Chad Riemenschneider Et Ux Rebekah Riemenschneider v. East Texas Medical Center-Crockett, Inc. and Tim Meyer

NO. 12-14-00113-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

CHAD RIEMENSCHNEIDER ET UX § APPEAL FROM THE 349TH

REBEKAH RIEMENSCHNEIDER,

APPELLANTS

V. § JUDICIAL DISTRICT COURT

EAST TEXAS MEDICAL CENTER-

CROCKETT, INC. AND TIM MEYER,

APPELLEES § HOUSTON COUNTY, TEXAS

MEMORANDUM OPINION

Chad and Rebekah Riemenschneider appeal the trial court’s order dismissing their suit

against East Texas Medical Center-Crockett, Inc. (ETMCC) and Tim Meyer. In two issues, the

Riemenschneiders argue that ETMCC failed to establish that it was a governmental unit entitled

to immunity from suit, and that Meyer did not establish that he is immune from liability as an

employee of a governmental unit under the Texas Tort Claims Act (TTCA). We affirm.

BACKGROUND

In 2008, Chad had an ATV accident resulting in a visit to ETMCC. The

Riemenschneiders allege that an MRI showed that Chad had a potential brain tumor, and that the

results were conveyed to Meyer, a physician assistant employed by ETMCC. According to the

Riemenschneiders, the radiologist strongly recommended that another MRI be conducted in six

to eight weeks. They allege that ETMCC and Meyer received this information, but failed to

disclose to the Riemenschneiders that Chad had a possible cancerous brain tumor, and failed to

schedule a follow up appointment. As a result, they contend, the undiagnosed tumor continued

to develop and increase in size. Eventually, Chad had a grand mal seizure and was transported to

ETMCC by ambulance. A CT scan revealed that the lesion had increased in size, and he was

transferred to Methodist Hospital in Houston for neurosurgical intervention. Chad’s subsequent

surgery revealed that the lesion was an “aggressive grade three anaplastic astrocytoma.”

The Riemenschneiders filed suit against ETMCC, Meyer, and a treating physician. They

settled their claim against the treating physician. ETMCC filed a plea to the trial court’s

jurisdiction, alleging that it was a “hospital district management contractor,” which rendered it a

governmental unit entitled to governmental immunity.1 Meyer filed a motion for summary

judgment, asserting that he should be dismissed from the suit since the Riemenschneiders sued

ETMCC, a governmental unit, and he is an employee of ETMCC. After a hearing, the trial court

granted ETMCC’s plea and motion to dismiss, along with Meyer’s motion. Consequently, the

trial court dismissed the Riemenschneiders’ claims with prejudice, and this appeal followed.

Standard of Review

Governmental immunity from suit defeats a trial court’s subject matter jurisdiction and is

properly asserted in a plea to the jurisdiction. Tex. Dep’t of Parks & Wildlife v. Miranda, 133

S.W.3d 217, 225–26 (Tex. 2004). Whether a court has subject matter jurisdiction and whether a

plaintiff has alleged facts that affirmatively demonstrate a trial court’s subject matter jurisdiction

are questions of law. Id. at 226. We therefore review de novo a trial court’s ruling on a

jurisdictional plea. Id. This standard mirrors our summary judgment standard under Texas Rule

of Civil Procedure 166a(c) and places the burden on the movant to meet the standard of proof to

show the trial court lacks subject matter jurisdiction. Id. at 22 8. Therefore, we review

ETMCC’s plea to the jurisdiction and Meyer’s motion for summary judgment under the same

standard. See Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 635 (Tex. 2012).

When a plea challenges the existence of jurisdictional facts, we must consider relevant

evidence submitted by the parties to resolve the jurisdictional issues. Miranda, 133 S.W.3d at

227. Thus, the trial court may consider affidavits and other summary judgment evidence. FKM

P’ship v. Board of Regents of Univ. of Houston Sys., 255 S.W.3d 619, 628 (Tex. 2008). In

reviewing a plea to the jurisdiction and a motion for summary judgment, we take as true all

evidence favorable to the nonmovant, indulging every reasonable inference and resolving any

doubts in the nonmovant’s favor. Miranda, 133 S.W.3d at 227–28. Once the movant asserts

and provides evidentiary support for the plea and motion, the nonmovant is then required to

show only that a disputed fact issue exists. Id. If the evidence creates a fact question on the

1

See TEX. HEALTH & SAFETY CODE ANN. §§ 285.071-.072 (West 2010).

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jurisdictional issue, the trial court cannot grant the plea or the motion, the issue is for the

factfinder to resolve. Id. at 227–28. If the relevant evidence fails to raise a fact question or is

undisputed, the trial court rules on the plea and the motion as a matter of law. Id. at 228.

Applicable Law

Governmental immunity protects constitutionally or legislatively-created institutions,

agencies, or organs of government from suit and liability. See TEX. CIV. PRAC. & REM. CODE

ANN. § 101.001(3)(D) (West 2011); see also TEX. SPEC. DIST. CODE ANN. §§ 1078.001-.253

(West 2015) (creating Houston County Hospital District).

The TTCA provides a limited waiver of governmental immunity. See TEX. CIV. PRAC. &

REM. CODE ANN. § 101.021 (West 2011). To recover under the TTCA, a claimant must provide

proper notice to the governmental unit unless the governmental unit has actual notice of the harm

suffered by the claimant. See id. § 101.101 (West 2011). The filing of a suit under the TTCA

against a governmental unit constitutes an irrevocable election by the claimant and forever bars

any suit or recovery by the claimant against any individual employee of the governmental unit

regarding the same subject matter. TEX. CIV. PRAC. & REM. CODE ANN § 101.106(a) (West

2011). When a claimant files suit against both a governmental unit and its employee, the

employee shall be dismissed from the suit upon the filing of a motion to dismiss by the

governmental unit. Id. § 101.106(e).

A hospital district management contractor, in its management or operation of a hospital

under a contract with a hospital district, is considered a governmental unit under the TTCA. See

TEX. HEALTH & SAFETY CODE ANN. § 285.072 (West 2010). A “hospital district management

contractor” is a nonprofit corporation, partnership, or sole proprietorship that manages or

operates a hospital or provides services under contract with a hospital district that was created by

general or special law. Id. § 285.071 (West 2010). Moreover, an employee of the contractor,

while performing services under the contract for the benefit of the hospital, is an employee of the

hospital district under the TTCA. See id. § 285.072.

Discussion

The Riemenschneiders concede that ETMCC is a nonprofit corporation and that the

Houston County Hospital District (HCHD) is a hospital district created by general or special law

that was authorized to contract with a hospital district management contractor to manage or

operate the hospital. But they contend that there is no evidence that ETMCC contracted with

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HCHD to manage, operate, or provide services to the hospital. Consequently, their argument

continues, ETMCC cannot be a hospital district management contractor under Section 285.072

and it is not entitled to governmental immunity. Therefore, they conclude, the trial court should

have overruled ETMCC’s plea to the jurisdiction and motion to dismiss Meyer from the suit,

along with Meyer’s motion for summary judgment.

On May 5, 1995, HCHD executed a lease with East Texas Medical Center Regional

Health Facilities (ETMC Facilities) to supervise, manage, and operate the hospital and its

financial and fiscal affairs. Section 6.03(a) of the lease, entitled “Operating Entity,” allowed

ETMC Facilities or East Texas Medical Center Regional Health System (ETMC System), upon

notice to HCHD, to create an entity wholly controlled by them to manage and operate the

hospital. Section 6.03 also states that HCHD’s consent is not a condition precedent to ETMC

Facilities’ or ETMC System’s assignment of their responsibilities to the new entity. The lease

expressly referred to this entity as ETMCC and provided that the definition of “LESSEE” under

the lease included ETMCC. The lease allowed ETMC Facilities or ETMC System to assign to

ETMCC “such responsibility for the operation of the hospital as LESSEE desired.” The lease

contemplated that ETMCC would operate the hospital and be “responsible for the day-to-day

operations of the hospital.”

On June 23, 1995, ETMCC was incorporated. The lease went into effect on July 1, 1995.

On December 11, 1995, ETMC Facilities merged into ETMC System. On August 25, 1998,

HCHD executed a memorandum of lease as lessor with ETMCC and ETMCC as Lessee. The

memorandum of lease defined the “lease premises,” through an attached exhibit referenced in the

memorandum, as the same property in the original 1995 lease. The memorandum stated that the

lease premises were subject to the same terms that were in the 1995 lease and its 1997

modifications.2 The memorandum expressly provided that all terms of the 1995 lease and its

1997 modifications were incorporated in the memorandum of lease. Furthermore, the

memorandum of lease provided for an initial twenty year term with automatic five year

extensions absent a specified notice to terminate the lease. The memorandum of lease was

signed by HCHD’s president of the board and ETMCC’s president.

The Riemenschneiders contend that there must be a specific document assigning the lease

from ETMCC Facilities to ETMCC. They rely on Section 18.06 of the lease, which requires that

2

The 1997 modifications to the lease do not appear in the record.

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all alterations or modifications to the lease be in writing, dated, and signed by the parties. The

Riemenschneiders cite no authority to support their contention that they have standing to enforce

the provisions of the lease. Moreover, the issue under the statute is not whether there is an

assignment from ETMCC Facilities to ETMCC. Rather, the issue is whether ETMCC operated

or managed the hospital under contract with HCHD at the time of the alleged negligent conduct.

The Riemenschneiders also point to Section 17.01 of the lease, which requires that

ETMC Facilities or ETMC System obtain written consent from HCHD for an assignment to a

third party. They argue that without written consent for the assignment to ETMCC, the

assignment is ineffective. In making this argument, the Riemenschneiders acknowledge that

Section 6.03 grants ETMC Facilities or ETMC System the right to create ETMCC, upon notice

to HCHD, and assign the lease to it without HCHD’s consent.

We apply contract interpretation principles to give effect to the parties' intentions as

expressed in the unambiguous provisions of the lease. See Seagull Energy E & P, Inc. v. Eland

Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006); Meridien Hotels, Inc. v. LHO Fin. P’ship I,

L.P., 255 S.W.3d 807, 815 (Tex. App.—Dallas 2008, no pet.). If the written instrument is so

worded that it can be given a definite or certain legal meaning, then it is not ambiguous, and we

will construe the contract as a matter of law. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).

Terms are given their plain, ordinary, and generally accepted meaning, unless the instrument

shows the parties used them in a technical or different sense. Heritage Res., Inc. v. Nations

Bank, 939 S.W.2d 118, 121 (Tex. 1996). We must examine and consider the entire writing in an

effort to harmonize and give effect to all provisions so that none are rendered meaningless. J.M.

Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). To the extent of any conflict,

specific provisions control over more general ones. Forbau v. Aetna Life Ins. Co., 876 S.W.2d

132, 133–34 (Tex. 1994).

In examining the lease, Section 17.01 and Section 6.03 can be harmonized. The lease,

read in context, clearly and unambiguously grants ETMC Facilities or ETMC System the right to

assign its duties to ETMCC without written consent. But the lease also provides that if one of

those entities were to assign their interest to a true third party not contemplated in the lease, such

as in the case of a sale of the lease to an entity unrelated to ETMC, then the entity must obtain

written consent from HCHD.

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Next, as part of its proof, ETMCC submitted the affidavit of Byron Hale, the chief

financial officer (CFO) of ETMC System. The Riemenschneiders contend that Hale’s affidavit

is conclusory and not based on personal knowledge. They failed to object to the affidavit, but

contend that their objections are to substantive defects in the affidavit that they may raise on

appeal for the first time. See Dailey v. Albertson’s, Inc., 83 S.W.3d 222, 226 (Tex. App.—El

Paso 2002, no pet.) (describing conflict of authority on issue of whether lack of personal

knowledge in affidavit is defect of form or substance, and whether issue may be raised on appeal

for first time). Assuming without deciding that they may raise that issue on appeal, we conclude

that the affidavit sufficiently establishes Hale’s personal knowledge of the facts relevant to our

inquiry in sufficient detail.

In Hale’s affidavit, he states that he is the CFO of ETMC System, and that he has

personal knowledge of the facts from October 1998 to the present. The Riemenschneiders

contend that since he was not the CFO at the time the assignment took place, and since he stated

that he acquired personal knowledge approximately two months after the memorandum of lease

was executed, his affidavit is incompetent evidence. But an employee may gain personal

knowledge of the company’s practices, procedures, and dealings, even if they were instituted or

occurred prior to the time he was hired. See Dickey v. Club Corp. of Am., 12 S.W.3d 172, 176

(Tex. App.—Dallas 2000, pet. denied) (discussing that although affiant was not employed at

country club when plaintiffs joined, his affidavit makes clear that as general manager, he

acquired knowledge of club’s policies and bylaws through his employment, and his affidavit was

sufficient). And, as we have stated, the relevant inquiry is whether ETMCC operated or

managed the hospital while under contract with HCHD, and implicitly under the statute, at the

time of the alleged malfeasance.

Hale established that, in his capacity as CFO at ETMC System, he knew that ETMCC

operated or managed the hospital under contract with HCHD at the relevant time. An affiant’s

position or job responsibilities can qualify him to have personal knowledge of facts and establish

how he learned of the facts. See, e.g., 1001 McKinney Ltd. v. Credit Suisse First Boston Mortg.

Capital, 192 S.W.3d 20, 27 (Tex. App.—Houston [14th Dist.] 2005, pet. denied) (stating the

affiant’s personal knowledge “resulted from his employment as director of the Controller’s

Division of CSFB, which keeps records of all licenses and government approvals”).

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Moreover, Hale’s affidavit is not conclusory. A conclusory statement in an affidavit is

one that does not provide the underlying facts to support the conclusion. 1001 McKinney Ltd,

192 S.W.3d at 27. Hale explained that the 1995 lease has remained in effect from 1995 to the

present, ETMC Facilities assigned its obligations to ETMCC as contemplated in Section 6.03 of

the lease, and that the assignment continued when ETMC Facilities merged into ETMC System.

He also explained that ETMCC has continuously provided hospital operations under the lease

from 1995 to the present day. We conclude that Hale’s affidavit established in sufficient detail,

based on his personal knowledge at the relevant time, that ETMCC managed or operated the

hospital under contract with HCHD.

In summary, the statements by Hale in his affidavit that ETMCC operated the hospital

under contract with HCHD at the time of the conduct allegedly causing Chad’s injury, along with

the memorandum of lease, its incorporation of the original lease, and the original lease’s

contemplation of this arrangement and naming ETMCC as a lessee, satisfy ETMCC’s burden to

prove that it operated or managed the hospital under contract with HCHD at the relevant time.

See Christus Spohn Health Sys. Corp. v. Ven Huizen, No. 13-10-400-CV, 2011 WL 1900174,

at *5 (Tex. App.—Corpus Christi May 19, 2011, pet. denied) (mem. op.) (holding that nonprofit

corporation’s agreement with county hospital district authorizing corporation to operate hospital,

along with controller of finance’s affidavit stating that corporation operated hospital under

contract, established that it was hospital district management contractor, and that plea to

jurisdiction was properly granted). Therefore, we hold that ETMCC was a hospital district

management contractor at the time of the alleged wrongful conduct, and it is entitled to

governmental immunity. See TEX. HEALTH & SAFETY CODE ANN. § 285.072.

It is undisputed that the Riemenschneiders did not provide notice of their claim to

ETMCC. See TEX. CIV. PRAC. & REM. CODE ANN. § 101.101. Furthermore, they do not allege a

claim for which immunity from suit is waived by the TTCA, namely, that the acts or omissions

involve a use or misuse of tangible personal property. See TEX. CIV. PRAC. & REM. CODE ANN.

§ 101.021; see also Univ. of Tex. Med. Branch v. York, 871 S.W.2d 175, 179 (Tex. 1994)

(failure to follow documented recommendation regarding a hip x-ray did not involve a use or

misuse of tangible personal property); Univ. of Tex. Med. Branch v. Mullins, 57 S.W.3d 653,

657 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (failure to advise patient of test result

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showing positive HIV status was not a use or misuse of tangible personal property).

Accordingly, the trial court properly granted its plea to the jurisdiction.

Finally, Meyer, who is undisputedly an employee of ETMCC, is likewise an employee of

a governmental unit. See TEX. HEALTH & SAFETY CODE ANN. § 285.072. The

Riemenschneiders initially filed suit against ETMCC, and later added Meyer as an additional

defendant. The trial court properly granted Meyer’s motion for summary judgment and

ETMCC’s motion to dismiss because the Riemenschneiders irrevocably elected to sue only

ETMCC when they filed suit against it. See TEX. CIV. PRAC. & REM. CODE ANN. § 101.106(a),

(e).

The Riemenschneiders’ first and second issues are overruled.

DISPOSITION

Having overruled the Riemenschneiders’ first and second issues, we affirm the trial

court’s order dismissing their claims, with prejudice, against ETMCC and Meyer.

GREG NEELEY

Justice

Opinion delivered December 30, 2015.

Panel consisted of Worthen, C.J., Neeley, J., and Bass, Retired J., Twelfth Court of Appeals, sitting by assignment.

(PUBLISH)

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COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

JUDGMENT

DECEMBER 30, 2015

NO. 12-14-00113-CV

CHAD RIEMENSCHNEIDER ET UX REBEKAH RIEMENSCHNEIDER,

Appellants

V.

EAST TEXAS MEDICAL CENTER-CROCKETT, INC. AND TIM MEYER,

Appellees

Appeal from the 349th District Court

of Houston County, Texas (Tr.Ct.No. 12-0006)

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 judgment.

It is therefore ORDERED, ADJUDGED and DECREED that the judgment

of the court below be in all things affirmed, and that all costs of this appeal are hereby adjudged

against the Appellants, CHAD RIEMENSCHNEIDER ET UX REBEKAH

RIEMENSCHNEIDER, for which execution may issue, and that this decision be certified to

the court below for observance.

Greg Neeley, Justice.

Panel consisted of Worthen, C.J., Neeley, J. and Bass, Retired J., Twelfth Court of Appeals,

sitting by assignment.