shirley-lenoir-individually-and-as-personal-representative-of-the-estate ( 2015 )

Opinion issued July 7, 2015
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-14-00767-CV
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SHIRLEY LENOIR, INDIVIDUALLY AND AS PERSONAL
REPRESENTATIVE OF THE ESTATE OF SHANA LENOIR AND
CHRISTOPHER MCKNIGHT, INDIVIDUALLY AND AS NEXT FRIEND
OF NAYLA MCKNIGHT, Appellants
V.
U.T. PHYSICIANS, Appellee
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Case No. 2012-35806
OPINION
This is a health care liability case arising from the death of Shana Lenoir
hours after receiving prenatal care at U.T. Physicians clinic (UTP). UTP obtained
dismissal from the suit when the trial court granted its plea to the jurisdiction based
on an assertion of governmental immunity. The appellants (referred to collectively
as “the Lenoirs”) brought this interlocutory appeal challenging the dismissal.
The Lenoirs contend that the trial court erred by granting UTP’s plea to the
jurisdiction because (1) UTP failed to prove that it is a governmental unit as
defined by the Tort Claims Act (TCA) and (2) to the extent the TCA does apply,
the Lenoirs adequately alleged that Shana’s death was proximately caused by an
employee’s use of tangible physical property.
Because we agree that UTP did not meet its burden to establish that it is a
governmental unit, we reverse the trial court’s order granting UTP’s plea to the
jurisdiction and remand for further proceedings.
Background
Shana Lenoir received prenatal care at UTP clinic. She was seen by Dr.
Gonski—a second-year medical resident. Shana discussed with Dr. Gonski
complications she had with an earlier twin pregnancy. The twins were born
preterm. One died; the other required extensive medical care and was in the
neonatal intensive care unit for several months. On this visit, Shana was between
32 and 35 weeks pregnant with twins. Dr. Gonski prescribed weekly injections of
progesterone. A nurse employed by UTP clinic, Angela Matthews, gave Shana her
initial progesterone injection during the office visit.
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While at home several hours later, Shana began having difficulty breathing.
She was taken by EMS to Memorial Hermann Hospital; however, she and both of
her unborn children died before they arrived.
The Lenoirs sued the treating physician (Dr. Gonski), the attending
physician overseeing Dr. Gonski (Dr. Huang), the nurse who injected the
progesterone medication (Matthews), and UTP clinic.1 In related appeals, we have
rendered judgment for Matthews, affirmed the dismissal of Dr. Huang, and
reversed the dismissal of Dr. Gonski. 2 We now consider whether the trial court
erred by dismissing UTP based on governmental immunity.
The Lenoirs are not Barred by Judicial Admission
As an initial matter, UTP argues that the Lenoirs are prohibited from
contesting its status as a governmental unit because they made judicial admissions
when contesting the dismissal of UTP’s nurse employee, Matthews.
A. A Judicial admission is an unequivocal assertion of fact
A judicial admission is an unequivocal assertion of fact that, once made,
relieves the opposing party of its burden of proving the admitted fact and bars the
admitting party from disputing that fact. See Holy Cross Church of God in Christ
1
Dr. Gonski contended that she worked for the UT Medical Foundation, and Dr.
Huang contended that he worked for the UT Health Science Center at Houston
(UTHSC-H). The Lenoirs did not sue either of those entities.
2
Matthews v. Lenoir, 439 S.W.3d 489 (Tex. App.—Houston [1st Dist.] 2014, pet.
filed Oct. 6, 2014); Lenoir v. Marino, No. 01-13-01034-CV, 2015 WL ____ (Tex.
App.—Houston [1st Dist.] July 2, 2015, no pet. h.) (op. on reh’g).
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v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001); Houston First Am. Sav. v. Musick, 650
S.W.2d 764, 767 (Tex. 1983); Mendoza v. Fid. & Guar. Ins. Underwriters, Inc.,
606 S.W.2d 692, 694 (Tex. 1980). A judicial admission must be “clear, deliberate,
and unequivocal.” Regency Advantage Ltd. P’ship v. Bingo Idea–Watauga, Inc.,
936 S.W.2d 275, 278 (Tex. 1996).
The elements for establishing that a statement is a judicial admission are
(1) the statement must be made in the course of a judicial
proceeding;
(2) it must be contrary to an essential fact or defense asserted by
the party;
(3) it must be deliberate, clear, and unequivocal;
(4) it cannot be destructive of the opposing party’s theory of
recovery or defense; and
(5) enforcing the statement as a judicial admission would be
consistent with public policy.
H2O Solutions, Ltd. v. PM Realty Grp., LP, 438 S.W.3d 606, 617 (Tex. App.—
Houston [1st Dist.] 2014, pet. denied); Khan v. GBAK Props., Inc., 371 S.W.3d
347, 357 (Tex. App.—Houston [1st Dist.] 2012, no pet.). “An assertion of fact
pleaded in the alternative is not a judicial admission.” H2O Solutions, 438 S.W.3d
at 617; accord Wolf, 44 S.W.3d at 568.
B. The Lenoirs did not judicially admit that UTP is a governmental unit
UTP’s original answer contained an assertion of governmental immunity.
Consistent with that assertion, the Attorney General’s Office began representing
UTP. Subsequently, Matthews moved for dismissal, asserting that she had not been
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timely served with an expert report. In response, the Lenoirs argued that the AG’s
actual representation of the employer (UTP) alleged to be vicariously liable for the
negligent acts of its employee (Matthews) mandated that the AG also represent the
employee. Thus, the Lenoirs argued, timely service of the expert report on the
AG’s office counted as timely service on Matthews.
Nowhere in that argument is there a “deliberate, clear, and unequivocal”
assertion of fact that UTP is a governmental unit. See Regency Advantage Ltd.
P’ship, 936 S.W.2d at 278. Instead, the Lenoirs were arguing that, if the defendants
were going to “allege” that they had governmental immunity, then they were going
to be bound by the laws and rules that accompany that assertion, including that the
AG’s representation of the employer mandates that the AG also represents the
employee. In other words, the defendants (including UTP and Matthews) could not
purport to rely on governmental immunity to defeat the Lenoirs’ claims while
avoiding the effects of that assertion (AG representation and adequate service).
The Lenoirs took a consistent position in the Matthews appeal, arguing in
their brief:
U.T. Physicians was represented by the Office of the Attorney
General (OAG) because it alleged that it is a governmental unit in its
answer. As such, the OAG is also the attorney for U.T. Physicians’
former co-employee, Nurse Matthews. . . . Since U.T. Physicians
alleges that it is a governmental unit of the State of Texas and Nurse
Matthews was its former employee, the attorney general is her
attorney in negligence actions arising from conduct in the course and
scope of her employment or contractual performance.
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....
The Lenoirs have never argued that the OAG “automatically became
Nurse Matthews’ attorney simply upon filing of the lawsuit. Instead,
the Lenoirs asserted that the OAG was already participating in the
lawsuit as the attorneys of record for Nurse Matthews’ vicariously
liable co-employer, U.T. Physicians, an alleged governmental unit.
Therefore, U.T. Physicians must have requested legal representation
from the OAG because the OAG filed an answer on behalf of U.T.
Physicians, on July 20, 2012. Since the OAG was already representing
U.T. Physicians based on the conduct of its co-employee, Nurse
Matthews, the OAG was also responsible for providing legal
representation to Nurse Matthews, even though she had not yet been
served with process.
To the extent there is an “assertion of fact” in this argument, it concerns who was
representing Matthews, not whether UTP is a governmental unit.
Likewise, the Lenoirs never admitted that UTP was a governmental unit in
the pleadings underlying this appeal. The Lenoirs have consistently maintained that
“UT Physicians is an independent contractor to UTHSCH and is not entitled to
governmental immunity. Further, Defendant Angela Matthews is an employee of
an independent contractor and her employer is not entitled to assert governmental
immunity under the plain language of the statute.”
Furthermore, AG representation was not the Lenoirs’ only argument against
dismissal of Matthews. They made two additional, alternative arguments:
(1) Matthews failed to timely object to the Lenoirs’ report and, therefore, waived
all other challenges to the report and (2) the Lenoirs’ diligence in attempting
service on Matthews prevented dismissal on constitutional grounds.
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In conclusion, the Lenoirs made alternative arguments why Matthews should
not be dismissed from the suit. None of the three arguments were based on an
unequivocal assertion that UTP qualifies as a governmental unit. We, therefore,
conclude that no judicial admission was made. Accordingly, we reject UTP’s
argument that the Lenoirs are barred from challenging the grant of UTP’s plea to
the jurisdiction.
Plea to the Jurisdiction Standard of Review
A trial court must have subject-matter jurisdiction to decide a case. See Tex.
Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993). A plaintiff
bears the initial burden of alleging facts that affirmatively demonstrate the trial
court’s subject-matter jurisdiction over the suit. Id. at 446. A defendant may
challenge the trial court’s subject-matter jurisdiction through a plea to the
jurisdiction. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000).
The purpose of a plea to the jurisdiction is to “defeat a cause of action
without regard to whether the claims asserted have merit.” Id. It does not authorize
delving into the merits of the plaintiff’s claims, but rather, examining the
preliminary issue of whether the merits of those claims should be reached. Id.
Accordingly, in reviewing the trial court’s ruling on a plea to the jurisdiction, we
construe the pleadings liberally in favor of the plaintiff and determine if the
plaintiff has alleged facts that affirmatively demonstrate the court’s jurisdiction to
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hear the cause. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226
(Tex. 2004); Villarreal v. Harris Cnty., 226 S.W.3d 537, 541 (Tex. App.—
Houston [1st Dist.] 2006, no pet.).
If the pleadings lack sufficient facts to affirmatively demonstrate the trial
court’s jurisdiction but do not reveal incurable jurisdictional defects, the issue is
one of pleading sufficiency, and the trial court may either afford the plaintiff an
opportunity to amend or await further development of the case’s merits. Miranda,
133 S.W.3d at 226–27; Villarreal, 226 S.W.3d at 541. Conversely, if the pleadings
affirmatively negate the existence of jurisdiction, the trial court may grant the plea
to the jurisdiction without providing the plaintiff an opportunity to amend.
Miranda, 133 S.W.3d at 227; Villarreal, 226 S.W.3d at 541.
If a plea to the jurisdiction challenges the existence of jurisdictional facts,
we consider relevant evidence submitted by the parties when necessary to resolve
the jurisdictional issues raised. Miranda, 133 S.W.3d at 227; Bland, 34 S.W.3d at
555 (confining evidentiary review to evidence relevant to jurisdictional issue). If
the evidence creates a fact question regarding the jurisdictional issue, then the
movant has failed to establish its right to dismissal. See Miranda, 133 S.W.3d at
227–28. However, if the relevant evidence is undisputed or fails to raise a fact
question on the jurisdictional issue, the plea to the jurisdiction may be ruled on as a
matter of law. Id. at 228.
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Governmental Immunity and
Waiver through the Tort Claims Act
The doctrine of governmental immunity bars suits against the state and its
governmental units unless the state consents by waiving immunity. Tex. Adjutant
General’s Office v. Ngakoue, 408 S.W.3d 350, 353 (Tex. 2013). Governmental
immunity protects subdivisions of the State from lawsuits and liability, which
would otherwise “hamper governmental functions by requiring tax resources to be
used for defending lawsuits and paying judgments rather than using those
resources for their intended purposes.” Id. (quoting Mission Consol. Indep. Sch.
Dist. v. Garcia, 253 S.W.3d 653, 655–56 (Tex. 2008)). Only the Legislature may
waive immunity. Id.; Tex. Natural Res. Conservation Comm’n v. IT-Davy, 74
S.W.3d 849, 853 (Tex. 2002). Statutory waivers of immunity are construed
narrowly. Garcia, 253 S.W.3d at 655; see TEX. GOV’T CODE ANN. § 311.034 (West
2013) (statutes are construed to waive sovereign immunity only if “by clear and
unambiguous language”).
The TCA provides a limited waiver for certain tort claims against the
government. TEX. CIV. PRAC. & REM. CODE ANN. § 101.001–.109 (West 2014).
The TCA permits a determination of liability on a governmental unit for a death
caused by use of tangible personal property if the governmental unit would, were it
a private person, be liable to the claimant according to Texas law. Id. § 101.021(2).
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UTP Has Not Established that it is a Governmental Unit
An entity meets the statutory definition of a governmental unit if its “status
and authority . . . are derived from the Constitution of Texas or from laws passed
by the legislature under the constitution.” TEX. CIV. PRAC. & REM. CODE ANN.
§ 101.001(3)(D) (defining governmental unit). The “dispositive issue” is less who
creates the entity than who gives “meaning” to its existence; in other words,
“[w]ho bestows the status and authority” to the entity and specifies its “powers,”
“authority,” and “status.” LTTS Charter Sch., Inc. v. C2 Constr., Inc., 342 S.W.3d
73, 81 (Tex. 2011).
There is no dispute that the University of Texas System and the University
of Texas Health Science Center at Houston (UTHSC-H) are governmental units
under the TCA and are entitled to governmental immunity. But that does not
answer the question whether UTP’s status and authority are derived from the state
constitution or laws of the Legislature.
UTP argues that its status and authority are derived from laws passed by the
Legislature, relying on various Education Code provisions and the minutes from a
meeting of the Board of Regents of the University of Texas System. UTP points to
Education Code Section 65.31(a), providing that the UT Board of Regents “is
authorized and directed to govern, operate, support, and maintain each of the
component institutions that are now or may hereafter be included in a part of The
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University of Texas System.” TEX. EDUC. CODE ANN. § 65.31(a) (West 2002)
Section 65.11 charges the UT Board with the “administration” and “organization”
of the UT System institutions and entities to “achieve the maximum operating
efficiency of such institutions and entities.” Id. § 65.11 (West 2002). Further,
Section 65.31(g) allows the UT Board “by rule [to] delegate a power or duty of the
board to a committee, officer, employee, or other agent of the board.” Id.
§ 65.31(g).
UTP also points to the minutes of a UT Board of Regents meeting
memorializing the Board’s decision to permit UTHSC-H and other health science
centers to create certified nonprofit health corporations, like UTP. Based on these
provisions and evidence, UTP claims that it is a governmental unit derived from
the laws of the Legislature.
But the Legislature has never granted UTP power, authority, or status.
Section 65.02 specifically lists 12 entities that comprise the UT System. Id.
§ 65.02. It further lists 29 subordinate entities that are included within the 12 main
entities. Id. The statute identifies UTHSC-H and lists within it the UT Houston
Medical School, Dental Branch, Graduate School of Biomedical Sciences, School
of Health Information Sciences, School of Public Health, Speech and Hearing
Institute, and School of Nursing. Id. The list does not include UTP. See id.
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Subsection (b) then states, “The University of Texas System shall also be
composed of such other institutions and entities as from time to time may be
assigned by specific legislative act to the governance, control, jurisdiction, or
management of The University of Texas System.” Id. § 65.02(b) (emphasis added).
Section 73.001(7) states that the University of Texas Houston is composed of six
component institutions (none of which are UTP) and “other institutions and
activities assigned to it from time to time.” Id. § 73.001. Thus, the Legislature
reserved to itself authority to add entities to the UT System, and it has not added
UTP.
An entity cannot incorporate itself into the UT System “by custom and usage
or at the behest of a single university officer.” Univ. Interscholastic League v.
Payne, 635 S.W.2d 754, 757 (Tex. App.—Amarillo 1982, writ dism’d) (holding
that UIL failed to establish that it qualified as governmental entity in its own right
or as part of UT–Austin, even though UIL was created at urging of UT–Austin
president). Only if the Legislature specifically addresses the existence and status of
an entity will the requirements for classification as a governmental unit be met. See
Univ. Interscholastic League v. Sw. Officials Ass’n, Inc., 319 S.W.3d 952, 958
(Tex. App.—Austin 2010, no pet.) (noting post-Payne amendment to Education
Code declaring that UIL is part of UT–Austin and holding that statutory reference
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met requirement for UIL to be considered governmental unit for governmental
immunity purposes).
Adhering to the rule that the source of status and authority is the dispositive
issue, the Texas Supreme Court recently held that open-enrollment charter schools
qualify as governmental units because multiple Education Code provisions detail
open-enrollment charter schools’ powers, authority to operate, and status, even
though each such entity is chartered by the State Board of Education instead of the
Legislature. See LTTS Charter Sch., 342 S.W.3d at 80–82. As the Court explained,
The Legislature’s own pronouncements declare the status and
authority of open-enrollment charter schools. Other state entities and
officials may exercise a measure of oversight pursuant to those
statutory commands, but the commands themselves, and that they are
legislative, are what matter most.
Id. at 82.
We also find instructive an appellate opinion in which the court held that a
water system created by the City of San Antonio did not independently meet the
statutory definition of a governmental unit. See San Antonio Water Sys. v. Smith,
451 S.W.3d 442, 450–51 (Tex. App.—San Antonio 2014, pet. withdrawn). In
Smith, the San Antonio Water System claimed that it was a governmental unit
independent of the city. Id. at 445–46. The appellate court noted that the
Legislature had authorized municipalities to create water system. And the City of
San Antonio, by a city ordinance, had done so. However, no statute conferred
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status or authority to the water systems. Id. at 450. Because the actual status and
authority of the water system derived from a city ordinance, instead of a statute,
the appellate court held that the water system was not a governmental unit
independent of the city. Id. at 450–51. It was, instead, an agent of the governmental
unit that created it—the City of San Antonio. Id.
Here, UTP points to no statutory provision that discusses the status or
authority of non-profit healthcare corporations like UTP. The evidence establishes
that UTP’s status and authority are derived from actions by the UT System Board,
not the Legislature. Cf. LTTS Charter Sch., 342 S.W.3d at 80 (noting multiple
Education Code provisions establishing powers and authority of charter schools)
and Arbor E&T, LLC v. Lower Rio Grande Valley Workforce Dev. Bd., Inc., No.
13-13-00139-CV, 2013 WL 8107122, at *4 (Tex. App.—Corpus Christi Dec. 5,
2013, no pet. h.) (considering multiple statutory provisions discussing “status” and
“authority” of local workforce development boards to hold that local workforce
development board met statutory definition of governmental unit). We therefore
conclude that UTP does not qualify as a governmental unit independent of
UTHSC-H.
UTP may not rely on UTHSC-H’s Immunity
UTP next argues that, even if it does not qualify as a governmental unit in its
own right, it may share in UTHSC-H’s immunity because it is a wholly-owned
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subsidiary of UTHSC-H. UTP finds support for its argument in TRST Corpus, Inc.
v. Fin. Ctr., Inc., 9 S.W.3d 316, 321 (Tex. App.—Houston [14th Dist.] 1999, pet.
denied).
In TRST, the Teacher Retirement System of Texas (TRS), a state agency,
formed a title-holding subsidiary corporation (TRST) to hold its assets. Id. at 321.
TRS was the sole shareholder of all of TRST’s stock. The creation of the wholly-
owned subsidiary was under the authority provided by Government Code section
825.304, which states that the “assets of the retirement system may be held in the
name of agents . . . or other entities designated by the board of trustees.” Id. at 321
& n.1 (citing TEX. GOV’T CODE ANN. § 825.304 (West 2012)). The appellate court
held that TRS’s agent could benefit from its immunity. Id.; see also K.D.F. v. Rex,
878 S.W.2d 589, 597 (Tex. 1994) (holding that entity created by Kansas
governmental unit that operates solely under direction of governmental unit
without exercising any discretion of its own may benefit from governmental unit’s
immunity); cf. Brown & Gay Eng’g, Inc. v. Olivares, No. 13-0605, 2015 WL
1897646, at *5 (Tex. Apr. 24, 2015) (discussing K.D.F. case and holding that “no
control” by principal over private party is “determinative” of issue and principal’s
immunity will not be extended to private party).
Unlike a holding company, we are concerned here with a functioning
medical clinic where physicians (employed by UTHSC-H) come together with
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nurses, clinical personnel and others (employed by UTP, third-party staffing
companies, or jointly between them) to provide medical care to the public. In a
clinical setting, all involved make decisions, interact with patients, and are engaged
in various and sometimes distinct aspects of the patients’ care. We do not view the
activities in such a dynamic environment to be equivalent to the concept of a
holding company that has no independent discretion: the two are not analogous.
Further, by statute, a governmental unit does not waive liability for the
negligence of all varieties of agents, only for its employees acting with the scope of
their employment with the governmental entity. Dumas v. Muenster Hosp. Dist.,
859 S.W.2d 648, 650 (Tex. App.—Fort Worth 1993, no writ); Harris v. Galveston
Cnty., 799 S.W.2d 766, 768 (Tex. App.—Houston [14th Dist.] 1990, writ denied).
The Act defines “employee” as a person who is “in the paid service of a
governmental unit by competent authority, but does not include an independent
contractor, an agent or employee of an independent contractor, or a person who
performs tasks the details of which the governmental unit does not have the legal
right to control.” TEX. CIV. PRAC. & REM. CODE ANN. § 101.001(2); Murk v.
Scheele, 120 S.W.3d 865, 866 (Tex. 2003). UTP has never argued that UTHSC-H
had the right to control Matthews’s work, such that UTHSC-H’s immunity would
apply to the nurse’s work at the clinic.
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Moreover, applying UTHSC-H’s immunity to UTP would be contrary to the
Legislature’s directive that only it may add entities to the UT System and, by
extension, to its immunity protections. See TEX. EDUC. CODE ANN. § 65.02(b)
(“The University of Texas System shall also be composed of such other institutions
and entities as from time to time may be assigned by specific legislative act . . . .”
(emphasis added)); id. § 73.001(7) (stating that The University of Texas at
Houston is composed of only six named component institutions, plus “other
institutions and activities assigned to it from time to time.”).
Because we have concluded that UTP has not met its burden to establish that
it qualifies as a governmental unit or to otherwise assert a right to governmental
immunity from its relationship with UTHSC-H, we conclude that the trial court
erred in granting UTP’s plea to the jurisdiction and sustain the Lenoirs’ first issue.
We therefore do not reach their second issue concerning whether the Lenoirs
adequately pleaded use of personal property to fit within an area in which
immunity has been waived.
Conclusion
The trial court’s order granting UTP’s plea to the jurisdiction and dismissing
the Lenoirs’ claims against UTP is reversed. The case is remanded for further
proceedings.
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Harvey Brown
Justice
Panel consists of Chief Justice Radack and Justices Brown and Lloyd.
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