Memorial Hermann faces class-action accusing the nonprofit hospital system of fleecing ER patients without insurance by charging them astronomical rates

Memorial Hermann Hospital System does not only sue scores of patients over unpaid hospital bills, it is also charging emergency room patients a multiple of the rates paid by private insurers and government programs such as Medicare, according to a class-action petition filed last week in Harris County District Court. 

The pleading alleges that the rates charged are grossly excessive, and that they far exceed the reasonable value of the services provided. The lawsuit was filed on behalf of one former Memorial Hermann ER patient, who complains that her bill was excessive, and seeks class certification on behalf of other whose hospital bill was not covered by insurance, and who were similarly overcharged.
 
Memorial Hermann has a practice of suing patients with unpaid bills on "sworn account" (with bills attached that have all meaningful detail removed, ostensibly for privacy reasons), leaving patients sued for the cost of medical treatment (excessive or otherwise) virtually without recourse to challenge the reasonableness of the bills, especially if they cannot afford legal representation, and do not know how to fight a sworn-account suit and contest the reasonableness of the amounts printed on the hospital's billing statement. Additionally, the law firm that handles the non-profit hospital's debt collection litigation routinely requests and receives substantial attorney's fees.
           
The class-action seeks a declaratory judgment that Memorial Herman's billing practices for ER patients without insurance, -- i.e. self-pay patients -- are improper and excessive, and that the hospital system is only entitled to be paid for charges that are reasonable. The lawsuit also challenges the contracts that ER patients are forced to sign upon admission as meaningless because no information is provided about the billing rates to which the patients purportedly agree (making the price an "open term" in the contract), and that the charges are - in fact - not standard because the rates for other patients are much lower and are either set by the government or negotiated with private insurance providers, with different rates resulting depending on the particular payor and the deal negotiated with it.    

EXCERPTS FROM THE CLASS ACTION PETITION 

Cause No. 2015-61950, Nataliya Shahin, on behalf of herself and all others similarly situated, v, Memorial Hermann Health System, e-filed with the Harris County District Clerk on October 16, 2015, and assigned to the 333rd District Court.  

Battle over O'Quinn's Fortune: Was he informally married? - 1st Court of Appeals weighs in on dispute between John M. O'Quinn Foundation and O'Quinn Girlfriend-Companion-Partner Darla Lexington

POST-MORTEM CLAIM OF INFORMAL MARRIAGE ALIVE AND WELL. LITIGATION OVER O'QUINN ESTATE TO CONTINUE AFTER APPELLATE COURT DECLINES TO STEP IN AND STOP IT.  IN RE DARLA LEXINGTON O'QUINN, No 01-11-00641-CV (Tex.App. -- Houston [1st Dist.] Nov. 3, 2011)(mandamus denied) Original Proceeding on Petition for Writ of Mandamus  O P I N I O N           Relator, Darla Lexington O’Quinn (“Darla”), complains of the trial court’s order denying her motion in limine, plea to the jurisdiction, and motion to strike the petition in intervention of real party in interest, The John M. O’Quinn Foundation (“the Foundation”).[1]  She contends that the trial court erred in denying her motions because the Foundation, as the sole beneficiary under the decedent’s will in an independent administration, does not have a justiciable interest in the underlying proceeding and thus lacks standing to assert its declaratory judgment claims.           We deny the petition for writ of mandamus. Background           On July 17, 2008, decedent John M. O’Quinn (“O’Quinn”) executed a self-proving will. In this will, O’Quinn devised all of his personal effects to the Foundation, a charitable organization dedicated to providing funding to educational institutes, hospitals, and other charities.  O’Quinn also devised the residue of his estate to the Foundation and provided that the Foundation would receive any assets remaining in the O’Quinn Law Firm Testamentary Trust after the trustees dissolved the law firm and sold or transferred the firm’s assets.  The will specifically recited that at the time of execution O’Quinn was unmarried, and the will did not include any devises or bequests in favor of Darla.           O’Quinn died in a car accident on October 29, 2009.  The Probate Court Number 2 of Harris County admitted the will to probate on November 17, 2009, appointed T. Gerald Treece as independent executor (“the Executor”), and issued letters testamentary.           On April 16, 2010, the Foundation intervened in the ongoing probate proceeding.  The Foundation’s petition in intervention listed only the Foundation and the Executor as parties; it did not name Darla as a party.  The Foundation alleged that at the time of his death, O’Quinn was neither formally nor informally married.  The Foundation sought declarations that:  (1) O’Quinn was not married, either formally or informally, at the time of his death; (2) no children were born to or adopted by O’Quinn after he executed his will; (3) O’Quinn devised all personal effects under the will to the Foundation; (4) O’Quinn devised all remaining property under the will to the Foundation; and (5) the Foundation is the sole residual beneficiary of the O’Quinn Law Firm Testamentary Trust.           On July 7, 2010, the Executor filed a petition for declaratory judgment and named Darla, the Foundation, and Hartford Financial Services Group, Inc., the holder of the proceeds of O’Quinn’s 401(k) plan, as defendants.  In his petition, the Executor stated that, “It is anticipated that the Foundation will intervene in this matter.”  The Executor alleged that, although O’Quinn and Darla had dated for several years, O’Quinn never married her and, thus, was single when he died.  The Executor sought, among other things, declarations from the trial court that: (1) O’Quinn never married Darla and (2) O’Quinn did not gift any art or cars to Darla except for the items for which the Executor had already paid the required gift taxes.           On July 8, 2010, Darla sued the Executor in the 125th District Court of Harris County “for the return and delivery of property that belongs to Darla Lexington as a result of her community property interests acquired by marriage, and received by gifts” and asserted causes of action for breach of fiduciary duty, negligence, tortious interference, and conversion.  Darla also sought the imposition of a constructive trust against the Estate and applied for a temporary restraining order to prevent the Executor from “proceeding with the auction of any property belonging to Darla Lexington.”  Darla contended that she and O’Quinn had informally married in 2003, that O’Quinn had made several inter vivos gifts to her of personal property and classic cars, and that O’Quinn had promised her that “he would provide for her welfare in the event something was to happen to him” and that she “did not need to worry about living expenses.”  Darla sought, among other things, preliminary and permanent injunctive relief to prevent the sale of her property, a declaration that she and O’Quinn had informally married, and receipt of one-half of the community estate.[2]           Four days later, the Foundation filed an amended petition in intervention in the Executor’s suit for declaratory relief, this time naming Darla as a defendant.  The Foundation again sought declarations that:  (1) O’Quinn was not married at the time of his death; (2) no children were born to or adopted by O’Quinn after he executed his will; (3) all of O’Quinn’s personal effects were devised under the will to the Foundation; (4) those personal effects included all right, title, and interest in O’Quinn Land & Cattle Co., the O’Quinn River Ranch, and Classy Classic Cars, Ltd., and all cars purchased through or titled in the name of Classy Classic Cars, Ltd.; (5) O’Quinn devised all remaining property to the Foundation; and (6) the Foundation is the sole residual beneficiary of the O’Quinn Law Firm Testamentary Trust.           The probate court subsequently issued an order pursuant to Probate Code section 5B transferring Darla’s lawsuit to it from the 125th District Court and consolidating her suit with the Executor’s and the Foundation’s petitions for declaratory relief.           In her answer to the Foundation’s amended petition in intervention, Darla asserted, by verified denial, that the Foundation lacks the capacity to intervene because only the Executor has the right to seek declaratory relief regarding the alleged marriage and alleged gifts made to Darla by O’Quinn.  Darla also asserted that the Foundation lacks standing to pursue its claims because it does not have a justiciable interest “in the outcome of this litigation.”           On May 10, 2011, Darla filed a motion in limine, plea to the jurisdiction, and motion to strike the Foundation’s petition in intervention.  Darla again asserted that the trial court lacks subject-matter jurisdiction over the Foundation’s petition in intervention because the Foundation “lacks the requisite interest, standing, and capacity to participate in this matter.”  Darla argued that the Executor, who virtually represents all beneficiaries under the will, is the sole party who has the right to prosecute and defend lawsuits on behalf of the Estate.  Darla also contended that the Executor, as the representative of the Estate, is the only party who has a justiciable interest in the claims being litigated.  Darla further contended that the Executor could adequately protect the Foundation’s interests, and thus its intervention was not necessary.           At a hearing, the trial court denied Darla’s motions.  The court reasoned that “[i]f [the Foundation] was not a party to the decision as to whether or not Ms. Lexington was common-law spouse, I think they would have a sufficient interest to come back in and try it again.”  This mandamus proceeding followed. Standard of Review           Mandamus relief is available only to correct a clear abuse of discretion when there is no adequate remedy by appeal.  See In re Odyssey Healthcare, Inc., 310 S.W.3d 419, 422 (Tex. 2010) (per curiam).  A trial court commits a clear abuse of discretion when its action is “so arbitrary and unreasonable as to amount to a clear and prejudicial error of law.”  In re CSX Corp., 124 S.W.3d 149, 151 (Tex. 2003) (per curiam).  A trial court has no discretion in determining what the law is or in applying the law to the particular facts.  In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135 (Tex. 2004).  Mandamus relief is permissible when a trial court abuses its discretion by erroneously denying a motion to strike a petition in intervention. See In re Union Carbide Corp., 273 S.W.3d 152, 156–57 (Tex. 2008) (per curiam).           We must uphold a trial court’s decision on any grounds that are before the court and supported by the record.  See Guar. Cnty. Mut. Ins. Co. v. Reyna, 709 S.W.2d 647, 648 (Tex. 1986) (per curiam) (“We must uphold a correct lower court judgment on any legal theory before it, even if the court gives an incorrect reason for its judgment.”).  “This approach is even more compelling in a mandamus proceeding where the issue is abuse of discretion.  A trial court cannot abuse its discretion if it reaches the right result . . . .”  Luxenberg v. Marshall, 835 S.W.2d 136, 142 (Tex. App.—Dallas 1992, no writ). Foundation’s Standing to Assert Claims           Darla contends that the Foundation lacks a justiciable interest in the underlying proceedings and, thus, lacks standing to assert its claims for declaratory relief.  The Foundation contends that it has a justiciable interest because if Darla succeeds on her claims and the fact-finder determines that she was informally married to O’Quinn and that he made several gifts to her, this result diminishes the size of the estate passing to the Foundation under the will.  The Foundation also contends that, as a devisee, it may permissibly seek declaratory relief to “determine any question arising in the administration of the . . . estate” under Civil Practice and Remedies Code section 37.005(3).  We agree with the Foundation. A.   Justiciable Interest Texas Rule of Civil Procedure 60 authorizes a party with a justiciable interest in a pending suit to intervene as a matter of right.  TEX. R. CIV. P. 60 (“Any party may intervene by filing a pleading, subject to being stricken out by the court for sufficient cause on the motion of any party.”); In re Union Carbide, 273 S.W.3d at 154.  To constitute a justiciable interest, “‘[t]he intervenor’s interest must be such that if the original action had never been commenced, and he had first brought it as the sole plaintiff, he would have been entitled to recover in his own name to the extent at least of a part of the relief sought’ in the original suit.”  In re Union Carbide, 273 S.W.3d at 155 (quoting King v. Olds, 12 S.W. 65, 65 (Tex. 1888)).  “[A] party may intervene if the intervenor could have ‘brought the [pending] action, or any part thereof, in his own name.’” Id. (quoting Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 657 (Tex. 1990)); Harris Cnty. v. Luna-Prudencio, 294 S.W.3d 690, 699 (Tex. App.—Houston [1st Dist.] 2009, no pet.). The Uniform Declaratory Judgments Act (“UDJA”) is “merely a procedural device for deciding cases already within a court’s jurisdiction rather than a legislative enlargement of a court’s power, permitting the rendition of advisory opinions.”  Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993).  A declaratory judgment is appropriate only if (1) a justiciable controversy exists regarding the rights and status of the parties and (2) the declaration sought will resolve the controversy.  Di Portanova v. Monroe, 229 S.W.3d 324, 329 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).  “To constitute a justiciable controversy, there must exist a real and substantial controversy involving a genuine conflict of tangible interests and not merely a theoretical dispute.”  Id.; see also In re Estate of Webb, 266 S.W.3d 544, 548 (Tex. App.—Fort Worth 2008, pet. denied) (“This interest must be more than ‘a mere contingent or remote interest.’  The intervenor has a justiciable interest in a lawsuit ‘when his interests will be affected by the litigation.’”) (quoting Law Offices of Windle Turley, P.C. v. Ghiasinejad, 109 S.W.3d 68, 70 (Tex. App.—Fort Worth 2003, no pet.)).  A court does not have the power to “pass upon hypothetical or contingent situations, or to determine questions not then essential to the decision of an actual controversy.”  Di Portanova, 229 S.W.3d at 330.  If a justiciable controversy does not exist, the court must dismiss the case for lack of subject-matter jurisdiction.  Id. Under Probate Code section 37, “[w]hen a person dies, leaving a lawful will, all of his estate devised or bequeathed by such will . . . shall vest immediately in the devisees or legatees of such estate . . . .”  TEX. PROB. CODE ANN. § 37 (Vernon 2003); see also Nowlin v. Frost Nat’l Bank, 908 S.W.2d 283, 288 (Tex. App.—Houston [1st Dist.] 1995, no writ) (“[U]nder the Probate Code, title to property vests in the beneficiary immediately upon a testator’s death.”). During the administration of the estate, the testator’s executor holds legal title to estate assets and retains the right of possession, but the devisees hold the equitable title to the assets.  SeeTEX. PROB. CODE ANN. § 37; see also Bailey v. Cherokee Cnty. Appraisal Dist., 862 S.W.2d 581, 584 (Tex. 1993) (“[I]t is true that the heirs hold equitable title to estate property . . . .”); Nowlin, 908 S.W.2d at 288 (“A ‘vested interest’ is a present right or title to a thing, which carries with it an existing right of alienation, even though the right to possession or enjoyment may be postponed to some uncertain time in the future.”). In In re Estate of York, the Corpus Christi Court of Appeals addressed the factually analogous situation of whether a beneficiary’s executor had standing to intervene in an heirship proceeding.  934 S.W.2d 848 (Tex. App.—Corpus Christi 1996, writ denied).  Charles York’s will provided that all of his assets were to be placed in a testamentary trust for the benefit of his mother, Myrtle, for her life, and were then to pass to the Mallettes, who ultimately disclaimed their interest in the assets.  Id. at 849.  Several years after York died and the Mallettes disclaimed their interest, Kristopher Gostecnik brought an heirship proceeding, alleging that he was York’s illegitimate son and only heir, and thus was entitled to the remainder of the trust assets.  Id.  Myrtle intervened to assert her own claims as York’s sole heir, but she died before the conclusion of the heirship proceeding.  Id.  As a result, her executor, the Victoria Bank, sought to pursue her claim in intervention on behalf of her estate.  Id.  The trial court ruled that the bank was not an interested party in Charles York’s estate, concluded that the bank lacked standing to intervene in the heirship proceeding, and struck Myrtle’s petition in intervention.  Id. In reversing the trial court’s ruling, the Corpus Christi Court of Appeals concluded that Myrtle, as a potential heir, was a person interested in Charles York’s estate and thus had standing to contest the heirship claims.  See id. at 850.  The court then noted that Myrtle’s estate “may be augmented or diminished by the outcome of Gostecnik’s heirship proceeding.”  Id.  Thus, “[b]ecause Myrtle York’s estate could benefit from such a contest, we hold that Victoria Bank as executor of Myrtle York’s estate has standing to contest Gostecnik’s claims in the proceeding to declare heirship.”  Id.  The court further distinguished between the bank’s capacity as executor of Charles York’s estate and its capacity as executor of Myrtle York’s estate: Charles York’s estate does not stand to gain or lose anything by Gostecnik’s heirship proceeding; the disposition of the estate’s assets may be affected, but the gross assets will be unaffected.  In contrast, Myrtle York’s estate will be affected by the outcome of Gostecnik’s heirship proceeding. Id. at 851.           Darla cites our previous opinion in Wilder v. Mossler, 583 S.W.2d 664 (Tex. Civ. App.—Houston [1st Dist.] 1979, no writ), for the proposition that lawsuits seeking to establish the decedent’s liability on a claim are properly brought against the personal representative of the estate and that heirs and devisees are not necessary and proper parties to such claims.  We first note that, unlike in this case, the heir in Wilder sought a jury trial to oppose the settlement of a claim against the estate but asserted no claims for affirmative relief in her own right.  Id. at 668. Second, we agree with the Foundation that, as in Lieber v. Mercantile National Bank at Dallas, Darla’s claims are not a “routine suit to establish a claim against the estate,” but are instead more like “a suit attacking and seeking to reform a will.”  331 S.W.2d 463, 472 (Tex. Civ. App.—Dallas 1960, writ ref’d n.r.e.). In Lieber, the widow, who was a beneficiary under the decedent’s will, sought a declaratory judgment to establish an antenuptial agreement that the decedent had allegedly made to provide financially for the widow for the rest of her life.  Id. at 466–67.  The executor sought a declaration that no such agreement existed, and he named the decedent’s four sisters, who were the beneficiaries of the bulk of the decedent’s estate under the will, as necessary parties.  Id. at 466.  The Dallas Court of Civil Appeals, in affirming the trial court’s denial of the widow’s motion to dismiss the sisters as parties, held that Lieber’s suit “was really an attack on the will of [the decedent]” because “the effect of sustaining her claim would be to defeat and prevent the full effect and operation of other parts of the will.”  Id. at 472, 471.  The court also held that, because resolution of the widow’s claims would affect their interests as legatees, the sister-beneficiaries were proper parties to the suit.  Id. at 473.  Similarly, by contending that she was informally married to O’Quinn and that he had made numerous gifts to her and had promised to take care of her financially after his death, Darla essentially attacks the provisions of O’Quinn’s will that (1) state that he was unmarried, and (2) leave all of his personal effects and remaining property to the Foundation as the sole beneficiary. As the sole beneficiary under O’Quinn’s will, the Foundation has a vested interest in property owned by O’Quinn, subject to possession and administration by the Executor, as of the moment of death.  By contending that she was O’Quinn’s common-law spouse, and thus entitled to a community property interest, and that O’Quinn had made several inter vivos gifts and promises to her, Darla seeks to significantly reduce the total amount of assets that are part of O’Quinn’s probate estate.  The Foundation opposes Darla’s claims and argues that she has no community property interest in estate assets because she was not married to O’Quinn and that O’Quinn never made any gifts or financial promises to Darla.  If she is successful, the determination that Darla has a one-half community interest and that particular assets belong to her reduces the gross assets available for the Estate, which affects the total amount of assets to be distributed to the Foundation as the sole beneficiary under O’Quinn’s will.  See Lieber, 331 S.W.2d at 473 (“This suit also involves that executor’s cross-action for declaratory judgment which we have held the executor was entitled to remain.  Since their interest would be affected as legatees the Four Sisters are proper parties.”). We therefore conclude that a “real and substantial controversy involving a genuine conflict of tangible interests” exists between the Foundation and Darla and that this dispute is not merely theoretical, hypothetical or contingent.  See Di Portanova, 229 S.W.3d at 329.  We hold that the Foundation has a justiciable interest in the underlying proceeding. B.   Applicability of Civil Practice and Remedies Code Section 37.005(3) Civil Practice and Remedies Code section 37.005(3) provides: A person interested as or through an executor or administrator, including an independent executor or administrator, a trustee, guardian, other fiduciary, creditor,devisee, legatee, heir, next of kin, or cestui que trust in the administration of a trust or of the estate of a decedent, an infant, mentally incapacitated person, or insolventmay have a declaration of rights or legal relations in respect to the trust or estate: . . . . (3) to determine any question arising in the administration of the trust or estate, including questions of construction of wills and other writings . . . . TEX. CIV. PRAC. & REM. CODE ANN. § 37.005(3) (Vernon 2008) (emphasis added).  Under this section, devisees “are among the classes of persons who are given the power to seek a declaration of rights with respect to the estate to, among other things, determine any question arising in the administration of the estate . . . .”  In re Estate of Bean, 120 S.W.3d 914, 918 (Tex. App.—Texarkana 2003, pet. denied) (holding that devisees in independent administration have power to seek declaration concerning construction of decedent’s will).           The plain language of section 37.005(3) allows a devisee to seek a declaration of rights or legal relations to determine “any question arising in the administration” of an estate.  TEX. CIV. PRAC. & REM. CODE ANN. § 37.005(3) (emphasis added).  The statutory language of this section does not include any limitations on the types of questions on which an interested party may seek a declaration by the trial court.  See Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex. 1999) (noting that, when interpreting statute, we start with plain language because “it is a fair assumption that the Legislature tries to say what it means, and therefore the words it chooses should be the surest guide to legislative intent”).  Darla cites no authority holding that a devisee may not seek declarations under this section that a purported widow was not married, either formally or informally, to the decedent and that the decedent did not make certain inter vivos gifts and financial promises to the purported widow.           Darla cites numerous cases for the proposition that, except in certain limited situations, the personal representative has the exclusive right to sue and defend on behalf of the estate.  SeeChandler v. Welborn, 294 S.W.2d 801, 806 (Tex. 1956); Burns v. Burns, 2 S.W.3d 339, 342 (Tex. App.—San Antonio 1999, no pet.); Glover v. Landes, 530 S.W.2d 910, 911 (Tex. Civ. App.—Houston [1st Dist.] 1975, writ ref’d n.r.e.).  As the Foundation notes, this line of cases is limited to situations in which the heirs or devisees are suing to recover or collect property belonging to the estate.  See, e.g., Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 850–51 (Tex. 2005) (survival action for personal injury); Chandler, 294 S.W.2d at 804 (suit for trespass to try title to recover property conveyed to third party); see also Roach v. Rowley, 135 S.W.3d 845, 847 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (holding that general rule did not apply in suit in which devisee objected to final accounting because “[devisee] was not filing a lawsuit to recover property belonging to the estate”).  Here, the Foundation is not asserting a claim against Darla alleging, for example, that she owes money to O’Quinn’s Estate or that Darla is wrongfully possessing property that belongs to the Estate; instead, it is seeking, among other things, a declaration to resolve the question of whether property properly belongs to the Estate, and thus passes to the Foundation under O’Quinn’s will, or to Darla.  Civil Practice and Remedies Code section 37.005(3) specifically authorizes a devisee, such as the Foundation, to bring a declaratory relief action such as this one.  See TEX. CIV. PRAC. & REM. CODE ANN.§ 37.005(3) (allowing devisee to seek declaration of rights or legal relations to “determine any question arising in the administration of the . . . estate”).  Darla cites no authority supporting a contention that the general rule that only the personal representative may maintain a suit to recover estate assets trumps the Foundation’s statutory right as a beneficiary to seek a declaration resolving a question arising during the administration of the estate that involves the proper ownership of purported estate assets.           We conclude that the Foundation, as the devisee under O’Quinn’s will, may permissibly seek declaratory relief pursuant to Civil Practice and Remedies Code section 37.005(3) to determine “any question arising in the administration” of O’Quinn’s estate, including questions of whether O’Quinn and Darla were married and whether O’Quinn made gifts and financial promises to Darla.  We therefore hold that because the Foundation may seek declaratory relief under this section, the trial court did not abuse its discretion in denying Darla’s motion in limine, plea to the jurisdiction, and motion to strike the Foundation’s petition in intervention.[3] Conclusion           We deny the petition for writ of mandamus.                                                                    Evelyn V. Keyes                                                                    Justice Panel consists of Justices Keyes, Higley, and Massengale. [1]           The Honorable Mike Wood, Judge of the Probate Court No. 2 of Harris County, Texas, Respondent.  The underlying lawsuit is T. Gerald Treece, Independent Executor of the Estate of John M. O’Quinn, Deceased v. Darla Lexington, The John M. O’Quinn Foundation, and Hartford Financial Services Group, Inc., 392,247-402 (Prob. Ct. No. 2, Harris Cnty., Tex.). [2]           In her ninth amended original petition, which is her live pleading, Darla specified that she was seeking, among other things:  (1) title and possession of all cars promised to her by O’Quinn; (2) $20 million in cash that O’Quinn had promised her upon his death; (3) the fair market value of 750 acres of O’Quinn’s Hays County ranch; (4) the value of all gifts from O’Quinn that became her separate property and were wrongfully converted by the Executor; (5) one-half of the community estate; and (6) the value of a life estate in O’Quinn’s River Oaks residence, which she contends was their homestead. [3]           Because we hold that the Foundation has standing to pursue its own declaratory relief claims under Civil Practice and Remedies Code section 37.005(3), we do not address the Foundation’s additional grounds for standing.  We also note that although Darla argues that, under Civil Practice and Remedies Code section 37.006, the Foundation is not a necessary party to the Executor’s declaratory relief claims, in which the Executor named the Foundation as a defendant, she seeks only to dismiss the Foundation’s own declaratory relief claims in its petition in intervention.  She does not challenge, either in the trial court or in this mandamus proceeding, the Executor’s declaratory relief claims.

Right to Nonsuit Vindicated by Mandamus: Defendant's DJA counterclaims weren't independent claims for affirmative relief

One way to deprive a Plaintiff of the ability to obtain a quick dismissal (without prejudice to refiling) by exercising the unilateral right to non-suit is to file a counterclaim. It's routinely done in divorce actions. But it does not always work, as seen in a civil case decided by the 14th Court of Appeals today. Defensive arguments cannot be dressed up as counterclaims under the Declaratory Judgments Act because they do not qualify as independent claims for affirmative relief. Finding that the trial court judge abused his discretion in denying the Plaintiff's attempted nonsuit under such circumstances, the appellate panel grants mandamus relief and orders the trial court to dismiss the suit, including the defendant's phoney counterclaims for declaratory relief.

In Re John D. Hanby (Tex.App.- Houston [14th Dist.] Feb. 11, 2010)(per curiam) (declaratory judgment counterclaims that mirrored plaintiff's causes of action were not independent claims that could survive nonsuit by plaintiff) (mandamus granted to vindicate plaintiff's right to nonsuit)

FROM THE PER CURIAM OPINION:

Hanby filed a notice of nonsuit dismissing the entire lawsuit. See Tex. R. Civ. P. 162. Weatherford filed an objection and motion to strike the notice of nonsuit, claiming it has sought relief that is independent of the relief sought by Hanby. The trial court granted Weatherford’s objection and motion to strike. The trial court found that “Weathford has sought relief that is independent of the relief sought by Plaintiff Hanby,” but did not specify the independent relief.

The granting of a nonsuit is a ministerial act by the court. See Shadowbrook Apartments v. Abu-Ahmad, 783 S.W.2d 210, 211 (Tex. 1990). Accordingly, a party is entitled to mandamus relief if the trial court erroneously refuses to grant a nonsuit and dismiss the case. See BHP Petroleum Co,. Inc. v. Millard, 800 S.W.2d 838, 840, n.7 (Tex. 1990).

“The plaintiff's right to take a nonsuit is unqualified and absolute as long as the defendant has not made a claim for affirmative relief.” Id. at 841 (original emphasis). A defensive pleading must allege the defendant has an independent cause of action on which he could recover to qualify as a claim for affirmative relief. Id. at 841. Restating defenses as a claim for declaratory judgment does not deprive the plaintiff as his right to the nonsuit. Id. Denials of the plaintiff’s cause of action do not suffice. Id. The allegations pleaded in the defendant’s counterclaim must aver facts upon which affirmative relief could be granted. Id.

Weatherford contends that its counterclaims exceed the scope of Hanby’s suit by seeking declarations that (1) Weatherford had no obligation to exercise the license option or negotiate a license; (2) Weatherford owned all intellectual property at issue; and (3) Hanby failed to cooperate with preparation of a patent application. Weatherford does not argue that any of its other claims for declaratory relief are independent of the relief sought by Hanby.

We conclude that the declaratory relief sought by Weatherford does not exceed the scope of Hanby’s suit. A declaration that Weatherford had no obligation to exercise the option for or negotiate a license with Hanby would establish that Weatherford did not breach the contract as alleged by Hanby. Accordingly, the counterclaims for license-related declarations are merely defenses to Hanby’s breach of contract claim. “Restating a defense in the form of a request for a declaratory judgment does not defeat a plaintiff’s claim to a nonsuit.” Digital Imaging Assoc., Inc. v. State, 176 S.W.3d 851, 854 (Tex. App. – Houston [1st Dist.] 2005, no pet.). Therefore, Weatherford’s second and third counterclaims are not independent claims for affirmative relief.

* * *
A declaratory judgment action is not available to settle disputes already pending before a court. See BHP Petroleum Co., 800 S.W.2d at 841-42. Weatherford’s counterclaims do not aver any facts upon which affirmative relief could be granted. See Digital Imaging Assoc., 176 S.W.3d at 855. Because the counterclaims asserted by Weatherford already are encompassed by Hanby’s original suit, the trial court abused its discretion in refusing to nonsuit the entire case.

* * *
For these reasons, we conditionally grant the petition for a writ of mandamus and direct the trial court to vacate its order of October 9, 2009 granting Weatherford’s objection and motion to strike Hanby’s notice of nonsuit. We direct the trial court to sign an order dismissing the underlying lawsuit. The writ will issue only if the trial court fails to act in accordance with this opinion.

MOTION OR WRIT GRANTED: Per Curiam
Before Justices Brock Yates, Anderson and Boyce
14-09-00896-CV In Re John D. Hanby
Appeal from 270th District Court of Harris County
Trial Court Judge: Brent Gamble

City of Houston's appeal in firefighter suit fails

Houston Court of Appeals upholds fine against City for failure to promptly implement decision favorable to fire fighter in compensation grievance. City's claim of sovereign immunity rejected in opinion written by Justice Hanks.

City of Houston v. Hildebrandt No. 01-06-00936-CV (Tex.App.- Houston [1st Dist.] Feb. 28, 2008)(Hanks) (firefighter law suits, UDJA, declaratory judgment, statutory penalty, construction of statute, authority of hearing examiner)
Opinion by Justice Hanks
Panel composition: Justices Sam Nuchia, George Hanks and Laura C. Higley
Case style: City of Houston vs. Alan Hildebrandt
Appeal from 165th District Court of Harris County (Judge Elizabeth Ray)
Dispostion: Judgment for firefighter affirmed
OPINION BY JUSTICE GEORGE HANKS

The City of Houston (“the City”) appeals the trial court’s judgment denying its request for declaratory judgment and awarding Alan Hildebrandt $24,000 in statutory penalties. On appeal, the City presents three issues, arguing that the trial court improperly: (1) awarded statutory penalties to Hildebrandt because there is no evidence to support the award, (2) denied its request for declaratory judgment, and (3) granted Hildebrandt’s request for declaratory judgment. We affirm.

Background

Following surgery, Alan Hildebrandt, a fire fighter with the Houston Fire Department, began using the sick leave that he had accumulated over his 30 years working in a Fire Department suppression unit. After being on sick leave for 90 consecutive days, Hildebrandt was transferred from his suppression unit to a position with a five-day work schedule.

Pursuant to Fire Department policy, after a member has been on sick or injury leave for 90 days,he is transferred to a position with a five-day work schedule.

The parties agree that this transfer caused Hildebrandt to utilize his sick leave faster than when he was a member of the suppression unit.

Hildebrandt filed a step I grievance, See Tex. Local Gov’t Code Ann. § 143.128 (Vernon 2008) (describing the procedures a firefighter must follow to file a step I grievance and the subsequent obligations of a municipality) requesting that he be allowed to use his sick leave on the same schedule as it was accrued. After his step I grievance was denied, Hildebrandt filed a step II grievance, See Tex. Local Gov’t Code Ann. § 143.129 (Vernon 2008) (describing how a fire fightercontinues the grievance procedure if he finds the proposed solution from his step I grievanceunacceptable and the municipality’s burden once a step II grievance is properly filed) which was also denied. He then submitted a written request to appeal his step II grievance to an independent hearing examiner. See Tex. Local Gov’t Code Ann. § 143.129 (d) (explaining that, if the proposed solutionfollowing a step II grievance is unacceptable, a fire fighter may request an independent hearingexaminer pursuant to section 143.057 or continue to a step III grievance).

After a hearing, the hearing examiner ordered the City to restore Hildebrandt’s sick leave level to the amount it would have been had he remained on a suppression unit.

The hearing examiner’s award noted that “it is left to the parties to work out the exact amount tobe restored to Hildebrandt’s account.”

The City appealed the hearing examiner’s award to a district court, asking for a declaratory judgment that the City is not required to implement the hearing examiner’s award. Hildebrandt brought a counter claim, asserting that he was owed statutory penalties that the City incurred by intentionally failing to implement the hearing examiner’s decision in a timely manner. See Tex. Local Gov’t Code Ann. § 143.134(h) (Vernon 2008) (award must be implementedwithin 10 days).

During opening statements in the trial court, the City clarified that it was claiming that the hearing examiner acted without or exceeded his jurisdiction in entering his award. The trial court denied the City’s declaratory judgment action and awarded Hildebrandt $24,000 on his counter claim. The City now appeals.

Declaratory Judgment

In its second issue, the City argues that the trial court erred in denying its motion for declaratory judgment “because the Fire Chief is statutorily entitled to assign members and to make policy relating to absences from work.”

Hildebrandt asserts that the City actually challenges whether the hearing examiner ignored the FireChief’s right to transfer members of the Fire Department. Hildebrandt contends that such anargument is foreclosed, because the City can only appeal a hearing examiner’s award on “groundsthat the arbitration panel was without jurisdiction or exceeded its jurisdiction or that the order wasprocured by fraud, collusion, or other unlawful means.” Tex. Local Gov’t Code Ann. §143.057(j) (Vernon 2008); see City of Houston v. Clark, 197 S.W.3d 314, 324 (Tex. 2006); City ofPasadena v. Smith, __ S.W.3d __, 2006 WL 2640410, at *3–4 (Tex. App.—Houston [1st Dist.] Sept.4, 2006, pet. denied, rehearing on pet. filed, Jan. 23, 2008). Hildebrandt contends that the City’sappeal fails because it does not concern the hearing examiner’s jurisdiction.
In Smith, we held that, because it was not arguing that the hearing examiner exceeded hisstatutorily conferred jurisdiction, but rather that he misapplied the law, the City was not affordedthe protection of section 143.057(j). 2006 WL 2640410 at *3–4. Here, however, the crux of theCity’s challenge is that, because “the Fire Chief has the unchallengeable right to assign members,the hearing examiner did not have jurisdiction to enter his award.” Therefore, we address whetherthe trial court erred in denying the City’s motion seeking a declaration that the hearing examiner hadno jurisdiction to enter his award.
Standard of Review

We review declaratory judgments under the same standards as other judgments and decrees. Tex. Civ. Prac. & Rem. Code Ann. § 37.010 (Vernon 1997). We look to the procedure used to resolve the issue at trial to determine the standard of review on appeal. City of Galveston v. Giles, 902 S.W.2d 167, 170 (Tex. App.—Houston [1st Dist.] 1995, no writ). The City’s motion for declaratory judgment required the trial court to interpret the City’s rights and those of the hearing examiner under the Local Government Code. Interpreting statutes is a legal matter, subject to de novo review. Bragg v. Edwards Aquifer Auth., 71 S.W.3d 729, 734 (Tex. 2002). A trial court has no discretion when evaluating a question of law. See Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992). The overriding goal of statutory interpretation is to determine the Legislature’s intent. Cont’l Cas. Co. v. Downs, 81 S.W.3d 803, 805 (Tex. 2002). In order to ascertain legislative intent, we first look to the plain and common meaning of the words used by the Legislature. Tex. Gov’t Code Ann. § 311.011 (Vernon 2005); Argonaut Ins. Co. v. Baker, 87 S.W.3d 526, 529 (Tex. 2002). It is a well-settled rule of statutory construction that every word of a statute must be presumed to have been used for a purpose. In re Bell, 91 S.W.3d 784, 790 (Tex. 2002). In ascertaining legislative intent, we do not confine our review to isolated statutory words, phrases, or clauses, but we instead examine the entire act. Meritor Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86, 90 (Tex. 2001).

Analysis

The City directs us to section 143.1095, which states that the head of a fire department may transfer a fire fighter for numerous reasons, including for “any other specified reason the department head considers necessary.” Tex. Local Gov’t Code Ann. § 143.1095(a)(6) (Vernon 2008). Thus, the City argues that the trial court erred in denying its motion for declaratory judgment, because the hearing examiner lacked jurisdiction to enter an award which usurped the Fire Chief’s statutorily prescribed authority to manage the Fire Department.

After his step II grievance was denied, Hildebrandt decided to appeal to an independent hearing examiner pursuant to the provisions of section 143.057. See Tex. Local Gov’t Code Ann. § 143.129. Under subsection 143.057(f), the hearing examiner has the same duties and powers as the Fire Fighters’ Civil Service Commission. Tex. Local Gov’t Code Ann. § 143.057(f); see also City of Houston v. Jackson, 192 S.W.3d 764, 768 (Tex. 2006). This includes the authority to determine whether Chapter 143 and its rules are being obeyed. Tex. Local Gov’t Code Ann. § 143.009 (Vernon 2008). Therefore, hearing examiners are given the power to apply, interpret, and enforce the rules that are contained in the chapter that permits the Fire Chief to transfer fire fighters. See Lindsey v. Fireman’s and Policeman’s Civil Serv. Comm’n, 980 S.W.2d 233, 236 (Tex. App.—Houston [14th Dist.] 1998, pet. denied).

Here, the hearing examiner interpreted section 143.045 and ordered an award based upon his interpretation; therefore, he acted within the jurisdiction afforded him by the Local Government Code. We hold that the trial court did not err in denying the City’s request for declaratory judgment.

We overrule the City’s second issue.

Sovereign Immunity

In its third issue, the City argues that the trial court improperly granted Hildebrandt’s suit for statutory penalties because the claim was barred by sovereign immunity.

Additionally, the City contends that the trial court erred by allowing Hildebrandt to avoid sovereignimmunity by using a declaratory action to claim monetary damages against it. However, the finaljudgment shows that the trial court did not grant Hildebrandt declaratory relief, but, rather, found thathe was entitled to judgment on his counter claim for statutory penalties. Therefore, a declaratoryaction was not used to circumvent the City’s sovereign immunity.

Specifically, the City asserts that Chapter 143 includes no enabling clause allowing for judicial review of Hildebrandt’s claim for statutory penalties.

Standard of Review

As with the City’s second issue, we review interpretation of the Local Government Code de novo. See Bragg, 71 S.W.3d at 734. Additionally, the Texas Supreme Court has consistently held that penal statutes should be strictly construed. See, e.g., Brown v. De La Cruz, 156 S.W.3d 560, 565 (Tex. 2004). Statutes waiving sovereign immunity and statutes waiving governmental immunity are similarly construed. See, e.g., Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003). “[A] statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language.” Tex. Gov’t Code Ann. § 311.034 (Vernon Supp. 2007).

Analysis

Hildebrandt responds to the City’s argument by asserting that subsection 143.134(h) clearly and unambiguously allows for a penalty to be pursued against the City. Subsection 143.134(h) provides for a statutory penalty as follows:

If the decision of the commission under Section 143.131 or the decision of a hearing examiner under Section 143.129 that has become final is favorable to a fire fighter, the department head shall implement the relief granted to the fire fighter not later than the 10th day after the date on which the decision was issued. If the department head intentionally fails to implement the relief within the 10-day period, the municipality shall pay the fire fighter $1,000 for each day after the 10-day period that the decision is not yet implemented.
Tex. Local Gov’t Code Ann. § 143.134(h).

In determining whether a statute affords a clear and unambiguous waiver of immunity absent express language to that effect, one interpreting guideline is that a statute must waive immunity “beyond a doubt,” such as “when the provision in question would be meaningless unless immunity were waived.” See Wichita Falls State Hosp, 106 S.W.3d at 697.

Here, the mandatory penalty in subsection 143.134(h) would be meaningless unless the municipality’s immunity were waived. Therefore, because subsection 143.134(h) mandates that a municipality pay a penalty for noncompliance with a hearing examiner’s decision after 10 days, there is a clear and unambiguous waiver of the municipality’s immunity. We also note that the Texas Supreme Court has recently recognized that subsection 143.134(h)applies where a municipality fails to comply with an independent hearing examiner’s decision. Jackson, 192 S.W.3d at 772.

We hold that sovereign immunity did not bar the trial court from determining whether Hildebrandt was owed statutory penalties under subsection 143.134(h).

We overrule the City’s third issue.

Legal Sufficiency

In its first issue, the City argues that the trial court erred in awarding statutory penalties to Hildebrandt because the evidence is legally insufficient to support the trial court’s finding that the Fire Chief intentionally failed to implement the hearing examiner’s award.

Standard of Review

In an appeal of a judgment rendered after a bench trial, the trial court’s findings of fact have the same weight as a jury’s verdict, and we review the legal sufficiency of the evidence used to support them just as we would review a jury’s findings. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994); In re K.R.P., 80 S.W.3d 669, 673 (Tex. App.—Houston [1st Dist.] 2002, pet. denied). When challenged, a trial court’s findings of fact are not conclusive if, as in the present case, there is a complete reporter’s record. In re K.R.P., 80 S.W.3d at 673. When a party who does not have the burden of proof at trial challenges the legal sufficiency of the evidence, we consider all of the evidence in the light most favorable to the prevailing party, indulging every reasonable inference in that party’s favor. Assoc. Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285–86 (Tex. 1998). If there is any evidence of probative force to support the finding, i.e., more than a mere scintilla, we will overrule the issue. Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex. 2005).

Analysis

Under subsection 143.134(h), “[i]f the department head intentionally fails to implement the relief” awarded to the fire fighter, the municipality must pay the fire fighter statutory penalties. Tex. Local Gov’t Code Ann. § 143.134(h). The City notes that “department head” is defined in the Local Government Code as “the chief or head of a fire or police department or that person’s equivalent, regardless of the name or title used.” Tex. Local Gov’t Code Ann. § 143.003 (Vernon 2008). Therefore, the City argues that, because there is no evidence that the Fire Chief knew of the award, let alone intentionally failed to implement it, the trial court’s finding is legally insufficient.

We rejected the identical argument in City of Houston v. Jackson. 135 S.W.3d 891, 898 (Tex. App.—Houston [1st Dist.] 2004), overruled on other grounds, 192 S.W.3d 764 (Tex. 2006). “Intent is generally a question of fact,” which “may be proven by circumstantial evidence.” Id. Therefore, in conducting our sufficiency review, we look to see whether there is more than a scintilla of evidence, actual or circumstantial, that the Fire Chief intentionally failed to implement the award within 10 days.

Here, Hildebrandt sent a letter to the City on February 12, informing it that implementation of the award was five days past due, and that subsection 143.134(h) provides for a statutory penalty for noncompliance after 10 days. In the letter, Hildebrandt directed that the Fire Chief be provided a copy of the letter to ensure timely implementation of the award. Nevertheless, the evidence shows that the City did not implement the award until March 3, 34 days after the decision was issued. Therefore, we hold that there was legally sufficient evidence that the Fire Chief intentionally failed to implement the hearing examiner’s award within 10 days. See Haggar Clothing, 164 S.W.3d at 388.

We overrule the City’s first issue.

Conclusion

We affirm the judgment of the trial court.

George C. Hanks, Jr.
Justice

Panel consists of Justices Nuchia, Hanks, and Higley.

Appellate panel splits on whether trial court should have heard declaratory judgment suit against City of Houston

Controversy here involved booze permit [okay: wine & beer]. The issue whether a declaratory judgment claim may be litigated under various contingencies, however, arises with some frequency in Texas courts, with inconsistent rulings on appeal.

Justice Edelman dissented in Supermercado Teloloapan, Inc. v. City of Houston (Tex. App.- Houston [14th Dist.] Dec. 18, 2007)(Dissenting Opinion by Justice Edelman) (exhaustion of administrative remedies, exclusive jurisdiction doctrine, lack of jurisdiction)

FROM THE DISSENTING OPINION

In 2005, Supermercado, a grocery store operator, applied to the Texas Alcoholic Beverage Commission (the "Commission") for an off-premise beer and wine permit. To satisfy a condition for obtaining the permit, Supermercado requested the City to certify that the location of its store was in a "wet area" and that the sale of beverages there was not prohibited by ordinance. See Tex. Alco. Bev. Code Ann. ' 61.37 (Vernon 2007). However, the City refused to certify the latter because it concluded that a charter school was located less than the required 300 feet from the store.

Because the certification sought from the City by Supermercado was one step in this permit application process, related directly to that process, and arises only in connection with such an application, this declaratory judgment action involves the same subject matter as that over which the Commission has exclusive jurisdiction. See Duenez, 201 S.W.3d at 676; Sells v. Roose, 769 S.W.2d 641, 643 (Tex. App.- Austin 1989, no writ). Therefore, because Supermercado had not exhausted its administrative remedies, the district court lacked subject matter jurisdiction over the declaratory judgment action, and we should reverse the judgment
of the trial court and order the case dismissed for lack of subject matter jurisdiction.

Supermercado Teloloapan, Inc. v. City of Houston (Tex.App.- Houston [14th Dist.] Dec. 18, 2007)(Hedges)(government entity law, regulation, declaratory judgment, UDJA)

M A J O R I T Y O P I N I O N [EXCERPTS]

In this declaratory judgment action, appellant, Supermercado Teloloapan, Inc. d/b/a Teloloapan Meat Market ("Supermercado"), appeals a take-nothing judgment in favor of appellee, the City of Houston ("the City"). In Supermercado's sole issue, it argues that the trial court erred in finding that the City's definition of the term "property line" is reasonable and consistent with the plain meaning of section 3-2(a) of Houston's Code of Ordinances. We affirm.

* * *
The dissent believes this Court does not have jurisdiction to address the merits of the declaratory judgment because the Commission has exclusive jurisdiction. The dissent finds that the issuance of the certification by the City in this case is but "one step" in the process of seeking a permit from the Commission. Relying on Sells v. Roose, 769 S.W.2d 641, 643 (Tex. App.CAustin 1989, no writ), the dissent concludes that Supermercado's remedy lies with the administrative agency. In Sells, Roose and other business owners applied for a beer retailer's permit with the Commission. The county clerk refused to certify that Roose's premises were in a "wet" area. The business owners filed a petition for writ of mandamus seeking to compel Sells to perform her statutory duty and issue the certificate. The court of appeals found that Sells's duty to issue a certificate as to the "wet" or "dry" status of a location arises only in connection with an application for a permit authorized by the Code. Id. at 643. In that regard, the court recognized exclusive jurisdiction in the administrative agency, with the result that the district court lacked subject-matter jurisdiction. Id.

In this case, however, Supermercado filed a declaratory judgment action seeking clarification of a Houston City ordinance. Unlike the business owners in Sells, Supermercado did not seek to compel the City to issue a certification of "wet" status. Supermercado sought a declaratory judgment to interpret the Ordinance, which is specifically permitted by the Texas Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code Ann.' 37.004(a) (Vernon 1997).

Supermercado is not required to exhaust administrative remedies with the Commission to obtain an interpretation of the Ordinance. See Burgess, 101 S.W.3d at 554. Therefore, Supermercado's cause of action and remedy for enforcement is not derived from the Code.

Before Chief Justice Hedges, Justices Fowler and Edelman; Justice Edelman dissented
Appellate Cause No. 14-06-00472-CV
Full case style: Supermercado Teloloapan, Inc. d/b/a Teloloapan Meat Market v. City of Houston
Appeal from 80th District Court of Harris County (Hon. Kent Sullivan, [since succeeded on that bench by Judge Lynn M. Bradshaw-Hull])

Find terms: municipal, local government law, suits, litigation involving City of Houston, government entities, governmental immunity, city ordinance