted that “a threshold legal issue exists—namely, whether the TWCA is preempted by the ADA.” The ALJ “decline[d] to reverse his prior ruling” and “continue[d] to find that the [MFA] applies to this case and results in the TWCA preempting the application of the ADA.” Notably, the ALJ rejected PHI’s “framing” of the preemption issue—in which PHI attempted to challenge merely the TWCA’s reimbursement provisions and not the entirety of the Act—because of his conclusion that the “reimbursement provisions are a non-severable part of a broad regulatory scheme that affects both the price and service of an air carrier.” The ALJ declined to grant PHI’s requested relief that, absent a preemption determination, the ALJ “issue a ruling that PHI could balance bill the workers’ compensation claimants who received the services” because such issue “goes beyond the scope of the ALJ’s authority” and is “more properly within the jurisdiction of the judiciary.” In his final decision and order, the ALJ concluded that the fair-and-reasonable standard applied and that, thereunder, PHI was entitled to reimbursement in the amount of 149% of the Medicare standard instead of the higher, full-billed charges that PHI requested.

Insurers filed in district court a petition for judicial review of the ALJ’s final decision and order. See Tex. Lab. Code § 413.031(k-1); Tex. Gov’t Code § 2001.174. In their petition, Insurers argued that either Rule 134.203(d)(2)’s 125%-of-Medicare reimbursement provision applies or that, alternatively, the “fair and reasonable” standard applies but would similarly result in a reimbursement rate of 125% of Medicare based on the facts. PHI filed a counter-petition for judicial review in which it asserted that the ADA preempts the TWCA’s reimbursement provisions or, alternatively, that it is entitled to its full billed charges. Insurers filed an amended petition adding a declaratory-judgment claim, seeking a declaration that the ADA does not preempt the TWCA’s reimbursement provisions. PHI filed a counterclaim seeking a declaratory judgment that the ADA does preempt the TWCA’s reimbursement provisions. In addition to directly challenging the reimbursement provisions, PHI “reserve[d] the right to request alternative relief, as applicable and warranted, that the Court declare the ADA preempts [the balance-billing prohibition] and any related statutes, rules or regulations where violation of that prohibition constitutes an administrative violation or warrants a sanction or fine.” Insurers filed a plea to the jurisdiction asserting that the trial court lacked jurisdiction over PHI’s counter-petition for judicial review because it was untimely filed. The trial court granted Insurers’ plea to the jurisdiction, dismissing PHI’s counter-petition.

Insurers and PHI filed competing motions for summary judgment. In their motion, Insurers argued that they are entitled to judgment on their declaratory-judgment claim that the ADA does not preempt the TWCA’s reimbursement provisions and on their contention that the ALJ erred in making his 149%-of-Medicare determination because PHI is entitled to only 125% of Medicare regardless of whether the “fair and reasonable” standard applies or the Division’s Rule 134.203(d)(2) standard applies. In its motion, PHI argued that the ADA does indeed preempt the TWCA’s reimbursement provisions or balance-billing prohibition and that, in any event, the “fair and reasonable” standard applies and Insurers’ argument that 125% of Medicare meets that standard is not supported by the record. The trial court rendered an order granting Insurers’ motion for summary judgment and denying PHI’s motion; determining that (a) the ADA does not preempt the TWCA’s reimbursement provisions or balance-billing prohibition and (b) PHI is not entitled to any payment greater than 125% of Medicare; and remanding the cause to the Division. PHI perfected this appeal from the trial court’s summary judgment.

In our prior opinion, we explicitly addressed only part of PHI’s first issue, in which it contended that the ADA preempts the reimbursement provisions. See PHI Air Med., 549 S.W.3d at 808 n.2. Because PHI argued that it challenged the balance-billing prohibition only in the alternative, and because we determined that the ADA preempts the reimbursement provisions, we did not reach PHI’s challenge to the balance-billing prohibition or its three other issues. See id. at 808 n.2, 816 n.14. Because the supreme court has reversed our determination that the ADA preempts the reimbursement provisions, we now address PHI’s remaining issues. See Texas Mut. Ins., 610 S.W.3d at 855; Tex. R. App. P. 60.2(c), (d).

DISCUSSION

Whether the ADA preempts Section 413.042

*4 The parties agree that the question of whether the ADA preempts TWCA Section 413.042—the balance-billing prohibition—is before us on remand. We therefore now consider whether, on this record, PHI established that Section 413.042 has a “significant effect” on its prices for carrying injured customers by air. See Texas Mut. Ins., 610 S.W.3d at 848–49 (citing Morales, 504 U.S. at 388). PHI insists that in performing our preemption analysis we must address the “combined effect” of the reimbursement provisions and the balance-billing prohibition rather than merely the balance-billing prohibition in isolation. We agree with PHI that we must consider the Act as a whole in performing our analysis, as the supreme court has directed. See id. at 851–52 (“Whether the Supremacy Clause displaces state law regulating a subject within its reserved powers should be decided by considering the state statutory and regulatory scheme as a whole, not just the particular provision that an individual litigant prefers to challenge.”); see also id. at 852–53 (disagreeing with this Court’s conclusion that “the specific rate-setting provisions at issue” could be severed from overall Texas reimbursement scheme).

In conducting anew our preemption analysis—considering the TWCA “as a whole,” inclusive of the balance-billing prohibition and reimbursement provisions—we are directly informed by the supreme court’s limitation of its preemption analysis to the record before it and a determination of whether PHI met its summary-judgment burden: “PHI must come forward with evidence proving that [the challenged provisions] have a significant effect on price to obtain a summary judgment of preemption.” See id. at 842, 849–50, 855.4 The supreme court based its holding—that the ADA did not preempt the reimbursement provisions—on the record, noting that the facts simply did not “bear out” PHI’s position that it would, in fact, recover significantly less for its services under the fair-and-reasonable standard than its full billed amount. Id. at 850. The supreme court supported this conclusion largely on the fact that three different tribunals—the Division, the ALJ, and the district court—had determined three different “fair and reasonable” amounts to which PHI was entitled, based on the same underlying evidence.5 Id. at 850–51. Reasoning that because it “is possible” under the fair-and-reasonable standard, and on this record, that the amount of PHI’s reimbursement could be (1) the full amount PHI billed, (2) the average price PHI is paid for its air-ambulance services, or (3) a price that PHI bargained for in the market, PHI had not demonstrated as a matter of law that the challenged standard has “a significant effect on PHI’s prices.” See id. at 851; cf. id. at 851–52 (distinguishing this case from opinions of Fourth, Tenth, and Eleventh federal circuits determining that ADA preempted state workers’ compensation schemes where those schemes employed fee schedules setting maximum reimbursement limits in conjunction with balance-billing prohibitions).

Taking the supreme court’s analysis and employing the same reasoning to whether the balance-billing prohibition—in the context of the entire Act—has a “significant effect” on PHI’s prices, we must similarly conclude that PHI did not meet its summary-judgment burden. In sum, “it is possible” under the fair-and-reasonable standard that PHI’s reimbursement could be the full amount it billed, and assuming that scenario is the prevailing one (see discussion infra about whether the trial court properly dismissed PHI’s petition for judicial review), then the balance-billing prohibition would have no effect on PHI’s prices, not just no “significant” effect. See id. at 851 (reasoning that “these [three] possibilities show that the fair and reasonable standard does not have a significant effect on PHI’s prices” and that, therefore, “the ADA does not preempt th[e] state reimbursement standard”). In other words, because of the supreme court’s holding, it is now indisputable that the reimbursement provisions do not have a significant effect on PHI’s prices, at least at this stage in the proceedings when the proper amount of PHI’s reimbursement has not been finally adjudicated (by this Court or another tribunal of last resort).6 If PHI ultimately prevails on obtaining a reimbursement determination awarding it the full amount of its billed charges, such full payment would obviate any need to balance-bill the injured worker (because there would be no balance) and the prohibition would have no effect on the “price” PHI receives. PHI has not met its burden to show, therefore, that as a matter of law the balance-billing prohibition has a “significant effect” on its prices. Accordingly, on this record, we hold that the ADA does not preempt Section 413.042 of the Act or any of the challenged provisions of the Act, when properly considered together.7

Whether the trial court had jurisdiction over Insurers’ petition for judicial review

*5 In its second issue, PHI contends that the trial court lacked jurisdiction over Insurers’ suit because Insurers failed to exhaust their administrative remedies by not requesting a benefit review conference (BRC) under Chapter 410 of the Act.8 See Tex. Lab. Code §§ 410.024(a) (“Except as otherwise provided by law or commissioner rule, the parties to a disputed compensation claim are not entitled to a contested case hearing or arbitration on the claim unless a benefit review conference is conducted as provided by this subchapter.”); 413.0312 (requiring party to medical-fee dispute that “remains unresolved after any applicable review under Sections 413.031(b) through (i)” to “adjudicate the dispute in the manner required by Subchapter B, Chapter 410”). Insurers and the Division respond that the requirement of a BRC is not applicable to the claims at issue because they were filed before June 1, 2012. We agree with Insurers and the Division.

When the legislature amended the Act in 2011, in House Bill 2605, and added the requirement of a BRC in newly added Section 413.0312, it specifically provided that “Section 413.0312 ... as added by this Act, appl[ies] only to the appeal of a medical fee dispute ... that is based on a review conducted by the [D]ivision ... on or after June 1, 2012.” Act of May 29, 2011, 82nd Leg., R.S., 2011 Tex. Gen. Laws 3010, 3023, ch. 1162, § 44 (HB 2605) (further providing that appeals based on Division review before that date are “governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose”). The record conclusively establishes that all thirty-three of the disputes at issue here were first filed with the Division before June 1, 2012.

Nonetheless, PHI argues that the applicable date for determining whether Section 413.0312 and its BRC requirement apply is not the initial 2012 filing date of the MFDR requests but, rather, the 2014 date on which the Division began conducting its merits review of the thirty-three fee disputes on remand from SOAH. Given the lengthy and unusual procedural history of these fee disputes, we conclude that the text in HB 2605 referring to “a review conducted by the Division” on or after June 1, 2012, is ambiguous because it can be reasonably construed to refer to any of the following dates: (1) the earliest date on which the Division could possibly have begun its review for the first time (i.e., the filing date of PHI’s thirty-three requests for MFDR, triggering review by the Division); (2) the date on which the Division issued a written decision dismissing the thirty-three disputes for lack of jurisdiction due to ADA preemption; (3) the date on which the Division began a second review of the disputes on the merits, after the SOAH remand; or (4) the date on which the Division issued a decision on the merits after considering the disputes on remand from SOAH. See Texas State Bd. of Exam’rs of Marriage & Fam. Therapists v. Texas Med. Ass’n, 511 S.W.3d 28, 41 (Tex. 2017) (“A statute is ambiguous if its words are susceptible to two or more reasonable interpretations, and we ‘cannot discern legislative intent in the language of the statute itself.’ ” (citation omitted)).

When a statute is ambiguous, we give “serious consideration” to an agency’s interpretation of it. Combs v. Health Care Servs. Corp., 401 S.W.3d 623, 630 (Tex. 2013). The Division has construed the applicable date for Section 413.0312’s BRC requirement as constituting the date on which a MFDR request is first filed. See 28 Tex. Admin. Code §§ 133.307(a) (“This section applies to a request” for MFDR “that is filed on or after June 1, 2012.”), .307(g)(1) (“A party seeking review of an MFDR decision must request a benefit review conference no later than 20 days from the date the MFDR decision is received by the party.”). It is undisputed that PHI first requested MFDR for the thirty-three fee disputes before June 1, 2012, and it would be unreasonable to construe the Division’s merits-based review of those same thirty-three disputes after remand from SOAH as the filing of new MFDRs. The Division’s construction of HB 2605’s BRC requirement provides unambiguous notice to litigants of the requirements for judicial review, lends predictability to proceedings before the Division, and supports consistency throughout a particular dispute’s journey from start to finish regardless of the number of times or variety of iterations the Division or ALJ consider the same underlying dispute. See Tex. Gov’t Code § 311.023 (including among factors courts may consider in construing statutes “the consequences of a particular construction”). Accordingly, we hold that Insurers were not required to request a BRC to meet the exhaustion-of-administrative-remedies requirement and that the trial court had jurisdiction over Insurers’ petition for judicial review. We overrule PHI’s second issue.

Whether the trial court erred in granting Insurers’ plea to the jurisdiction

*6 In its third issue, PHI contends that the trial court erred in granting Insurers’ plea to the jurisdiction and dismissing PHI’s counter-petition for judicial review. We agree with PHI and sustain its third issue.

In their plea, Insurers argued that PHI failed to timely file its petition and that timely filing is a jurisdictional prerequisite. See Tex. Lab. Code § 413.031(k–1) (providing for judicial review of Division’s or SOAH’s final decision, including requirement that—for medical-fee disputes—suit be filed “not later than the 45th day after the date on which [SOAH] mailed the party the notification of the decision”); Otieno v. Texas Bd. of Nursing, No. 03-14-00251-CV, 2015 WL 4909766, at *2 (Tex. App.—Austin Aug. 11, 2015, no pet.) (mem. op.) (“This Court has consistently held that failure to timely file a suit for judicial review deprives the district court of subject-matter jurisdiction.”).

However, since this Court’s opinion in Otieno, the supreme court has held that a similarly worded section of the Act, although mandatory, was not jurisdictional, noting that the high court has been “reluctant to conclude that a provision is jurisdictional, absent clear legislative intent to that effect.” Texas Mut. Ins. v. Chicas, 593 S.W.3d 284, 286–87 (Tex. 2019) (quoting In re United Servs. Auto. Ass’n, 307 S.W.3d 299, 306 (Tex. 2010) (USAA)). In Chicas, the supreme court considered Section 410.252 of the Act, which provides that a party seeking to appeal a decision of the Division’s appeals panel “may seek judicial review by filing suit not later than the 45th day after the date on which the division mailed the party the decision of the appeals panel.” Id. at 288 (citing Tex. Lab. Code § 410.252(a)). Section 413.031(k-1), at issue here, is worded similarly. See Tex. Lab. Code § 413.031(k-1).

In determining in Chicas that the forty-five-day deadline for filing suit for review of the decision of an appeals panel was not jurisdictional, the supreme court found dispositive the following four factors: (1) the absence of explicit language in the statute indicating the legislature intended the deadline to be jurisdictional, i.e., any language referring to the trial court’s jurisdiction; (2) the absence in the statute of any specific consequences for noncompliance with the timeline; (3) the recognition that treatment of the deadline as merely mandatory rather than jurisdictional would not frustrate any of the Act’s purposes; and (4) the fact that if the deadline were jurisdictional, an unfavorable consequence would be that final judgments would be vulnerable and subject to future attack on the ground that the deadline was not met. See Chicas, 593 S.W.3d at 289.

Chicas is the supreme court’s latest opinion demonstrating a retreat during the last twenty years from its rule nearly a century ago that “strict compliance with all statutory prerequisites is necessary to vest a trial court with jurisdiction.” Prairie View A & M Univ. v. Chatha, 381 S.W.3d 500, 510 (Tex. 2012) (citing Mingus v. Wadley, 285 S.W. 1084, 1087 (1926)). That rule “remained the law for decades and, consistent with Mingus, multiple courts of appeals treated the statutory deadline for seeking judicial review of appeals-panel decisions as mandatory and jurisdictional.” Chicas, 593 S.W.3d 284 (collecting cases). However, beginning in 2000, the supreme court “identified concerns with the approach to subject-matter jurisdiction that [it] set out in Mingus.Id. (citing Dubai Petrol. Co. v. Kazi, 12 S.W.3d 71, 76 (Tex. 2000)). Dubai overruled Mingus “to the extent that it characterized the plaintiff’s failure to establish a statutory prerequisite as jurisdictional,” noting that “the modern direction of policy is to reduce the vulnerability of final judgments to attack on the ground that the tribunal lacked subject matter jurisdiction.” Dubai, 12 S.W.3d at 76; see also USAA, 307 S.W.3d at 304 (holding that two-year statutory deadline for filing suit alleging employment discrimination is mandatory but not jurisdictional). After setting out the above four permissible factors for determining whether a statutory filing deadline is jurisdictional, Chicas explicitly overruled several cases from courts of appeals that—after Dubai and USAA—“continued to hold that the 45-day deadline to file suit under section 410.252(a) is jurisdictional without applying the USAA analysis to decide the issue.” Chicas, 593 S.W.3d at 287, 291 (listing cases).

*7 The statute at issue here appears in the same Act and reads substantially the same as that in Chicas, and therefore the supreme court’s analysis of its four prescribed factors applies equally and controls here. We conclude that Chicas implicitly overruled this Court’s Otieno case and others in that line, to the extent that they conflict with Chicas’s holding. See Otieno, 2015 WL 4909766, at *2; see, e.g., Jones v. State Bd. of Educator Certification, 315 S.W.3d 237, 244 (Tex. App.—Austin 2010, pet. denied); HCA Healthcare Corp. v. Texas Dep’t of Ins., 303 S.W.3d 345, 352 (Tex. App.—Austin 2009, no pet.).

We hold that Section 413.031(k-1)’s requirement that a petition for judicial review be filed within forty-five days of the mailing of a SOAH decision is not a jurisdictional prerequisite to suit. Accordingly, we sustain PHI’s third issue and hold that the trial court erred in granting Insurers’ plea to the jurisdiction and dismissing PHI’s counter-petition for judicial review.

What amount of reimbursement is appropriate

In its final issue, PHI contends that the trial court erred in concluding that 125% of the Medicare rate is sufficient reimbursement and in remanding the fee disputes to SOAH with instructions that no further monies are due to PHI. PHI argues that under the applicable “fair and reasonable” standard, it is entitled to its full billed charges. It asks this Court to reverse the trial court’s summary judgment that 125% of Medicare is a proper reimbursement rate and render judgment that it is “entitled to its full billed charges.”

However, because the trial court dismissed PHI’s counter-petition for judicial review—in which PHI made its assertion about entitlement to its full billed charges—and because PHI’s only live claim when the trial court rendered summary judgment was its counterclaim for declaratory relief (in which it raised arguments pertaining only to preemption and reverse-preemption), the trial court has not in the first instance addressed PHI’s arguments about its entitlement to its full billed charges. Furthermore, PHI’s argument about its full billed charges is based on its argument that the “fair and reasonable” standard applies instead of the Division’s fee guidelines (requiring a reimbursement rate of 125% of Medicare), which is a dispute that the trial court did not explicitly resolve in its final summary judgment, which merely determined that a reimbursement rate of 125% was proper. The trial court’s judgment reads, “The Court further considered the Petitioners’ judicial review challenge ... and concluded that no additional payments greater than the 125% of Medicare amounts already paid are due.” The trial court’s judgment does not specify whether its determination that no greater amount is due than 125% of Medicare is based on the determination that the “fair and reasonable” standard applies or that a specific Division fee guideline applies.9 Insurers made arguments in their summary-judgment motion supporting 125% of Medicare under either standard.

*8 We thus conclude that because the trial court has not in the first instance determined whether the “fair and reasonable” standard applies (which would potentially allow PHI to obtain reimbursement in the amount of 125% or at an amount greater than 125% of Medicare, up to and including its full billed charges) or whether a specific Division fee guideline applies (which would limit PHI’s reimbursement to only 125% of Medicare), we do not reach PHI’s fourth issue on appeal and instead note that this dispute about which standard applies is an integral part of PHI’s issues raised in its counter-petition for judicial review, which we are remanding to the trial court.

CONCLUSION

Having determined that the trial court did not err in determining that the ADA does not preempt the provisions of the TWCA challenged by PHI, we affirm the corresponding portion of the trial court’s summary judgment. However, because we conclude that the trial court erred in granting Insurers’ plea to the jurisdiction and dismissing PHI’s counter-petition for judicial review, we reverse the trial court’s order granting the plea and dismissing PHI’s counter-petition. We also reverse the portion of the trial court’s summary judgment determining that PHI is entitled to no reimbursement greater than 125% and remanding the cause to SOAH and remand this cause to the trial court for further proceedings consistent with this opinion.

Footnotes

1

Appellee insurers are Texas Mutual Insurance Company, Hartford Underwriters Insurance Company, TASB Risk Management Fund, Transportation Insurance Company, Truck Insurance Exchange, Twin City Fire Insurance Company, Valley Forge Insurance Company, and Zenith Insurance Company (collectively, Insurers). The Division is also an appellee.

2

We refer to TWCA Section 413.011 and the Division’s Rules 134.1 and 134.201 collectively as the Act’s “reimbursement provisions.”

3

We refer to TWCA Section 413.042 as the “balance-billing prohibition.”

4

Throughout its opinion, the supreme court emphasized that the fact-specific inquiry is limited to the record before it. See Texas Mut. Ins. v. PHI Air Med., LLC, 610 S.W.3d 839, 842, 849, 850, 855 (Tex. 2020), cert. denied, 141 S.Ct. 2565 (2021).

5

The Division concluded that the full amount billed by PHI was fair and reasonable. The ALJ determined that 149% of the Medicare regulations was fair and reasonable, and the district court determined that 125% of Medicare was the fair and reasonable price.

6

Presumably the supreme court based its three “possibilities” analysis in large part on the fact that the proper amount of reimbursement under the fair-and-reasonable standard was still at issue and had not been finally adjudicated.

7

Because of this holding, we need not consider PHI’s contention that the MFA does not reverse-preempt the balance-billing prohibition. See Tex. R. App. P 47.1.

8

The exhaustion of administrative remedies is an issue of subject-matter jurisdiction and may, therefore, be raised for the first time on appeal. See Croysdill v. Old Republic Ins., 490 S.W.3d 287, 296 (Tex. App.—El Paso 2016, no pet.).

9

In dicta, the supreme court indicated that the “fair and reasonable” standard applies. See Texas Mut. Ins., 610 S.W.3d at 852 (“Texas does not have fixed reimbursement limits,” “uses a reasonableness standard—not a fee schedule—to determine reimbursement for air ambulance services,” and employs a “fact-driven standard—which requires insurers to pay 100% of fair and reasonable charges—[that] has no [forbidden significant] effect” on prices.).

Court of Appeals of Texas, Austin.

Greg ABBOTT, in his official capacity as Governor of Texas; and Ken Paxton, in his official capacity as Texas Attorney General, Appellants

v.

HARRIS COUNTY, Texas; Rodney D. Ellis, in his official capacity as a Harris County Commissioner; and Janeana White, M.D., in her offiical capacity as Harris County Local Health Authority, Appellees

NO. 03-21-00429-CV

|

Filed: January 6, 2022

FROM THE 345TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-21-003896, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING

Attorneys & Firms

Christian Menefee, Tiffany S. Bingham, Courtney Carlson, Moustapha Gassama, Sameer Birring, Jonathan Fombonne, Susannah Mitcham, Harris County Attorney’s Office, 1019 Congress St., Floor 15, Houston, TX 77002, for Appellee.

Benjamin L. Dower, Office of the Attorney General, P. O. Box 12548, Capitol Station, Austin, TX 78711-2548, for Appellant.

Before Chief Justice Byrne, Justices Triana and Kelly

OPINION

Chari L. Kelly, Justice

*1 In this interlocutory appeal, Greg Abbott, Governor of Texas, and Ken Paxton, Texas Attorney General (collectively, the “State Appellants”), assert that the trial court (1) erred in denying their plea to the jurisdiction and (2) abused its discretion in issuing a temporary injunction in favor of the plaintiffs. The primary issue in this case is whether Governor Abbott, under his authority granted by the Legislature in the Texas Disaster Act, may issue an executive order that prohibits local governmental entities and officials in Harris County from requiring face coverings. The Harris County officials view face-covering requirements as necessary to mitigate the effects of COVID-19 and protect the public health within their jurisdictions; conversely, the Governor views the requirements as more restrictive than necessary. Because we conclude that the trial court has subject-matter jurisdiction over the dispute and that it did not abuse its discretion in granting temporary-injunctive relief, we affirm the trial court’s orders.

BACKGROUND FACTS

On March 11, 2020, Harris County Judge Lino Hidalgo issued a local disaster declaration for Harris County “to allow [the County] to take measures to reduce the possibility of COVID-19 and promote the health and safety of Harris County residents.” See Tex. Gov’t Code § 418.108 (authorizing “the presiding officer of the governing body of political subdivision [to] declare a local state of disaster”). On March 13, Governor Abbott, in his official capacity, issued a statewide disaster declaration, certifying that “the novel coronavirus (COVID-19) poses an imminent threat of disaster for all Texas Counties.” See id. § 418.014 (authorizing governor to “declare a state of disaster” by executive order or proclamation). In the months that have followed, both Governor Abbott and Judge Hidalgo have continuously renewed their respective disaster declarations, and both declarations remain in effect. In addition, both the Governor and various Harris County local officials have issued orders designed to mitigate the threat posed by the COVID-19 pandemic.

On July 29, 2021, Governor Abbott issued the executive order that is the subject of this dispute, Executive Order GA-38 (GA-38). In relevant part, GA-38 states, “No governmental entity, including a county, city, school district, and public health authority, and no governmental official may require any person to wear a face covering or to mandate that another person wear face covering.” GA-38 also states that it “supersede[s] any face-covering requirement imposed by any local governmental entity or official.” In addition, relevant here, GA-38 purports to suspend several laws to “the extent necessary to ensure that local government entities or officials do not impose any such face-covering requirements,” including certain provisions in the Texas Disaster Act, pertaining to local officials’ powers under the Act; Subchapter E of Chapter 8 and Chapters 121, 122, and 341 of the Texas Health and Safety Code; and “[a]ny other statute invoked by any local governmental entity or official in support of a face-covering requirement.” Finally, GA-38 provides that “the imposition of any such face-covering requirement by a local governmental entity or official constitutes a ‘failure to comply with’ this executive order that is subject to a fine up to $1,000.”

*2 Both before and after Governor Abbott issued GA-38, local authorities in Harris County issued orders that require the wearing of face coverings under certain circumstances. On March 9 and August 17, 2021, Judge Hidalgo issued orders requiring, with certain exceptions, that all individuals wear face coverings in County buildings. On May 25, 2021, the Harris County Commissioners Court issued a similar order mandating that Harris County employees wear face coverings when inside County buildings for any purpose associated with their official duties. On August 12, the Harris County Local Health Authority issued an order requiring, with certain exceptions, that schools and licensed childcare centers in Houston and Harris County follow “Centers for Disease Control and Prevention (CDC) recommendations for universal masking” by requiring students, staff, teachers, and visitors to wear face coverings in school buildings and on school buses. There is no dispute that these orders violate the terms of GA-38, specifically, its ban on face-covering mandates.

On August 12, 2021, Harris County filed suit against the State Appellants in Travis County. Rodney Ellis, in his official capacity as a Harris County Commissioner, and Janeana White, M.D., in her official capacity as the Harris County Local Health Authority (collectively, with Harris County, the “Harris County Parties”), later intervened as co-plaintiffs. In the suit, the Harris County Parties seek temporary and permanent injunctive relief to prevent the State Appellants from enforcing GA-38 “against any local governmental entity, or employee or official of a local government entity in Harris County” as well as declarations that the Governor acted ultra vires in issuing GA-38 and that GA-38 is unconstitutional, invalid, and unenforceable. According to the Harris County Parties, Governor Abbott acted ultra vires in issuing GA-38 because his “suspension of laws exceeds his authority under the Texas Disaster Act” and because his prohibition on face-covering mandates “impermissibly purports to supersede Harris County Commissioners Court’s broad authority to set and enforce policies, rules, and regulations, over County employees.”

In response, the State Appellants filed a general denial and a plea to the jurisdiction. In their plea, the State Appellants asserted that the Harris County Parties lack standing to challenge GA-38 because no credible threat of prosecution to enforce GA-38 has been alleged and because the suit is barred by sovereign immunity. On August 13, 2021, the trial court issued an order granting the Harris County Parties’ application for a temporary restraining order, and on August 27, 2021, the court conducted an evidentiary hearing on the Plaintiffs’ request for temporary injunctive relief. The trial court later signed orders granting the Harris County Parties’ request for temporary injunctive relief and denying the State Appellants’ plea to the jurisdiction.

On appeal, the State Appellants contend that the trial court erred in denying their plea to the jurisdiction, see Tex. Civ. Prac. & Rem. Code § 51.014(a)(4), and that it abused its discretion in granting the Harris County Parties’ request for temporary injunctive relief, see id. § 51.014(a)(8). Because it implicates subject-matter jurisdiction, we will begin by reviewing the trial court’s ruling on the State Appellants’ plea to the jurisdiction before considering the merits of their challenge to the temporary injunction.

PLEA TO THE JURISDCTION

A plea to the jurisdiction is a dilatory plea that challenges the trial court’s subject-matter jurisdiction without regard to whether the asserted claims have merit. Harris County v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004); Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). Because whether a trial court has subject-matter jurisdiction is a question of law, we review a trial court’s ruling on a plea to the jurisdiction de novo. Texas Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225 (Tex. 2004).

The burden is on the plaintiff to affirmatively demonstrate the trial court’s jurisdiction. Heckman v. Williamson County, 369 S.W.3d 137, 150 (Tex. 2012). In reviewing a plea to the jurisdiction, we begin with the plaintiff’s live pleadings and determine if the plaintiff has alleged facts that affirmatively demonstrate the trial court’s jurisdiction to hear the cause. Miranda, 133 S.W.3d at 226. In making this assessment, we construe the plaintiff’s pleadings liberally, taking all assertions as true, and look to the plaintiff’s intent. Id. If a plea to the jurisdiction challenges the existence of jurisdictional facts, we may consider evidence and must do so when necessary to resolve the jurisdictional issues raised. Id. at 227; Bland, 34 S.W.3d at 555. That is, we review the evidence in the light most favorable to the nonmovant to determine whether a genuine issue of material fact exists. Town of Shady Shores v. Swanson, 590 S.W.3d 544, 550 (Tex. 2019) (citing Miranda, 133 S.W.3d at 221, 227-28). “Our ultimate inquiry is whether the plaintiff’s pleaded and un-negated facts, taken as true and liberally construed with an eye to the pleader’s intent, would affirmatively demonstrate a claim or claims within the trial court’s jurisdiction.” Brantley v. Texas Youth Comm’n, 365 S.W.3d 89, 94 (Tex. App.—Austin 2011, no pet.).

*3 In their plea to the jurisdiction, and now on appeal, the State Appellants argue that the trial court lacks subject-matter jurisdiction over the claims made by the Harris County Parties for two independent reasons. First, the State Appellants assert that the Harris County Parties’ claims are barred by sovereign immunity and that the allegations and the evidence fail to demonstrate that their suit falls within the ultra vires exception. Sovereign immunity implicates a court’s subject-matter jurisdiction and generally bars suits against the State or its subdivisions, absent a clear and unambiguous waiver of immunity by the Legislature. Nazari v. State, 561 S.W.3d 495, 500 (Tex. 2018). “In certain narrow instances, a suit against a state official can proceed even in the absence of a waiver of immunity if the official’s actions are ultra vires.” Hall v. McRaven, 508 S.W.3d 232, 238 (Tex. 2017).

In this case, whether the Harris County Parties have sufficiently pleaded facts or presented evidence that would support a valid ultra vires claim for the purpose of demonstrating subject-matter jurisdiction overlaps with the substantive issue of whether the Harris County Parties have established a probable right to relief on their ultra vires claim for the purpose of obtaining temporary injunctive relief. For the reasons more fully set forth in that portion of our opinion discussing the trial court’s grant of temporary injunctive relief, we conclude that the Harris County Parties met their burden of demonstrating a valid ultra vires claim. That is, we conclude that the Harris County Parties’ pleadings, liberally construed, and the evidence submitted by the parties, viewed in the light most favorable to the Harris County Parties, demonstrate facts sufficient to show that the Governor acted without authority in issuing GA-38 to the extent it prohibits local governmental entities and officials from instituting face-covering requirements.

Second, the State Appellants argue that the trial court erred in denying their plea to the jurisdiction because the Harris County Parties lack standing to bring their claims. Standing is implicit in the concept of subject-matter jurisdiction, and subject-matter jurisdiction is essential to the authority of a court to decide a case. Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993). Standing requires a “concrete injury to the plaintiff and a real controversy between the parties that will be resolved by the court.” Heckman, 369 S.W.3d at 154. That is, to establish standing, the plaintiff must show that: (1) the plaintiff was personally injured, (2) the alleged injury is “fairly traceable” to the defendant’s conduct, and (3) the alleged injury is “likely to be redressed by the requested relief.” Id. at 154-55 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). The State Appellants’ standing challenge focuses on the third element of standing, that is, whether the Harris County Parties have demonstrated that their alleged injury is likely to be redressed by the requested relief. The State Appellants argue that the lawsuit will not redress any injury suffered by the Harris County Parties because, according to the Appellants, neither the Governor nor the Attorney General have any power to enforce GA-38. The State Appellants insist that only a local district attorney can prosecute a violation of GA-38 and that, therefore, they are the wrong defendants in this suit to enjoin enforcement of GA-38.

The Harris County Parties allege in their petition that “the likelihood of state enforcement against Harris County is high” and that “[t]he Attorney General has joined the Governor in stating that ‘any local government official that defies [GA-38] will be taken to court.’ ” In addition, according to the Plaintiffs’ allegations, “over the past year, the Texas Attorney General has repeatedly sued local governmental entities that have instituted measures inconsistent with the Governor’s executive orders.” Moreover, publicly available records, including records filed in this Court in similar cases, reveal that the State Appellants have filed numerous lawsuits seeking to prevent local governments and school districts from enforcing local orders that, in their view, are invalid and unenforceable because they conflict with emergency orders issued by the Governor. See Tex. R. Evid. 201 (“The court may judicially notice a fact that is not subject to reasonable dispute ....”); State v. City of Austin, No. 03-20-00619-CV, 2021 WL 1313349 at *1, 2021 Tex. App. LEXIS 2651 at *1 (Tex. App.—Austin Apr. 8, 2021, no pet.) (mem. op.) (dismissing as moot appeal from denial of temporary injunctive relief where State sought to enjoin enforcement of local pandemic-related orders and to prevent local officials from issuing new orders more restrictive than GA-32); State v. El Paso County, 618 S.W.3d 812, 818 (Tex. App.—El Paso 2020, no pet.) (appeal from denial of temporary injunctive relief in lawsuit where State intervened and sought to invalidate local pandemic-related order on ground that it conflicted with GA-32); see also In re Round Rock Indep. Sch. Dist., No. 03-21-00472-CV, 2021 WL 4350299, at *1, 2021 Tex. App. LEXIS 7884, at *1-2 (Tex. App.—Austin Sept. 24, 2021, orig. proceeding) (mem. op.) (mandamus proceeding arising from lawsuit filed by State seeking to prevent school district from enforcing mask requirement on ground that it violates GA-38). Although those suits are not criminal-enforcement proceedings, the State plaintiffs in those suits seek to enforce the Governor’s executive orders by striking down orders issued by local governmental entities to the extent the local orders conflict with or are more restrictive than the Governor’s orders.

*4 In this case, the Harris County Parties seek a declaration that the Governor’s actions in issuing GA-38 are ultra vires. Thus, the Harris County Parties are not directly complaining about any threat of enforcement for non-compliance with GA-38, but about the validity of the executive order itself. If the Harris County Plaintiffs are successful on their ultra vires claim, the declaratory and injunctive relief sought would allow them to exercise their authority to require the wearing of face coverings within their jurisdictions and would prevent the State Appellants from interfering with that authority. Based on the allegations in the Harris County Parties’ pleadings, we conclude that there is a live controversy between the parties concerning the validity of GA-38 and that the declaratory and injunctive relief sought, if successful, would resolve this controversy. Accordingly, the Harris County Parties have affirmatively demonstrated that they have standing to assert their ultra vires claim against the State Appellants. Having rejected both of the State Appellants’ jurisdictional challenges, we conclude that the trial court did not err by denying the State Appellants’ plea to the jurisdiction.

We now consider the State Appellants’ appeal from the trial court’s grant of the Harris County Parties’ request for temporary injunctive relief.

TEMPORARY INJUNCTIVE RELIEF

“A temporary injunction is an extraordinary remedy that does not issue as a matter of right.” Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002) (citing Walling v. Metcalfe, 863 S.W.2d 56, 57 (Tex. 1993)). The purpose of a temporary injunction is to preserve the status quo of the litigation’s subject matter pending trial on the merits. Id. To obtain relief, the party applying for a temporary injunction “must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable imminent, and irreparable injury in the interim.” Abbott v. Anti-Defamation League Austin, Sw. & Texoma Regions, 610 S.W.3d 911, 916 (Tex. 2020) (quoting Butnaru, 84 S.W.3d at 204)

The decision to grant a temporary injunction lies in the sound discretion of the trial court and is subject to reversal only for a clear abuse of that discretion. Butnaru, 84 S.W.3d at 204. A trial court abuses its discretion when it acts unreasonably or in an arbitrary manner or without reference to any guiding rules and principles. Id. at 211. When reviewing a temporary-injunction order, we view the evidence in the light most favorable to the order, indulging every reasonable inference in its favor, and “determine whether the order was so arbitrary that it exceeds the bounds of reasonable discretion.” Fox v. Tropical Warehouses, Inc., 121 S.W.3d 853, 857 (Tex. App.—Fort Worth 2003, no pet.). “The trial court does not abuse its discretion if some evidence reasonably supports the trial court’s decision.” Butnaru, 84 S.W.3d at 211.

To the extent our review of the trial court’s temporary injunction turns on statutory construction, we review these issues de novo. Cadena Comercial USA Corp. v. Texas Alcoholic Beverage Comm’n, 518 S.W.3d 318, 325 (Tex. 2017). In construing a statute, our primary objective is to determine the Legislature’s intent which, when possible, we discern from the plain meaning of the words chosen. State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). In making this determination, we construe the statute as a whole, rather than as isolated provisions, and we do not give an undefined term a meaning that is out of harmony or inconsistent with other provisions in the statute. Texas Dep’t of Transp. v. Needham, 82 S.W.3d 314, 318 (Tex. 2002).

On appeal, the State Appellants argue that the trial court abused its discretion in granting temporary injunctive relief because (1) the Harris County Parties failed to establish that they are likely to prevail on the merits of their ultra vires claim, the substantive claim underlying their requests for declaratory and injunctive relief; (2) the Harris County Parties failed to establish that they will suffer irreparable harm; and (3) the temporary injunction is not necessary to preserve the status quo and, instead, alters the status quo.

Probable Right to Recovery

*5 While governmental immunity provides broad protection to the state and its officers, it does not bar a suit against a state officer for acting outside his authority, i.e., an ultra vires suit. Houston Belt & Terminal Ry. v. City of Houston, 487 S.W.3d 154, 161 (Tex. 2016). Suits alleging ultra vires or unconstitutional conduct by a government official “do not seek to alter government policy but rather to enforce existing policy” by compelling a government official “to comply with statutory or constitutional provisions.” City of El Paso v Heinrich, 284 S.W.3d 366, 372 (Tex. 2009). Plaintiffs bringing ultra vires claims must “allege, and ultimately prove, that the officer acted without legal authority or failed to perform a ministerial act.” Creedmoor-Maha Water Supply Corp. v. Texas Comm’n on Env’t Quality, 307 S.W.3d 505, 515 (Tex. App.—2010, no pet.) (quoting Heinrich, 284 S.W.3d at 372). “Ministerial acts” are those “where the law prescribes and defines the duties to be performed with such precision and certainty as to leave nothing to the exercise of discretion or judgment.” City of Houston v. Houston Mun. Emps. Pension Sys., 549 S.W.3d 566, 576 (Tex. 2018) (quoting Southwestern Bell Tel. v. Emmett, 459 S.W.3d 578, 587 (Tex. 2015)).

The Texas Disaster Act

The State Appellants assert that the Harris County Parties failed to establish a probable right to recover on their ultra vires claims because the Governor validly exercised his authority under the Texas Disaster Act when he issued GA-38, more specifically, that portion of GA-38 that prohibits local governmental entities and officials, such as Harris County Parties, from “requir[ing] any person to wear a face covering or ... mandat[ing] that another person wear a face covering.”

Chapter 418 of the Texas Government Code, known as the Texas Disaster Act, establishes a detailed, comprehensive framework that, in the case of a disaster, allocates powers, duties, and responsibilities across various levels of state government and multiple agencies. Ector Cnty. Alliance of Bus. v. Abbott, No. 11-20-00206-CV, 2021 WL 4097106 at *2, 2021 Tex. App LEXIS 7492 at *3 (Tex. App.—Eastland Sept. 9, 2021, no pet.) (mem. op.); see Tex. Gov’t Code §§ 418.001-.307. Among the stated purposes of the Act are to (1) clarify and strengthen the roles of the governor, state agencies, the judicial branch of state government, and local governments in prevention of, preparation for, response to, and recovery from disasters; (2) authorize and provide for cooperation in disaster mitigation, preparedness, response, and recovery; and (3) authorize and provide for coordination of activities relating to disaster mitigation, preparedness, response, and recovery by agencies and officers of this state, and similar state-local, interstate, federal-state, and foreign activities in which the state and its political subdivisions may participate. Tex. Gov’t Code. § 418.002 (“Purposes”).

The Act charges the Governor with meeting the “dangers to the state and people presented by disasters.” Id. § 418.011. Under the Act, the Governor may declare a state of disaster within a defined geographic area “if the governor finds that a disaster has occurred or that the occurrence or threat of disaster is imminent.” Id. § 418.014(c), (d). The declaration of a state of disaster “activates the disaster recovery and rehabilitation aspects of the state emergency management plan applicable to the area subject to the declaration.” Id. § 418.015(a). “During a state of disaster and the following recovery period, the governor is the commander in chief of state agencies, boards, and commissions having emergency responsibilities.” Id. § 418.015(c). Among other powers, “[t]he governor may control ingress and egress to and from a disaster area and the movement of persons and the occupancy of premises in the area.” Id. § 418.018.

*6 The Act also authorizes the presiding officers of local governmental entities, such as mayors and county judges, to issue local disaster declarations. Id. § 418.108. “A declaration of a local disaster activates the appropriate recovery and rehabilitation aspects of all emergency management and furnishing of aid and assistance under the declaration.” Id. § 418.108(d). Similar to that authority granted to the Governor, when a local disaster is declared the county judge or mayor of a municipality may also “control ingress to and egress from a disaster area under the jurisdiction and authority of the county judge or mayor and control the movement of persons and the occupancy of premises in that area.” Id. § 418.108(g). In addition, as it relates to the pandemic, the county commissioners court is authorized by the Texas Health and Safety Code to adopt orders that are “reasonably necessary to protect the public health.” See Tex. Health & Safety Code § 121.003.

In summary, the Act empowers and recognizes that the Governor may issue statewide disaster declarations and that certain local officials may also issue local disaster declarations. Nothing in the Act, however, suggests that these authorities are mutually exclusive, such that a disaster cannot simultaneously be both a statewide disaster and a local disaster. Moreover, it stands to reason that even a statewide disaster may have distinct and disproportionate impacts in each of the State’s 254 counties and that, as a result, some measures for addressing a disaster in some counties may not be necessary or even appropriate in other counties. With this statutory framework in mind, we consider the primary legal issue presented by this appeal: whether the Governor, under his authority granted by the Legislature under the Texas Disaster Act, may prohibit local governmental entities and officials from implementing measures that they view as necessary to mitigate the effects of a local disaster and to protect the public health and that, conversely, the Governor views as more restrictive than necessary to mitigate the disaster statewide.

Analysis

On appeal, the State Appellants argue that the Governor’s authority under the Texas Disaster Act includes the authority to prohibit local governments from implementing measures such as face-covering mandates because the Act provides that orders issued by the Governor will preempt contradictory orders issued by local governments.1 In support of their argument, the State Appellants point to several provisions in the Act that they contend demonstrate that the Legislature intended for such preemption to apply. Specifically, the State Appellants note that the Act (1) designates the Governor as “commander in chief” in addressing statewide disasters, Tex. Gov’t Code § 418.015(c), and empowers the Governor to “control ingress and egress .. and the movement of persons and the occupancy of premises in the area,” id. § 418.018(c), which would encompass indoor face-covering mandates; (2) provides that emergency-management directors, including the presiding officers of the governing body of a county, act as the “governor’s designated agent[s],” id. § 418.015(a), (b); and (3) states that executive orders issued by the Governor under the Act have “the force and effect of law,” id. § 418.012.

*7 Based on the plain language of the Disaster Act, we do not agree that the provisions designating the Governor as “commander in chief” and emergency-management directors as the “governor’s designated agents” demonstrate that the Legislature intended to empower the governor with broad authority to preempt local orders. As the Harris County Parties point out, the Act designates the Governor as “commander in chief of state agencies, boards, and commissions having emergency responsibilities,” not counties, see id. § 418.015(c), and gives both the Governor and counties the same authority “to control ingress and egress,” see id. § 418.018(c); Abbott v. Jenkins, No. 05-21-00733-CV, 2021 WL 5445813, at *9, 2021 Tex. App. LEXIS 9460 at *24 (Tex. App.—Dallas Nov. 22, 2021, no pet. h.) (mem. op.) (“Thus, we must conclude section 418.015(c) limits the governor’s authority to act as commander in chief only to specific state entities.”); Abbott v. City of San Antonio, ––– S.W.3d ––––, No. 04-21-00342-CV, 2021 WL 5217636, 2021 Tex. App. LEXIS 9129 (Tex. App.—San Antonio Nov. 10, 2021, no pet. h.) (analyzing whether action was valid under Section 418.016(a) and noting that governor failed to show how provisions designating him as “commander in chief” and granting him authority to “control ingress and egress” provide him with “power to prohibit local governments from adopting rules to promote public health within their jurisdiction during a disaster”). In addition, while the Act provides that “[a]n emergency management director serves as the governor’s designated agent in the administration and supervision of duties,” id. § 418.015(a), (b), nothing in this provision limits the authority that counties and local officials, including county commissioners courts, otherwise possess under the Act in responding to local disasters and public-health crises, see Jenkins, 2021 WL 5445813, at *12, 2021 Tex. App. LEXIS 9460, at *30 (rejecting argument that Section 418.015 limits county judge’s role to that of governor’s agent and explaining that if county judge could only act as governor’s agent during statewide disaster, then “to avoid being surplusage, section 418.108 would need to state it does not apply in the event of a statewide disaster,” but it does not).

In addition, we disagree that the use of the phrase “force and effect of law” demonstrates that the Legislature intended to give broad authority to the Governor to limit the ability of local governmental entities and officials to respond to disasters. The State Appellants argue that “because the Texas Legislature chose to imbue the Governor’s Disaster Act executive authority with the same force and effect as state law, traditional preemption analysis applies.” In effect, the State Appellants contend that the Legislature has delegated its authority to regulate counties to the Governor to create what our sister court in El Paso has characterized as a “tie breaker.” See El Paso County, 618 S.W.3d at 821-822 (explaining that Section 418.012 is “a delegation of power from the Legislature to the governor” and that Legislature “inserted a tie breaker and gave it to the governor in that his or her declarations under Section 418.012 have the force of law”). However, in the same statute, the Legislature has expressly provided the Governor with a limited power to suspend provisions of “regulatory statute[s] prescribing the procedures for conduct of state business.” Tex. Gov’t Code § 418.016(a). To construe the phrase “force and effect of law” as broadly as the State Appellants suggest—as granting the governor absolute power to suspend or prohibit any order or regulation that, in his estimate, is unnecessary or overly restrictive in mitigating the disaster—would render this provision superfluous. Columbia Med. Ctr. of Las Colinas, Inc. v. Hogue, 271 S.W.3d 238, 256 (Tex. 2008) (“The Court must not interpret the statute in a manner that renders any part of the statute meaningless or superfluous.”). Instead, we agree with our sister court in Dallas that “[S]ection 418.012 does not give the governor carte blache to issue executive orders empowering him to rule the state in any way he wishes during a disaster.” Jenkins, 2021 WL 5445813, at *10, 2021 Tex. App. LEXIS 9460, at *26.

The Disaster Act contains a specific provision to resolve conflicts between orders issued by county judges and mayors. See Tex. Gov’t Code § 418.108(h) (providing that county judge’s orders control over those of mayor when both use statutory authority to manage certain disaster-relief activities). In the absence of a similar clear and express provision in the Act to resolve conflicts between orders issued by the Governor and local governmental entities and officials, we cannot conclude that executive orders issued by the Governor under Section 418.018(c) automatically preempt any contrary local orders issued under Section 418.108(g).2 Jenkins, 2021 WL 5445813, at *11, 2021 Tex. App. LEXIS 9460, at *29 (“To conclude the governor owns the tiebreaking authority, we would have to ignore a stated purpose of the Disaster Act and provisions that delineate the responsibilities of the governor and county judges, among others.”). Consequently, whether GA-38’s prohibition on face-covering mandates exceeds the Governor’s authority under the Act and constitutes ultra vires conduct turns on whether it falls within the scope of suspension allowed under Section 418.016(a).

*8 Section 418.016(a) of the Act provides:

The Governor may suspend the provisions of any regulatory statute prescribing the procedures for conduct of state business or the orders or rules of a state agency if strict compliance with the provisions, orders, or rules would in any way prevent, hinder, or delay necessary action in coping with a disaster.

Tex. Gov’t Code § 418.016(a). The State Appellants argue that pursuant to Section 418.016(a), GA-38 validly suspends Section 418.108 of the Act and other statutory authorities pertaining to public health that the Harris County Parties relied on in issuing their respective face-covering mandates. Based on the plain language of the Act, we disagree.3

First, Section 418.016 authorizes the suspension of certain “regulatory statute[s],” and although the term “regulatory” is not defined in the Act, the term “regulate” ordinarily means “to govern or direct according to rule.” Regulate, Webster’s Third New Int’l Dictionary 1913 (2002); see also Regulate, Black’s Law Dictionary (10th ed.) (“To control (an activity or process) esp. through the implementation of rules.”). Under this definition, the statutes that the Governor purports to suspend are not “regulatory,” but instead are “grant-of-authority statute[s] giving local authorities the leeway to act in their best independent judgment within the confines of their own jurisdictions.” El Paso County., 618 S.W.3d at 839-40. For example, Section 418.018, the cited basis for County Judge Lina Hidalgo’s order requiring face coverings, empowers local government officials to declare a local state of disaster and to take certain appropriate action but does not direct or require that the local official take any particular action. See Tex. Gov’t Code § 418.108.

In addition, Section 418.108 and the other statutes that GA-38 purports to suspend under Section 418.016 do not pertain to “conduct of state business,” but instead concern the authority of local governments to react to local disasters and address local public-health concerns. We agree with our sister court of appeals in San Antonio that “[i]f the Legislature had intended Section 418.016(a) to reach the ordinances and business of local governments, Section 418.016(a) would have stated an application to ‘political subdivisions’ or ‘local governmental entities,’ which are terms defined in the Act.” City of San Antonio, ––– S.W.3d at ––––, 2021 WL 5217636 at *5, 2021 Tex. App. LEXIS 9129, at *15-16.

In summary, we conclude that the Governor does not possess absolute authority under the Texas Disaster Act to preempt orders issued by local governmental entities or officials that contradict his executive orders. Further, the Governor’s authority to suspend certain statutes under Section 418.016 does not include the authority to suspend Section 418.108 or other public-health statutes relied on by the Harris County Parties in issuing their respective face-covering requirements. The trial court reasonably concluded that the Harris County Parties have a probable right of recovery on their ultra vires claim.

Irreparable Harm

*9 The State Appellants also argue that the trial court abused its discretion by issuing temporary injunctive relief because the Harris County Parties failed to establish that they will suffer irreparable harm. Specifically, the State Appellants complain that the witnesses presented at the temporary-injunction hearing for the Harris County Parties could not “tie a rise in local COVID-19 rates to GA-38’s ban on face-covering mandates.” In addition, they argue that the trial court failed to properly “weigh the countervailing interests against Harris County’s request for injunctive relief.” See NMTC Corp. v. Conarroe, 99 S.W.3d 865, 868 (Tex. App.—Beaumont 2003, no pet.) (“An application for injunction is a request that a court exercise its equitable jurisdiction, and in exercising that power the court balances competing equities.”). Based on the evidence presented at the temporary-injunction hearing, we disagree.

At the hearing, the trial court heard testimony from two witnesses—Dr. Janeana White, Local Health Authority for Harris County and medical advisor to the County, and David Berry, Harris County Administrator to the Commissioners Court. Dr. White testified that COVID-19 is a respiratory virus that “has been catastrophic” across the globe; recently, the highly contagious delta variant has contributed to a “fourth wave in the Harris County area,” meaning there has been a significant increase in the positivity rate; and hospitals and the health care facilities in Harris County have been overwhelmed due to a 305% increase in hospitalizations due to COVID in the month before the hearing. Dr. White also explained that despite mitigation efforts such as vaccines, physical distancing, and handwashing, as of the hearing date, there had been 479,547 cases of COVID and 5,232 deaths from COVID in Harris County and that the positivity rate was currently 21%. Finally, Dr. White testified that based on guidance from the CDC and on published scientific articles, which were admitted into evidence at the hearing, she determined that the imposition of a face-covering mandate would be effective in mitigating the community spread of COVID-19 and in decreasing the number of hospitalizations and deaths due to COVID in Harris County. Dr. White explained that the Governor of Kansas had issued an executive order requiring masks in public spaces with the ability to opt out and that studies on the effectiveness of that mandate had shown that the counties that opted out saw an increase in COVID relative to those counties that did not.

Berry testified as to the economic impact of COVID on the County. In part, Berry explained that as a self-insurer under the workers’ compensation system, the County has paid over $3.8 million in COVID-related healthcare costs in 2021 due to employees contracting COVID and that the County has lost occupancy tax revenue as a result of events being cancelled due to COVID. Berry also testified about the negative impact that COVID has had on county operations. For example, according to Berry’s testimony, there was an outbreak at a juvenile detention facility, which required the County to “evacuate out a large number of personnel and place these young adults and children on a no-movement policy,” meaning they could not access therapy, see visitors, or appear in court.

Based on the evidence presented at the hearing, viewed in the light most favorable to the trial court’s order, we conclude that the Harris County Parties sufficiently demonstrated that the use of face coverings is an effective tool in controlling the spread of COVID-19; the ability to require the use of face coverings in certain settings is especially helpful; and the uncontrolled spread of COVID-19 is detrimentally impacting the health of citizens and county operations. Because GA-38, by its terms, prevents local governmental entities and officials like the Harris County Parties from enforcing local orders requiring the use of face coverings, it inflicts irreparable harm on these entities and officials. See Texas Ass’n of Bus. v. City of Austin, 565 S.W.3d 425, 441 (Tex. App.—Austin 2018, pet. denied) (explaining that “inability [of state] to enforce its duly enacted [laws] clearly inflicts irreparable harm,” quoting Abbott v. Perez, ––– U.S. ––––, 138 S. Ct. 2305, 2324 n.17, 201 L.Ed.2d 714 (2018)). Conversely, the State did not present any evidence to show how the State would be adversely impacted by the requested temporary injunction. The trial court reasonably determined that the Harris County Parties would suffer “probable imminent, and irreparable injury” if interim relief were not granted. See Anti-Defamation League Austin, Sw. & Texoma Regions, 610 S.W.3d at 916.

Status Quo

*10 As previously discussed, the purpose of a temporary injunction is to preserve the status quo. Butnaru, 84 S.W.3d at 204. In this context, “status quo” means “the last, actual, peaceable, non-contested status which preceded the pending controversy.” Texas Ass’n of Bus., 565 S.W.3d at 437 (quoting In re Newton, 146 S.W.3d 648, 651 (Tex. 2004) (orig. proceeding)). The State Appellants argue that “the last, actual, peaceable, non-contested status which preceded the pending controversy” was GA-36, which was issued in May 2021 and, like GA-38, prohibited local governmental entities and officials from imposing face-covering mandates. Thus, the State Appellants reason that the status quo has existed at least since May 2021, at which time there was no active dispute between the parties, and that the temporary injunction sought and obtained by the Harris County Parties does not preserve the status quo of the litigation’s pending subject matter but instead “upends” it.

We have already concluded that the trial court did not abuse its discretion by determining that the Harris County Parties established a probable right to relief on their claim that the Governor’s issuance of GA-38 constitutes an ultra vires act to the extent it prohibits local governmental entities and officials from issuing face-covering mandates. “Continuation of illegal conduct cannot be justified as preservation of the status quo.” In re Newton, 146 S.W.3d at 651. If GA-38 is determined to be ultra vires and invalid, GA-36 would be ultra vires and invalid for the same reason. Consequently, GA-36 cannot constitute the “status quo” as a matter of law. Instead, the temporary injunction as requested and granted by the trial court seeks to return the parties to the position they were in prior to the Governor’s ultra vires actions. The trial court reasonably concluded that a temporary injunction would preserve the status quo. Moreover, having rejected the State Appellants’ arguments, we conclude that the trial court did not abuse its discretion by imposing a temporary injunction to prevent the State Appellants from seeking to enforce GA-38 pending a trial on the merits.

CONCLUSION

We affirm the trial court’s orders denying the State Appellants’ plea to the jurisdiction and granting the Harris County Parties’ request for a temporary injunction.

Footnotes

1

In addition, the State Appellants argue that (1) the Texas Disaster Act places concrete limits on the Governor’s authority to suspend statutes and, thus, does not violate the Texas Constitution’s nondelegation doctrine; and (2) county judges and county commissioners courts do not have authority to violate state law. The Harris County Parties have not challenged the constitutionality of the Act, and there is no dispute that county officials do not have the authority to violate state law. Instead, the parties’ dispute centers on whether GA-38 constitutes a valid exercise of the governor’s authority under the Act such that it has “the force and effect of law.” See Tex. Gov’t Code § 418.012.

2

The State Defendants also argue that “[a] finding that GA-38 carries no preemptive effect would create mass confusion and collapse of the State’s unified response to the challenges posed by the pandemic by turning dozens of state and local emergency orders into a flurry of non-binding recommendations.” This is not a case, however, where the Governor’s executive order directly conflicts with a local order such that a person subject to the orders could not possibly comply with both. Cf. State v. El Paso County, 618 S.W.3d 812, 822 (Tex. App.—El Paso 2020, no pet.) (explaining that there must be final decision-maker because “there could be good faith differences on the proper response”). Because GA-38 does not prohibit a person from wearing a face-covering, a person does not violate GA-38 by complying with a local face-covering mandate. Therefore, the issue before us is not whether there is a “tie breaker” when an order issued by the Governor and an order issued by a local governmental entity directly conflict. Nevertheless, to the extent preemption bears on the larger issue of whether the Governor can suspend or prohibit local orders with which he disagrees, we agree with Chief Justice Rodriguez, who explained, “Laws conflict with one another frequently, but there is no legal principle that automatically elevates certain laws above others as a matter of course.... Laws preempt other laws because constitutions and other foundational texts create conflict-of-law schemes that establish priority ranks among different types of valid law.” Id. at 832-33 (Rodriguez, J., dissenting). Here, nothing in the Texas Constitution nor the Act gives the Governor’s executive orders preemptive effect. Id. at 833 (Rodriguez, J., dissenting).

3

The Governor does not contend that Section 418.016(a) authorizes him to suspend the local orders at issue directly, as there can be no dispute that the orders issued by the Harris County Parties are not “statutes.” See Statute, Black’s Law Dictionary (10th ed.).

Court of Appeals of Texas, Austin.

PHI Air Medical, LLC, Appellant

v.

Texas Mutual Insurance Company; Hartford Underwriters Insurance Company; TASB Risk Management Fund; Transportation Insurance Company; Truck Insurance Exchange; Twin City Fire Insurance Company; Valley Forge Insurance Company; Zenith Insurance Company; and Texas Department of Insurance, Division of Workers’ Compensation, Appellees

NO. 03-17-00081-CV

|

Filed: December 17, 2020

ON REMAND

FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-15-004940, THE HONORABLE JAN SOIFER, JUDGE PRESIDING

Before Justices Goodwin, Baker, and Kelly

MEMORANDUM OPINION

PER CURIAM

*1 Appellant PHI Air Medical, LLC, appealed the trial court’s judgment in favor of Texas Mutual Insurance Company, Hartford Underwriters Insurance Company, TASB Risk Management Fund, Transportation Insurance Company, Truck Insurance Exchange, Twin City Fire Insurance Company, Valley Forge Insurance Company, and Zenith Insurance Company (collectively “the Insurers”). This Court reversed the trial court’s judgment. See PHI Air Med., LLC v. Texas Mut. Ins., 549 S.W.3d 804 (Tex. App.—Austin 2018). The Insurers and the Department of Insurance, Division of Workers’ Compensation appealed, and the Texas Supreme Court reversed this Court’s decision and remanded to this Court. Texas Mut. Ins. v. PHI Air Med., LLC, __ S.W.3d __, 2020 WL 3477002 (Tex. June 26, 2020). PHI then filed a petition for writ of certiorari with the Supreme Court of the United States (SCOTUS).

PHI has now filed an unopposed motion to stay proceedings until after SCOTUS has reviewed the petition. We grant the motion and abate the appeal pending review by SCOTUS. The parties are instructed to notify this Court within thirty days of SCOTUS’s decision regarding whether to grant the petition. Failure to timely comply may result in the case being dismissed for want of prosecution. See Tex. R. App. P. 42.3(b).

Abated

Court of Appeals of Texas, Austin.

Alvy CHILDRESS, Appellant

v.

TEXAS MUTUAL INSURANCE COMPANY, Appellee

NO. 03-19-00284-CV

|

Filed: August 27, 2020

Attorneys & Firms

Alvy Childress, 3526 Lakeview Pkwy, Suite B #128, Rowlett, TX 75088, pro se.

Mary A. Keeney, Graves, Dougherty, Hearon & Moody, PC, 401 Congress Avenue, Suite 2700, Austin, TX 78701, for Appellee.

Before Chief Justice Rose, Justices Baker and Triana

MEMORANDUM OPINION

Jeff Rose, Chief Justice

*1 Pro se appellant Alvy Childress suffered an on-the-job injury in 2015. Appellee Texas Mutual Insurance Company, his workers’ compensation carrier, determined that a torn tendon in his shoulder was not compensable. An administrative law judge (ALJ) with the Texas Department of Insurance, Division of Workers’ Compensation (the Division), held a contested case hearing and agreed with Texas Mutual; her decision was upheld by an Appeals Panel. See Tex. Lab. Code §§ 410.151-.169 (Contested Case Hearing), .201-.209 (Appeals Panel). Childress sought judicial review, see id. §§ 410.251-.308, and the trial court granted summary judgment in favor of Texas Mutual. We will affirm the trial court’s order.

FACTUAL AND PROCEDURAL SUMMARY

Childress owns a steel-fabrication-and-erection business called ACE Fab, and in May 2015, while moving an iron beam weighing between 2,000 and 3,000 pounds, he ruptured his right bicep tendon. Texas Mutual accepted the bicep injury as compensable but determined that a “full thickness tear of his distal supraspinatus tendon” in his right shoulder was “degenerative in nature and not caused or aggravated by the work place injury.” Childress appealed, and on September 27, 2017, the ALJ held a contested case hearing to decide: whether the supraspinatus tear was compensable; whether Childress had reached maximum medical improvement (MMI) and, if so, when; his impairment rating (IR) if he had reached MMI; and whether he had disability starting July 25, 2016.1

In her Decision and Order, the ALJ stated that she had considered Childress’s proffered “letters of causation” from Dr. Cynthia Goodman, Dr. Johann Van Beest, and Dr. Paul Vu, as well as testimony by Dr. Brett Bolte, an expert provided by Texas Mutual. The ALJ summarized Dr. Goodman’s report as opining that “the supraspinatus muscle and tendon are commonly injured when a person attempts to lift a heavy object” and that the “pulling and jerking motion” described by Childress “created the supraspinatus injury, which [Dr. Goodman] characterized as a spontaneous rupture of the flexor tendon in the right upper arm.” She said that Dr. Vu had “described the traction force” that caused that damaged Childress’s right upper arm, “point[ing] to” a September 3, 2015 MRI that identified “a full thickness tear of the distal supraspinatus tendon at its insertion.” However, the ALJ noted, Dr. Vu had not explained how Childress “was able to continue working for 3 months after his date of injury,” nor had the doctor “persuasively explain[ed]” how, if the tear was a pre-existing condition aggravated by the workplace injury, “the condition was enhanced, accelerated, or worsened.” Finally, the ALJ found Dr. Van Beest’s evidence unpersuasive because although he stated that the workplace injury “caused injury to the right shoulder,” his report “limits this damage to a rotator cuff strain, which is not the disputed condition.”

*2 Dr. Bolte, on the other hand, opined that “the right shoulder conditions were degenerative in nature” and not caused or worsened by the workplace injury. He stated that “an acute tear of the supraspinatus tendon would be very painful,” would be “unlikely to go unnoticed for long after an injury,” and would not typically be caused by the kind of injuring event Childress described. The ALJ summarized Childress’s medical records as starting more than three months after the date of injury and as stating that Childress “uses arm normally—concerned about further damage.” She said the first record diagnosed “only a non-traumatic rupture of the bicep tendon” and stated that Childress’s symptoms and pain levels were “mild”; that at the time, Childress told medical staff that he had “full range of motion”; and that an exam confirmed that his range of motion was “intact in all extremities.” The ALJ concluded:

After review, there was no qualified expert opinion evidence, based on reasonable medical probability, which provided a persuasive explanation of the causal link between the mechanism of the compensable injury and the right shoulder full thickness tear of the distal supraspinatus tendon. Thus, it is not part of the compensable injury.

The ALJ noted that although Childress had asserted that he had not reached MMI “because he needs further treatment,” Designated Doctor Clayton Clark determined in September 2016 that Childress had reached MMI on June 22, 2016, and assigned a 1% IR, while Dr. Van Beest determined Childress reached MMI on July 25, 2016, with a 7% IR. However, the ALJ observed that Dr. Van Beest “rated a bicep muscle strain, which is not the compensable injury[, s]o his certification could not be adopted.” She also stated that Childress reached “statutory MMI on August 19, 2017.” See id. § 401.011(30)(B) (MMI is reached no later than two years from date on which income benefits begin to accrue). The ALJ recited that Dr. Clark’s “certification was not contrary to the preponderance of the other medical evidence and is adopted.” The ALJ determined:

The May 2, 2015, compensable injury does not extend to and include a right shoulder full thickness tear of the distal supraspinatus tendon. Claimant reached maximum medical improvement on June 22, 2016. Claimant’s impairment rating is 1%. Claimant had disability beginning on July 25, 2016, and continuing through September 2, 2016, but not from September 2, 2016, continuing through September 27, 2017, the date of the contested case hearing.

After Childress appealed, a Division Appeals Panel issued a notice stating that the ALJ’s decision was final, the effect of which was the ALJ’s Decision and Order became “the final decision of the appeals panel.” See id. § 410.204(c). Childress then sought judicial review, and in his first amended petition stated that he was bringing the suit in his own name and “d/b/a ACE Fab party to this proceeding ... as Employer, Employee and Claimant.” He argued that his supraspinatus tear should be considered part of his compensable injury and that he had not reached MMI; contested the 1% IR; sought disability from June 22, 2016; and asserted claims for breach of contract, negligence, bad faith, and statutory violations.

Texas Mutual filed special exceptions, arguing that ACE Fab was not a party to the administrative proceeding, was not aggrieved by the Appeals Panel’s decision, and had not exhausted its administrative remedies, and asking the trial court to therefore strike ACE Fab’s claims. It also excepted to Childress’s statement that he was seeking to appeal “all portions of the judgment,” arguing that he was limited to challenging the findings and conclusions he contested before the Appeals Panel. See id. § 410.302(b) (suit for judicial review “is limited to issues decided by the appeals panel and on which judicial review is sought”). After a hearing on Texas Mutual’s special exceptions, Childress again amended his petition, dropping ACE Fab as a claimant and asserting that Texas Mutual was liable for negligence for violations of the insurance code and the administrative code. He further argued that Texas Mutual had waived its right to specially object to ACE Fab as a party and stated that his pleadings “will reference Alvy Childress d/b/a ACE Fab only for substance rights to argument and credibility.”

*3 In January 2019, Texas Mutual filed a motion for summary judgment, arguing first that Childress had not stated a claim on which relief can be granted because his amended petition only leveled claims for negligence and violations of various statutes and rules, rather than seeking judicial review of the appeals panel’s final decision. Texas Mutual further contended that it was entitled to dismissal of “all claims brought by or on behalf of the employer, ACE Fab,” because it was not a party to the administrative proceeding, noting that Childress is “both the employer and the injured employee, but the issues before the Appeals Panel pertain only to the employee.” Texas Mutual argued in the alternative that “to the extent [Childress’s] lawsuit seeks judicial review of the final decision” of the Appeals Panel, Texas Mutual was entitled to dismissal of Childress’s claims for negligence and statutory violations because Childress’s suit for judicial review is limited to the issues before the Appeals Panel. It also argued that Childress’s claims for damages beyond workers’ compensation benefits were barred by section 408.001 of the labor code. See id. § 408.001(a) (workers’ compensation benefits are “the exclusive remedy” for employee covered by workers’ compensation insurance who suffers work-related injury). Finally, Texas Mutual asserted a no-evidence motion arguing that Childress could not present evidence: that his supraspinatus tear is compensable; that his MMI was not June 22, 2016, or that his IR is something other than 1%; that Dr. Clark’s certification was contrary to the evidence; or that Childress had a disability sometime after September 2, 2016.

Following a hearing in March 2019, the trial court signed an order granting Texas Mutual’s motion for summary judgment. In its order, the trial court stated that Childress’s second response, second supplemental response, and third supplemental response, all filed on the day of the hearing, were untimely and thus were not considered by the court. It affirmed the Appeals Panel’s decision in its entirety, decreeing that Childress’s compensable injury did not include his supraspinatus tear; that he reached MMI on June 22, 2016, with a 1% IR; that he had disability from July 25, 2016, through September 2, 2016; and that he did not have disability from September 3 forward. This appeal followed.

STANDARD OF REVIEW

A proceeding seeking judicial review from an appeals panel’s decision related to compensability or eligibility for or the amount of benefits is conducted under a “modified de novo” standard. National Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 528 (Tex. 2000) (citing Tex. Lab. Code § 410.301(a)); Deleon v. Royal Indem. Co., 396 S.W.3d 597, 600 (Tex. App.—Austin 2010), rev’d on other grounds, 396 S.W.3d 527 (Tex. 2012). The appealing party has the burden of proof by a preponderance of the evidence. Tex. Lab. Code § 410.303; Deleon, 396 S.W.3d at 600; Texas Builders Ins. Co. v. Molder, 311 S.W.3d 513, 518 (Tex. App.—El Paso 2009, no pet.). In conducting such a case:

(1) the trial court is informed of the TWCC Appeals Panel’s decision; (2) evidence of the extent of impairment is limited to that presented to the TWCC, unless the court makes a threshold finding that the claimant’s condition has substantially changed; and (3) the court is required to adopt the specific impairment rating arrived at by one of the physicians in the case.

Molder, 311 S.W.3d at 518; see Deleon, 396 S.W.3d at 600-01 (“Evidence of the extent of impairment is limited to that presented to the Division absent a finding that the claimant’s condition has substantially changed, and the court can only adopt a specific impairment rating arrived at by one of the doctors in the case.”). “The fact finder, although informed of the [appeals panel] decision, does not review it for ‘reasonableness,’ but rather independently decides the issues by a preponderance of the evidence.” Texas Workers’ Comp. Comm’n v. Garcia, 893 S.W.2d 504, 531 (Tex. 1995); see Deleon, 396 S.W.3d at 600-01 (fact finder considers administrative decision but need not give it any particular weight, nor is opinion of “designated doctor regarding impairment” given special weight).

We review the trial court’s granting of summary judgment de novo, taking as true all evidence favorable to the non-movant, indulging every reasonable inference in his favor, and resolving any doubts in his favor. First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 219 (Tex. 2017). When a party moves for both traditional and no-evidence summary judgments, we consider the no-evidence motion first because if the non-movant did not produce evidence raising a genuine issue of material fact as to the challenged elements, a no-evidence summary judgment is proper and there is no need to address the challenge to the traditional motion. Id. at 219-20. Any claims that survive the no-evidence review are reviewed under the traditional standard, asking whether the movant proved that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Id. at 220 (citing Tex. R. Civ. P. 166a(c)). “A genuine issue of material fact exists if the evidence ‘rises to a level that would enable reasonable and fair-minded people to differ in their conclusions,’ ” and the evidence must do more than create a mere surmise or suspicion of the fact. Id. (quoting Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)).

*4 As for summary-judgment procedure, a non-movant must file his response, along with the evidence on which he seeks to rely, at least seven days before the summary-judgment hearing or obtain the trial court’s leave to file it late. Tex. R. Civ. P. 166a(c), (d). We review a trial court’s ruling on whether to accept a late response for an abuse of discretion. Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 686 (Tex. 2002); Bierwirth v. TIB, No. 03-11-00336-CV, 2012 WL 3239121, at *3 (Tex. App.—Austin Aug. 10, 2012, no pet.) (mem. op.). We also review a trial court’s decisions related to the admission or exclusion of evidence for an abuse of discretion. U-Haul Int’l, Inc. v. Waldrip, 380 S.W.3d 118, 132 (Tex. 2012). A trial court abuses its discretion when it acts without reference to any guiding rules or principles. Id.

DISCUSSION

In Childress’s briefing, he asserts that the trial court erred in refusing to admit certain documents into the record; in not allowing ACE Fab to proceed as a party or bringing its claims for breach of contract or statutory violations; and in affirming the Appeals Panel’s decision, contending that the Decision and Order “is clearly against the great weight and preponderance of the evidence.”2 He asks this Court to render judgment that he has a 7% IR and to declare his date of MMI as July 25, 2016, as recited in a report by Dr. Van Beest, and seems to seek a declaration of disability starting on August 18, 2017. Finally, he asks that we remand the case for the trial court to address his claims for breach of contract and statutory violations.

Evidentiary Rulings

Texas Mutual filed its motion for summary judgment in January, and the motion was heard by the trial court on March 14. Childress filed his first response on March 6, attaching three hundred pages of exhibits, some of which were his own pleadings, and in contesting his date of MMI or his IR, he states only, “The preponderance of the other medical evidence herein is to the contrary. See Cease and Desist attached herein. This court should take judicial notice of such pleadings attached with attached evidence herein.” On the date of the hearing, he filed two affidavits referring to exhibits that he intended to use for summary judgment and attaching forty-seven pages of documents without any explanation of their relevance.3 He also filed a second response, a second supplemental response, and a third supplemental response. In his second response, Childress stated that his March 6 response had a “clerical error” and asked to amend that error. He also asked for “Leave of Court pursuant to” rule 166a(c) as follows: “DWC 15315468 filed returned incomplete, completed and sent back overnight 3-11-19. DWC 15315468 sent from the Texas Department of Insurance 2-08-18 if necessary, to stand in the shoes of DWC 15315483 resubmitted 3-11-2019.”

*5 Although it is not entirely clear, it appears that Childress is arguing that the underlying administrative record was wrongfully excluded from evidence. However, in the November 2018 hearing on Texas Mutual’s special exceptions, the trial court explained to Childress that to file the administrative record, he had to review and follow the rules of evidence related to governmental documents. It does not appear that Childress arranged to have the record filed in accordance with those rules. Further, it is unclear exactly what evidence Childress wanted admitted and how it would have been necessary to his case.4 See State v. Central Expressway Sign Assocs., 302 S.W.3d 866, 870 (Tex. 2009) (complaining party must show that exclusion of evidence probably resulted in rendition of improper judgment). On this record, we cannot conclude that the trial court abused its discretion in excluding evidence. We overrule Childress’s arguments related to the trial court’s evidentiary rulings.

ACE Fab as Would-Be Party

Childress complains of the trial court’s rulings barring ACE Fab from proceeding as a party and bringing claims for breach of contract or statutory violations. He insists that ACE Fab could not have been a party to the administrative proceeding because the “Division of Workers Compensation does not have jurisdiction over Contract law” and that it should have been allowed to join the proceeding in the trial court to pursue its non-benefits-related claims. However, the proceeding before the trial court was a suit for judicial review. Such a proceeding is brought by a party “that has exhausted its administrative remedies under this subtitle and that is aggrieved by a final decision of the appeals panel,” Tex. Lab. Code § 410.251, and it is “limited to issues decided by the appeals panel and on which judicial review is sought,” id. § 410.302(b). ACE Fab was not a party to the contested case—that addressed which of Childress’s injuries were compensable, when he reached MMI, the IR that should be assigned, and whether he had disability after September 2, 2016—and is not aggrieved by Childress’s benefits decision. See Just Energy Texas I Corp. v. Texas Workforce Comm’n, 472 S.W.3d 437, 443 (Tex. App.—Dallas 2015, no pet.). ACE Fab’s claims against its insurance carrier for breach of contract or statutory violations were not a part of the contested case, nor could they have been, and they therefore cannot be raised in this suit for judicial review, which has a limited scope. See Tex. Lab. Code § 410.302(b); State Office of Risk Mgmt. v. Martinez, 539 S.W.3d 266, 274 (Tex. 2017) (“issues” identified by administrative review officer “remain the same through hearing, appeal, and judicial review”). Because the trial court could only address compensability, MMI, and IR, it correctly disallowed ACE Fab as a party as well as its contract- and statute-based claims. We overrule Childress’s claims related to ACE Fab as a party.

Affirmance of Appeals Panel Decision

Finally, we consider whether the trial court properly granted summary judgment affirming the Appeals Panel’s decision.

As noted by Texas Mutual in its special exceptions, motion for summary judgment, and appellate brief, Childress’s amended petition seems only to assert a claim for negligence, contending that Texas Mutual knowingly violated provisions of the insurance code, labor code, and administrative code and that as a result, Childress suffered an “under treated, under diagnosed, under documented biceps and shoulder injury which produced by causation the manifestly unjust [ALJ’s] Decision and Order, Independent Injury actual damages, Physical harm on 1-24-17 a new injury as a direct result of one or more of the above stated violations.” He therefore arguably abandoned his request for judicial review of the Appeals Panel’s decision. However, construing his pleadings liberally and in the interest of justice, we will consider whether Texas Mutual showed itself entitled to a summary judgment affirming the Appeals Panel’s order.

*6 Childress, as the party challenging the decision, had the burden of proving by a preponderance of the evidence that the decision should be overturned. See Tex. Lab. Code § 410.303; Morales v. Liberty Mut. Ins. Co., 241 S.W.3d 514, 516 (Tex. 2007). The issues before the trial court were whether Childress’s supraspinatus tear was part of his compensable injury; whether he had reached MMI and, if so, when; if he had reached MMI, his IR; and whether he had disability after September 2, 2016, and Texas Mutual’s no-evidence motion required Childress to put on evidence to rebut the Appeals Panel’s decision on those issues.

In the portion of Childress’s summary-judgment response addressing the extent of his compensable injury, he referred to reports by Drs. Van Beest, Goodman, and Vu and stated:

The great weight and substantial medical records, Plaintiff inserts [sic] the four doctors is by all standards have established the burden of proof and should have presumptive weight. Plaintiff asserts this fact has great weight and is controlling. [Texas Mutual’s] argument is plainly erroneous and is inconsistent with the facts. The preponderance of the other medical evidence herein is to the contrary. See Cease and Desist[5] attached herein[.] This court should take judicial notice of such pleadings attached with attached evidence herein.

As to the issues of MMI and IR, Childress stated:

The claimant received improper and inadequate treatment leading to a under diagnosed and under documented bicep’s injury, and shoulder torn tendon. Critical evidence and the factual sufficiency of the evidence presented in relation to; Impairment, MMI. The preponderance of the other medical evidence herein is to the contrary. See Cease and Desist attached herein. This court should take judicial notice of such pleadings attached with attached evidence herein.

Finally, as to disability, Childress referred to a report by Designated Doctor Daniel Lerma in September 2018, which Childress said “disputed” the ALJ’s finding as to disability and which he asserted should be given “presumptive weight.”6 He also stated, “Statutory dates are 6-22-16 to 8-18-17. Material fact. This court should take judicial notice of such pleadings attached with attached evidence herein.” Childress included an affidavit stating that he was attaching 285 pages of records that were “the original records or exact duplicates” and that the records “were made at or near the time of each act, event, condition, opinion, or diagnosis set forth” and were kept as part of ACE Fab’s business records. He then attached over 300 pages of documents, which included his own pleadings; photographs of his arm (apparently taken in 2018); ACE Fab’s sales tax permit; Texas Mutual’s quote for ACE Fab’s workers’ compensation insurance; Dr. Clark’s report; Texas Mutual’s form disputing the compensability of the supraspinatus tear; several pages of medical records with handwritten notes on them; MRI reports and a summary of some of those results; a report made after Childress’s December 2015 surgery to repair his biceps tendon; reports by Drs. Van Beest, Goodman, and Vu; documents showing poor online reviews for Dr. Bolte; Dr. Lerma’s September 2018 Designated Doctor report; and medical records and reports pertaining to a January 2017 injury to his left shoulder.

*7 As our sister court has explained, “When faced with a no-evidence motion for summary judgment, a nonmovant cannot avoid judgment by simply filing voluminous evidence and stating generally that a genuine fact issue has been raised.” Kimbrell v. Memorial Hermann Hosp. Sys., 407 S.W.3d 871, 878 (Tex. App.—Houston [14th Dist.] 2013, no pet.); see also Burns v. Canales, No. 14-04-00786-CV, 2006 WL 461518, at *5–6 (Tex. App.—Houston [14th Dist.] Feb. 28, 2006, pet. denied) (mem. op.) (response to no-evidence motion lacked argument and citation to evidence or authority and attached 122 pages of evidence; “The number of pages, however, is not dispositive. The issue is whether the trial court must search through all of the non-movant’s evidence to determine if a fact issue exists without any guidance concerning what evidence creates an issue on a particular element.”). “Mere reference to attached evidence is insufficient to avoid” a motion for no-evidence summary judgment, and the non-movant “bears the burden to file a written response that raises issues preventing summary judgment, and that points to evidence supporting those issues. Where the nonmovant fails to meet that burden, the trial court is not required to supply the deficiency, but instead must grant the motion.” Burns, 2006 WL 461518, at *5-6.

Although we have attempted to read Childress’s pleadings liberally and with patience, we cannot grant him so much leeway as to give him a procedural advantage we would not extend to a party represented by counsel. See id. at *6; Holt v. F.F. Enters., 990 S.W.2d 756, 759 (Tex. App.—Amarillo 1998, pet. denied). Childress did not present understandable argument as to how there was a genuine issue of material fact, nor did he point to evidence or authority to support any such argument. We must hold, therefore, that Childress did not meet his burden to explain to the trial court how his attached evidence raised a fact issue as to each element challenged by Texas Mutual. See Fagerberg v. Steve Madden, Ltd., No. 03-13-00286-CV, 2015 WL 4076978, at *5 & n.8 (Tex. App.—Austin July 3, 2015, pet. denied) (mem. op.) (in response to no-evidence motions, party made vague statements about effect of deposition testimony that, along with “mere ‘incorporation’ of evidence” without explanation of how it raised fact issue, were insufficient to defeat motions; although attached evidence was not voluminous, non-movant still had burden of raising fact issue, but “not only did he not specify where the court should look to find the asserted material issues of fact, he did not refer to the evidence, attempt to explain how the evidence raised such questions, or otherwise connect the evidence to the challenged elements”); Burns, 2006 WL 461518, at *5-6 (“Burns’s written response to the motion for summary judgment contains no argument, and cites to neither evidence nor authority.”); Cargill, Inc. v. Merit Distrib. Servs., Inc., No. 03-02-00718-CV, 2003 WL 21241642, at *3 (Tex. App.—Austin May 30, 2003, no pet.) (mem. op.) (response to no-evidence motion was insufficient where it listed specific affidavits and asked that they be “filed of record” but “presented no argument or explanation that makes reference to any evidence”). The trial court therefore did not err in granting Texas Mutual’s motion for no-evidence summary judgment, and we overrule Childress’s arguments to the contrary.

CONCLUSION

Having overruled Childress’s arguments on appeal, we affirm the trial court’s order granting Texas Mutual’s motion for summary judgment.

Footnotes

1

The supreme court has explained IRs and MMI as follows:

An employee receives impairment income benefits according to the employee’s impairment rating, which is the percentage of the whole body’s permanent impairment. To determine the impairment rating, an examining doctor evaluates the permanent effect of the employee’s injury under statutory guidelines. The doctor expresses the rating as a percentage of permanent impairment to the whole body. The greater this percentage, the greater the amount the employee receives as impairment income benefits....

A doctor will not certify an impairment rating until the employee reaches “maximum medical improvement,” the point at which the employee’s injury will not materially improve with additional rest or treatment. The date of maximum medical improvement is fixed when an examining doctor certifies that no further material recovery or lasting improvement can reasonably be anticipated. The [Workers’ Compensation Act] presumes that maximum medical improvement will be reached not later than two years after income benefits begin to accrue.

Until an employee reaches maximum medical improvement, he or she may receive temporary income benefits. Once an employee reaches maximum medical improvement, temporary income benefits end. Whether the injured employee receives any additional income benefits depends largely on the assigned impairment rating.

Rodriguez v. Service Lloyds Ins. Co., 997 S.W.2d 248, 253-54 (Tex. 1999) (citations omitted).

2

Childress’s briefing is somewhat difficult to follow. He states his issues as being: (1) “Did the Trial abuse its discretion by exclusion of critical evidence to prove a fact,” and (2) “Is this a case of First Impression where it set forth a completely original issue of law for a decision by the trial court and did the trial court error prevent appellate from properly presenting the case to the court of appeals.” We will attempt to address Childress’s arguments as fairly and thoroughly as we can, but we must also apply the same rules as we would if he were represented by counsel. See Veigel v. Texas Boll Weevil Eradication Found., Inc., 549 S.W.3d 193, 195 n.1 (Tex. App.—Austin 2018, no pet.).

3

Childress’s first affidavit refers to “EXHIBITS LIST A-X,” and the second refers to “EXHIBITS LIST, L.” Exhibit L—included in the clerk’s record as having been attached to the affidavit—consists of several documents filed with the Division well after the ALJ’s hearing in September 2017. The clerk’s record does not include Exhibits A through X, and according to Childress’s exhibit list, those exhibits total about 270 pages plus an unspecified number of pages contained in two exhibits described as “Court Records” for two Division cases.

4

We also note that the trial court was tasked with conducting a de novo review in which the evidence of the extent of impairment is limited to that presented in the administrative case. Deleon v. Royal Indem. Co., 396 S.W.3d 597, 600-01 (Tex. App.—Austin 2010), rev’d on other grounds, 396 S.W.3d 527 (Tex. 2012). It is not clear whether Childress sought to introduce the parties’ competing medical reports, but the ALJ’s opinion, summarizing the content of those reports relevant to Childress’s injuries and impairment, provided the trial court with the information relevant for its de novo evaluation of the issues.

5

Childress’s main summary-judgment exhibit was a “Claimant Request for Review Tex Lab Code § Sec 415.0211, Emergency Cease and Desist Order,” which he apparently filed with the Division in March 2019. That document includes twenty-two exhibits, along with a list providing a page count (the documents range from one to thirty-three pages long) and a description (such as “Right Bicep,” “Denial,” Interlocutory Order,” “Wage Statement,” “Bolte,” “Added Issues,” and “Response First Supplemental Answer to [Amended] Original”) for each of those exhibits.

6

In September 2018, the Division assigned Dr. Lerma to examine Childress to determine his “Return to Work Status” from September 2, 2016, through the date of the exam and his “Disability” from October 2, 2017, through the date of the exam. However, the ALJ’s Decision was made after considering a report by Dr. Clark as Designated Doctor, not Dr. Lerma, whose examination occurred about nine months after Childress filed his suit for judicial review. Thus, it appears Childress was granted permission to seek a change to his status, but we have no information about what has transpired in the Division since Dr. Lerma’s exam and report.

Court of Appeals of Texas, Austin.

Rhonda Yvonne DAVILA, Appellant

v.

TEXAS MUTUAL INSURANCE COMPANY, Appellee

NO. 03-19-00366-CV

|

Filed: March 12, 2020

FROM THE 126TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-18-000354, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING

Attorneys & Firms

Rhonda Yvonne Davila, pro se.

Bryan W. Jones, for Appellee.

Before Chief Justice Triana

MEMORANDUM OPINION

Thomas J. Baker, Justice

*1 Appellant Rhonda Yvonne Davila, pro se, filed a suit for judicial review of a final decision of the Texas Department of Insurance, Division of Workers’ Compensation (DWC). Appellee Texas Mutual Insurance Company is the workers’ compensation carrier of Davila’s employer. Texas Mutual filed a no-evidence motion for summary judgment, which the trial court granted after sustaining Texas Mutual’s objections to Davila’s summary-judgment evidence. We will affirm the trial court’s summary judgment.

BACKGROUND

In April 2016 Davila sustained a compensable work-related injury. Texas Mutual accepted liability for her injury, but a dispute arose between the parties concerning the extent of her compensable injury (i.e., whether it includes Tex. Lab. Code §§ 408.001(a) (“Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee.”), 413.031 (providing procedures for resolution of medical disputes involving workers’ compensation).

After a contested-case hearing, the administrative law judge (ALJ) issued a decision and order finding that Davila’s compensable injury did not extend to or include lumbar sprain/strain and that she reached MMI on May 19, 2016 with a 0% impairment rating. Davila appealed the ALJ’s order to the DWC Appeals Panel, which affirmed the ALJ’s decision. See id. § 410.202 (providing for appeal of ALJ’s decision to Appeals Panel). Davila then filed this suit for judicial review specifically challenging the DWC’s findings on all three disputed issues. See id. § 410.251 (providing for judicial review of decision of DWC Appeals Panel).

Texas Mutual filed a no-evidence summary-judgment motion. Davila filed a response, attaching several exhibits (A through J) as evidence, much of which appears to be excerpts from the administrative hearing. Texas Mutual filed objections to all of Davila’s exhibits and a motion to strike them, raising several grounds: lack of proper authentication and predicate; hearsay; and failure to meet the “producing cause standard” of causation. Davila did not file a response to Texas Mutual’s objections and motion to strike. At the hearing on the motion to strike and motion for summary judgment, Davila argued that the documents comprising her evidence were “authenticated” because they had stamps at the bottom denoting they had been admitted as exhibits at the administrative hearing. The trial court responded, “because these [documents] were admitted in that administrative hearing does not mean they are authenticated for purposes of Summary Judgment evidence.” Davila’s only response was that, contrary to Texas Mutual’s contention that she had “no evidence” to support her claims, she had “tons of evidence.” Davila did not otherwise respond to Texas Mutual’s evidentiary objections.

*2 In separate orders rendered after the hearing, the trial court (1) sustained all of Texas Mutual’s evidentiary objections without stating the basis of its ruling and struck all of Davila’s summary-judgment evidence from the record, and (2) granted Texas Mutual’s summary-judgment motion.

DISCUSSION

On appeal, Davila contends that (1) the trial court abused its discretion in excluding all of her summary-judgment evidence, and (2) the evidence was legally insufficient to support the trial court’s summary judgment. Although we review the trial court’s summary judgment de novo, Starwood Mgmt., LLC v. Swaim, 530 S.W.3d 673, 678 (Tex. 2017) (per curiam).

In reviewing the grant of summary judgment, the scope of our review is limited to the summary-judgment record upon which the trial court’s ruling was based. See Dees v. Thomas, No. 03-18-00372-CV, 2019 WL 2847438, at *4 (Tex. App.—Austin July 3, 2019, no pet.) (mem. op.). In determining what constitutes the summary-judgment record, we begin with Davila’s first issue regarding the trial court’s excluding her evidence. As relevant here, Texas Mutual made the following three objections to Davila’s summary-judgment evidence: (1) “Texas Mutual objects to Exhibits A through J on the ground that they have not been properly authenticated,” (2) “Exhibits A through J, as outlined below, contain hearsay statements and hearsay within hearsay,” and (3) “Texas Mutual objects to Davila’s Exhibits A through J because they do not meet the producing cause standard [citations omitted].”

Davila did not file a written response to Texas Mutual’s objections; object to the trial court’s ruling; request the trial court to reconsider its decision to strike her exhibits; or request an opportunity to amend her summary-judgment response via a motion for new trial, for rehearing, or to set aside the judgment. Now, for the first time in briefing before this Court, Davila asserts that the trial court “erred by omitting all [of her] exhibits,” “err[ed] in excluding critical evidence,” “excluded all of [her] exhibits not just the ones containing hearsay,” and that Texas Mutual “is objecting to its own self by stating the Decision and Order of the Division contain hearsay.” Other than this vague reference to hearsay, her brief contains no contention or supporting argument and authority that any of the three bases that Texas Mutual asserted for exclusion of her evidence are without merit.

As a prerequisite to presenting a complaint for appellate review, the record must show the complaint was made to the trial court by a timely request, objection, or motion. Cantu, 195 S.W.3d at 871.

*3 Furthermore, “when an appellee urges several objections to a particular piece of evidence and, on appeal, the appellant complains of its exclusion on only one of those bases, the appellant has waived that issue for appeal because [she] has not challenged all possible grounds for the trial court’s ruling that sustained the objection.” Gulley v. Davis, 321 S.W.3d 213, 218 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). Read liberally, Davila’s appellate contentions address only Texas Mutual’s hearsay ground supporting the trial court’s ruling that sustained the objections. However, she fails to address the other two objections that Texas Mutual advanced (i.e., that her exhibits were not properly authenticated and did not meet the “producing cause standard”).

Because the trial court could have sustained Texas Mutual’s objections on grounds other than hearsay, and Davila has not challenged all possible grounds for sustaining the objections, we conclude that she has waived any error as to the exclusion of her summary-judgment evidence. See Murray v. Grayum, No. 03-10-00165-CV, 2011 WL 2533796, at *1 (Tex. App.—Austin June 24, 2011, pet. denied) (mem. op.) (if appellant does not “attack all independent bases or grounds that fully support a complained-of ruling or judgment,” court “must affirm the ruling or judgment on the remaining independent basis”).

Because we must review the trial court’s summary-judgment ruling on the record before it, see Jennings v. Bindseil, 258 S.W.3d 190, 194 (Tex. App.—Austin 2008, no pet.) (noting that if nonmovant fails to raise issue of material fact, court must grant no-evidence motion). Because of our disposition of Davila’s first issue, we need not address her second issue asserting that there is “factually insufficient evidence” to support the trial court’s summary judgment.

CONCLUSION

We affirm the trial court’s order granting summary judgment for Texas Mutual.

Court of Appeals of Texas, Austin.

Sabrina ISMAIL, Appellant

v.

Mohammad Sayem KHAN, Appellee

NO. 03-19-00039-CV

|

Filed: January 24, 2020

FROM THE 425TH JUDICIAL DISTRICT COURT OF WILLIAMSON COUNTY, NO. 17-2600-F425, THE HONORABLE BETSY F. LAMBETH, JUDGE PRESIDING

Attorneys & Firms

Sabrina Ismail, 13858 N. Highway 183, #102, Austin, TX 78750, pro se.

Matthew Valley, The Law Office of Matthew Valley, 1213 W. Slaughter Ln., Ste. 100, Austin, TX 78748, for Appellant.

Mohammad Sayem Khan, 12129 Wickline Way, Austin, TX 78717, pro se.

Before Chief Justice Smith

MEMORANDUM OPINION

Jeff Rose, Chief Justice

*1 Sabrina Ismail appeals the district court’s final decree of divorce in the underlying suit filed by Mohammad Sayem Khan. In three issues, Ismail contends that the district court erred by: (1) finding that her monthly net resources for calculating child support were $4,000 per month; (2) characterizing real property in Bangladesh as community property; and (3) dividing the marital estate without sufficient evidence to make a just-and-right division. We will affirm the district court’s decree.

BACKGROUND

Ismail and Khan married in 2004 and have two children. Khan filed for divorce in 2017. After a bench trial, the district court determined that Ismail had monthly net resources of $4,000 and signed a divorce decree ordering her to pay $280 in monthly child support. The decree also awarded Ismail and Khan an undivided 50% interest in “[t]he parties’ partial ownership of land in Mirpur, Bangladesh.” This appeal followed.

DISCUSSION

Monthly net resources for child-support calculation

In her first issue, Ismail contends that the district court erred by finding that her monthly net resources for calculating child support were $4,000 per month. She states that the evidence at trial showed she was “destitute,” and specifically contends that the district court should not have considered money she receives from family as part of her “resources” because her family has no obligation to continue providing that money. Thus, in her view, her monthly net resources are not $4,000, but zero.

A trial court’s child-support order will not be disturbed on appeal unless the complaining party shows a clear abuse of discretion. Ziefman v. Michels, 212 S.W.3d 582, 587 (Tex. App.—Austin 2006, pet. denied)).

The Family Code defines “resources,” for the purpose of determining child-support liability, as including:

(1) 100 percent of all wage and salary income and other compensation for personal services (including commissions, overtime pay, tips, and bonuses);

(2) interest, dividends, and royalty income;

(3) self-employment income;

(4) net rental income (defined as rent after deducting operating expenses and mortgage payments, but not including noncash items such as depreciation); and

(5) all other income actually being received, including severance pay, retirement benefits, pensions, trust income, annuities, capital gains, social security benefits other than supplemental security income, United States Department of Veterans Affairs disability benefits other than non-service-connected disability pension benefits, as defined by 38 U.S.C. Section 101(17), unemployment benefits, disability and workers’ compensation benefits, interest income from notes regardless of the source, gifts and prizes, spousal maintenance, and alimony.

*2 section 154.062(b)(5) includes “gifts” and “all other income actually being received” in definition of “resources”).

Here, Khan, Ismail, and Ismail’s sister testified about Ismail’s financial resources. Khan testified that Ismail has an extensive inheritance from her parents. But Ismail’s sister denied knowing of any assets that Ismail inherited or would inherit. Ismail testified that she receives financial assistance from her family each month:

Court: How much money do you receive from your family on a monthly basis?

Ismail: The thing is that Mohammad Khan gives me $1,800 and after that if I need something, they do grocery and sometimes they pay money like $300 or $200 like that.

Ismail further testified that because of her family’s financial assistance, money does not matter to her:

Ismail’s counsel: Do you have a job that pays you money?

Ismail: No, I am not getting money but I will give [sic] some money from Mohammad Khan and my family members are helping me so money doesn’t matter for me.

....

Ismail’s counsel: Do you have any cash yourself?

Ismail: Right now in my bank statement in bank account are you asking?

Ismail’s counsel: Yes, approximately how much do you have?

Ismail: $1,800 and if I need more money I would get it from Mohammad Khan and if don’t get it from Mohammad Khan I’ll take it from my family members so I don’t need to think about money, actually.

At the hearing on the motion to enter the final decree, Ismail’s counsel contended that Ismail’s “testified-to income was zero” but the district court recalled that “[Ismail] testified as to money that was coming in from other sources and that’s what I based it on.” Thus, the record disproves Ismail’s contention that her “testified-to income was zero” by showing that Ismail receives monthly “resources,” statutorily defined as including “gifts,” from her family members that may be considered in calculating child support. See In re L.R.P., 98 S.W.3d at 314.

However, the district court stated that it was “not comfortable with the information” it had “regarding what [Ismail] receives or what she’s able to receive from her family.” Using the wage-and-salary presumption under Id. Application of the wage-and-salary presumption here yields a monthly child support obligation of $280.91, which is slightly greater than the $280 child support that the district court ordered in its final decree.1 Unsurprisingly, Ismail does not complain that the district court ordered her to pay less child support than that authorized by application of the wage-and-salary presumption in the Family Code.

*3 Rather, Ismail complains about the finding that her monthly net resources were any amount greater than zero. But Ismail acknowledges that when determining her monthly net resources available for child support, the trial court was authorized to assign a reasonable amount of deemed income attributable to assets that do not currently produce income. See id. § 154.067(a). Section 154.067(a) of the Family Code provides that:

[w]hen appropriate, in order to determine the net resources available for child support, the court may assign a reasonable amount of deemed income attributable to assets that do not currently produce income. The court shall also consider whether certain property that is not producing income can be liquidated without an unreasonable financial sacrifice because of cyclical or other market conditions. If there is no effective market for the property, the carrying costs of such an investment, including property taxes and note payments, shall be offset against the income attributed to the property.

Id. Here, the court’s marital-property division (excluding clothing, jewelry, and furniture with a net value of $22,500) awarded Ismail assets with net values in excess of $85,801.97. Ismail received liquid assets, an income-producing asset, and other assets that do not currently produce income:

• real property in Temple, Texas with a net value of $45,789.65 that generates $1,200 in rent (after deducting $150 payment to property-management entity);

• an Employee Retirement System account with a net value of $9,979.19;

• a Baylor Scott & White Health Retirement Savings Plan with a net value of $15,368.94;

• half of a Canadian Local Authority pension plan with Ismail’s share of net value at $13,664.19; and

• a Wells Fargo joint checking account with a balance of $1,000.

Further, Khan was ordered to pay Ismail $1,000 monthly for spousal maintenance.

The district court could have considered these assets and spousal-maintenance income—in addition to the $200 to $300 monthly financial support that Ismail’s family provides to her—when determining Ismail’s net resources available for child support. See id. Norris v. Norris, No. 03-12-00108-CV, 2013 WL 812110, at *8, 2013 Tex. App. LEXIS 1884, at *24 (Tex. App.—Austin Feb. 27, 2013, no pet.) (mem. op.) (rejecting father’s complaint about trial court’s conclusion that his assets provided him with net monthly income of $3,300 because evidence indicated that he had assets in excess of $500,000 and trial court could have reasonably determined that those assets could produce $3,300 monthly).

*4 Because this record contains some evidence of a substantive and probative character supporting the district court’s net-resources finding, Ismail failed to meet her burden of showing that the district court abused its discretion in making that finding. See Ziefman, 212 S.W.3d at 587. And in any event, the district court set Ismail’s child support amount at a figure well below this, applying the wage-and-salary presumption for minimum-wage income from the Family Code. We overrule Ismail’s first issue.

Characterization of real property in Bangladesh

In her second issue, Ismail contends that the district court erred by characterizing real property in Bangladesh as community property. She states that testimony in the record “indicated that the Bangladesh property, if it exists,” is her sole and separate property. All property possessed by either spouse during or on dissolution of marriage is presumed to be community property. Id. § 3.003(b).

However, the district court’s decree does not purport to divide any spouse’s separate property. Rather, the decree specifies that Ismail and Khan are each awarded 50% interest in land in which they have “partial”—not sole—ownership. Unlike the other references to real property in the decree, there is no property description for the reference to land in Bangladesh, and Ismail herself questions the Bangladesh property’s existence.

Further, the partial ownership of land referenced during Khan’s closing argument was “land in Pakistan,” not in Bangladesh.2 Khan testified that Ismail would inherit certain real property in unspecified cities—“two four-story building[s]” located “in the capital” and “the home [where] she was born and grew up, it’s in another city and they have acres and acres and acres of land”—but there was conflicting testimony on the inheritance issue and nothing in the record to establish that Ismail actually owned any such properties. When Ismail’s sister was asked what happened to her parents’ property after their deaths, she testified, “We don’t have any specific property. My parents used to live in a house, that house now belongs to my brother who lives in Bangladesh.” Ismail’s sister denied knowing of any assets that Ismail inherited or would inherit.3

*5 Moreover, the decree specifies that “any assets of the parties not awarded or divided by this Final Decree of Divorce are subject to future division as provided in the Texas Family Code.” If Ismail has any separate property assets in Bangladesh, this decree—which is limited to the land in which Ismail and Khan have “partial” ownership—on its face does not purport to divide those assets. Thus, Ismail is incorrect in her contention that the district court characterized any separate property in Bangladesh as community property. On this record, we conclude that the district court did not abuse its discretion by dividing “[t]he parties’ partial ownership of land in Mirpur, Bangladesh” equally between the spouses. We overrule Ismail’s second issue.

Just-and-right division of marital estate

In her third issue, Ismail contends that the district court erred by dividing the marital estate without sufficient evidence to make a just-and-right division. She specifically contends that absent evidence about the value of “the land” in Bangladesh, the district court was unable to determine “the size of the community pie.”

A trial court must make a just-and-right division of the community estate upon divorce. Henry v. Henry, No. 03-11-00253-CV, 2014 WL 1572478, at *1, 2014 Tex. App. LEXIS 4233, at *2 (Tex. App.—Austin Apr. 18, 2014, no pet.) (mem. op.).

In support of this issue, Ismail relies exclusively on two cases in which the parties presented no evidence of the value of the community estate or any of its component parts. See Sandone v. Miller Sandone, 116 S.W.3d 204, 206-08 (Tex. App.—El Paso 2003, no pet.) (concluding that trial court abused its discretion by dividing marital property when there was no evidence as to value of assets or amount of liabilities; “a complete absence of evidence to support the division of property”). Unlike those cases, this case does not concern a default divorce decree or a record devoid of evidence about the value of assets and amount of liabilities in the marital estate. Thus, neither of Ismail’s cited authorities supports her contention that the trial court abused its discretion in its division of the marital estate.

Moreover, each party in a divorce proceeding has a burden to present sufficient evidence of the value of the community estate to enable the trial court to make a just-and-right division. Deltuva v. Deltuva, 113 S.W.3d 882, 887 (Tex. App.—Dallas 2003, no pet.). Because Ismail failed to provide a value for any real property in Bangladesh, she may not now complain that the district court had insufficient information to divide the marital estate in a just-and-right manner. We overrule Ismail’s third issue.

CONCLUSION

*6 We affirm the district court’s final decree of divorce.

Dissenting Opinion by Justice Smith

DISSENTING OPINION

Edward Smith, Justice, dissenting.

The divorce decree in this case awards each of the parties an undivided 50% interest “[i]n the parties’ partial ownership of land in Mirpur, Bangladesh.” Sabrina Ismail contends the district court erred by characterizing this land, if it exists, as community property. I disagree with the majority that Ismail failed to establish an abuse of discretion and would reverse and remand for a new property division. For that reason, I respectfully dissent.

The Family Code directs the trial court presiding over a divorce to make a “just and right” division of the parties’ community property. Id.

All property possessed by a spouse on divorce is presumed to be community property. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005).

*7 The majority concludes the decree does not purport to divide any spouse’s separate property. Instead, the majority construes the decree as dividing their joint, partial ownership interest in land in Bangladesh. But Ismail argues that there is no evidence that the land divided by the decree was in fact jointly owned. In response, Khan argues that the parties jointly purchased the land. He claims that he “provided a copy of an email to the [trial] court [showing] that he paid money to purchase the land.” But Khan did not mention this purchase in his testimony at trial, and he did not offer that email into evidence. In fact, the only evidence regarding the character of the land in Bangladesh is Khan’s own testimony. He testified that Ismail inherited some of her family’s extensive landholdings in Bangladesh and that he saw the property while traveling there. Khan’s testimony regarding how Ismail acquired the land is undisputed and thus conclusively establishes it as her separate property. See id. at 815 (holding undisputed evidence may “become conclusive when a party admits it is true”).

If a court mischaracterizes a spouse’s separate property as community property and awards some of it to the other spouse, as the district court did here, “the error is by definition harmful, and we must reverse and remand because the subsequent division of the community estate would divest the spouse of his or her separate property.” Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 140–41 (Tex. 1977))). I therefore would sustain Ismail’s second issue and reverse and remand the division of the community estate.

This disposition makes it unnecessary to address Ismail’s third issue, in which she alleges that the district court divided the community estate without evidence of its value. See Wilson v. Wilson, 132 S.W.3d 533, 539 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (same).

I respectfully dissent.

Footnotes

1

The statutory chart in the Family Code lists $1123.62 as the net monthly income for a person earning the federal minimum wage. See Tex. Fam. Code § 154.061 (containing chart for computing net monthly income). Applying to that amount the 25% guideline for two children results in a total of $280.91. See id. § 154.125 (providing schedule of percentage guidelines which for two children is 25% of obligor’s net resources).

2

Khan’s counsel stated, “We have partial ownership of the land in Pakistan which is 100 percent to the wife but there is no valuation on that because we don’t have a value so Ms. Ismail is not exactly getting a 43 percent split compared to Mr. Khan’s 56 percent split as shown on this spreadsheet.” (The spreadsheet referenced here is not in the record.). Ismail’s counsel responded, “[T]here was no testimony before [the court] about a piece of property in Pakistan.”

3

Given the testimony at trial, evidence as to Ismail’s separate-property claim was not conclusive. We defer to the district court’s resolution of evidentiary conflicts as the factfinder. See 2019 WL 2078173, 2019 U.S. LEXIS 2051 (May 13, 2019).

1

I express no opinion on whether the majority’s analysis of the merits of Ismail’s first issue is correct.

Court of Appeals of Texas, Austin.

FACILITY INSURANCE COMPANY; Midwest Employers Casualty Company; ACE American Insurance Company; Houston General Insurance Company; UPS Ground Freight Inc.; Hartford Casualty Insurance Company; WC Solutions; Poly-America, LP; British American Insurance Company; Clarendon National Insurance Company; Sentry Insurance, A Mutual Company; St. Paul Fire & Marine Insurance Company; American Zurich Insurance Company; Employers Insurance Company of Wausau; Zurich American Insurance Company; CompPac Trust of Texas; Netherlands Insurance Company; American Home Assurance Company; and Fidelity & Guaranty Insurance Company, Appellants

v.

VISTA HOSPITAL OF DALLAS, Vista Medical Center Hospital, and Surgery Specialty Hospitals of America, Appellees

NO. 03-18-00663-CV

|

Filed: December 5, 2019

FROM THE 126TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-15-005812, HONORABLE KARIN CRUMP, JUDGE PRESIDING

Attorneys & Firms

Steven M. Tipton, Flahive Ogden & Latson, P.O. Box 201329, Austin, TX 78720, for Appellants.

David F. Bragg, Law Offices of David F. Bragg, P.C., P.O. Box 2047, Bastrop, TX 78602, for Appellees.

Before Chief Justice Smith

MEMORANDUM OPINION

Chari L. Kelly, Justice

*1 This is an appeal in a suit for judicial review of an administrative decision.1 The administrative decision arose from a dispute over reimbursement for workers’ compensation medical benefits. Appellants are insurance companies, or “certified self-insureds,” who provide coverage under the Texas workers’ compensation system (collectively, the Carriers). Appellees are Vista Hospital of Dallas, Vista Medical Center Hospital, and Surgery Specialty Hospitals of America (collectively, Vista). Vista alleged systematic underpayment of claims by the Carriers beginning in 2002. Vista initially claimed a “fair and reasonable” payment of 70%–100% of their billed charges. After a 2008 regulatory change required the kind of services that Vista rendered to be reimbursed at 200% of the Medicare allowable reimbursement going forward, Vista revised its calculations to that amount. A panel of State Office of Administrative Hearings (SOAH) judges issued a Decision and Order, awarding reimbursement to Vista based on its revised calculations because SOAH determined those amounts to be “fair and reasonable.” The trial court affirmed SOAH’s decision, and this appeal ensued.

In nine issues, which can be grouped into three categories, the Carriers challenge (1) alleged procedural problems with Vista’s presentation of its case before SOAH, (2) the evidence supporting SOAH’s findings and conclusions that the Carriers’ reimbursement calculations did not result in “fair and reasonable” reimbursement to Vista (and that Vista’s competing calculations did), and (3) SOAH’s award of interest to Vista. We affirm.

BACKGROUND

The underlying disputes are the latest in a long-running series between Vista and carriers of workers’ compensation policies over reimbursement for covered medical expenses. See generally Vista Healthcare, Inc. v. Texas Mut. Ins. Co., 324 S.W.3d 264 (Tex. App.—Austin 2010, pet. denied).

Legal Framework for Medical Reimbursement

State law requires that “health care reimbursement policies and guidelines” govern reimbursement of health care providers who provide services to injured workers covered by workers’ compensation. See Vista Med. Ctr. Hosp., 2018 WL 3999595, at *1.

*2 Once the Division adopts a fee guideline for a certain type of medical care, workers’ compensation carriers must reimburse providers of that type of care in accord with the guideline. See id. (citing 28 Tex. Admin. Code § 134.1(e)(3) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Medical Reimbursement).

Vista and the Carriers’ Disputes Over Vista’s Bills

Vista provided outpatient medical services to injured workers from 2002 to 2008 under policies issued by the Carriers. In the fifty-three instances underlying this appeal, Vista billed one or more of the Carriers for these services. Vista’s original bill in each instance was on a Uniform Bill (UB) form—the standard bill form required by the Division. See id. § 133.10(b)(2) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Required Billing Forms/Formats). Vista computed its billed amounts according to its usual and customary fee schedule. Vista listed on the UBs the “procedure codes” corresponding with the services or procedures that it performed.

The Carriers paid Vista some, but not all, of the amounts requested. Vista asked the Carriers to reconsider and to reimburse it at 100% of the billed charges. When the Carriers refused, Vista requested Medical Dispute Resolution before the Division. See generally 28 Tex. Admin. Code § 133.305 (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., MDR—General). Before the Division, Vista contended that “fair and reasonable” reimbursement required compensation at no less than 70% of its billed charges in each dispute.

Ultimately, the Division determined that Vista was not entitled to any reimbursement beyond what the Carriers had already paid. So, from 2004 to 2009, Vista sought de novo contested case hearings before SOAH for each of the fifty-three disputes, again contending that reimbursement at 70%–100% of its billed charges was “fair and reasonable.”

The fifty-three disputes remained on SOAH’s docket for several years.

Legal Developments While the Disputes Were Pending Before SOAH

In the meantime, there were developments in the law affecting workers’ compensation reimbursement.

In 2006, the Division promulgated Rule 134.1, which requires “fair and reasonable” reimbursement to be, among other things, “consistent with the criteria of 28 Tex. Admin. Code § 134.1(d)(1) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Medical Reimbursement)), renumbered to subsection 134.1(f) by 33 Tex. Reg. 364, 393 (2008).

Tex. Lab. Code § 413.011(d) (“Fee guidelines must be fair and reasonable ....”). The criteria are that fee guidelines must be “designed to ensure the quality of medical care,” must be “designed ... to achieve effective medical cost control,” and “may not provide for payment of a fee in excess of the fee charged for similar treatment of an injured individual of an equivalent standard of living and paid by that individual or by someone acting on that individual’s behalf.” Id. In the absence of a fee guideline for a certain type of medical care, that care must be reimbursed at “fair and reasonable” rates.

*3 Following promulgation of Rule 134.1, Vista took the position that, for health care services for which the Division had not yet created any fee guideline, the rule could only require “fair and reasonable” reimbursement and could not also require that reimbursement comply with id. at 272–73.

In 2008, the Division promulgated a new fee guideline to govern “medical services provided in an outpatient acute care hospital on or after March 1, 2008” (the 2008 Fee Guideline). See Labor Code section 413.011(d). See 33 Tex. Reg. at 400–28.

The 2008 Fee Guideline uses reimbursement amounts prescribed by the federal Centers for Medicare and Medicaid Services for certain procedure codes, instead of using any health care provider’s usual and customary charges for those procedure codes. The guideline also requires that outpatient facilities be reimbursed at “200 percent” of “[t]he sum of the Medicare facility specific reimbursement amount and any applicable outlier payment amount” as provided in “the most recently adopted and effective Medicare Outpatient Prospective Payment System (OPPS) reimbursement formula and factors as published annually in the Federal Register.” 28 Tex. Admin. Code § 134.403(f)(1)(A) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Hospital Facility Fee Guideline—Outpatient). The 200% figure is called a Payment Adjustment Factor (PAF) or “200% of Medicare.” An outpatient facility’s ultimate reimbursement under the 2008 Fee Guideline is, roughly, the Medicare-prescribed amount for the services performed, plus any outlier payment,3 times two.

The 2008 Fee Guideline included a Preamble explaining its origin and underlying reasoning. The Preamble explained the Division’s purpose behind promulgating the guideline; the extensive research that informed its choices; and how the guideline meets the applicable statutory requirements, including Labor Code section 413.011’s criteria. The Preamble also explained why the Division’s research supported the 200% PAF. For all this, the Preamble explains, the Division relied on data from the years preceding 2008.

Vista Changes its “Fair and Reasonable” Calculations in the Pending Disputes

When Vista presented the fifty-three fee disputes to the Division, it calculated its reimbursement requests based on its view that Rule 134.1 should not require it to satisfy Labor Code section 413.011’s criteria. Then, in response to the 2008 Fee Guideline’s promulgation and to this Court’s rejection of Vista’s position on Rule 134.1 in Vista Healthcare, Vista changed its methodology for calculating “fair and reasonable” reimbursement in the fifty-three disputes. Even though Vista’s underlying claims preceded the 2008 Fee Guideline change, Vista recalculated their reimbursement requests from their initial 70%–100% of billed charges to the Medicare-prescribed reimbursement amounts for those same procedure codes, added any applicable outlier amounts, and applied the 200% PAF. These new calculations, Vista represents, resulted in lower overall amounts requested for reimbursement than its original calculations did.

*4 Vista laid out these new calculations in “Exhibit 1” documents that it filed with SOAH in each of the fifty-three disputes. In November 2013, Jacquelyn Pham, the Vice President of Business Financial Services for Dynacq Healthcare, swore to an affidavit in support of the “Exhibit 1” documents’ new calculations. In it, she said that Vista’s use of the 200% PAF resulted in “fair and reasonable” reimbursement. And she said that using the 2008 Fee Guideline for the fifty-three disputes produced “fair and reasonable reimbursement amount[s] which take[ ] into consideration all of the factors in the Texas Labor Code that are to be considered in the development of fee guidelines in the adjudication of fair and reasonable reimbursement.”

Final Hearing Before SOAH, Evidence Presented, and Result

In April 2015 before a panel of three administrative-law judges, SOAH held its final hearing in the fifty-three disputes. Vista’s evidence included its “Exhibit 1” documents; the 2008 Fee Guideline (including its Preamble); and testimony from Pham, who had provided the affidavit in support of Vista’s position.

Pham testified about her qualifications, training, and experience to opine about Vista’s calculation methodology. She also testified about how Vista calculated the “fair and reasonable” reimbursement amount on each “Exhibit 1,” including applying the 200% PAF, and that Vista and payors have been using the same method for several years.

Vista represented that, in every dispute, its “fair and reasonable” calculations produced lower overall reimbursement amounts than its original calculations produced. But the Carriers were unwilling to reimburse Vista at the newly calculated amounts.

Pham was the only witness to testify. The Carriers’ counsel cross-examined her extensively, but the Carriers did not offer any witness of their own.

Ultimately, the SOAH panel concluded that the Carriers should reimburse Vista at the rates calculated under the 2008 Fee Guideline, less amounts that the Carriers had already paid. The panel’s Decision and Order specified that the panel “derive[d] a methodology for determining fair and reasonable reimbursement.” The Decision and Order’s fourth conclusion of law said that “Vista met its burden of proving by a preponderance of the evidence that it had not been reimbursed a fair and reasonable amount by the Carriers for the services provided.”

The panel included the following findings relevant here in its Decision and Order:

4. The responsible Carrier reimbursed Vista ... for the services provided to the injured worker in each case.

5. Vista requested additional reimbursement in each of the cases, and in each case the responsible Carrier denied the request.

....

11. At the time Vista provided the services at issue in each case, there was no applicable fee guideline.

12. The Division adopted [the 2008 Fee Guideline], found at 28 Texas Administrative Code § 134.403, effective March 1, 2008.

13. The [2008 Fee Guideline] was adopted in order to provide fair and reasonable reimbursement for hospital outpatient services.

14. The [2008 Fee Guideline] is based on nationally-recognized studies, including data from other state systems, and research conducted by the federal Centers for Medicare and Medicaid Services (CMS).

15. Pursuant to the [2008 Fee Guideline], the Division adopted a Payment Adjustment Factor (PAF) for outpatient hospital fees of 200%, effective March 1, 2008.

16. The [2008 Fee Guideline] methodology provides a reliable method for calculating fair and reasonable reimbursement for the services at issue.

The Decision and Order also awarded Vista all interest as required by law.

Proceedings in the Trial Court

The Carriers then filed this suit, seeking judicial review of the Decision and Order. See Tex. Gov’t Code §§ 2001.001–.903. Ultimately, the trial court affirmed the Decision and Order and rendered judgment against the Carriers for the amounts that SOAH had ordered to be paid. The Carriers now appeal that judgment.

STANDARD OF REVIEW

*5 The Carriers ask that we reverse the district court’s judgment affirming SOAH’s final reimbursement decision. The Carriers sought judicial review of that decision under the APA. See generally id.; see also Tex. Lab. Code § 410.255. Under those provisions, we must “reverse or remand the case for further proceedings if,” and only if,

substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(A) in violation of a constitutional or statutory provision;

(B) in excess of the agency’s statutory authority;

(C) made through unlawful procedure;

(D) affected by other error of law;

(E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or

(F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

See Vista Med. Ctr. Hosp., 2018 WL 3999595, at *2.

“Essentially, this is a rational-basis test to determine, as a matter of law, whether an agency’s order finds reasonable support in the record.” Jenkins, 537 S.W.3d at 149.

DISCUSSION

I. Procedural Issues

We will first address the Carriers’ procedural complaints about the case that Vista should or should not have been allowed to present before SOAH. The Carriers raise these complaints in their sixth and seventh appellate issues.

A. Alleged procedural problems stemming from Vista’s new calculation methodology

In their sixth issue, the Carriers put forward three alleged procedural problems with Vista’s case: (1) “Vista failed to timely submit to each Carrier its corrected, new bill”; (2) “Vista failed to request reconsideration of its corrected ‘bills’ ” by the Carriers; and (3) “Vista failed to submit a ‘complete’ bill.” The Carriers contend that these alleged failures mean that SOAH’s award cannot stand because it either violated a statutory provision, was in excess of SOAH’s authority, was made through unlawful procedure, or was arbitrary and capricious. See Tex. Gov’t Code § 2001.174(2)(A), (B), (C), (F).

1. Timely submission of medical bills and claims for payment

The Carriers rely on a statute, a former rule, and a current rule for their argument about timely bill submission. Under the statute, “[a] health care provider shall submit a claim for payment to the insurance carrier not later than the 95th day after the date on which the health care services are provided to the injured employee.” Tex. Lab. Code § 408.027(a). Failing this requirement “constitutes a forfeiture of the provider’s right to reimbursement for that claim for payment.” Id.4

*6 Under a now-repealed rule in force during the period relevant to the underlying disputes, a health care provider could not “submit a medical bill later than the first day of the eleventh month after the date the services are provided.” See 25 Tex. Reg. 2139, 2146 (2000) (formerly codified at 28 Tex. Admin. Code § 134.801(c) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Submitting Medical Bills for Payment)), repealed by 31 Tex. Reg. 3560, 3560 (2006).

And under a rule in force since 2006, a health care provider generally may not “submit a medical bill later than the 95th day after the date the services are provided.” See 28 Tex. Admin. Code § 133.20(b) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Medical Bill Submission by Health Care Provider), adopted by 31 Tex. Reg. 3554, 3555 (2006), amended by 34 Tex. Reg. 430, 432 (2009).

The statute applies to “claim[s] for payment,” see 28 Tex. Admin. Code § 133.20(b) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Medical Bill Submission by Health Care Provider); 25 Tex. Reg. at 2146, repealed by 31 Tex. Reg. at 3560.

The Carriers argue that the “Exhibit 1” documents’ reimbursement calculations under the 2008 Fee Guideline’s methodology were new “claims for payment” or new “medical bills.” However, the Carriers’ argument misconstrues the reimbursement process. Health care providers submit claims for payment as a billed charge, and payors may re-price the charges when reimbursing. A provider need not submit a new bill when it challenges the reimbursement amount determined by a carrier, even if the alleged underpayment changes during a regulatory proceeding. Cf. 28 Tex. Admin. Code §§ 133.250(d) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Reconsideration for Payment of Medical Bills) (requiring that providers’ “request[s] for reconsideration” to carriers contain simply (1) same information as original bill, (2) copy of original explanation of benefits, (3) “any necessary and related documentation not submitted with the original medical bill to support the health care provider’s position,” and (4) explanation “that provides a rational basis to modify the previous denial or payment”), 133.250(i) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Reconsideration for Payment of Medical Bills) (authorizing Medical Dispute Resolution for provider after carrier has denied reconsideration).

Vista’s evidence about its calculation process is substantial evidence to support the conclusion that its “Exhibit 1” documents’ calculations were not new “medical bills” or new “claims for payment.” The way Vista calculated “fair and reasonable” reimbursement may have changed, but the underlying bills, UBs, and procedure codes did not. Vista represents that its ultimate “fair and reasonable” calculations produced less in reimbursement than its earlier calculations had produced. Vista’s new calculations therefore do not constitute new claims for payment or new medical bills under the statute and two rules on which the Carriers rely. Cf. 28 Tex. Admin. Code § 133.250(d), (i) (2018) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Reconsideration for Payment of Medical Bills) (allowing providers to pursue reconsideration and dispute resolution with new explanations but without changing underlying bills).

2. Reconsideration of bills

The Carriers also challenge the “reconsideration” step in the underlying disputes. Generally, an aggrieved provider must request reconsideration by the carrier before proceeding to dispute resolution before the Division. See id.

*7 The Carriers rely on a former rule, which was in effect during the period relevant to the underlying disputes and which provided:

The sender of a medical bill may request medical dispute resolution in accordance with § 133.305 of this title (relating to Medical Dispute Resolution) if the sender of a medical bill has requested reconsideration in accordance with this section and:

(1) after reconsideration, the sender is still dissatisfied with the insurance carrier’s action on the medical bill; or

(2) the sender has not received the insurance carrier’s response to the request for reconsideration by the 28th day after the date the request for reconsideration was sent to the insurance carrier.

25 Tex. Reg. 2128, 2131 (2000) (formerly codified at 28 Tex. Admin. Code § 133.304(m) (Tex. Workers’ Comp. Comm’n, Medical Payments and Denials)), repealed by 31 Tex. Reg. 3543, 3544 (2006).5

The Carriers argue that Vista “could not possibly have submitted” its new calculations “for reconsideration, since it never submitted these corrected, new bills to each Carrier in the first instance.” The Carriers received Vista’s new calculations while the underlying disputes were pending before SOAH. But Vista represents—and the Carriers do not contend otherwise—that, in every dispute, Vista’s “fair and reasonable” calculations under the 2008 Fee Guideline produced lower overall reimbursement amounts than its original calculations produced. When Vista originally requested reconsideration, then, it did so at higher amounts than it ultimately sought before SOAH. We therefore conclude that Vista’s original, timely reconsideration requests were effective to support proceeding to Medical Dispute Resolution under former Rule 133.304(m). And we conclude that Vista was not required under the rule to ask for reconsideration again at the lower amount. See 25 Tex. Reg. at 2131 (formerly codified at 28 Tex. Admin. Code § 133.304(m) (Tex. Workers’ Comp. Comm’n, Medical Payments and Denials)); Texas Workers’ Comp. Comm’n v. Patient Advocates of Tex., 136 S.W.3d 643, 654 (Tex. 2004) (describing former Rule 133.304(m) in only these terms: “A health care provider that disagrees with a carrier’s determination of the reimbursement amount may initiate the dispute resolution process.”)

3. “Complete” bills

The Carriers argue that Vista’s “Exhibit 1” in each dispute was a medical bill and that Vista therefore did not submit complete bills because the new calculation methodology reflected in the “Exhibit 1” documents (1) was not reflected in the documents originally submitted to the Carriers, (2 “does not include the correct billing codes from Division fee guidelines in effect on the date of service,” and (3) “contains charges [that] have been altered from the UBs.” The Carriers’ position, in effect, is that Vista’s bills as originally submitted were complete but only so long as Vista stuck with the “fair and reasonable” reimbursement calculation methodology reflected in those bills.

*8 We have already concluded that the “Exhibit 1” documents were not themselves new medical bills. And we have concluded that former Rule 133.304(m) did not require Vista to submit to the Carriers for reconsideration its new “fair and reasonable” reimbursement calculations when Vista’s original request for reconsideration was calculated at the higher, charged-based amounts. The Carriers do not argue that those earlier submissions were not complete in themselves, so we reject this third portion of their sixth issue.

Accordingly, we overrule the Carriers’ sixth issue.

B. Argument about barring Vista’s new calculation methodology before SOAH

In their seventh issue, the Carriers contend that Vista’s claims for “fair and reasonable” reimbursement before SOAH should have been barred for failure to meet “jurisdictional and procedural prerequisites.” The prerequisite that the Carriers contend was unmet is Vista’s failure to have presented the same reimbursement calculations to SOAH that it had presented to the Division. When Vista filed its challenges with the Division from 2004 to 2009, Vista sought reimbursement calculated at 70%–100% of its billed charges. But during the final hearing before SOAH in 2015, Vista sought reimbursement calculated at 200% of the Medicare-prescribed charges for the outpatient services that Vista performed, plus any outlier payment, as the 2008 Fee Guideline requires.

The Carriers consider the revised calculation methodology to be beyond “the claims” that Vista made “at the agency level.” Not so. Beginning with the dispute process before the Division, and continuing through the SOAH hearing, Vista has always sought reimbursement at “fair and reasonable” rates. This Court’s 2010 opinion in Vista Healthcare clarified that Rule 134.1’s incorporation of 324 S.W.3d at 269–73.

This Court issued Vista Healthcare in 2010—after Vista initiated with the Division the disputes underlying this appeal but before SOAH conducted its hearing in 2015. Vista argues that, because this Court supported the Division’s application of Rule 134.1 to “fee disputes involving ambulatory surgical centers” in Vista Healthcare, “it was clear ... that the same standards would be applied to the outpatient cases” underlying this appeal. The Carriers argue similarly: they identify the Vista facilities at issue here as ones converted from ambulatory surgical centers to outpatient facilities, and they recognize that, for the period relevant to the underlying disputes, reimbursement to ambulatory surgical centers was required to be “fair and reasonable” too. See 22 Tex. Reg. 6264, 6306 (1997) (formerly codified at 28 Tex. Admin. Code § 134.401(a)(4)), repealed by 33 Tex. Reg. 5319, 5319–21 (2008).

In support of their argument, the Carriers rely on id. at 86–87.

*9 In Treybig, there was a “fatal variance” between an injured worker’s claim before the Board and his claim in court. See id. at 897–99. His “hurt hip” claim reasonably supported only a claim of accidental injury before the Board, but his claims in court were for a full-blown occupational disease. See id.

Assuming without deciding that Johnson and Treybig apply to medical fee disputes under the workers’ compensation scheme and Division rules, we conclude that those cases do not require reversal here. Vista’s “claim,” both before the Division and SOAH, was for reimbursement at “fair and reasonable” rates. No one argues that the Division had before it insufficient facts or information to pass upon Vista’s “fair and reasonable” fee claims. In 2015, SOAH had before it sufficient facts and information, even though the fee calculations were different from what the Division had addressed. Vista changed its “fair and reasonable” calculation methodology in response to Vista Healthcare and to the 2008 Fee Guideline, but there was nevertheless a “fair and substantial identity of the claim” that Vista advanced before both the Division and SOAH—“fair and reasonable” fee reimbursement.

Accordingly, we hold that some reasonable basis exists in the record for SOAH’s decision to allow Vista to present its new calculation methodology, in light of Vista Healthcare and the 2008 Fee Guideline. See Jenkins, 537 S.W.3d at 149. We therefore overrule the Carriers’ seventh issue.6

II. Substantial Evidence Issues

A. Evidence that the Carriers’ calculation methodology did not produce “fair and reasonable” reimbursement

The Carriers’ first through fifth issues challenge the sufficiency of Vista’s evidence to support SOAH’s Decision and Order. In their first issue, the Carriers contend that Vista failed to carry its burden to prove that the Carriers’ payments to Vista did not constitute “fair and reasonable” reimbursement. Relatedly, they argue that there was “no evidence and no findings of fact” to support SOAH’s fourth conclusion of law—that “Vista met its burden of proving by a preponderance of the evidence that it had not been reimbursed a fair and reasonable amount by Carriers for the services provided.”

*10 “To obtain relief from SOAH, Vista had the burden to demonstrate by a preponderance of the evidence that [the Carriers’] reimbursement was insufficient and that Vista’s proposed methodology would result in fair and reasonable reimbursement.” Vista Med. Ctr. Hosp., 2018 WL 3999595, at *2.

“Substantial evidence” requires “more than a mere scintilla.” Id. (quoting Texas Health Facilities Comm’n, 665 S.W.2d at 452).

Vista’s evidence included (1) the 2008 Fee Guideline; (2) Vista’s calculations of “fair and reasonable” reimbursement in accordance with Vista Healthcare and the guideline; and (3) comparisons between the amounts produced by those calculations with the amounts that the Carriers agreed to pay, which were lower. Vista presented evidence that the Carriers did not reimburse them at rates that the Division considers “fair and reasonable” under the 2008 Fee Guideline and its 200% PAF. Because the Carriers’ payments fell short of the rates produced by the 2008 Fee Guideline, there was more than a scintilla of evidence for SOAH to conclude that the Carriers’ payments to Vista did not result in “fair and reasonable” reimbursement.

The Carriers respond that there are no findings of fact in SOAH’s decision to support the conclusion that the Carriers’ payments did not result in “fair and reasonable” reimbursement. On the contrary, the following findings of fact in SOAH’s order support the conclusion that the Carriers’ payments were not “fair and reasonable” because they fell short of the amounts produced by the 2008 Fee Guideline’s methodology: Vista requested additional reimbursement beyond what the Carriers had paid in each dispute; the Carriers refused; there was no applicable fee guideline when Vista provided the underlying services; the 2008 Fee Guideline was then promulgated “to provide fair and reasonable reimbursement for hospital outpatient services” and was “based on nationally-recognized studies, including data from other state systems, and research conducted by the federal Centers for Medicare and Medicaid Services (CMS)”; and the guideline, including its 200% PAF, “provides a reliable method for calculating fair and reasonable reimbursement for the services at issue.”

We hold that SOAH had before it substantial evidence to conclude that the Carriers’ payments to Vista did not amount to “fair and reasonable” reimbursement. Accordingly, we overrule the Carriers’ first issue.

B. Evidence that Vista’s calculation methodology produced “fair and reasonable” reimbursement

*11 The Carriers argue their second, third, and fourth issues together, so we address them together. In their second and third issues, the Carriers contend that Vista failed to carry its alleged burdens to prove (1) that the 200% PAF produced “fair and reasonable” rates “for each date of service in dispute” from 2002 to 2008 and (2) “that a 200% [PAF] was the only acceptable outpatient [PAF] for dates of service” in that period. In their fourth issue, the Carriers contend that SOAH prejudiced their substantial rights by “adopt[ing] and retrospectively appl[ying]” the 2008 Fee Guideline “to set a single exclusive reimbursement rate for all date[s] of service in dispute” from 2002 to 2008. The Carriers argue that the SOAH panel, as it said in the Decision and Order, should not have “derive[d] a methodology for determining fair and reasonable reimbursement.”

Vista’s evidence on these topics includes (1) the guideline’s Preamble, which explains in detail how the Division created the guideline, including its 200% PAF, and (2) Pham’s testimony.

In the Preamble, the Division explains: “In adopting PAFs ..., the Division has conducted extensive research to understand hospital reimbursement in the current Texas workers’ compensation system, including: reimbursement rates, the reimbursement rates as compared to Medicare reimbursement, and the reimbursement rates as compared to non-workers’ compensation reimbursement for hospital services.” 33 Tex. Reg. at 405. The Division also “considered economic indicators for hospitals that are particularly relevant,” including “[h]ospital Medicare margins and hospital market basket information.” Id. The Preamble summarized other information considered by the Division:

• The Division’s health-insurance consultant estimated that, in 2005, outpatient-services facilities were compensated on average at 186% of Medicare’s prescribed amount. “Reimbursement at these levels would generally maintain overall system costs at [calendar year] 2005 levels.” But the 186% average figure was the result of “one workers’ compensation payor [reimbursing] at a significantly lower rate than the average payor. Adjusting for this anomaly, reimbursement moves to approximately 211 percent of Medicare allowable reimbursement.”

• “[S]takeholders” of the workers’ compensation system recommended PAFs ranging from 100% to 266% “of Medicare for outpatient services.”

• The Division’s Compensation Research Institute concluded that “hospital outpatient payments per claim in Texas were lower than the 13-state median studied.”

• The Division adopted the 200% PAF based on all these factors.

Id. at 405–07. Many of these considerations stemmed from the Division’s health-insurance consultant’s review of data from 2005 and 2006. See id. at 402, 405–06.

The 2008 Fee Guideline also relied on other data from the several years before promulgation. The Preamble says that “the Division has based the primary components of its analysis on [calendar year] 2005 information” from “charged and paid data” provided by workers’ compensation carriers. Id. at 401. The Division also studied data on about “166,000 hospital outpatient billing lines” from 2005, which led to the 186% figure. Id. at 402. The Division concluded from 2005 and 2006 surveys conducted by the Texas Hospital Association that outpatient services had been reimbursed by workers’ compensation carriers at about 46%–49% of the service providers’ billed charges. Id. at 403.

In her testimony, Pham discussed her qualifications to opine about using the 2008 Fee Guideline and its 200% PAF and why Vista decided to use it. In her role, she is responsible for “health information management,” including “coding” and “billing and collection” under her company’s comprehensive system for tracking codes and charges. She has “a certification as a registered health information administrator,” which “involves all aspects of the medical record departments, which includes coding, physician deficiencies, delinquencies, [and] making sure the department’s up to different rules and regulations pertaining to patients’ medical records.”

*12 Pham also testified that she participates in at least thirty hours of continuing education every year and is “very familiar” with the Medicare claims processing manual. The manual “defines how Medicare would pay claims based on either inpatient or outpatient” services. In past health-industry employment, she worked (1) as an “auditor consultant,” comparing bill coding to underlying records; (2) as a director of health information management; and (3) as an executive director of operations, acting as “the hub between the business office, case management, and Chargemaster,” which is a billing system. In all, she has “use[d] Medicare methodologies, weights, values,” and the like for over a dozen years. SOAH accepted her “as an expert in ... Medicare billing and billing practices and values.”

Pham was involved with Vista’s application of the 2008 Fee Guideline and its 200% PAF to these disputes. Pham testified about how Vista calculated the “fair and reasonable” reimbursement amount on each “Exhibit 1”:

Q. Well, you added modifiers that weren’t on the bill, correct?

A. I believe based on the coding logic was [sic] that it was my belief that we could add modifiers, we just couldn’t recode the CPT code.

For the modifiers, Vista used the Medicare allowable reimbursement amounts associated with the original UBs’ procedure codes, as the 2008 Fee Guideline would require. Pham testified that Vista refined its calculations over a period of several months and that the calculations resulting from that effort produced “fair and reasonable” reimbursement.

As to the 200% PAF, and as in her affidavit, she opined that using the 200% PAF resulted in “fair and reasonable” reimbursement. She noted that Vista has used the 2008 Fee Guideline to calculate reimbursement for outpatient services for several years. She testified that “workers’ comp. accepts that” method “as the correct way to do it” and that several carriers reimburse Vista according to the guideline’s calculation methodology.

The Carriers respond that Pham’s testimony is not probative evidence at all because it is conclusory. Conclusory opinion testimony is opinion testimony that has “no basis” or whose basis “provides no support” for the opinion given. See CenterPoint Energy Entex v. Railroad Comm’n of Tex., 213 S.W.3d 364, 373 (Tex. App.— Austin 2006, no pet.) (requiring agencies to provide basis for rejecting uncontradicted, unimpeached testimony unless testimony is conclusory).

The Carriers argue that Pham provided no basis, or an insufficient basis, for her opinion that the 2008 Fee Guideline’s 200% PAF could be applied to services provided from 2002 to 2008 though the Division’s order promulgating the guideline said that it would apply from March 1, 2008, onward. But the Preamble, entered into evidence by Vista, did provide Pham with a sufficient basis for her opinion. The Preamble’s explanation of the Division’s and its consultants’ research from the years preceding 2008 provided a sufficient basis. Her opinions therefore were not conclusory. See Texas Health Facilities Comm’n, 665 S.W.2d at 452). Accordingly, we overrule the Carriers’ second issue.7

*13 We also overrule the Carriers’ third issue because it misstates Vista’s burden before SOAH. Vista needed to have shown that calculating reimbursement according to the 2008 Fee Guideline and 200% PAF resulted in “fair and reasonable” rates—not that that methodology was the only acceptable one. See Tex. Lab. Code § 413.011(d); Rule 134.1. We have concluded that substantial evidence supported SOAH’s ruling that Vista’s calculations produced “fair and reasonable” reimbursement.

As for the Carriers’ fourth issue, we do not read the Decision and Order as categorically as the Carriers do. They argue that the panel’s decision to “derive a methodology for determining fair and reasonable reimbursement” was not merely an effort to resolve the disputes but was instead taking upon itself “a new mandate to fashion a methodology for all the cases” and “to set a single exclusive reimbursement rate.” The better reading of SOAH’s action, however, is that it was resolving the Carriers and Vista’s dispute over how to compensate Vista at “fair and reasonable” rates under Labor Code section 413.011(d) and Rule 134.1. To do so, the panel necessarily needed to decide whether Vista’s proposed methodology produced “fair and reasonable” reimbursement. Accordingly, we overrule the Carriers’ fourth issue.8

C. Evidence that Vista’s calculations were accurate

In their fifth issue, the Carriers contend that Vista failed to “prove by a preponderance of the evidence that each of its ... payment calculations were true and accurate.” The Carriers put forward several alleged inaccuracies in Vista’s calculations under the 2008 Fee Guideline, which, according to the Carriers, undermine SOAH’s final award.

The Carriers’ challenges, however, amount to attacks on the credibility and weight of Vista’s evidence. In a substantial evidence review, we “may not substitute [our] judgment for the judgment of the state agency on the weight of the evidence on questions committed to agency discretion.” Central Power & Light Co. v. Public Util. Comm’n, 36 S.W.3d 547, 561 (Tex. App.—Austin 2000, pet. denied)).

*14 Pham testified that Vista refined its calculations over a period of several months and that the calculations resulting from that effort produced “fair and reasonable” reimbursement. Under substantial evidence review, SOAH was permitted to believe that testimony notwithstanding the Carriers’ cross-examination of Pham about instances of allegedly inaccurate calculations. See Lamb Cty. Elec. Coop., 269 S.W.3d at 272. Accordingly, we overrule the Carriers’ fifth issue.

III. Interest Issues

The Carriers’ eighth and ninth issues concern SOAH’s award of interest to Vista. SOAH’s order awarded Vista all interest as required by law, and the trial court did not disturb that ruling.

In their eighth issue, the Carriers contend that requiring them to “pay interest for unpaid fees and charges” was an error that prejudiced their substantial rights because “those fees and charges were not consistent with the guidelines.” The Carriers and Vista agree that any interest owed by the Carriers is by operation of Labor Code section 413.019(a), which provides: “Interest on an unpaid fee or charge that is consistent with the fee guidelines accrues at the rate provided by Section 401.023 beginning on the 60th day after the date the health care provider submits the bill to an insurance carrier until the date the bill is paid.”

Our conclusions above and this Court’s decision in Vista Medical Center Hospital dispose of this issue. In that opinion, as here, (1) Vista sought reimbursement from a workers’ compensation carrier, calculated as a percentage of its billed charges; (2) the disputes went before SOAH; and (3) the Division promulgated a new fee guideline in the meantime. See Id. at *4.

Here, as noted above, we have concluded that substantial evidence supports SOAH’s conclusion that Vista’s calculations under the 2008 Fee Guideline produced “fair and reasonable” reimbursement. Vista’s calculations therefore were “consistent with the fee guidelines,” as required by Labor Code section 413.019(a). See id. at *4. Accordingly, we overrule the Carriers’ eighth issue.

In their ninth issue, the Carriers contend that the accrual date for calculating interest “must be the 60th day following the date of the SOAH Order or the date each Carrier received Vista’s” calculations under the 2008 Fee Guideline. The Carriers argue that the accrual date for calculating interest can be no earlier than the date in each dispute when they first learned of the amounts that Vista was claiming were “fair and reasonable” under the new guideline.

We disagree. This Court concluded the interest discussion in Vista Medical Center Hospital by holding that Tex. Lab. Code § 413.019(a). As reflected in SOAH’s order, each of the claims that are greater than zero contain unpaid charges that are consistent with the guidelines. These unpaid charges existed as of the date the Carriers reimbursed Vista at what has now been determined to be unreasonable and unfair rates. Accordingly, interest properly accrues from the date that the Carriers made each inadequate reimbursement. Thus, we overrule the Carriers’ ninth issue.

CONCLUSION

*15 We affirm the trial court’s judgment.

Footnotes

1

See Tex. Gov’t Code § 2001.901(a).

2

The disputes underlying this appeal involve health care services provided as far back as 2002, when the Division’s predecessor agency, the Workers’ Compensation Commission, administered the workers’ compensation system. See Vista Healthcare, Inc. v. Texas Mut. Ins. Co., 324 S.W.3d 264, 265 n.1 (Tex. App.—Austin 2010, pet. denied). “Effective September 1, 2005, the legislature abolished the Commission and transferred its statutory responsibilities and rules to the Division.” Id. (citing Act of May 29, 2005, 79th Leg., R.S., ch. 265, §§ 8.001(b), .004(a), 2005 Tex. Gen. Laws 469, 607–08). We use “Division” to refer to either or both of the predecessor agency and the current one, as the context requires.

3

In this context, an “outlier” payment is an additional payment on top of the standard Medicare-prescribed amount for a particular procedure payable when necessary to reimburse a hospital for “high cost and complex procedures where a very costly service could present a hospital with significant financial loss.” See Medicare Program: Changes to the Hospital Outpatient Prospective Payment System, 72 Fed. Reg. 66,579, 66,683 (Nov. 27, 2007).

4

This statute became effective September 1, 2005. Act of May 29, 2005, 79th Leg., R.S., ch. 265, §§ 3.089, 8.020, sec. 408.027(a), 2005 Tex. Gen. Laws 469, 517, 611.

5

The topics addressed by former Rule 133.304(m) are now addressed within current Rule 133.240. See 31 Tex. Reg. at 3543–45, 3550, 3557–58 (codified at 28 TAC § 133.240, concerning Medical Payments and Denials, in the April 28, 2006, issue of the Texas Register (31 TexReg 3544), effective May 2, 2006.”). The Carriers rely only on the former rule.

6

Our reasoning also disposes of what the Carriers call the “Constitutional Limitations” portion of their seventh issue. In that portion, the Carriers consider Vista’s change in calculation methodology to be “rais[ing] a new basis for its claim” before SOAH from the one it had raised before the Division. The Carriers argue that they themselves would have been prohibited from making a similar change. The Carriers say that “[t]here is no rational basis to allow one party to a dispute to make changes to its claims at any time, yet prohibit the other party from ever doing the same.” But the “basis for [Vista’s] claim” did not change from the Division to SOAH—Vista sought “fair and reasonable” fee reimbursement in both venues. The Carriers cite no authorities suggesting otherwise in a constitutionality context. Indeed, the Carriers recognize that “Vista did have the right to present evidence, old or new,” before SOAH. The Carriers had the same right, but the Carriers did not put forward testimony from any witnesses of their own. We therefore reject the argument that the Carriers were treated unconstitutionally differently.

7

Relatedly, the Preamble and Pham’s testimony distinguish this case from Id. at 124–25. By contrast here, the Preamble’s discussion of the Division’s review of information from before 2008 and Pham’s affirmative testimony that the 2008 Fee Guideline produces “fair and reasonable” reimbursement for the 2002–2008 services is the kind of affirmative evidence that the Commission in Lone Star Gas lacked.

8

We also reject the Carriers’ one-sentence Due Process argument. They argue that SOAH’s use of the 2008 Fee Guideline to arrive at “fair and reasonable” reimbursement in these disputes is a “change of precedent” that “violates the Carriers[’] Due Process rights.” They cite Labor Code section 413.011(d) and Rule 134.1. But even if it were a change in policy or precedent, the Carriers cannot argue any lack of a meaningful opportunity to be heard. The hearing before SOAH took place in April 2015. In November 2013, Pham made her affidavit, in which she testified that Vista’s calculations according to the 2008 Fee Guideline produced “fair and reasonable reimbursement amount[s] which take[ ] into consideration all of the factors in the Texas Labor Code that are to be considered in the development of fee guidelines in the adjudication of fair and reasonable reimbursement.” Despite over a year’s notice of Vista’s position through the affidavit, the Carriers chose not to put forward any witnesses of their own during the SOAH hearing.

Court of Appeals of Texas, Austin.

Dr. Robert COOLBAUGH, D.C., Appellant

v.

TEXAS DEPARTMENT OF INSURANCE-DIVISION OF WORKERS’ COMPENSATION and Commissioner Ryan Brannan, in his Official Capacity, Appellees

NO. 03-18-00345-CV

|

Filed: September 10, 2019

FROM THE 353RD DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-15-005776, THE HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING

Attorneys & Firms

David Gordon, for Commissioner Ryan Brannan, in his Official Capacity

Bradley Dean McClellan, for Robert Coolbaugh

David Gordon, for Texas Department of Insurance-Division of Workers’ Compensation

Before Chief Justice Shannon*

MEMORANDUM OPINION

Bob E. Shannon, Justice

*1 This is an appeal from the judgment of the district court of Travis County sustaining a plea to the jurisdiction and affirming an order of the Commissioner of Workers’ Compensation. Appellant is Robert Coolbaugh, D.C.; appellees are the Texas Department of Insurance-Division of Workers’ Compensation (the Division) and Commissioner Ryan Brannan (the Commissioner).

The Division and the Commissioner filed a multifaceted plea to the jurisdiction challenging the court’s subject-matter jurisdiction. After hearing, the district court granted the plea and dismissed all of Coolbaugh’s claims save for his claim for judicial review of the Commissioner’s Penalty Order. After conducting the suit for judicial review, the district court rendered judgment affirming the Commissioner’s Penalty Order. This Court will affirm the district court’s judgment.

Coolbaugh filed a declaratory-judgment suit complaining, among other things, of two orders: (1) a 2013 order of the State Office of Administrative Hearings (SOAH) requiring him to pay a $8,326.90 refund to an insurance company as a final disposition of a medical-fee dispute (the Refund Order),1 and (2) the order of the Commissioner imposing a $10,000 administrative penalty for his failure to comply with Division orders requiring him to produce requested information and to furnish proof of payment of the Refund Order to the insurance company (the Penalty Order).

Respecting the Refund Order, Coolbaugh asserted that the Division had acted beyond its authority regarding certain disputed medical bills; he also challenged one of the controlling agency rules.

In its plea to the jurisdiction, the Division claimed that the court lacked jurisdiction to review Coolbaugh’s challenge to the Refund Order because it became final in October 2013, when he did not seek judicial review. According to the plea, SOAH rendered the Refund Order in August 2013. Coolbaugh did not challenge the Refund Order and it became final in October 2013. Coolbaugh filed the instant suit complaining of that order in December 2015.

From the parties’ briefing and the correspondence between the district court and counsel, it is apparent that the district court determined the plea to the jurisdiction after an evidentiary hearing, yet Coolbaugh filed no reporter’s record in this Court. See S.C. San Antonio, Inc. v. Texas Dep’t of Human Servs., 891 S.W.2d 773, 779 (Tex. App.—Austin 1995, writ denied).

*2 To avoid the Division’s plea to the jurisdiction asserting sovereign immunity, Coolbaugh alleged that the Penalty Order was an ultra vires act by the Commissioner. In its order granting the plea to the jurisdiction, the district court concluded that Coolbaugh failed to plead a valid ultra vires claim against the Commissioner and dismissed him from the lawsuit.

The ultra vires exception to the sovereign-immunity doctrine permits suits against state officials for nondiscretionary acts unauthorized by law. Tex. Lab. Code § 415.021(a).

After hearing, the district court rendered judgment affirming the Commissioner’s Penalty Order, which imposed a $10,000 administrative penalty for Coolbaugh’s failure to comply with Division orders requiring him to produce requested information and to furnish proof of payment of the Refund Order to the insurance company.

Coolbaugh faults the Penalty Order because it imposes a penalty for violations of the Refund Order, which he claims is void and unconstitutional. However, he ignores the fact that the Refund Order is now final and cannot be challenged. The Division and the Commissioner argue that the district court correctly determined that the Commissioner’s Penalty Order is supported by substantial evidence. We agree.

In a substantial-evidence review, the court presumes that the agency order is supported by substantial evidence and the burden is on the contestant to prove otherwise. Id. at 777–78.

After Coolbaugh indisputably failed to comply with the Division’s orders, the Division staff filed a complaint with SOAH seeking imposition of a $30,000 administrative penalty. The administrative law judge conducted a hearing to determine the appropriate amount of the penalty. The Division’s case was presented by one witness, Darrell Cooper, the Division’s Manager of Audits and Investigations. Cooper testified that the Division analyzes the factors in section 415.021(c) in evaluating the amount of the administrative penalty. At the date of the hearing, that section provided:

(c) In assessing an administrative penalty:

(1) the commissioner shall consider:

(A) the seriousness of the violation, including the nature, circumstances, consequences, extent and gravity of the prohibited act;

*3 (B) the history and extent of previous administrative violations;

(C) the demonstrated good faith of the violator, including actions taken to rectify the consequences of the prohibited act

(D) the penalty necessary to deter future violations;

(E) other matters that justice may require; and

(2) the commissioner shall, to the extent reasonable, consider the economic benefit resulting from the prohibited act.

Tex. Lab. Code § 415.021(c).

Measuring Coolbaugh’s conduct against these factors, Cooper testified that Coolbaugh’s violation was serious because of the amount owed and his on-going non-compliance—Cooper was 1,400 days late in payment as of the hearing. He testified further, “An order violation is considered [a] very serious violation. All system participants that have statutory duties are expected to comply with their requirements without being ordered, but if they fail to, the commissioners can issue orders [for them] to come into compliance. If they fail to comply with those orders, then it makes it virtually impossible for the agency to regulate the system.”

Cooper also attested that Coolbaugh had not complied with Division orders requesting information. Cooper noted that Coolbaugh had received two warning letters in the past about late submission of forms. He also opined that Coolbaugh failed to demonstrate good faith in that he did not respond to the Division orders and that he still owed the refund to the insurance companies.

Coolbaugh testified concerning claimed mitigating factors which he asserted should result in no administrative penalty.

The administrative judge filed a proposal for decision concluding that the Division was entitled to an order finding that an administrative penalty in the sum of $7,326.90 was warranted. The Commissioner adopted the proposal for decision with the modification that the administrative penalty be increased to $10,000.

It is undisputed that Coolbaugh failed to reply to orders for production or provide proof of payment of the refund to the insurance company. Accordingly, the Division was authorized to assess an administrative penalty. Under this record, this Court has concluded that the Commissioner’s imposition of the $10,000 Penalty Order is amply supported by substantial evidence.

The judgment is affirmed.

Footnotes

*

Before Bob E. Shannon, Chief Justice (retired), Third Court of Appeals, sitting by assignment. See Tex. Gov’t Code § 74.003(b).

1

Early in the controversy, Coolbaugh made a $1,000 payment to the insurance company, thereby reducing the amount owed under the Refund Order to $7,326.90.

Court of Appeals of Texas, Austin.

Pamela JOHNSON, Appellant

v.

TEXAS MUTUAL INSURANCE COMPANY, Appellee

NO. 03-18-00532-CV

|

Filed: August 23, 2019

FROM THE 345TH DISTRICT COURT OF TRAVIS COUNTY, NO. D-1-GN-15-001439, THE HONORABLE JAN SOIFER, JUDGE PRESIDING

Attorneys & Firms

Ms. Pamela Johnson, 815 A Brazos Street, # 416, Austin, TX 78701, Pro Se Appellant.

Ms. Shannon Simmons Pounds Texas Mutual Insurance Company, 2200 Aldrich Street, Austin, TX 78723, Mr. Bryan W. Jones, Texas Mutual Insurance Company, 2200 Aldrich Street, Austin, TX 78723, for Appellee.

Before Chief Justice Smith

MEMORANDUM OPINION

Edward Smith, Justice

*1 Pamela Johnson appeals from a no-evidence summary judgment rendered in favor of Texas Mutual Insurance Company on Johnson’s petition for judicial review of a Division of Workers’ Compensation (DWC) decision. On appeal, Johnson argues that the district court erred by excluding her summary-judgment evidence. We will affirm.

BACKGROUND

On February 9, 2013, Johnson sustained a compensable work-related injury. Texas Mutual accepted liability for her injuries, including a right tendinitis of the left posterior tibial tendon. She further disputed the date of her maximum medical improvement (MMI), her impairment rating, and the period of disability.

Johnson initiated a dispute-resolution process at the DWC to resolve the disputed issues. The DWC administrative law judge (ALJ) issued a decision and order finding that Johnson’s compensable injury included tendonitis, but not left ankle CRPS; that Johnson had not yet reached MMI and therefore should not be assigned an impairment rating; and that Johnson did not have disability from February 12, 2013 through December 31, 2013. Johnson appealed the ALJ’s decision and order, but the DWC Appeals Panel affirmed the ALJ’s decision on all issues. Johnson then filed a petition seeking judicial review challenging the panel’s findings.

In June 2015, Texas Mutual requested that an independent doctor assess whether Johnson had reached MMI and, if she had, to assign her an impairment rating. See (b) (providing that insurance carrier may request designated doctor to perform medical examination to resolve questions about work-related injury). The doctor opined that Johnson reached MMI on February 24, 2015, and assigned an impairment rating of zero percent. Johnson initiated another dispute-resolution process at the DWC to challenge the designated doctor’s findings. The ALJ issued a decision and order finding that Johnson reached MMI on February 24, 2015, and assigned her a zero percent impairment rating.

Johnson then filed another petition seeking judicial review of the ALJ’s decision, and the district court consolidated the two pending cases. Johnson moved for a traditional summary judgment on all issues, and Texas Mutual filed a no-evidence motion for summary judgment and objections to Johnson’s summary-judgment evidence. See Tex. R. Civ. P. 166a(c), (i). The district court sustained Texas Mutual’s objections, leaving Johnson with no summary-judgment evidence, and granted Texas Mutual’s no-evidence motion for summary judgment. Johnson timely appealed. She appears pro se before our Court.

DISCUSSION

We review a trial court’s granting of summary judgment de novo. Town of Dish v. Atmos Energy Corp., 519 S.W.3d 605, 608 (Tex. 2017). If the non-movant fails to raise an issue of material fact, the court must grant the motion. Id.

*2 Johnson argues the district court erred by sustaining Texas Mutual’s objection to Johnson’s exhibits, resulting in the court improperly granting Texas Mutual’s no-evidence motion for summary judgment. We review the exclusion of evidence for an abuse of discretion. Valadez v. Avitia, 238 S.W.3d 843, 845 (Tex. App.—El Paso 2007, no pet.). We conclude that Johnson has waived her evidentiary issue. And because Johnson did not provide evidence in response to Texas Mutual’s motion, she failed to raise a genuine issue of material fact. Therefore, we overrule Johnson’s issues on appeal.

CONCLUSION

We affirm the district court’s judgment.

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