570 S.W.3d 323
Tex. App.2018Background
- Insurer United sued a licensed hospital (First Street Hospital), several freestanding off-site ERs, and a coordinator (Crumley), alleging they conspired to bill United facility fees using the hospital's license and tax ID for services rendered at Off-site ERs not entitled to such fees.
- Freestanding ERs initially were unlicensed; Texas law in 2009 (Health & Safety Code §254.051–.052) later required licensing but exempted facilities that (1) were owned/operated by a licensed hospital and (2) had federal provider‑based status.
- Off-site ERs entered management/affiliate agreements with First Hospital (2009–2010) and obtained CMS provider‑based determinations; they then submitted millions in facility‑fee claims billed under First Hospital’s name/ID.
- United first demanded reimbursement in March 2011 and learned of Aetna’s near‑identical federal suit against First Hospital and St. Michael on June 2, 2011; United hired counsel to investigate in December 2011 and repeatedly requested contracts/documentation from First Hospital in 2014.
- The trial court granted summary judgment for defendants on statute‑of‑limitations and other grounds; only a short‑window money‑had‑and‑received claim survived but was nonsuited by United. The appellate court affirmed, holding limitations barred all tort claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did United’s fraud claim accrue before suit (triggering limitations)? | United: discovery rule delays accrual until United actually knew or reasonably should have known its specific injury; June 2011 knowledge of Aetna’s complaint was insufficient by itself. | Defs: United was on inquiry notice by June 2, 2011 when it downloaded Aetna’s complaint alleging the same scheme, so accrual occurred then. | Accrual: June 2, 2011 as a matter of law; United’s August 28, 2015 suit was untimely. |
| Did the discovery rule/fraud‑discovery require more than notice of Aetna’s complaint? | United: other courts require “more” or verified facts producing a good‑faith basis to sue; mere filing of similar suit is not dispositive. | Defs: Where claims, parties, and facts substantially overlap and parties are similarly situated, a public suit gives inquiry notice. | Court: Aetna’s complaint put United on inquiry notice because claims, defendants, and parties were substantially the same; reasonable diligence required investigation. |
| Did defendants fraudulently conceal their wrongdoing so as to toll limitations? | United: First Hospital’s repeated assurances and reliance on CMS letters, plus stonewalling, equitably tolled limitations. | Defs: Any communications did not sufficiently conceal beyond Sept. 23, 2014; United unreasonably delayed filing after being put on notice. | Held: Even if concealment raised fact issues, tolling could not extend limitations enough to make the suit timely; reliance was unreasonable after Sept. 23, 2014. |
| Does each bill/payment create a new fraud claim with its own limitations period? | United: each submitted bill contained an independent misrepresentation and injury, so each restarts the limitations period for fraud. | Defs: The bills were continuing damages from one core fraudulent misrepresentation; they do not create separate fraud causes of action. | Held: Single accrual for the core fraud; repeated bills are continuing damages and do not reset accrual. |
Key Cases Cited
- Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830 (Tex. 2018) (movant on limitations must conclusively establish accrual date and negate discovery rule)
- KPMG Peat Marwick v. Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746 (Tex. 1999) (summary‑judgment burden on limitations affirmative defense)
- Via Net v. TIG Ins. Co., 211 S.W.3d 310 (Tex. 2006) (narrow application of discovery rule; diligence required of contracting parties)
- Hooks v. Samson Lone Star, Ltd. P’ship, 457 S.W.3d 52 (Tex. 2015) (inquiry/constructive notice: publicly available information can bar discovery rule)
- United States v. Beef Indus. Antitrust Litig., 600 F.2d 1148 (5th Cir. 1979) (filing of similar lawsuit may give notice in some circumstances but not necessarily dispositive)
- Cherry v. Victoria Equip. & Supply, Inc., 645 S.W.2d 781 (Tex. 1983) (fraudulent concealment can toll limitations where plaintiff reasonably relied on defendant’s false exonerating statements)