Entrust, Inc. v. Rice District Community Hospital D/B/A Rice Medical Center
14-14-00196-CV
| Tex. App. | Sep 17, 2015Background
- Entrust administered Rice’s self-funded health plan from 2006; stop-loss insurance covered claims above Rice’s $35,000 self-insured retention.
- Entrust processed claims and submitted excess claims to Pan American Life; contract required standard-based benefit calculations and timing proofs of loss; no guarantees of processing before the 10th day after proof of loss.
- In 2009, Entrust denied a $157,666.50 Methodist Hospital bill after requesting more documentation; Rice cancelled the contract in November 2009 amid changes in hospital management and stop-loss coverage.
- Stop-loss coverage terminated October 31, 2009 due to Rice’s nonpayment of monthly premiums; Rice was unaware of the Methodist bill at termination.
- Entrust later supplied documents; processing concluded November 24, 2009; Methodist bill reduced to $94,559.90; Rice partly paid, leaving $58,915.40 unpaid; Rice sued Entrust for DTPA and other claims.
- Jury answered yes to whether Entrust committed a false, misleading, or deceptive act; awarded $58,915.40 for the Methodist bill and $134,039.20 in attorney’s fees; trial court entered final judgment; Entrust challenged on sufficiency and post-trial grounds;.Texas court of appeals granted take-nothing judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for DTPA Question 1 | Rice asserts pre- and post-contract representations, including website claims, misled reliance. | Entrust contends there is no legally sufficient evidence of a precise misrepresentation or detrimental reliance. | No evidence supports the jury’s yes on Question 1; reversed. |
| Impact on damages and fees | Damages/fees based on theYes finding for representations about Entrust’s services/rights. | Without a valid Question 1 finding, damages and attorney’s fees cannot stand. | Damages and attorney’s fees reversed with take-nothing judgment. |
Key Cases Cited
- Ryland Enter., Inc. v. Weatherspoon, 355 S.W.3d 664 (Tex. 2011) (implied extension for appeal under Verburgt; leniency in dismissals)
- Verburgt v. Dorner, 959 S.W.2d 615 (Tex. 1997) (extension of time for notices; implied extension rules)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (no-evidence standard for legal sufficiency review)
- Royal Globe Ins. Co. v. Bar Consultants, 577 S.W.2d 688 (Tex. 1979) (no evidence standard and reliance principles applied to insurance matters)
- Prudential Ins. Co. of Am. v. Fin. Review Servs., 29 S.W.3d 74 (Tex. 2000) (directed verdict-standard and burden on no-evidence challenges)
- Tiller v. McLure, 121 S.W.3d 709 (Tex. 2003) (standard for directed verdict and post-verdict judgments)