Shamrock Psychiatric Clinic, P.A. v. Tex. Dep't of Health & Human Servs.
540 S.W.3d 553
| Tex. | 2018Background
- Shamrock Psychiatric Clinic, a Medicaid provider, received a payment-hold notice from the HHSC Office of Inspector General (OIG) in Jan. 2013 and timely requested an expedited SOAH hearing.
- OIG counsel proposed consolidating the payment-hold contested case with an anticipated overpayment/recoupment case; Shamrock agreed by email and the OIG filed a status report with SOAH stating the parties had agreed to consolidate and to proceed to an overpayment hearing at SOAH.
- SOAH continued a scheduled November 2013 hearing to March 3, 2014, relying on the parties’ representations; OIG counsel left the agency in Oct. 2013.
- OIG issued a Final Notice of Overpayment on Dec. 2, 2013 requiring a written appeal within 15 days; Shamrock did not file a separate written appeal because it had relied on the consolidation and the SOAH scheduling.
- OIG later withdrew the payment-hold case, moved to dismiss the SOAH proceeding as untimely, and the administrative judge (after an initial denial) dismissed for lack of a pleading; the State sought recoupment of ~$1.6 million. Shamrock sued seeking mandamus/declaratory relief and to enforce the parties’ agreement; the trial court granted OIG’s plea to the jurisdiction.
Issues
| Issue | Shamrock’s Argument | OIG’s Argument | Held |
|---|---|---|---|
| Whether OIG’s status report and emails functioned as a pleading or amendment sufficient to establish SOAH jurisdiction | Status report + emails were a written, filed agreement to consolidate and to proceed to an overpayment hearing at SOAH | Status report only indicated a vague plan to consolidate later and did not constitute a pleading or jurisdictional filing | Court held the status report and related orders evidenced a complete written memorandum of the parties’ agreement and supported jurisdiction for the contested hearing |
| Whether OIG waived the notice-and-appeal requirements by its representations | OIG’s representations and conduct induced Shamrock to rely and forego a separate written appeal, thereby effecting waiver | Statutory/regulatory notice-and-appeal requirements are mandatory and not waived by informal correspondence | Court treated the parties’ written agreement as controlling; Shamrock’s reliance made denial of the hearing improper under the circumstances (ministerial duty issue dispositive) |
| Whether the parties formed a binding Rule 11 / SOAH Rule 155.415 agreement enforceable by the judge | The emails, status report, and the judge’s reliance constitute a writing filed of record satisfying Rule 11 / Rule 155.415 | The correspondence lacked essential terms or specificity to be an enforceable Rule 11 agreement | Court held the written status report and related orders constituted a complete memorandum with essential terms and thus an enforceable agreement that the judge should have enforced |
| Whether sovereign immunity barred Shamrock’s suit (ultra vires/ministerial-duty exception) | The administrative law judge had a ministerial duty to enforce the parties’ Rule 11 agreement; OIG’s withdrawal breached a non-discretionary obligation, falling within the ultra vires exception to sovereign immunity | Relief would effectively require the State to pay money and is barred by sovereign immunity; no ministerial duty was shown | Court held the judge failed to perform a ministerial duty in refusing to enforce the agreement; the ultra vires exception applied and sovereign-immunity plea was improperly granted |
Key Cases Cited
- Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217 (Tex. 2004) (sovereign immunity/plea to jurisdiction standards)
- City of El Paso v. Heinrich, 284 S.W.3d 366 (Tex. 2009) (ultra vires exception and ministerial-duty framework)
- Fortis Benefits v. Cantu, 234 S.W.3d 642 (Tex. 2007) (trial court’s ministerial duty to enforce valid Rule 11 agreements)
- Padilla v. LaFrance, 907 S.W.2d 454 (Tex. 1995) (requirements for a memorandum to satisfy Rule 11)
- Cohen v. McCutchin, 565 S.W.2d 230 (Tex. 1978) (Rule 11 memorandum must be complete in every material detail)
- Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (contract interpretation and ambiguity principles)
- Trudy’s Tex. Star, Inc. v. City of Austin, 307 S.W.3d 894 (Tex. App.—Austin 2010) (Rule 11 agreements treated as contracts)
- Reata Constr. Corp. v. City of Dallas, 197 S.W.3d 371 (Tex. 2006) (governmental immunity and exceptions)
- In re Castillo, 201 S.W.3d 682 (Tex. 2006) (mandamus and supervisory role of courts)