ETX Successor Tyler F/K/A East Texas Medical Center v. Terrie Pridgeon (As Guardian of the Person and the Estate of Jason C. Dubose)

NO. 12-18-00083-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
ETX SUCCESSOR TYLER F/K/A § APPEAL FROM THE 217TH
EAST TEXAS MEDICAL CENTER,
APPELLANT
V. § JUDICIAL DISTRICT COURT
TERRIE PRIDGEON, AS GUARDIAN
OF THE PERSON AND THE ESTATE
OF JASON C. DUBOSE,
APPELLEE § ANGELINA COUNTY, TEXAS
OPINION
ETX Successor Tyler, formerly known as East Texas Medical Center (ETMC), brings this
interlocutory appeal of the trial court’s denial of its motion to dismiss the declaratory judgment
action filed by Terrie Pridgeon, as guardian of the person and the estate of Jason C. Dubose. In its
sole issue, ETMC asserts that the Texas Citizens Participation Act (TCPA) 1 applies, there are no
applicable statutory exemptions, Pridgeon did not meet her burden to establish a prima facie case,
and ETMC established affirmative defenses to Pridgeon’s claim. We affirm.
BACKGROUND
After being seriously injured in a car accident in September 2015, Jason C. Dubose
obtained treatment at ETMC. While Dubose was still in the hospital, ETMC filed a hospital lien
pursuant to Chapter 55 of the Texas Property Code to give notice that it asserts a lien on all causes
of action or claims filed by or on behalf of Dubose for damages arising from the injury for which
he was admitted to the hospital. ETMC asserts an outstanding balance of $597,830.16 for
extensive emergency care it provided over the course of three and a half weeks.
1 See TEX. CIV. PRAC. & REM. CODE ANN. §§ 27.001-.011 (West 2015).
Pridgeon filed a personal injury lawsuit against the person who caused DuBose’s injuries.
That case settled in July 2017. A few months later, Pridgeon filed a declaratory judgment action
pursuant to the Uniform Declaratory Judgments Act (UDJA) 2 for a determination of the parties’
rights, status, and other legal relationship arising under Chapter 55 of the property code. ETMC
counterclaimed for breach of contract, quantum meruit, unjust enrichment, suit on a sworn account,
conversion, and money had and received. ETMC also filed a motion to dismiss pursuant to the
TCPA. The motion was overruled by operation of law, and ETMC appeals that ruling. See TEX.
CIV. PRAC. & REM. CODE ANN. § 27.008(a).
TEXAS CITIZENS PARTICIPATION ACT
In its sole issue, ETMC asserts that the trial court erred in failing to grant its TCPA motion
to dismiss. It argues that recording the notice of hospital lien constitutes an exercise of the right
to free speech and the right to petition, the statute’s commercial speech and bodily injury
exemptions do not apply, Pridgeon failed to satisfy her burden of establishing a prima facie case
for each essential element of her claim, and ETMC established affirmative defenses to Pridgeon’s
claim.
Standard of Review
We review a trial court’s ruling on a TCPA motion to dismiss de novo. Lane v. Phares,
544 S.W.3d 881, 886 (Tex. App.−Fort Worth 2018, no pet.). Specifically, we consider de novo
whether each party has met its respective burden under the Act’s two-step dismissal mechanism.
Grant v. Pivot Tech. Sols., Ltd., 556 S.W.3d 865, 873 (Tex. App.−Austin 2018, pet. filed). In our
review, we consider the pleadings and supporting and opposing affidavits stating the facts on
which the liability or defense is based. TEX. CIV. PRAC. & REM. CODE ANN. § 27.006(a); Campbell
v. Clark, 471 S.W.3d 615, 623 (Tex. App.−Dallas 2015, no pet.). We view the pleadings and
evidence in the light most favorable to the nonmovant when determining whether the TCPA
applies. Cheniere Energy, Inc. v. Lotfi, 449 S.W.3d 210, 214 (Tex. App.−Houston [1st Dist.]
2014, no pet.).
Applicable Law
2 TEX. CIV. PRAC. & REM. CODE ANN. §§ 37.001-.011 (West 2015).
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The TCPA provides a two-step procedure for early dismissal of claims brought to
intimidate or to silence a defendant’s exercise of its First Amendment rights. TEX. CIV. PRAC. &
REM. CODE ANN. § 27.003; ExxonMobil Pipeline Co. v. Coleman, 512 S.W.3d 895, 898 (Tex.
2017) (per curiam). Under the first step, a movant seeking dismissal under the TCPA has the
burden to show by a preponderance of the evidence that the nonmovant’s legal action is based on,
relates to, or is in response to the movant’s exercise of the right of free speech, the right to petition,
or the right of association. TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(b). If the movant makes
this showing, the burden shifts to the nonmovant to establish a prima facie case for each essential
element of the claim in question. Id. § 27.005(c). However, the movant may still obtain a
dismissal if it establishes each essential element of a valid defense to the nonmovant’s claim. Id.
§ 27.005(d).
ETMC’s First Amendment Rights
ETMC asserts that the notice of hospital lien that it filed constitutes an exercise of the right
of free speech or, alternatively, the right to petition. Pridgeon argues that her suit is not a challenge
to ETMC’s speech, and the lien notice is not speech on a matter of public concern.
The TCPA defines “exercise of the right of free speech” as a communication made in
connection with a matter of public concern. Id. § 27.001(3). A “communication” is defined to
include “the making or submitting of a statement or document in any form or medium. . . .” Id.
§ 27.001(1). A “matter of public concern” includes an issue related to health or safety;
environmental, economic, or community well-being; the government; a public official or public
figure; or a good, product, or service in the marketplace. Id. § 27.001(7).
A hospital has a lien on a cause of action or claim of an individual who receives hospital
services for injuries caused by an accident that is attributed to the negligence of another person.
TEX. PROP. CODE ANN. § 55.002(a) (West 2014). The lien attaches to the proceeds of a settlement
of a cause of action or a claim by the injured individual. Id. § 55.003(a)(3). The statute helps
ensure prompt and adequate treatment for accident victims. McAllen Hosps., L.P. v. State Farm
Cty. Mut. Ins. Co. of Tex., 433 S.W.3d 535, 537 (Tex. 2014). To secure the lien, the hospital must
provide notice to the injured individual and file written notice of the lien with the county clerk of
the county in which the services were provided. TEX. PROP. CODE ANN. § 55.005 (West 2014).
ETMC’s filing of written notice of the hospital lien fits within the definition of
communication. See TEX. CIV. PRAC. & REM. CODE § 27.001(1). The lien, as an attempt to obtain
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payment for medical services, relates to health. See TEX. PROP. CODE ANN. § 55.002. The
provision of medical services by a health care professional constitutes a matter of public concern.
Lippincott v. Whisenhunt, 462 S.W.3d 507, 510 (Tex. 2015). Further, the statute’s purpose in
obtaining treatment for accident victims affects community well-being. See McAllen Hosps., L.P.,
433 S.W.3d at 538. Accordingly, ETMC’s filing of the hospital lien was an exercise of its right to
free speech. Pridgeon’s declaratory judgment cause of action, in which she seeks a declaration
regarding the construction of the hospital lien statute, is in response to ETMC’s exercise of its right
of free speech. 3
Statutory Exemptions
Pridgeon asserts that her suit is exempt from a TCPA analysis due to application of the
bodily injury exemption and the commercial speech exemption. ETMC argues that neither
exemption applies and therefore cannot justify the trial court’s failure to grant its motion to dismiss.
The party asserting the exemption has the burden of proving its applicability. Kirkstall Road
Enters., Inc. v. Jones, 523 S.W.3d 251, 253 (Tex. App.−Dallas 2017, no pet.).
The TCPA does not apply to a legal action seeking recovery for bodily injury or to
statements made regarding that legal action. TEX. CIV. PRAC. & REM. CODE ANN. § 27.010(c).
Here, the hospital lien sought to recover judgments for damages and the proceeds of settlements
of Dubose’s causes of action for injuries sustained by him in the accident. Thus, the lien is a
statement regarding Dubose’s bodily injury action. Pridgeon’s declaratory judgment action
involves the interpretation and application of the hospital lien statute pursuant to which ETMC
filed a lien to obtain payment for its services to Dubose for his bodily injuries. We are unpersuaded
by ETMC’s argument that the lien cannot be a statement regarding Dubose’s bodily injury action
because the lawsuit was filed after the lien was recorded. By its own terms, the lien was to attach
to judgments or settlements occurring at any time after the lien was recorded. We conclude that
this exemption applies, making Pridgeon’s declaratory judgment suit exempt from application of
the TCPA’s dismissal scheme.
Regarding the commercial speech exemption, the TCPA does not apply to a legal action
brought against a person primarily engaged in the business of selling or leasing goods or services,
3 Because ETMC met its burden to show Pridgeon’s suit is in response to the exercise of the right of free
speech, we need not address whether ETMC’s exercise of the right to petition has been implicated. See TEX. CIV.
PRAC. & REM. CODE ANN. § 27.005(b); see also TEX. R. APP. P. 47.1.
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if the statement or conduct arises out of the sale or lease of goods, services, or an insurance product,
insurance services, or a commercial transaction in which the intended audience is an actual or
potential buyer or customer. TEX. CIV. PRAC. & REM. CODE ANN. § 27.010(b).
ETMC contends it is not primarily engaged in the business of selling or leasing goods or
services. It asserts that it is primarily in the business of treating sick and injured people and the
selling of goods and services is ancillary to its primary purpose. ETMC does not contend that it
does not charge for its services. As demonstrated by its filing the lien, attempting to have
Pridgeon’s declaratory judgment action dismissed, and countersuing to recover almost $600,000
for goods and services provided to Dubose, ETMC wants to be paid. Pridgeon provided evidence
that, between 1996 and 2015, ETMC charged in excess of $2.5 billion for its services. During that
same time period, ETMC’s expenses totaled less than $500,000,000, indicating that ETMC sold
its services, and for an amount much greater than the expenses required for providing those
services. The business of selling or leasing goods or services and the business of treating sick and
injured people are not mutually exclusive activities. We conclude ETMC participated in the
business of selling goods or services in the context of treating sick and injured people.
ETMC also argues that the commercial speech exemption does not apply because Pridgeon
was not the intended audience of the lien. We disagree. The lien attaches to the personal injury
lawsuit Dubose had against the person who caused his injuries, the judgment arising out of that
lawsuit, or the proceeds of a settlement of his cause of action. See TEX. PROP. CODE ANN.
§ 55.003(a). A lien against the patient’s tort recovery is a claim against the patient. Daughters of
Charity Health Servs. of Waco v. Linnstaedter, 226 S.W.3d 409, 411 (Tex. 2007). Therefore, the
intended audience of the hospital lien includes Dubose, and by extension, Pridgeon.
ETMC was primarily engaged in the business of selling goods or services, that is,
healthcare. ETMC filed the lien in its capacity as seller of healthcare, and the lien arose out of a
commercial transaction involving ETMC’s provision of healthcare to Dubose, who was the
intended audience of the lien. See Castleman v. Internet Money Ltd., 546 S.W.3d 684, 688 (Tex.
2018) (per curiam). We conclude that the commercial speech exemption applies here, and
Pridgeon’s declaratory judgment suit is exempt from application of the TCPA’s dismissal scheme.
Therefore, the trial court did not err by not granting ETMC’s motion to dismiss.
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Prima Facie Case
ETMC also asserts that Pridgeon failed to meet her burden to establish by clear and specific
evidence a prima facie case for each essential element of her claim. ETMC bases its argument on
its interpretation of Pridgeon’s claim. ETMC emphasizes that Pridgeon “pleaded for declaratory
judgment specifically holding that ETMC’s ‘lien amount of $597,830.16 exceeds the reasonable
and regular rate for the services provided.’” Therefore, ETMC asserts that Pridgeon has the burden
to prove whether the lien amount of $597,830.16 exceeds the reasonable and regular rate for the
services provided. We disagree. For purposes of determining if ETMC’s motion to dismiss should
be granted, the reasonableness of the lien amount is not the issue Pridgeon must address. 4
The trial court may not dismiss a legal action pursuant to the TCPA if the party bringing
the legal action establishes by clear and specific evidence a prima facie case for each essential
element of the claim in question. TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(c). “Clear” means
unambiguous, sure or free from doubt, and “specific” means explicit or relating to a particular
named thing. S & S Emerg. Training Sols., Inc. v. Elliott, No. 17-0628, 2018 WL 6711322, at
*3 (Tex. December 21, 2018). “Prima facie case” as used in the statute means evidence that is
legally sufficient to establish a claim as factually true if it is not countered. Id. A prima facie case
is the minimum quantum of evidence necessary to support a rational inference that the allegation
of fact is true. Id.
The UDJA is a procedural device available as a remedy. Chenault v. Phillips, 914 S.W.2d
140, 141 (Tex. 1996) (per curiam) (orig. proceeding). The UDJA’s purpose is to settle and to
afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations.
TEX. CIV. PRAC. & REM. CODE ANN. § 37.002(b). A person whose rights are affected by a statute
may have determined any question of construction or validity arising under the statute and obtain
a declaration of rights, status, or other legal relations under the statute. Id. § 37.004(a). Thus, a
declaratory judgment is appropriate when a justiciable controversy exists concerning the rights
and status of the parties and the controversy will be resolved by the declaration sought. Bonham
State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995). A justiciable controversy is one in which
4 Our analysis of the requirement to prove a prima facie case here differs from our analysis of this issue in E.
Tex. Med. Ctr. v. Hernandez, No. 12-17-00333-CV, 2018 WL 2440508 (Tex. App.−Tyler May 31, 2018, pet. denied)
(mem. op.). Here, in her response to the motion to dismiss, and on appeal, Pridgeon asserted that she sought a
declaration of nonliability for the excessive portion of ETMC’s bill and her burden was to show a justiciable
controversy that will be resolved by the declaration sought. This argument was not raised in Hernandez.
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a real and substantial controversy exists involving a genuine conflict of tangible interest and not
merely a theoretical dispute. Id.
Therefore, we evaluate the pleadings and evidence adduced in connection with ETMC’s
motion to dismiss to determine whether Pridgeon established a prima facie case by clear and
specific evidence that (1) a justiciable controversy exists as to the rights and status of the parties
under the hospital lien statute and (2) the controversy will be resolved by the declaration sought.
See Perez v. Quintanilla, No. 13-17-00143-CV, 2018 WL 6219627, at *4 (Tex. App.−Corpus
Christi Nov. 29, 2018, no pet.) (mem. op.); Dolcefino v. Cypress Creek EMS, 540 S.W.3d 194,
201 (Tex. App.−Houston [1st Dist.] 2017, no pet.); Cosmopolitan Condo. Owners Ass’n v. Class
A Inv’rs Post Oak, LP, No. 01-16-00769-CV, 2017 WL 1520448, at *4 (Tex. App.−Houston [1st
Dist.] April 27, 2017, pet. denied) (mem. op.).
In her petition for declaratory judgment, Pridgeon asked the court to affirmatively declare
the rights, status, and other legal relationship between the parties arising under the UDJA. She
argued that Texas Property Code Section 55.004(d)(1) limits the amount of a hospital lien to the
“reasonable and regular rate for the services.” She explained that she filed the petition “to
determine the ‘reasonable and regular rate’ so the lien may be satisfied and released.” Considering
the petition in the light most favorable to Pridgeon, it is a request for the court to construe the
statute and determine whether or not the statute requires the amount of a hospital lien to be a
reasonable and regular rate for the services rendered. She also requested the court make fact
findings in her favor, asking the court to determine the valid amount of the alleged lien and find
that payment of that amount will completely extinguish the debt covered by the lien.
Thus, in her suit for declaratory action Pridgeon sought to have her rights under the hospital
lien statute construed. Her burden then was to establish that a justiciable controversy exists as to
the rights of the parties with respect to construction of the hospital lien statute and to show that the
controversy will be resolved by the declaration sought.
ETMC’s motion to dismiss asserts an interpretation of the statute that is at odds with
Pridgeon’s, arguing that the statute does not require the lien amount to be a reasonable and regular
rate. While a mere difference of opinion does not create a justiciable controversy, under the
circumstances of this case, the dueling interpretations as to whether the statute requires the charges
to be reasonable are at the crux of the parties’ dispute. See Allstate Indem. Co. v. Mem’l Hermann
Health Sys., 437 S.W.3d 570, 575-76 (Tex. App.−Houston [14th Dist.] 2014, no pet.) (held, in
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context of standing dispute, insurance company’s declaratory judgment action concerning the
construction of the hospital lien statute, including its right to challenge the reasonableness of billed
services, presented a justiciable controversy which will be resolved by the declaration sought).
Further, whether the statute requires the amount of the lien to be a reasonable and regular rate is
the question of statutory construction before the trial court. Statutory construction is a purely legal
question that does not involve evidentiary issues or burdens of proof. Johnson v. City of Fort
Worth, 774 S.W.2d 653, 656 (Tex. 1989) (per curiam). A justiciable controversy exists as to the
rights and status of the parties with respect to the hospital lien statute. Thus, Pridgeon established
a prima facie case as to the first element of her declaratory judgment action. See Dolcefino, 540
S.W.3d at 201.
ETMC’s argument that Pridgeon must prove the lien amount exceeds the reasonable and
regular rate for the services provided misses the mark. Fact issues in declaratory judgment
proceedings may be tried and determined in the same manner that issues of fact are tried and
determined in other civil actions. TEX. CIV. PRAC. & REM. CODE ANN. § 37.007. If, upon hearing
the merits of Pridgeon’s declaratory judgment action, the trial court determines that the statute
includes a requirement that the lien must be reasonable, the burden to prove what is reasonable
will not be Pridgeon’s as ETMC asserts. The burden of proof in a declaratory judgment action is
on the party asserting an affirmative claim and who in the absence of evidence will be defeated.
Berthelot v. Brinkmann, 322 S.W.3d 365, 369 (Tex. App.−Dallas 2010, pet. denied). Pridgeon,
who is seeking a declaration of nonliability as to a portion of the bill, does not have the burden to
prove the amount of the bill. See McCart v. Cain, 416 S.W.2d 463, 466 (Tex. Civ. App.−Fort
Worth 1967, writ ref’d n.r.e.).
Furthermore, ETMC asserted numerous counterclaims against Pridgeon in an effort to
obtain payment. A hospital attempting to recover sums owed pursuant to a hospital lien bears the
burden of proving the amount owed. See Dallas Cty. Hosp. Dist. v. Perrin, 694 S.W.2d 257, 260
(Tex. App.−Dallas 1985, writ ref’d n.r.e.) (holding that, in case involving earlier version of hospital
lien statute, hospital has burden of proving its charge was not more than a reasonable and regular
rate for services billed); see also Linnstaedter, 226 S.W.3d at 412 (holding that the Texas Property
Code allows reimbursement of a reasonable and regular rate). Whether there is, or is not, a
requirement that the amount owed is reasonable, in the absence of proof of the amount owed,
ETMC cannot recover.
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We note that ETMC does not argue that, if a justiciable controversy exists, the requested
declaratory judgment will not resolve it. ETMC’s counterclaims for conversion and for money
had and received are based on its lien, and it requested an award of the entire amount of its bill. A
determination of the correct interpretation and application of the hospital lien statute will resolve
the parties’ dispute about how to determine the amount owed. See Allstate Indem. Co., 437
S.W.3d at 575-76. Specifically, Pridgeon will know if she is responsible for the full amount of the
hospital bill. We conclude that Pridgeon met her burden to show that the controversy would be
resolved by the declarations sought. See Dolcefino, 540 S.W.3d at 201.
Affirmative Defenses
ETMC also asserts that its motion to dismiss should have been granted because it
established affirmative defenses to Pridgeon’s claim. Again relying on the language in Pridgeon’s
pleading asking the court to find that the amount of the lien exceeds the reasonable and regular
rate for the services provided, ETMC argues that is the “claim” that must be considered in
determining whether it has established a defense to Pridgeon’s claim.
ETMC argues that it established the defense of quasi-estoppel because Pridgeon’s use of
the full amount of the hospital bill in her negotiations with the third-party tortfeasor is inconsistent
with her assertion in her declaratory judgment action that the bill was not reasonable and regular.
Quasi-estoppel precludes a party from asserting, to another’s disadvantage, a right inconsistent
with a position previously taken. Samson Expl., LLC v. T.S. Reed Props., Inc., 521 S.W.3d 766,
778 (Tex. 2017).
ETMC also asserts that it established the defense of estoppel by contract because Pridgeon
contractually assigned all money due to her pursuant to the settlement up to the total amount of
her ETMC account. The doctrine of estoppel by contract provides that a party is bound by the
terms of his contract until it is set aside by fraud, accident, or mistake. Royalco Oil & Gas Corp.
v. Stockhome Trading Corp., 361 S.W.3d 725, 732 (Tex. App.−Fort Worth 2012, no pet.).
ETMC’s reliance on these affirmative defenses is misplaced. ETMC would have been
entitled to dismissal of Pridgeon’s declaratory judgment suit if ETMC established a valid defense
to her claim. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.005(d). As explained above,
Pridgeon’s claim in this case is a request for construction of the hospital lien statute. Neither quasi-
estoppel nor estoppel by contract address whether there is a justiciable controversy or whether it
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will be resolved by the declaratory judgment suit. The defenses ETMC asserts address the amount
of the hospital lien, a question not at issue here.
Conclusion
Because filing the hospital lien is an exercise of free speech and Pridgeon’s declaratory
judgment suit was a response to the lien, the TCPA applies. However, Pridgeon’s suit is exempt
from the TCPA’s dismissal provisions due to application of the statute’s bodily injury and
commercial speech exemptions. Additionally, Pridgeon avoids dismissal because she met her
burden to prove her prima facie case, and ETMC did not raise any viable affirmative defenses to
Pridgeon’s declaratory judgment suit. We overrule ETMC’s sole issue.
DISPOSITION
Having overruled ETMC’s sole issue, we affirm the trial court’s denial by operation of law
of ETMC’s motion to dismiss pursuant to the TCPA.
BRIAN HOYLE
Justice
Opinion delivered February 14, 2019.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
(PUBLISH)
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COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
JUDGMENT
FEBRUARY 14, 2019
NO. 12-18-00083-CV
ETX SUCCESSOR TYLER F/K/A EAST TEXAS MEDICAL CENTER,
Appellant
V.
TERRIE PRIDGEON (AS GUARDIAN OF THE PERSON AND THE ESTATE OF
JASON C. DUBOSE),
Appellee
Appeal from the 217th District Court
of Angelina County, Texas (Tr.Ct.No. CV-00752-17-11)
THIS CAUSE came to be heard on the oral arguments, appellate record, and
briefs filed herein, and the same being considered, it is the opinion of this court that there was no
error in the denial by operation of law of Appellant ETX SUCCESSOR TYLER F/K/A EAST
TEXAS MEDICAL CENTER’S motion to dismiss.
It is therefore ORDERED, ADJUDGED and DECREED that the trial court’s
denial by operation of law be in all things affirmed, and that all costs of this appeal are hereby
adjudged against the appellant, ETX SUCCESSOR TYLER F/K/A EAST TEXAS MEDICAL
CENTER, for which execution may issue, and that this decision be certified to the court below
for observance.
Brian Hoyle, Justice.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.