                                                                                         ACCEPTED
                                                                                     03-15-00309-CV
                                                                                             6335946
                                                                          THIRD COURT OF APPEALS
                                                                                     AUSTIN, TEXAS
                                                                                 8/3/2015 4:23:28 PM
                                                                                   JEFFREY D. KYLE
                                                                                              CLERK
                              NO. 03-15-00309-CV

CITY OF AUSTIN and THE UNITED §              IN THE THIRD        FILED IN
                                                          3rd COURT OF APPEALS
HEALTHCARE CHOICE PLUS PLAN §                                 AUSTIN, TEXAS
FOR CITY OF AUSTIN EMPLOYEES, §                           8/3/2015 4:23:28 PM
                              §                             JEFFREY D. KYLE
              Appellants,     §              COURT OF    APPEALS  Clerk
                                                                      IN
v.                            §
                              §
CHARLES LESNIAK,              §
                              §
              Appellee.       §              AUSTIN, TEXAS




                   JOINT APPELLANTS’ REPLY BRIEF




ORAL ARGUMENT IS REQUESTED

Andrew G. Jubinsky                       Andralee Cain Lloyd
Texas Bar No. 11043000                   State Bar No. 24071577
andy.jubinsky@figdav.com                 andralee.lloyd@austintexas.gov
Lance V. Clack                           Megan Mosby
Texas Bar No. 24040694                   State Bar No. 24073392
lance.clack@figdav.com                   megan.mosby@austintexas.gov

FIGARI + DAVENPORT, LLP                  CITY OF AUSTIN – LAW DEPARTMENT
901 Main Street, Suite 3400              P. O. Box 1546
Dallas, Texas 75202                      Austin, Texas 78767-1546
(214) 939-2000                           (512) 974-2918
(214) 939-2090 (Fax)                     (512) 974-1311 (Fax)

ATTORNEYS FOR APPELLANT                  ATTORNEYS FOR APPELLANT
THE UNITED HEALTHCARE CHOICE PLUS        CITY OF AUSTIN
PLAN FOR CITY OF AUSTIN EMPLOYEES
                                         TABLE OF CONTENTS

TABLE OF CONTENTS ............................................................................................i
INDEX OF AUTHORITIES..................................................................................... ii
ARGUMENT .............................................................................................................1
         A.        Introduction. ..........................................................................................1

         B.        Appellants are immune from suit. ......................................................... 1

         C.        Section 271.152 does not waive Appellee’s immunity. ........................ 3

PRAYER ....................................................................................................................4
CERTIFICATE OF COMPLIANCE ......................................................................... 6




                                                            -i-
                                     INDEX OF AUTHORITIES

                                                                                                            Page(s)
CASES

Bailey v. City of Austin,
   972 S.W.2d 180 (Tex. App.—Austin 1998, pet. denied) ..................................... 2
City of Georgetown v. Lower Colorado River Authority,
   413 S.W.3d 803 (Tex. App.—Austin 2013, pet. dism’d) ..................................... 2
City of San Antonio v. City of Boerne,
   111 S.W.3d 22 (Tex. 2003)...................................................................................4

East Houston Estate Apartments, LLC v. City of Houston,
  294 S.W.3d 723 (Tex. App.—Houston [1st Dist.] 2009, no pet.) ........................ 4
Gates v. City of Dallas,
  704 S.W.2d 737 (Tex. 1986) ................................................................................2
Humana Ins. Co. v. Mueller,
  2015 WL 1938657, No. 04-14-752-CV (Tex. App.—San Antonio, April
  29, 2015, no pet. h.) ..............................................................................................2
Lubbock County Water Control & Imp. Dist. v. Church & Akin, L.L.C.,
  442 S.W.3d 297 (Tex. 2014) ............................................................................3, 4

STATUTES
Tex. Gov’t Code § 271.152................................................................................1, 3, 4
Tex. Gov’t Code § 2259.002..........................................................................1, 2, 3, 4




                                                         -ii-
                                  ARGUMENT

A.    Introduction.

      In his brief, Appellee argues that (1) providing benefits to city employees is

a proprietary function, for which there is no immunity, and (2) even if immunity

exists, it is waived by Tex. Local Gov’t Code §271.152. Appellee’s first argument

ignores the application of Tex. Gov’t Code § 2259.002, which is fatal to

Appellee’s position, and his second argument fails because this suit does not arise

from services provided to the City of Austin. The Trial Court’s ruling should be

reversed, and judgment rendered in favor of Appellants.

B.    Appellants are immune from suit.

      Appellee concedes the City of Austin is a qualifying governmental entity

with immunity [Appellee’s Brief, p. 7], and does not dispute that the Plan, which is

a self-funded benefit plan established by the City of Austin, is likewise immune.

Instead, Appellee argues that the City of Austin engaged in a proprietary function

for which there is no immunity.

      Appellee’s argument that providing benefits pursuant to a self-funded plan is

a proprietary function is incorrect.     The legislature has made clear that a

municipality has immunity from claims for benefits under a self-funded plan:

“[t]he establishment and maintenance of a self-insurance program by a




JOINT APPELLANTS’ REPLY BRIEF                                                 PAGE 1
governmental unit is not a waiver of immunity or of a defense of the governmental

unit or its employees.” Tex. Gov’t Code § 2259.002.

      The cases Appellee relies on for the proposition that providing benefits to

employees pursuant to a self-funded benefit plan is a proprietary function, Bailey v.

City of Austin, 972 S.W.2d 180 (Tex. App.—Austin 1998, pet. denied) and Gates

v. City of Dallas, 704 S.W.2d 737 (Tex. 1986), were decided before Section

2259.002 was enacted in 1999. These cases have been superseded by statute, and

are no longer good law. Further, the clear applicability of Section 2259.002

distinguishes this case from City of Georgetown v. Lower Colorado River

Authority, 413 S.W.3d 803 (Tex. App.—Austin 2013, pet. dism’d), which involved

an agreement between a city and a power company, and was not governed by

Section 2259.002 or any similar statute.

      More recent cases make clear that a municipality has immunity from claims

for benefits brought pursuant to a self-funded plan. Humana Ins. Co. v. Mueller,

2015 WL 1938657, No. 04-14-752-CV (Tex. App.—San Antonio, April 29, 2015,

no pet. h.). Tellingly, Appellee does not even cite Section 2249.002 or argue that it

is inapplicable to this case. Appellee likewise fails to address the opinion in

Mueller, 2015 WL 1938657, which correctly applied Section 2259.002 and held

that a governmental entity, and its self-funded plan, is immune from any suits for

benefits brought pursuant to the plan. Even if Appellee’s argument regarding the


JOINT APPELLANTS’ REPLY BRIEF                                                  PAGE 2
applicability of the proprietary/governmental function distinction is accepted, a

municipality clearly has immunity for claims arising from the provision of benefits

pursuant to a self-funded plan. Id.

C.    Section 271.152 does not waive Appellee’s immunity.

      Appellee concedes that, in order to plead a valid waiver of immunity under

Chapter 271, Appellee must show that the contract provides for the provision of

goods and services to the local governmental entity. [Appellee’s Brief, p. 7-8.]

Appellee argues that the Plan provides for services to the City of Austin because

(1) Appellee provided services to the City of Austin, and (2) the Plan provides

benefits to the City of Austin, employees of the City of Austin, and their

dependents. [Appellee’s Brief, p. 10.]

      These services are insufficient to bring the contract within the scope of

Section 271.152. First, to the extent Appellee provides services to the City of

Austin, he does not do so pursuant to the Plan. Stated differently, the Plan does not

provide for the provision of any services by Appellee. Second, to the extent the

Plan provides services to the City of Austin, they are not the subject of suit.

Services provided to employees of the City of Austin and their dependants are not

services provided to the governmental entity.      None of the provided services

identified by Appellee are sufficient to waive immunity for this suit under Section

271.152. See, e.g., Lubbock County Water Control & Imp. Dist. v. Church & Akin,


JOINT APPELLANTS’ REPLY BRIEF                                                  PAGE 3
L.L.C., 442 S.W.3d 297, 303 (Tex. 2014) (holding that the provision of services to

a water district’s constituents did not constitute the provision of services to the

water district, and therefore immunity was not waived under Chapter 271); East

Houston Estate Apartments, LLC v. City of Houston, 294 S.W.3d 723, 726 (Tex.

App.—Houston [1st Dist.] 2009, no pet.). Appellee makes no effort to distinguish

Church & Akin or East Houston Estate, both of which are fatal to his claim.

      Finally, Appellee again fails to recognize the impact of Section 2259.002. If

Appellee’s argument regarding Section 271.152 was accepted, every governmental

entity would waive immunity when it established a self-funded plan, and Section

2259.002 would be rendered a nullity. This is not the law. City of San Antonio v.

City of Boerne, 111 S.W.3d 22 (Tex. 2003) (holding that the purpose of statutory

construction is to give effect to every part). Appellee has failed to plead or

articulate a valid waiver of immunity.

                                    PRAYER

      For the foregoing reasons, Appellants request that this Court reverse the

Trial Court’s order denying Appellants’ plea to the jurisdiction and render

judgment dismissing Appellee’s claims.




JOINT APPELLANTS’ REPLY BRIEF                                                 PAGE 4
                                Respectfully submitted,


                                By: /s/ Lance V. Clack
                                        Andrew G. Jubinsky
                                        Texas Bar No. 11043000
                                        andy.jubinsky@figdav.com
                                        Lance V. Clack
                                        Texas Bar No. 24040694
                                        lance.clack@figdav.com

                                FIGARI & DAVENPORT, L.L.P.
                                901 Main Street, Suite 3400
                                Dallas, Texas 75202
                                Tel: (214) 939-2000
                                Fax: (214) 939-2090

                                ATTORNEYS FOR THE UNITED HEALTHCARE
                                CHOICE PLUS PLAN FOR CITY OF AUSTIN
                                EMPLOYEES



                                KAREN M. KENNARD, CITY ATTORNEY
                                MEGHAN L. RILEY, CHIEF LITIGATION

                                By: /s/ Megan Mosby
                                        Andralee Cain Lloyd
                                        State Bar No. 24071577
                                        andralee.lloyd@austintexas.gov
                                        Megan Mosby
                                        State Bar No. 24073392
                                        megan.mosby@austintexas.gov

                                City of Austin – Law Department
                                P. O. Box 1546
                                Austin, Texas 78767-1546
                                Tel: (512) 974-2918
                                Fax: (512) 974-1311

                                ATTORNEYS FOR CITY OF AUSTIN




JOINT APPELLANTS’ REPLY BRIEF                                            PAGE 5
                     CERTIFICATE OF COMPLIANCE
        This document complies the word-count limitations of Rule 9.4(i)(3)
because it contains 877 words as calculated per the word processing program used
for its preparation, excluding any parts exempted by Rule 9.4(i)(1).

                                           /s/ Lance V. Clack
                                             Lance V. Clack




JOINT APPELLANTS’ REPLY BRIEF                                             PAGE 6
                        CERTIFICATE OF SERVICE

     On the 3rd day of August, 2015, a true and correct copy of the foregoing
document was served on counsel as follows:

Via E-Service
Amar Raval
araval@plummerlawyers.com
James C. Plummer
jplummer@plummerlawyers.com
PLUMMER & KUYKENDALL
4203 Montrose Blvd., Suite 270
Houston, Texas 77006
Attorney for Plaintiff
                                         /s/ Lance V. Clack
                                           Lance V. Clack




JOINT APPELLANTS’ REPLY BRIEF                                               PAGE 7
