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Date: 09-20-2022
Case Style:
Texas Health Harris Methodist Hospital Fort Worth v. Stephen Featherly
Case Number: 02-19-00199-CV
Judge: Wade Birdwell
Court:
Court of Appeals Second Appellate District of Texas at Fort Worth
On appeal from the County Court at Law No. 3
Tarrant County, Texas
Plaintiff's Attorney: Grant D. Blaies
Defendant's Attorney:
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Description:
Fort Worth, Texas Personal Injury lawyer represented Defendant challenging hospital’s lien.
In this case, a hospital filed a statutory lien against an emergency room patient’s
personal injury cause of action, and the patient brought this declaratory judgment action
to challenge the validity of the hospital’s lien. The trial court ultimately declared the lien
partially valid for a lesser amount and partially invalid for the remainder and awarded
the patient attorney’s fees in an amount almost quadruple the lien amount originally
asserted by the hospital. Both sides appealed. Due to the erroneous exclusion of the
hospital’s evidence of ratification, we reverse and remand for a new trial.
I. BACKGROUND
On March 13, 2014, Appellee Stephen Featherly was injured in a motor vehicle
accident. He was transported to Appellant Texas Health Harris Methodist Hospital Fort
Worth (the Hospital) for treatment. After signing an admission acknowledgment and
consent form confirming his agreement to pay for any treatment to be provided,
Featherly was treated in the emergency room for roughly three and a half hours before
he asked to be discharged.
Shortly thereafter, the billing department of the Hospital sent Featherly a patient
account statement, dated March 20, 2014, seeking payment in the amount of $13,575.10
for the medical care rendered in its emergency room. The statement identified Featherly
as a “self-pay” patient and credited him with an uninsured discount/adjustment of
$11,106.90 against the total charges of $24,682.00, resulting in the $13,575.10 account
balance. The statement indicated that the deadline for payment was April 7, 2014.
3
On April 1, 2014, the Hospital’s legal department received a letter from attorney
James Jinks, who stated that he and his law firm represented Featherly for injuries
sustained. The letter enclosed a HIPAA-compliant medical authorization executed by
Featherly and requested “a copy of an itemized billing statement for services” rendered
as a result of the accident on March 13, 2014.
The billing department of the Hospital thereafter sent Featherly a second
statement, dated April 14, 2014, seeking past due payment of the original adjusted
account balance of $13,575.10. Neither this statement nor the original statement that
was sent to Featherly personally itemized the individual charges for the services
rendered.
Subsequently, the Hospital forwarded to Jinks two sworn affidavits of billing
records, dated May 8, 2014, and June 5, 2014, respectively. Each affidavit attested to an
account balance for services rendered in the “full amount” of $24,682.00, and each
attached a “Patient Account Summary” and either an itemized statement or computer
printout of the charges and codes for the individual services rendered. The affidavits
further attested: “The service(s) provided were necessary and the amount charged for
the service(s) was reasonable at the time and place that the service(s) were provided.”
In this manner, the affidavits met the admissibility requirements of Section 18.001 of
the Texas Civil Practice and Remedies Code, which provides for civil actions asserting
claims for personal injuries:
4
Unless a controverting affidavit is served as provided by this section, an
affidavit that the amount a person charged for a service was reasonable at
the time and place that the service was provided and that the service was
necessary is sufficient evidence to support a finding of fact by judge or
jury that the amount charged was reasonable or that the service was
necessary.
Tex. Civ. Prac. & Rem. Code Ann. § 18.001(b) (setting forth admissibility requirements).
With the Hospital newly aware of the possibility that Featherly could obtain a
judgment or settlement for damages arising out of the underlying accident, on May 9,
2014, the Hospital filed a statutory hospital lien with the county clerk of Tarrant County.
See Tex. Prop. Code Ann. § 55.002(a) (“A hospital has a lien on a cause of action or
claim of an individual who receives hospital services for injuries caused by an accident
that is attributed to the negligence of another person.”). The lien did not specify an
amount due. See id. § 55.005(b) (providing that the notice filed need only contain the
injured individual’s name and address, the date of the accident, the name and location
of the hospital claiming the lien, and the name of the person alleged to be liable for
damages arising from the injury, if known). Once it filed the executed lien, the Hospital
faxed a copy of it to Jinks.
After filing its lien, the Hospital sent three additional statements to Featherly
dated May 15, June 15, and July 25, 2015. The amount due reflected on each of these
statements was $24,682.00; they no longer reflected an uninsured discount/adjustment.
The Hospital explained that this was due to the possibility of Featherly’s recovery of
5
damages against a negligent third party, thereby rendering him “insured” for purposes
of payment.
On August 20, 2015, Jinks filed a personal injury lawsuit on Featherly’s behalf
against the driver of the other vehicle involved in the accident, Jennifer Rose
Applebaum. In addition to alleging a negligence cause of action, the original petition
sought damages including “reasonable expenses for necessary health care, including
rehabilitative services and devices, resulting from the injuries he sustained in the
occurrence in question.” More specifically, the petition alleged that Featherly had
“incurred $149,481.75 in past medical expenses.”
On October 19, 2015, Featherly responded to an interrogatory propounded by
Applebaum seeking the specific amounts “of any and all hospital, doctor, medical or
pharmaceutical expenses” that he claimed to have incurred because of the underlying
accident. His sworn response identified fifteen health care providers, including the
Hospital, and enumerated the charges for all fifteen, including $24,682.00 for the
Hospital, with the cumulative amount incurred of $159,367.33. On January 27, 2016,
Jinks responded to a request for disclosure of the amount and method of calculating
Featherly’s economic damages by identifying the same providers and enumerating the
same individual and cumulative amounts charged. See Tex. R. Civ. P. 194.2(d).
On March 2, 2016, Featherly executed a “Confidential Settlement Agreement
and Release” with Applebaum whereby he agreed to accept $500,000.00 in full and final
6
settlement of his cause of action against her and, upon payment of this amount, to fully
release and discharge her from any further liability arising from the underlying accident.
To effectuate the settlement, on March 4, 2016, the claims adjuster for
Applebaum’s liability insurer sent her defense attorney a check payable to “STEPHEN
FEATHERLY & JAMES JINKS AND COURT CLERK FOR THE BE[NEFIT] OF
HARRIS METHODIST FORT[] WORTH” in the amount of $24,682.00, the same
amount the Hospital had claimed since first contacted by Jinks on behalf of Featherly
and the same amount asserted by Featherly and Jinks as reasonable and necessary
charges by way of Featherly’s pleadings and discovery responses.
On March 10, 2016, Featherly and Applebaum filed a joint motion in the trial
court seeking dismissal of the lawsuit in its entirety with prejudice. The next day,
March 11, 2016, the trial court entered an Agreed Order of Dismissal with Prejudice
granting the relief jointly requested.
On April 14, 2016, the claims adjuster for Applebaum’s liability insurer sent Jinks
another check payable to “DISTRICT CLERK OF TARRANT COUNTY FOR THE
BENEFIT OF HARRIS METHODIST FORT [WORTH,] STEPHEN
FEATHERLY, & HIS ATTORNEY, JAMES [JINKS]” in the same amount of
$24,682.00.
On May 24, 2016, Featherly filed this lawsuit against the Hospital and Texas
Health Huguley, Inc. (Huguley) seeking a declaratory judgment that the liens filed by
both hospitals were invalid because the amounts charged for the services rendered by
7
each exceeded “a reasonable and regular rate” for hospital and emergency medical
services, citing Texas Property Code Section 55.004(d)(1), (g)(1).1 See Tex. Prop. Code
Ann. § 55.004(d)(1), (g)(1); see also Daughters of Charity Health Servs. of Waco v. Linnstaedter,
226 S.W.3d 409, 411 (Tex. 2007) (confirming that the amount of a hospital lien cannot
exceed a reasonable and regular rate). As to the Hospital, the original petition asserted
that an independent audit commissioned by Featherly had determined that the
$24,682.00 charge exceeded the reasonable and regular rates for its services. On this
basis, the prayer for relief sought a declaration that the Hospital’s lien was invalid and
sought attorney’s fees and court costs for obtaining such relief.
On June 6, 2016, the claims adjuster for Applebaum’s liability insurer sent yet
another check to Jinks, this one made payable to “STEPHEN FEATHERLY AND
HIS ATTORNEY JAMES A JINKS” in the exact amount for which the new lawsuit
sought a declaration of invalidity for the Hospital’s lien due to its exceeding reasonable
and regular rates.
On June 30, 2016, the Hospital filed a general denial. On September 29, 2016,
the Hospital filed an amended answer adding to its general denial the affirmative
defenses of waiver, equitable estoppel, and quasi-estoppel, asserting that Featherly
should be precluded from contesting the reasonableness and regularity of the rates
1
Featherly later agreed to dismiss his declaratory judgment action against Huguley
with prejudice.
8
charged for its emergency room services given his use of the full charges to negotiate
the settlement agreement in the underlying personal injury lawsuit.
On February 21, 2017, the Hospital filed a counterclaim for the full $24,682.00
charged for its services, asserting breach of contract and unjust enrichment as theories
of liability. The Hospital again cited Featherly’s reliance on that amount as the basis for
his personal injury cause of action and the foundation of the amount he eventually
obtained in settlement thereof. Featherly thereafter filed a general denial and further
specifically pleaded that, due to his injuries, he lacked the capacity to execute the
contract for services with the Hospital and that the Hospital committed fraud in
charging for its services.
On July 6, 2018, the Hospital amended its counterclaim to add the theories of
quantum meruit and money had and received. Featherly responded with an amended
answer asserting that the Hospital’s unclean hands foreclosed any recovery under the
Hospital’s equitable theories of recovery. On November 2, 2018, the Hospital amended
its counterclaim to assert that, even if Featherly had initially lacked the capacity to
execute the admission acknowledgment and consent form, he subsequently ratified the
contract by adopting the full amount billed therefor as the basis for the litigation and
settlement of his personal injury cause of action against Applebaum.
Called to trial on November 12, 2018, the parties submitted their proposed jury
questions and instructions and agreed to reserve their claims for attorney’s fees for
adjudication by the court post-verdict. Before and during trial, the Hospital sought to
9
prove its ratification defense by offering a demand letter, the discovery responses, the
settlement agreement, the joint motion to dismiss, and the order of dismissal with
prejudice in the underlying negligence action against Applebaum. The Hospital argued
that in each of these documents, Featherly ratified the contract for hospital services by
urging $24,682.00 as the reasonable and necessary amount he incurred for those
services as compensable damages resulting from Applebaum’s negligence. The trial
court excluded each of these exhibits as irrelevant.
The trial court submitted its charge to the jury. As an initial matter, and separate
and distinct from the subsequent liability questions, the court’s charge asked the
following question concerning the validity of the Hospital’s lien: “What was a
‘reasonable and regular rate’ for the hospital services provided to [Featherly] by [the
Hospital] on March 13, 2014[?]” The charge then conditioned the breach of contract
liability and damages questions upon a negative answer to a question asking whether
Featherly lacked the mental capacity to contract for the hospital care he received—
effectively an affirmative finding of mental incapacity. The trial court refused to submit
ratification as an alternative basis for contract formation in the event of an affirmative
incapacity answer.
2 The charge did, however, submit a liability question with instruction
and a damages question on the Hospital’s quantum meruit theory of recovery.
2
The Hospital tendered the following question and instruction on ratification:
Did Plaintiff ratify an agreement with Defendant to pay the “full billed
charges” for the goods and services provided to him during his admission
10
Addressing the validity of the hospital lien, the jury eventually found that the
reasonable and regular rate for the Hospital’s services to Featherly was $13,575.10, the
exact amount originally calculated by the Hospital applying its uninsured discount. The
jury also found that, due to Featherly’s injuries in the wreck, he lacked the mental
capacity to contract when he signed the admission acknowledgment and consent form
at the Hospital. Because this negative response foreclosed any consideration of the
Hospital’s breach of contract theory of recovery, the jury did not answer those
questions. Nevertheless, on the Hospital’s alternative quantum meruit theory of
recovery, the jury found that the Hospital had rendered compensable services to
Featherly for which it was entitled to compensation in the amount of $13,575.10.
3
to Defendant’s emergency department and to “irrevocably assign” to
Defendant his interest in a recovery from a third-party liability policy up
to the amount of Defendant’s charges?
A person ratifies an agreement if he recognizes the validity of the
agreement by acting or performing under the agreement or by otherwise
affirmatively acknowledging the agreement. In other words, if a person by
his conduct recognizes an agreement as valid, having knowledge of all
relevant facts, he ratifies the agreement. Any act inconsistent with an
intent to avoid being bound by an agreement has the effect of ratifying
the agreement.
3
The charge instructed the jury to “proceed” to consider and answer the quantum
meruit questions if it found Featherly lacked the requisite mental capacity to contract,
but later instructed the jurors to answer the quantum meruit questions only if they
previously found Featherly had the mental capacity to contract but did not actually agree
to a contract with the Hospital. The jury apparently followed the first instruction and
ignored the second in answering the quantum meruit questions.
11
After trial, the parties submitted competing motions for judgment, including
briefing and affidavits on their respective attorney’s fees, with Featherly urging the trial
court to disregard the jury’s quantum meruit findings because the finding of mental
incapacity conclusively negated any finding that he “accepted, used and benefited from”
the Hospital’s services or that he was “reasonably notified” that the Hospital expected
to be compensated for its services. On May 10, 2019, the trial court entered a Final
Judgment granting Featherly declaratory judgment relief in the following particulars:
The lien filed on May 9, 2014 by Texas Health Harris Methodist Hospital
Fort Worth for the hospital’s charges for services provided to Plaintiff on
March 13, 2014 alleged the amount of $24,682.00 due, but is invalid as to
the amount of $11,106.90. This amount was found by the jury to exceed
a reasonable and regular rate for the hospital services provided to Plaintiff
by Defendant on March 13, 2014. The lien is valid for the remaining
$13,575.10, the amount determined by the jury to be a reasonable and
regular rate for the hospital services provided to Plaintiff by Defendant
on March 13, 2014.
The trial court awarded Featherly $88,715.01 in attorney’s fees on his declaratory
judgment claim. But the trial court disregarded the jury’s verdict on the Hospital’s
quantum meruit theory of recovery and rendered a take-nothing judgment against the
Hospital on each of its counterclaims. In so doing, the Final Judgment paradoxically
declared the validity of the Hospital’s lien in the amount of $13,575.10 but invalidated
the underlying debt secured by the lien. See Linnstaedter, 226 S.W.3d at 411 (“A lien is
part and parcel of the underlying claim, the former existing only because of the latter.”).
The Hospital subsequently appealed, and Featherly cross-appealed.
12
II. FEATHERLY’S CROSS-APPEAL4
In his sole issue, Featherly complains of the trial court’s declaration that the
Hospital’s statutory lien is valid in the amount of $13,575.10. He contends that the
entirety of the lien should have been declared invalid—despite the jury’s finding that
this amount represents the reasonable and regular rate for the hospital services rendered
to him—because he was never “admitted” as an inpatient to the Hospital as required
by Section 55.002(a) of the Texas Property Code, which provides,
A hospital has a lien on a cause of action or claim of an individual who
receives hospital services for injuries caused by an accident that is
attributed to the negligence of another person. For the lien to attach, the
individual must be admitted to a hospital not later than 72 hours after the
accident.
Tex. Prop. Code Ann. § 55.002(a) (emphasis added). Featherly reasons that since he
only received treatment in the Hospital’s emergency room and was never formally
“admitted” to the Hospital for “inpatient” treatment, the treatment he received was
“outpatient” in nature and, therefore, not subject to a statutory lien.5
4
We address Featherly’s cross-appeal first because the error of which he
complains is a matter of statutory construction that presents the only circumstances for
rendition of judgment as a matter of law. “Generally, when a party presents multiple
grounds for reversal of a judgment on appeal, the appellate court should first address
those points that would afford the party the greatest relief.” Bradleys’ Elec., Inc. v. Cigna
Lloyds Ins., 995 S.W.2d 675, 677 (Tex. 1999).
5
The first acknowledgment on the consent form signed by Featherly upon his
arrival at the Hospital provided, “I understand that my health condition requires
inpatient or outpatient admission.” Although the Hospital’s form contemplates the
13
The authority he offers for this interpretation of the word “admitted” is an online
Medicare FAQ.
6 The FAQ explains that for purposes of Medicare, a patient is admitted
to the hospital only when there is a doctor’s order to admit the patient to the hospital
and treat him on an inpatient basis.
Moreover, Featherly notes that the Legislature subsequently amended the
hospital lien statute in 2019 to define the term “admitted” to include treatment in an
emergency medical services department, to wit, “For purposes of this chapter, an
injured individual is considered admitted to a hospital if the individual is allowed access
to any department of the hospital for the provision of any treatment, care, or service to
the individual.” Tex. Prop. Code Ann. § 55.0015. Featherly argues that if, prior to 2019,
the term “admitted” had already embraced outpatient treatment of the kind he received
in the Hospital, there would have been no need for the Legislature to clarify that fact
with a new enactment.
By way of response, the Hospital urges us to interpret the term “admitted”
consistent with its plain meaning, which coincides with the interpretation endorsed by
Section 55.0015, i.e., that an individual is “admitted” if he is allowed access to a hospital
or one of its departments—including its emergency medical services department—to
admission of a patient for both inpatient and outpatient treatment, Featherly’s signed
acknowledgment is not dispositive of the issue he presents for our review.
6
See https://www.medicare.gov/sites/default/files/2018-09/11435-Are-Youan-Inpatient-or-Outpatient.pdf (revised Aug. 2018) (last visited Apr. 7, 2022).
14
receive treatment. The Hospital maintains that because Featherly was allowed access to
and was treated in the Hospital’s emergency room, he was indeed “admitted” to the
Hospital for purposes of Section 55.002(a), even if he did not receive inpatient
treatment.7
7
It should be noted that Featherly never formally pleaded for a declaration that
the word “admitted” in Section 55.002(a) required inpatient treatment to the exclusion
of outpatient and emergency room treatment. And while his timely motion for
judgment notwithstanding the verdict urged the trial court to disregard the jury’s verdict
and to declare the Hospital’s statutory lien invalid in its entirety, the only mention of
this interpretation of Section 55.002(a) as a basis for JNOV occurred in a supplemental
brief he filed on May 9, 2019, well after the February 8, 2019 hearing on post-verdict
motions and the day before the trial court signed the Final Judgment: “This Court
should enter a declaration that [the Hospital]’s lien in this case is invalid and void and
of no effect because . . . it was undisputed at trial that Stephen Featherly was not
admitted to the hospital[.]”
Although counsel for Featherly had urged this interpretation verbally during the
February 8 hearing, he readily acknowledged the absence of any supporting caselaw for
his interpretation. And although not couched or ruled upon as an objection, counsel
for the Hospital informed the trial court during that hearing that this was the first time
Featherly raised the issue and there was no pleading to support it. Counsel for Featherly
subsequently verbally objected on this basis to the Final Judgment at the hearing on
May 10, 2019, but again referenced no pleading or interpretive caselaw to support the
declaration sought.
With no reference to any pleading wherein Featherly had sought this declaration,
the single sentence in his belated supplemental brief is the sole basis for concluding that
the trial court considered and rejected this interpretation of Section 55.002(a) for
purposes of declaratory relief. See Tex. R. App. P. 33.1(a)(1) (requiring, for purposes of
preserving appellate review, a complaint made to the trial court by motion to have
“stated the grounds for the ruling that the complaining party sought from the trial court
with sufficient specificity to make the trial court aware of the complaint”). Nevertheless,
for purposes of his cross-appeal, we will assume without deciding that Featherly has
preserved this complaint and address its merits. Cf. Dall. Cnty. Hosp. Dist. v. Sosa, No. 05-
19-01164-CV, 2020 WL 4581666, at *7 n.9 (Tex. App.—Dallas Aug. 10, 2020, pet.
denied) (mem. op.) (“[W]e need not address [the] arguments that . . . Sosa’s pleadings
15
A. Standard of Review
Statutory construction is a question of law subject to appellate review de novo.
See Tex. Health Presbyterian Hosp. of Denton v. D.A., 569 S.W.3d 126, 131 (Tex. 2018). “In
construing statutes, our primary objective is to give effect to the Legislature’s intent.”
Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 838 (Tex. 2018).
“[W]ords and phrases are read in context and construed according to the rules
of grammar and common usage.” Marks v. St. Luke’s Episcopal Hosp., 319 S.W.3d 658,
663 (Tex. 2010) (op. on reh’g) (citing Tex. Gov’t Code Ann. § 311.011(a)). “Words that
are not defined are given their ordinary meaning unless a contrary intention is apparent
from the context, or unless such a construction leads to absurd results.” Id. “To
determine a statutory term’s common, ordinary meaning, we typically look first to their
dictionary definitions and then consider the term’s usage in other statutes, court
decisions, and similar authorities.” Tex. State Bd. of Exam’rs of Marriage and Fam. Therapists
v. Tex. Med. Ass’n, 511 S.W.3d 28, 35 (Tex. 2017).
“Words and phrases that have acquired a technical or particular meaning,
whether by legislative definition or otherwise, shall be construed accordingly.” Tex.
Gov’t Code Ann. § 311.011(b). For example, “when a term unknown to the law has a
particular or technical meaning as applied to some art, science or trade, the court will
look to the particular craft in order to ascertain its proper significance.” State v. Kaiser,
negate his assertion that he was not admitted to [the hospital] because those pleadings
allege Sosa was seen in [the hospital]’s emergency department[.]”).
16
822 S.W.2d 697, 700 (Tex. App.—Fort Worth 1991, pet. ref’d) (op. on reh’g); Lloyd A.
Fry Roofing Co. v. State, 541 S.W.2d 639, 642 (Tex. App.—Dallas 1976, writ ref’d n.r.e.)
(same). When the art, science, or trade involves the practice of medicine, we may
consider how medical dictionaries define a particular term of art. See Tex. State Bd. of
Exam’rs, 511 S.W.3d at 35 & n.14.
Finally, even if the statute is not ambiguous, we may consider its object, the
circumstances of its enactment, its legislative history, and any former statutory
provisions, whether discarded, amended, codified, or otherwise preserved. See Tex.
Gov’t Code Ann. § 311.023(1)–(4); see also Pruski v. Garcia, 594 S.W.3d 322, 328 & n.2
(Tex. 2020) (recognizing how an enacted statute may change over time, i.e., the history
of legislation as opposed to legislative history, and how such “variations lend helpful
interpretive context” (quoting Ojo v. Farmers Grp., Inc., 356 S.W.3d 421, 445 n.31 (Tex.
2011) (Willett, J., concurring in part))). Ultimately, we “must not interpret the statute in
a manner that renders any part of the statute meaningless or superfluous.” Columbia
Med. Ctr. of Las Colinas, Inc. v. Hogue, 271 S.W.3d 238, 256 (Tex. 2008).
17
B. Hospital Liens Secure Payment for Post-Accident Hospital
Treatment
Originally enacted in 1933,8 and thereafter codified in 1983,
9 the hospital lien
statute provides hospitals an additional method of securing payment from accident
victims, thereby encouraging their prompt and adequate treatment. In re N. Cypress Med.
Ctr. Operating Co., 559 S.W.3d 128, 131 (Tex. 2018) (orig. proceeding); McAllen Hosps.,
8
See Act of Apr. 19, 1933, 43rd Leg., R.S., ch. 85, §§ 1–5, 1933 Tex. Gen. Laws
182, 182–85 (Tex. Rev. Civ. Stat. Ann. art. 5506a) (repealed) (hereinafter “former
Article 5506a”). As originally enacted, former Article 5506a authorized the attachment
of a lien as security for payment in the following manner:
Every association, individual, corporation, or other institution maintaining
a hospital or clinic rendering hospital services in the State of Texas shall be entitled
to a lien upon any and all rights of action, suits, claims, counter-claims, or
demands of any persons admitted to any such hospital and receiving treatment, care,
and maintenance therein, on account of any personal injuries received in any accident as
the result of the alleged negligence of any other person or firm or corporation or
joint stock association, his, its, or their agent, servant or employee, which
any such person may or shall have, assert, or maintain against any such
other person or firm or corporation or joint stock association for damages
on account of such injuries, for the amount of the charges of such hospital or clinic
for such treatment, care and maintenance as may have been given to the injured
persons. Provided the lien provided for herein shall not exist or attach unless the
injured person is received in such hospital within seventy-two (72) hours after the
happening of the accident causing the injury.
See id. at § 1 (emphasis added). Although alluding to a person’s being both “admitted to
any such hospital” and “received in such hospital” when referencing the creation and
attachment of a lien, respectively, former Article 5506a, Section 1 nevertheless defined
neither “admitted” nor “received” as statutory terms of art. Id.
9
See Act of May 26, 1983, 68th Leg., R.S., ch. 576, § 1, 1983 Tex. Gen. Laws 3475,
3561–65 (codified as Chapter 55 of the Texas Property Code) (hereinafter “1983
codification”). “[N]o substantive change in the law [was] intended by this
[codification].” Id. § 7.
18
L.P. v. State Farm Cnty. Mut. Ins. Co. of Tex., 433 S.W.3d 535, 537 (Tex. 2014); Linnstaedter,
226 S.W.3d at 411; Bashara v. Baptist Mem’l Hosp. Sys., 685 S.W.2d 307, 309 (Tex. 1985);
Speegle v. Harris Methodist Health Sys., 303 S.W.3d 32, 35–36 (Tex. App.—Fort Worth
2009, pet. denied) (per curiam) (op. on reh’g). “The purpose of the act was to encourage
hospitals to provide immediate care and treatment to persons injured in accidents[] and
to compensate hospitals for the vast sums of money being lost when treating patients
who were unable to pay.” Members Mut. Ins. v. Hermann Hosp., 664 S.W.2d 325, 326 (Tex.
1984). Accordingly, “the statute ‘is replete with language that the hospital recover the
full amount of its lien, subject only to the right to question the reasonableness of the
charges comprising the lien.’” N. Cypress, 559 S.W.3d at 131 (quoting Bashara, 685
S.W.2d at 309).
“Subject to certain conditions, a hospital has a lien on the cause of action of a
patient who receives hospital services for injuries caused by an accident that is attributed
to the negligence of another person.” Id. (internal quotation omitted); see Tex. Prop.
Code Ann. § 55.003(a)(1). “The lien also attaches to the proceeds of a settlement of the
patient’s cause of action.” N. Cypress, 559 S.W.3d at 131 (citing Tex. Prop. Code Ann.
§ 55.003(a)(3)). Finally, the lien attaches to any judgment awarding damages for the
patient’s personal injury or wrongful death if arising from an injury for which the patient
is admitted to the hospital or receives emergency medical services. See Tex. Prop. Code
Ann. § 55.003(a)(2).
As observed by the supreme court in Linnstaedter,
19
A lien is part and parcel of the underlying claim, the former existing only
because of the latter. As a chose in action is the intangible personal
property of the claimant, a lien against such property is necessarily a claim
against its owner. Moreover, as a hospital has neither tort nor contract
rights against a tortfeasor who has injured a patient, the only support for
a hospital lien is its claim for reimbursement from the patient. Thus, a lien
against a patient’s tort recovery is just as much a claim against the patient
as if it were filed against the patient’s house, car, or bank account.
226 S.W.3d at 411 (footnotes omitted).
Nevertheless, for a valid lien to attach, the injured patient must have been
“admitted to a hospital” for the treatment made the subject of the lien not later than 72
hours after the underlying accident. Tex. Prop. Code Ann. § 55.002(a).
C. According to the Plain Meaning of the Term, Featherly was
“Admitted” to the Hospital
In his sole issue, Featherly contends that the Hospital is not entitled to a lien
because he was never “admitted” to the Hospital. See id. As Featherly notes, he was
treated in the Hospital’s emergency room and left the Hospital just three hours later,
and he did not stay overnight or receive inpatient treatment. In Featherly’s view,
inpatient treatment is a necessary precondition to qualify as being “admitted” to a
hospital. Featherly urges us to adopt a technical, medical interpretation of the word
“admitted,” in which “admitted” is a term of art that essentially means treatment at a
hospital on an inpatient basis. To support this position, Featherly relies on
contemporary sources that treat “admitted” as a term of art implying treatment on an
inpatient basis.
20
We do not dispute that modern sources such as contemporary medical
dictionaries and Medicare regulations use the term “admitted” in such a fashion. For
example, contemporary medical dictionaries refer to inpatient care, as distinguished
from outpatient care, when defining the term “admit.” See, e.g., Admit, Merriam-Webster
Medical Dictionary 15 (2016) (“to accept into a medical facility (as a hospital) as an
inpatient”); Inpatient, id. at 381 (“a hospital patient who receives lodging and food as
well as treatment”); Outpatient, id. at 555 (“a patient who is not hospitalized overnight
but who visits a hospital, clinic, or associated facility for diagnosis or treatment”). But
see Hospitalize, id. at 343 (“to place in a hospital as a patient”).
Likewise, the current Medicare regime also defines “admitted” as a term of art
that connotes inpatient care. Enacted in 1965,10 Medicare provides health insurance for
the elderly and disabled, as administered by the United States Department of Health &
Human Services through the Center for Medicare & Medicaid Services. Alvarado Hosp.,
L.L.C. v. Price, 868 F.3d 983, 987 (Fed. Cir. 2017) (citing 42 U.S.C.A. §§ 1395–1395lll).
“Medicare Part A covers hospital inpatient services and Medicare Part B covers
outpatient services, including emergency room services for patients who do not require
a hospital admission.” Id. At a minimum, therefore, Medicare reimbursement eligibility
10See Health Insurance for the Aged Act, Pub. L. No. 89–97, tit. I, 79 Stat. 286
(1965).
21
appears to make a distinction between inpatient and outpatient care as applied to
emergency room services.11
But critically, to determine the meaning of a statute, “we must consider the term’s
original public meaning, that is, ‘the meaning which it had when [the statute was]
enacted.’” VIA Metro. Transit v. Meck, 620 S.W.3d 356, 369 (Tex. 2020) (quoting Taylor
v. Firemen’s & Policemen’s Civ. Serv. Comm’n of City of Lubbock, 616 S.W.2d 187, 189 (Tex.
1981)). The Legislature enacted the hospital lien statute over three decades before
Congress enacted Medicare, and well before the issuance of contemporary dictionaries.
We therefore cannot retrospectively imbue the word “admitted” with the
inpatient/outpatient distinction used by Medicare and some modern medical
authorities.
Rather, our focus is on the term’s historical meaning, and the relevant historical
authorities strongly suggest that the development of the word “admitted” into a medical
term of art occurred well after the original enactment of the hospital lien statute.
Historical medical dictionaries show that when the hospital lien statute was enacted, the
term “admitted” was not used as a term of art that implied inpatient treatment. At the
time, medical dictionaries had never considered “admit,” “admitted,” or “admission”
11Whether the reimbursement is for inpatient or outpatient emergency room
services, the charges subject to reimbursement are only those that are “reasonable and
necessary.” Norfolk Cnty. Ret. Sys. v. Cmty. Health Sys., Inc., 877 F.3d 687, 690 (6th Cir.
2017) (quoting 42 U.S.C.A. § 1395y(a)(1)(A)).
22
to be terms of art in need of a unique medical definition.12 The earliest reference to the
admission of a patient to a hospital appears in the seventh edition of Dunglison’s
Medical Dictionary, published in 1848: “An establishment for the reception of the sick,
in which they are maintained and treated medically. . . . They may be general, receiving
all cases; or special, admitting only the subjects of certain diseases.” Compare Hospital,
Dunglison’s Medical Dictionary 428–29 (7th ed. 1848) (cleaned up) (emphasis added),
with Hospital, Dunglison’s Medical Dictionary 363 (6th ed. 1846) (“An establishment for
the reception of the sick, in which they are maintained and treated medically.”). And its
definition of “hospital” clearly equates “admitting” with “receiving” a patient on any
basis, as does the language of former Article 5506a.
In a similar vein, the third edition of Black’s Law Dictionary, which was
published the same year as the enactment of former Article 5506a, defined “hospital”
by reference to the reception of patients, but not their admission. Hospital, Black’s Law
Dictionary 904 (3d ed. 1933) (“An institution for the reception and care of sick,
12See Gould’s Medical Dictionary 36 (4th rev. ed. 1935); Dorland’s Medical
Dictionary 45 (14th ed. 1927); Dorland’s Pocket Medical Dictionary 20 (12th ed. 1922);
Stedman’s Medical Dictionary 20–21 (7th ed. 1922); Stedman’s Medical Dictionary 20–
21 (6th ed. 1920); Dorland’s Medical Dictionary 40 (10th ed. 1919); Stedman’s Medical
Dictionary 20 (5th ed. 1918); Gould’s Medical Dictionary 26 (3d ed. 1916); Appleton’s
Medical Dictionary 22 (1916); Lippincott’s Medical Dictionary 22 (2d ed. 1911); Gould’s
Medical Dictionary 30 (2d ed. 1910); Gould’s Medical Dictionary 30 (1907); Lippincott’s
Medical Dictionary 22 (rev. ed. 1905); Dunglison’s Medical Dictionary 23 (23d ed.
1903); Gould’s Pocket Medical Dictionary 20 (1898); Lippincott’s Pocket Medical
Dictionary 14 (1897); Dunglison’s Medical Dictionary 23 (21st ed. 1893); Dunglison’s
Medical Dictionary 26 (7th ed. 1848); Dunglison’s Medical Dictionary 24 (6th ed. 1846).
23
wounded, infirm, or aged persons.”). And consistent with this definition, the same
dictionary defined “admit” as meaning “to suffer one to enter.” Admit, Black’s Law
Dictionary 62 (3d ed. 1933). Both definitions were unchanged from those in the first
edition published in 1891. See Hospital, Black’s Law Dictionary 581 (1891); Admit, id. at
41.
As to the inpatient/outpatient distinction urged by Featherly, “inpatient” was
not a recognized medical term of art before the enactment of former Article 5506a.13
Conversely, “outpatient” had long been a medical term of art, the usage of which usually
contemplated some form of treatment provided at a hospital, but without the need for
13See Gould’s Medical Dictionary 661 (4th rev. ed. 1935); Dorland’s Medical
Dictionary 591 (14th ed. 1927); Dorland’s Pocket Medical Dictionary 323 (12th ed.
1922); Stedman’s Medical Dictionary 498 (7th ed. 1922); Stedman’s Medical Dictionary
498 (6th ed. 1920); Stedman’s Medical Dictionary 489 (5th ed. 1918); Gould’s Medical
Dictionary 26 (3d ed. 1916); Gould’s Medical Dictionary 464 (3d ed. 1916); Appleton’s
Medical Dictionary 451 (1916); Lippincott’s Medical Dictionary 458 (2d ed. 1911);
Gould’s Medical Dictionary 514 (2d ed. 1910); Gould’s Medical Dictionary 514 (1907);
Lippincott’s Medical Dictionary 519 (rev. ed. 1905); Dunglison’s Medical Dictionary
579 (23d ed. 1903) (Thomas L. Stedman, A.M., M.D., editor); Lippincott’s Pocket
Medical Dictionary 188 (1897); Dunglison’s Medical Dictionary 583 (21st ed. 1893).
24
room and board.14 Usually, such treatment occurred in a hospital dispensary,15 as
opposed to a ward.
16 Indeed, the County Hospital Act of 1913 authorized “out-patient”
hospital services consistent with these definitions, thereby demonstrating the
Legislature’s awareness of their usage at the time of its enactment of former Article
14See Outpatient, Gould’s Medical Dictionary 1038 (4th rev. ed. 1935) (“A hospital
patient who is not treated in the wards of the institution.”); Outpatient, Dorland’s
Medical Dictionary 846 (14th ed. 1927) (“A hospital patient not treated within the
wards.”); Outpatient, Dorland’s Pocket Medical Dictionary 463 (12th ed. 1922) (same);
Outpatient, Stedman’s Medical Dictionary 460 (7th ed. 1922) (“A patient treated at a
hospital dispensary and not in the wards of the institution.”); Outpatient, Stedman’s
Medical Dictionary 718 (6th ed. 1920) (same); Outpatient, Stedman’s Medical Dictionary
705 (5th ed. 1918) (same); Outpatient, Gould’s Medical Dictionary 640 (3d ed. 1916)
(same); Outpatient, Appleton’s Medical Dictionary 618 (1916) (“A patient who receives
treatment at a hospital without being an inmate of it.”); Outpatient, Lippincott’s Medical
Dictionary 669 (2d ed. 1911) (“A patient of a hospital not treated within its walls.”);
Outpatient, Gould’s Medical Dictionary 718 (2d ed. 1910) (same); Outpatient, Gould’s
Medical Dictionary 718 (1907) (same); Outpatient, Lippincott’s Medical Dictionary 726
(rev. ed. 1905) (same); Outpatient, Dunglison’s Medical Dictionary 811 (23d ed. 1903)
(“A dispensary patient; one treated in a hospital or dispensary while living at home.”);
Outpatient, Lippincott’s Pocket Medical Dictionary 285 (1897) (same).
15See Dispensary, Stedman’s Medical Dictionary 286 (7th ed. 1922) (“An outpatient department of a hospital[.]”); Dispensary, Stedman’s Medical Dictionary 286 (6th
ed. 1920) (same); Dispensary, Stedman’s Medical Dictionary 281 (5th ed. 1918) (same).
16See Ward, Dorland’s Medical Dictionary 1326 (14th ed. 1927) (“A large room in
a hospital.”); Ward, Stedman’s Medical Dictionary 1110 (7th ed. 1922) (“A room or hall
in a hospital containing a number of beds.”); Ward, Stedman’s Medical Dictionary 1110
(6th ed. 1920) (same); Ward, Stedman’s Medical Dictionary 1092 (5th ed. 1918) (same);
Ward, Gould’s Medical Dictionary 945 (3d ed. 1916) (“A division or room of a
hospital.”); Ward, Lippincott’s Pocket Medical Dictionary 399 (1897) (“One of the
apartments of a hospital.”).
25
5506a.17 And these definitions are consistent with contemporary medical definitions.
See, e.g., Outpatient, Stedman’s Medical Dictionary 1396 (28th ed. 2006) (“A patient
treated in a hospital dispensary or clinic instead of in an overnight room or ward.”).
In sum, the state of the language, as reflected in medical dictionaries of the time,
shows that when the hospital lien statute was enacted, the word “admitted” was not
used as the term of art it has since become. Nor was it a reference to “inpatient”
treatment—a coinage that did not yet exist. Nor did it exclude well-defined “outpatient”
treatment from the statute’s application.
If a term of art was not intended, we resort to plainer methods of construction.
See Marks, 319 S.W.3d at 663. “To determine a term’s common, ordinary meaning, we
typically look first to dictionary definitions.” Rodriguez, 547 S.W.3d at 838. Thus, our
square one is a dictionary dated to the era of the statute’s enactment, which defines
“admit” as “to allow to enter, let in, receive.” Admit, The Shorter Oxford English
Dictionary 25 (3d ed. 1933). Likewise, a dictionary printed around the time that the
statute was codified defines “admit” as “to allow to enter.” Admit, Webster’s II New
Riverside Dictionary 10 (1984). The facts of this case neatly fit these definitions.
Featherly’s own evidence proved that he was allowed entry to the Hospital’s emergency
17The Act authorized hospital services that (1) included an outpatient department
and free dispensary and clinic, (2) treated the admission of a patient to the hospital
synonymously with a patient’s reception into the hospital, and (3) made “the urgency
of need of treatment” a criterion for the reception and admission of patients. See Act of
Mar. 1, 1913, 33rd Leg., R.S., ch. 39, §§ 1–17, 1913 Tex. Gen. Laws 71, 71–78 (Tex.
Rev. Civ. Stat. Ann. arts. 4478–94) (repealed).
26
room for treatment, and it is undisputed that the emergency room is part of the
Hospital. According to the original public meaning of the term, then, Featherly was
“admitted” to the Hospital. See VIA Metro., 620 S.W.3d at 369.
We find confirmation of this interpretation in the history of the legislation itself.
See Pruski, 594 S.W.3d at 328 & n.2. First, as previously observed, the original legislation
alluded to being “admitted to any such hospital” and being “received in such hospital”
as phrases of similar effect when referencing the creation and attachment of a lien. See
former Article 5506a, § 1. The original version of the statute thus arguably drew a
parallel between being admitted to a hospital and being received at a hospital for
treatment; there is no language contemplating an inpatient/outpatient distinction. See
id. The 1953 amendments to the statute similarly treated the phrases “admitted to any
hospital” and “received in a hospital” as synonymous,
18 and the Legislature left those
phrases unchanged through the enactment of Medicare and the repeal and codification
of the statute in 1983.19
Second, the original version of the statute applied equally to charges incurred for
hospital services provided after admission to both hospitals and clinics, the latter of
18See Act of May 6, 1953, 53rd Leg., R.S., ch. 131, §§ 1–4, 1953 Tex. Gen. Laws
443, 443–45 (hereinafter “1953 amendments”).
19See 1983 codification, at § 7 (“[N]o substantive change in the law is intended by
this [codification].”); Act of May 31, 1981, 67th Leg., R.S., ch. 359, §§ 1–3, 1981 Tex.
Gen. Laws 953, 953–54 (hereinafter “Medicare amendment”); Act of May 18, 1979,
66th Leg., R.S., ch. 509, §§ 1–2, 1979 Tex. Gen. Laws 1080, 1080; Act of May 29, 1971,
62nd Leg., R.S., ch. 769, §§ 1–2, 1971 Tex. Gen. Laws 2420, 2420–21.
27
which, by definition,20 provided exclusively outpatient treatment. See former Article
5506a, §§ 1, 3–5. Section 1 measured the amount of the lien by “the amount of the
charges of such hospital or clinic for such treatment, care and maintenance as may have
been given to the injured persons.” Id. (emphasis added). And Sections 3, 4, and 5
referred to clinics as distinct entities from hospitals and other institutions whose charges
are eligible for the lien. Id. And the statute continued to recognize clinics as distinct
providers of lien-eligible hospital services through codification, see notes 17 & 18 supra,
when the Legislature subsumed them into the definition of “hospital” as “a person or
institution maintaining a facility that provides hospital services in this state.” See 1983
codification, at 3562 (codified at Tex. Prop. Code Ann. § 55.001(3)).
Third, the emergency enactment provision of former Article 5506a plainly
contemplated that the hospital services subject to a lien included emergency medical
treatment:
The fact that it is necessary for persons injured in accidents to be taken immediately to
hospitals and to receive care and treatment for their injuries and to be maintained during
such care and treatment without giving the hospitals, clinics and institutions an
opportunity to investigate the financial worth of the injured party, and that the hospitals
of the State of Texas are losing vast sums of money which amounts to the taking of
property without compensation therefor, creates an emergency and an imperative
public necessity that the Constitutional Rule which requires bills to be read
on three several days be suspended and said Constitutional Rule is hereby
20See Clinic, Stedman’s Medical Dictionary 208 (7th ed. 1922) (“An institution in
which medical attention is given to patients who live at home, not requiring hospital
care.”); Clinic, Stedman’s Medical Dictionary 208 (6th ed. 1920) (same); Clinic, Stedman’s
Medical Dictionary 205 (5th ed. 1918) (same).
28
suspended, and this Act shall take effect and be in full force from and after
its passage, and it is so enacted.
See former Article 5506a, § 5 (emphasis added); see also Tex Gov’t Code Ann.
§ 311.023(7) (authorizing consideration of emergency enactment provision to discern
legislative intent). See generally Baylor Univ. Med. Ctr. v. Travelers Ins., 587 S.W.2d 501, 503–
04 (Tex. App.—Dallas 1979, writ ref’d n.r.e.) (considering the emergency enactment
provisions in the original 1933 hospital lien statute and its 1953 amendments). Twenty
years later, the 1953 amendments employed virtually the same emergency enactment
language:
The fact that it is necessary for persons injured in accidents to be taken
immediately to hospitals to receive care and treatment for their injuries
and to be maintained during such care and treatment . . . create[s] an
emergency and an imperative public necessity . . . .
See 1953 amendments, at § 4. In both instances, the phrase “taken immediately to
hospitals” anticipates emergency room treatment.21
And at least one pre-Medicare decision considered charges for emergency room
treatment to fall within the scope of statutory hospital liens. In City of Houston v. Bullard,
our sister court in Houston addressed the validity of a hospital lien arising because the
21Although we have been unable to find a single decision of this or any other
Texas court antedating the enactment of former Article 5506a that refers to treatment
received in an “emergency room” setting as either including or excluding hospital
admission, at least one court observed, “[I]t is a matter of common knowledge, and to
their credit, that most hospitals are charitably equipped in these hazardous times . . .
with facilities for caring for patients in emergencies of this sort, . . . without advanced
or secured payment.” Willacy Cnty. v. Valley Baptist Hosp., 29 S.W.2d 456, 457–58 (Tex.
App.—San Antonio 1930, no writ).
29
patients “were admitted for emergency treatment” for injuries sustained in a motor
vehicle accident from which they were taken directly to the hospital. 354 S.W.2d 224,
227 (Tex. App.—Houston 1962, no writ). This phrasing confirms that prior to the
enactment of Medicare, emergency room treatment was fully consistent with the
statute’s use of the word “admitted.” See id.; see also Dill v. Holt’s Sporting Goods Store, 323
S.W.2d 644, 646 (Tex. App.—Houston 1959, no writ) (“The hospital record which was
introduced in evidence shows that Mrs. Dill was admitted to the emergency room of
the hospital at 10:30 a.m. and that the time of the accident was approximately 10 a.m.”).
Fourth, the Legislature eventually confirmed Bullard’s understanding of the term
“admitted” in 2001, by amending the statute to include “emergency hospital care”
within those services subject to a lien:
The lien may also include the amount of a physician’s reasonable and
necessary charges for emergency hospital care services provided to the injured
individual during the first seven days of the injured individual’s
hospitalization. At the request of the physician, the hospital may act on
the physician’s behalf in securing and discharging the lien.
See Act of May 24, 2001, 77th Leg., R.S., ch. 930, § 1, 2001 Tex. Gen. Laws 1867, 1868
(Tex. Prop. Code Ann. § 55.004(c)) (hereinafter “2001 amendment”) (emphasis added).
The Legislature defined “emergency hospital care” to mean
health care services provided in a hospital to evaluate, stabilize, and treat
a serious medical problem of recent onset or severity, including severe
pain that would lead a prudent layperson possessing an average knowledge
of medicine and health to believe that the condition, illness, or injury is of
such a nature that failure to obtain immediate medical care would in all
reasonable probability: (1) seriously jeopardize the patient’s health;
(2) seriously impair one or more bodily functions; (3) seriously harm an
30
organ or other part of the body; (4) cause serious disfigurement; or (5) in
the case of a pregnant woman, seriously jeopardize the health of the fetus.
See Tex. Prop. Code Ann. § 55.004(a).
Critically, this definition substantially tracks the definition of “emergency medical
care” in the federal Emergency Medical Treatment and Active Labor Act (EMTALA),
42 U.S.C.A. § 1395dd, which establishes medical screening requirements for individuals
presenting themselves “for examination or treatment” to hospital emergency departments. See
Camp v. Harris Methodist Fort Worth Hosp., 983 S.W.2d 876, 880 (Tex. App.—Fort Worth
1998, no pet.) (“EMTALA defines an emergency medical condition as a medical
condition manifesting itself by acute symptoms of sufficient severity (including severe
pain), such that the absence of immediate medical attention could reasonably be
expected to result in (1) placing the health of the individual in serious jeopardy,
(2) serious impairment to bodily functions, and (3) serious dysfunction of any bodily
organ or part.” (citing 42 U.S.C.A. § 1395dd(e)(1))); see also Burditt v. U.S. Dep’t of Health
& Human Servs., 934 F.2d 1362, 1369 (5th Cir. 1991) (observing that, under EMTALA,
“active labor” is an emergency medical condition when “there is inadequate time to
effect a transfer to another hospital prior to delivery” or “a transfer may pose a threat
[to] the health and safety of the patient or the unborn child” (citing same)). To interpret
the term “admitted” as requiring inpatient treatment, therefore, would lead to the
absurd result of excluding charges for emergency room treatment obviously intended
by the Legislature’s use of EMTALA language. See Molinet v. Kimbrell, 356 S.W.3d 407,
31
411 (Tex. 2011) (“The plain meaning of the text is the best expression of legislative
intent unless a different meaning is apparent from the context or the plain meaning
leads to absurd or nonsensical results.”). Indeed, given the lien-eligibility of charges by
“emergency medical services providers” such as EMTs, see Tex. Prop. Code Ann.
§ 55.002(c), Featherly’s interpretation would lead to the nonsensical availability of
statutory liens from the arrival of an ambulance at the scene of an accident through the
100th day of the patient’s hospitalization but exclude any and all emergency hospital
care services provided exclusively within the confines of the hospital’s emergency room
or department without subsequent hospitalization—a consequence undoubtedly not
envisioned by the Legislature. See In re Christus Santa Rosa Health Sys., 492 S.W.3d 276,
280 (Tex. 2016) (orig. proceeding) (“If the statute is unambiguous, we apply the words
according to their common meaning, but we may consider the objective of the law and
the consequences of a particular construction.”).
Fifth and finally, although the current version of the hospital lien statute makes
no mention of Medicare or its regulatory regime, a previous iteration expressly
incorporated Medicare reimbursement limits, but did so in a manner that completely
undermines the inpatient/outpatient interpretation urged by Featherly. In 1981, the
Legislature amended the statute to provide that a lien “does not apply to the extent that
charges for operating costs are in excess of the routine operating costs prescribed by 42
C.F.R., Section 405.460.” See Medicare amendment, at § 1 (amending Section 3 of
former Article 5506a). Significantly, the same proviso excluded “charges for other services
32
. . . in excess of a reasonable and regular rate.” See id. (emphasis added). By making
reasonable and regular charges for hospital services other than those regulated by Medicare
subject to a lien, therefore, the Legislature did not intend the term “admitted” to exclude
outpatient emergency hospital care services to the extent such “other services” were
not eligible for Medicare reimbursement.
22
Based upon this history of the legislation, the Legislature plainly intended to
employ a simple, dictionary-grounded interpretation of the term “admitted” that
encompassed inpatient, outpatient, and emergency hospital care services. To this end,
it amended the statute to add the following definition in 2019: “For purposes of this
chapter, an injured individual is considered admitted to a hospital if the individual is
allowed access to any department of the hospital for the provision of any treatment,
care, or service to the individual.” Tex. Prop. Code Ann. § 55.0015. And the addition
of Section 55.0015 was “intended to clarify rather than change the existing law.” Act of
May 22, 2019, 86th Leg., R.S., ch. 862, § 3, 2019 Tex. Gen. Laws 2329, 2330; see Tex.
Water Comm’n v. Brushy Creek Mun. Util. Dist., 917 S.W.2d 19, 21 (Tex. 1996) (“When the
meaning of an existing law is uncertain, the Legislature’s later interpretation of it is
22The Legislature codified this proviso in 1983, see 1983 codification amendment,
at 3563 (Tex. Prop. Code Ann. § 55.004 (repealed)), but removed its reference to
Medicare reimbursement limitations altogether in 2001. See 2001 amendment. To the
extent the Legislature ever intended to limit lien-eligibility to only those hospital services
subject to Medicare reimbursement, such limitation no longer applies.
33
highly persuasive.”).23 The Legislature’s clarification thus buttresses our conclusion that
a patient may be “admitted” for purposes of the hospital lien statute even without
inpatient treatment.
Based on the term’s common meaning, we conclude that because Featherly was
allowed entry and access to the Hospital’s emergency room for treatment, Featherly
was “admitted” to the Hospital for purposes of the hospital lien statute. Stated
differently and tracking the language of the emergency enactment provision of former
Article 5506a, Featherly was “taken immediately” to the Hospital “to receive care and
treatment” for injuries sustained in a motor vehicle accident and received such care and
treatment before the Hospital had “an opportunity to investigate” his “financial worth”
including the viability of his negligence cause of action against Applebaum. His
unilateral decision to forego further “emergency hospital care services” did not remove
23This rule of interpretation dates back more than a hundred and fifty years:
There is a very well-established rule that where a later act implies a
particular construction of an existing law, and particularly where the
existing law is ambiguous or its meaning uncertain, interpretation of the
prior act by the Legislature as contained in the later act is persuasive when
a court is called upon to interpret the prior law.
Gaskamp v. WSP USA, Inc., 596 S.W.3d 457, 475 n.11 (Tex. App.—Houston [1st Dist.]
2020, pet. dism’d) (op. on en banc reconsideration) (quoting Stanford v. Butler, 181
S.W.2d 269, 274 (Tex. 1944) (orig. proceeding), which in turn quoted Cannon’s Adm’r v.
Vaughan, 12 Tex. 399, 402 (1854), for a similar proposition). But see Hegar v. Am. MultiCinema, Inc., 605 S.W.3d 35, 44 (Tex. 2020) (quoting In re C.O.S., 988 S.W.2d 760, 764
(Tex. 1999)) (cautioning against fully ascribing a later legislature’s intent to a previous
legislature).
34
the charges he reasonably and necessarily incurred thereby from the application of the
statute. We overrule Featherly’s issue arguing to the contrary.
III. THE HOSPITAL’S APPEAL
A. Exclusion of Evidence
For the Hospital’s appeal, we begin with its fourth point, in which the Hospital
challenges the exclusion of evidence. Before trial, the Hospital amended its
counterclaim to assert that, even if Featherly had initially lacked the capacity to execute
the admission acknowledgment and consent form made the basis of its breach of
contract claim, he subsequently ratified the contract by adopting the full amount billed
therefor as the basis for the litigation and settlement of his personal injury cause of
action against Applebaum. See Elston v. Jasper, 45 Tex. 409, 410–11 (1876) (holding that
ratification must be affirmatively pleaded to avoid a mental incapacity defense to a
breach of contract cause of action). Before and during trial, the Hospital sought to
provide evidentiary support for its ratification defense by offering a pre-litigation
demand letter, Featherly’s discovery responses, the settlement agreement, the joint
motion to dismiss, and the order of dismissal with prejudice in the underlying
negligence action against Applebaum. The Hospital argued that, both singularly and
cumulatively, these documents demonstrated that Featherly ratified the contract for
hospital services by urging $24,682.00 as the reasonable and necessary amount he
incurred for those services as compensable damages resulting from Applebaum’s
negligence. The trial court excluded each of these exhibits as irrelevant.
35
On appeal, the Hospital primarily asserts that Featherly’s discovery responses
were relevant to show that Featherly ratified the contract. According to the Hospital,
the fact that Featherly quoted and adopted the exact amount billed under the contract
is strong evidence that Featherly affirmed the contract’s existence and validity, as well
as the reasonableness and necessity of its charges, and the trial court therefore abused
its discretion by excluding this evidence.
We review a trial court’s exclusion of evidence for an abuse of discretion. JBS
Carriers, Inc. v. Washington, 564 S.W.3d 830, 836 (Tex. 2018). “A trial court abuses its
discretion if it acts without reference to guiding rules and principles such that the ruling
is arbitrary or unreasonable.” Brewer v. Lennox Hearth Prods., LLC, 601 S.W.3d 704, 717
(Tex. 2020). “If a trial court abuses its discretion and erroneously excludes evidence,
then the question is whether the error probably caused the rendition of an improper
judgment.” JBS Carriers, 564 S.W.3d at 836 (internal quotation omitted); see Tex. R. App.
P. 44.1(a)(1). That standard does not require the complaining party to prove that but
for the exclusion of evidence, a different judgment would necessarily have resulted. JBS
Carriers, 564 S.W.3d at 836 (quoting State v. Cent. Expressway Sign Assocs., 302 S.W.3d
866, 870 (Tex. 2009) (op. on reh’g)). Instead, the erroneous exclusion of evidence
“crucial to a key issue” is likely harmful “unless the evidence was cumulative or the rest
of the evidence was so one-sided that the error likely made no difference in the
judgment.” Id. (internal quotation omitted).
36
“To be admissible under the Texas Rules of Evidence, evidence must be relevant
to the issues in the case.” Trencor, Inc. v. Cornech Mach. Co., 115 S.W.3d 145, 152 (Tex.
App.—Fort Worth 2003, pet. denied) (citing Tex. R. Evid. 402). “Evidence is relevant
if it has any tendency to make a fact of consequence to the action more or less probable
than it would be without the evidence.” N. Cypress, 559 S.W.3d at 131 (cleaned up)
(quoting Tex. R. Evid. 401). The test for relevance is satisfied if there is directly, or by
inference, some logical connection between the evidence and the fact to be proven.
Republic Waste Servs., Ltd. v. Martinez, 335 S.W.3d 401, 406 (Tex. App.—Houston [1st
Dist.] 2011, no pet.) (citing Boswell v. Brazos Elec. Power Co-op., Inc., 910 S.W.2d 593, 601
n.3 (Tex. App.—Fort Worth 1995, writ denied)).
“Ratification is the adoption or confirmation by a person with knowledge of all
material facts of a prior act which did not then legally bind him and which he had the
right to repudiate.” Concho Res., Inc. v. Ellison, 627 S.W.3d 226, 234 (Tex. 2021). “The
defense rests upon a manifestation of assent to confirm one’s prior act or that of
another.” Id. (internal quotation omitted). “Ratification may be inferred by a party’s
course of conduct and need not be shown by express word or deed.” Miller v. Kennedy
& Minshew, P.C., 142 S.W.3d 325, 342–43 (Tex. App.—Fort Worth 2003, pet. denied).
Ratification occurs when a party with full knowledge of the contract recognizes its
validity, such as by acting or performing under the contract, affirmatively
acknowledging the contract, or retaining benefits under the contract. Verizon Corp. Servs.
Corp. v. Kan-Pak Sys., Inc., 290 S.W.3d 899, 906 (Tex. App.—Amarillo 2009, no pet.);
37
accord Ohrt v. Union Gas Corp., 398 S.W.3d 315, 329 (Tex. App.—Corpus Christi–
Edinburg 2012, pet. denied); Thomson Oil Royalty, LLC v. Graham, 351 S.W.3d 162, 166
(Tex. App.—Tyler 2011, no pet.). “Once a party ratifies a contract, he may not later
withdraw his ratification and seek to avoid the contract.” Mission Petro. Carriers, Inc. v.
Kelley, 449 S.W.3d 550, 553 (Tex. App.—Houston [14th Dist.] 2014, no pet.); Bank of
Am., N.A. v. Prize Energy Res., L.P., 510 S.W.3d 497, 506 (Tex. App.—San Antonio
2014, pet. denied), judgm’t vacated in part w.r.m., 2015 WL 1138309 (Tex. App.—
San Antonio Mar. 11, 2015).
Specific to the contracts for “necessaries” provided to the mentally incompetent,
Texas law has long recognized a common law claim for reasonable charges despite the
individual’s incapacity to contract. See Ferguson v. Fitze, 173 S.W. 500, 501 (Tex. App.—
Galveston 1914, writ ref’d) (“Where the contract is for necessaries, and the
consideration is performed, or where the contract is for legal services rendered to the
party resting under disability, it seems that the reasonable value therefor may be
recovered.” (citing Searcy v. Hunter, 17 S.W. 372, 373 (Tex. 1891) (“For necessaries
furnished an infant the law implies a contract. These are usually food, lodging, wearing
apparel, medicine, medical attendance, and the means of an education. Such is the more
rigid rule of the common law.”))). If the individual should subsequently regain his
mental capacity, even temporarily, he may ratify this implied contract post hoc through
declaration or conduct. See Bolton v. Stewart, 191 S.W.2d 798, 802 (Tex. App.—Fort
Worth 1945, no writ) (“It is the universal rule in this state that contracts made by minors
38
and persons of unsound mind are not void but voidable only; they may be ratified if the
party becomes competent to do so.”). See generally Insane and Incompetent Persons, 24 Tex.
Jur. § 8 (“Necessaries”), § 10 (“Ratification”), at 382–83 & 385–86 (1933).
In Chandler v. Hendrick Memorial Hospital, the Eastland Court of Appeals stated
the common law rule thusly as applied to hospital services provided to a mentally
incompetent patient:
Where necessities are furnished to a person of unsound mind, the law
imposes an obligation or agreement on his part to pay for them to the
extent of the benefits received. “The doctrine that mental incapacity
renders a contract voidable does not apply where the incompetent has
been furnished with necessities. In such case the law creates an obligation
to repay, to the extent of the reasonable value of the necessities.” Medical
services, including nursing and other usual services rendered a person of
unsound mind, are necessities.
317 S.W.2d 248, 252 (Tex. App.—Eastland 1958, writ ref’d n.r.e.) (citations omitted)
(misquoting 24 Tex. Jur. 382); see also Chandler v. Warlick, 321 S.W.2d 897, 901 (Tex.
App.—Eastland 1958, writ ref’d n.r.e.) (same); Chandler v. Prichard, 321 S.W.2d 891, 895
(Tex. App.—Eastland 1958, writ ref’d n.r.e.) (same). Liability under such circumstances
is “quasi-contractual rather than contractual” in nature. Westbrook v. Adams, 17 S.W.2d
116, 121 (Tex. App.—Fort Worth 1929) (quoting 1 Williston on Contracts, at 498
(1920)), aff’d on other grounds by Adams v. Bankers’ Life Co., 36 S.W.2d 182 (Tex. Comm’n
App. 1931, holding approved).
For example, even if a hospital lien is not available, a hospital may seek payment
for its services from a mentally incompetent patient based on quantum meruit. See Dall.
39
Cnty. Hosp. Dist. v. Wiley ex rel. Wiley, No. 05-01-01031-CV, 2002 WL 1286515, at *2–3
(Tex. App.—Dallas June 12, 2002, pet. denied) (op. on reh’g) (not designated for
publication) (holding that patient’s minority did not foreclose his liability for hospital
services under quantum meruit cause of action). Indeed, the common law recognizes
an implied contract for necessary hospital services even for mentally competent
patients:
Further, as a matter of law, we hold that when plaintiff entered the hospital
and received its services, there was created an implied contract to pay for
same, and he was liable therefor until he or someone else paid the bill. The
fact that his action created a derivative obligation on the part of one or
more third parties to pay the hospital, or to reimburse him, did not affect
his obligation under the implied contract between him and the hospital. If
these derivative obligors had failed to pay, the hospital would have had a
legal claim against plaintiff.
Black v. Am. Bankers Ins., 478 S.W.2d 434, 437–38 (Tex. 1972) (citing Republic Bankers
Life Ins. v. Anglin, 433 S.W.2d 795, 796 (Tex. App.—Texarkana 1968, no writ)
(“Mr. Anglin’s entry into the hospital and reception of its services created an implied
agreement between the two that Mr. Anglin would pay the reasonable and customary
charges made by the hospital.”), and Am. Indem. Co. v. Olesijuk, 353 S.W.2d 71, 72 (Tex.
App.—San Antonio 1961, writ dism’d) (“When Dr. Olesijuk entered the hospital for
treatment and received the same from the hospital and the doctors, there was created
an implied contract to pay for such services, and he became liable therefor.”)).
Finally, in addition to being deemed to have entered into a common law contract
for necessaries, a patient who contracts for hospital services while of unsound mind
40
may ratify his liability for payment by declaration or conduct if he subsequently regains
his mental competency, whether permanently or temporarily. See Barry v. St. Joseph’s
Hosp. & Sanitarium, 48 P. 68, 69 (Cal. 1897) (holding that patient “in a condition of
imbecility or great weakness of mind” ratified deed executed to hospital for room,
board, care, “and medical attendance in sickness” during “the term of his natural life”
when he regained his mental competency shortly before his death), cited with approval by
Newman v. Taylor, 122 S.W. 425, 426 (Tex. App.—Texarkana 1909, no writ) (“If the
insane person recovers his reason, he may ratify the contract and so make it valid.”).
At trial, the Hospital proffered responses to an interrogatory and a request for
disclosure from Featherly’s personal injury suit in which he stated that he had
“incurred” $24,682.00 in medical expenses from the Hospital. The first question we
must answer is whether this evidence was relevant to the Hospital’s theory that
Featherly ratified the contract. We conclude that it was.
This sort of litigation conduct may give rise to a ratification if it affirms the
existence of an agreement, as is shown by Harris v. Archer, 134 S.W.3d 411 (Tex. App.—
Amarillo 2004, pet. denied) (op. on reh’g). There, a party sought to rescind a partnership
agreement, asserting fraud. Id. at 426. However, the court noted that while the party
was attempting to distance from the agreement in some regards, the party was also
embracing the agreement through other litigation conduct. Id. at 428. For instance, the
party’s “pleadings consistently asserted” the agreement’s validity, both through
affirmative claims for damages and defensive theories that hinged on the agreement. Id.
41
The party also “asserted the validity of the agreements in affidavits, deposition[,] and
trial testimony.” Id. Finally, the party’s ultimate prayer for relief was to obtain a stake in
the proceeds of a property sale, and he relied in part on the partnership agreement “in
taking such position.” Id.; see also Granberry v. McBride, 138 S.W.2d 283, 284–85 (Tex.
App.—Texarkana 1940, no writ) (holding grantor seeking cancellation of a deed on the
grounds of mental and physical infirmity ratified the deed by failing to raise such
incapacity in defense of a previous forcible detainer suit brought for possession by the
grantee).
Like the defendant in Harris, a party here is attempting to run from an agreement
that he appears to have already embraced through litigation conduct. The proffered
evidence suggests that Featherly approved the exact amount that the Hospital
demanded under the contract—$24,682.00—by quoting it in his interrogatory response
as the amount of medical expenses that he incurred and by specifically adopting it in
his disclosures as his “method of calculating economic damages.” Cf. Paragon Indus.
Applications, Inc. v. Stan Excavating, LLC, 432 S.W.3d 542, 551–52 (Tex. App.—
Texarkana 2014, no pet.) (concluding that there was no ratification because the
ratification-proponent paid a different amount than what was to be paid under the
purported contract). Featherly swore to the interrogatory response, and by endorsing
the result of the contract under oath, Featherly arguably manifested his assent and
confirmed the contract itself. See Concho Res., 627 S.W.3d at 234. We therefore see a
42
logical connection between this evidence and ratification.24 See Republic Waste Servs., 335
S.W.3d at 406.
Moreover, the proffered evidence tended to show that Featherly accepted the
benefit of the contract, and a party generally “cannot avoid an agreement by claiming
there was no intent to ratify after he has accepted the benefits of the agreement” with
knowledge of the agreement. Mission Petro., 449 S.W.3d at 553–54. The backhanded
benefit of the contract and the steep hospital bill that ensued was that they gave
Featherly leverage to pursue greater damages in his personal injury suit. The evidence
suggests that Featherly capitalized on this aspect of the contract, using it to obtain a
sizable settlement. If it is proved that Featherly knowingly accepted that benefit, a jury
may fairly decide that ratification is shown. This evidence was relevant, and the trial
court abused its discretion in concluding otherwise.
24Featherly argues that he never endorsed the Hospital’s claim for $24,682.00,
and that he was merely a passive conduit for the Hospital’s assertion that $24,682.00
was the amount of the lien. As Featherly paints the scene, he merely relayed the
Hospital’s demand along to Applebaum. However, in his discovery responses, Featherly
couched the $24,682.00 as his own “method of calculating economic damages,” not as
the Hospital’s assertion or demand. Moreover, as discussed in more detail below, the
hospital lien statute provides that before Featherly could offer a valid release and
thereby obtain a settlement in the personal injury suit, it was Featherly’s responsibility
to either pay the Hospital’s charges or to facilitate their payment as part of the
settlement itself. See Tex. Prop. Code Ann. § 55.007(a)(1), (3); Speegle, 303 S.W.3d at 36.
Thus, rather than being a passive mouthpiece for the Hospital, Featherly retained some
degree of responsibility to accurately represent his position concerning the
reasonableness and necessity of the Hospital’s charges in prosecuting his personal injury
cause of action and in negotiating its settlement.
43
This is particularly true since, as a matter of law, payment of the Hospital’s
charges was a condition precedent to Featherly’s capacity to provide Applebaum with
a valid and enforceable release of liability. See Langever v. Miller, 76 S.W.2d 1025, 1026–
27 (Tex. 1934) (“The laws, at least as to substantial rights and remedies, existing at the
time a contract is made, become a part of the contract.”); Fix v. Flagstar Bank, FSB, 242
S.W.3d 147, 155 (Tex. App.—Fort Worth 2007, pet. denied) (“This doctrine is based
on the presumption that the parties to a contract knew and took into consideration the
law in effect at the time of [the] contract.”). Once the lien properly attached, the statute
expressly withdrew from Featherly the legal capacity to offer, execute, or deliver a valid
release as consideration for the settlement of his personal injury cause of action, without
first having (1) paid the charges of the Hospital in full, (2) paid the charges of the
Hospital “to the extent of any full and true consideration paid to [Featherly] by or on
behalf of the other parties to the release,” or (3) made the Hospital a party to the release
itself. Tex. Prop. Code Ann. § 55.007(a); see Linnstaedter, 226 S.W.3d at 411 (“Once the
lien is filed, a tortfeasor cannot obtain a release by judgment or settlement unless the
hospital’s charges are paid in full.”); Speegle, 303 S.W.3d at 36 (same).
When Featherly offered to release his personal injury cause of action against
Applebaum as consideration for her settlement of his claim, an implied term of the
release—known to both parties—was the antecedent or contemporaneous payment of
the Hospital’s lien. Given that Featherly’s outstanding discovery responses, sworn and
unsworn, represented that the reasonable and necessary amount of hospital expenses
44
he sought as damages was $24,682.00, such responses were relevant to the
determination of whether he intended to ratify the admission acknowledgment and
consent form he signed when admitted to the Hospital’s emergency room, as well as
the full amount of the charges made the subject of the Hospital lien. Combined with
the agreed motion to dismiss, order of dismissal with prejudice, and the
contemporaneous issuance of three settlement checks by Applebaum’s liability insurer
in the exact amount of the full charges sought by the Hospital, two of which included
the Hospital as a payee, Featherly’s implied offer to pay the lien off as a condition
precedent for his release and his acceptance of the amounts tendered to him in
consideration thereof is admissible evidence of his intent to ratify the agreement to pay
the Hospital’s invoiced charges as both reasonable and necessary.
25
25The Hospital also protests the exclusion of the pre-litigation demand letter
directed to Applebaum on behalf of Featherly, offering to release her from any and all
liability in exchange for $875,000.00, including the implied payment of $24,682.00 to
resolve the Hospital’s lien. Ordinarily, offers of settlement are inadmissible if offered
to prove the validity or amount of a claim. See Tex. R. Evid. 408(a); Scurlock Oil Co. v.
Smithwick, 724 S.W.2d 1, 4 (Tex. 1986) (op. on reh’g). The exclusion of such offers
furthers the public policy favoring the settlement of lawsuits—a policy frustrated by
their use as admissions against interest. McGuire v. Com. Union Ins. of N.Y., 431 S.W.2d
347, 352 (Tex. 1968). The demand letter clearly falls within the ambit of Rule 408,
though Featherly has not carried his burden to demonstrate that the discovery
responses also fall within Rule 408’s purview. See Vinson Mins., Ltd. v. XTO Energy, Inc.,
335 S.W.3d 344, 351–52 (Tex. App.—Fort Worth 2010, pet. denied).
We note that offers of settlement are admissible if offered for another relevant
purpose, such as prejudice, bias, or interest. Tex. R. Evid. 408(b); see Vinson Mins., 335
S.W.3d at 351–52. We also note that the hospital lien statute clearly anticipates a medical
provider’s participation in settlement negotiations and embodies a public policy
encouraging the immediate treatment of injured individuals by securing the payment of
45
We also conclude that the error was harmful. The discovery responses were the
Hospital’s most consequential evidence of ratification—a defensive theory that could
have swung the contract claim in the Hospital’s favor, netted the Hospital thousands
more in recovery, and (at least potentially) headed off the $88,715.01 award for
attorney’s fees that Featherly received. Indeed, without the admission of this evidence,
the trial court refused to even submit the issue of ratification, effectively granting a
directed verdict on the Hospital’s affirmative defense to a possible mental incapacity
finding by the jury—error compounded by the disallowance of the Hospital’s common
law quantum meruit claim. Because the evidence that Featherly endorsed the contract
and the dollar amount of the bill was crucial to the key issue of ratification, the
erroneous exclusion of that evidence was harmful and reversible. See JBS Carriers, 564
S.W.3d at 836; LSR Joint Venture No. 2 v. Callewart, 837 S.W.2d 693, 699–700 (Tex.
hospital charges, which may have implications for the admissibility of a demand letter
such as this one. However, the Hospital did not articulate a theory of admissibility
consistent with the exceptions recognized by Rule 408(b) or any public policy reason
to depart from Rule 408. To preserve a complaint for appellate review, a party must
present to the trial court a timely request, objection, or motion that states the specific
grounds for the desired ruling, if not apparent from the context. In re J.C., 594 S.W.3d
466, 473 (Tex. App.—Fort Worth 2019, no pet.) (citing Tex. R. App. P. 33.1(a)(1)(A)).
Because these arguments were not raised in the trial court, we decline to consider them
here.
Finally, the Hospital mentions that the trial court excluded (1) the amount of the
settlement that Featherly received in the personal injury suit and (2) testimony
concerning Featherly’s contentment with that amount. But the Hospital offers no
argument or legal authority as to whether this evidence was admissible. Due to
inadequate briefing, we decline to consider whether that evidence was erroneously
excluded. See Tex. R. App. P. 38.1(i).
46
App.—Dallas 1992, writ denied) (op. on reh’g) (holding that the trial court reversibly
erred by excluding “evidence of the dollar amount” of the benefit received by the party
who allegedly ratified an agreement because excluding this amount undermined the
proponent’s effort to show ratification and forced the jury to “try this case
blindfolded”).
The dissent ventures that this evidence could have also fairly been excluded
under Texas Rule of Evidence 403. However, no Rule 403 objection was raised when
this evidence was proffered in the trial court, which casts doubt on Featherly’s ability
to prosecute such a basis for exclusion on appeal. See SRMOF II 2012-1 Tr., U.S. Bank
Tr. N.A. v. Alaimo, No. 02-18-00336-CV, 2019 WL 3955198, at *5 (Tex. App.—Fort
Worth Aug. 22, 2019, pets. denied) (mem. op.); Keller v. Keller, No. 02-17-00466-CV,
2018 WL 4782162, at *4 n.3 (Tex. App.—Fort Worth Oct. 4, 2018, no pet.) (mem. op.);
see also Guar. Cnty. Mut. Ins. v. Reyna, 709 S.W.2d 647, 648 (Tex. 1986) (“We must uphold
a correct lower court judgment on any legal theory before it, even if the court gives an
incorrect reason for its judgment.” (emphasis added)); Sullivan v. Microsoft Corp., 618
S.W.3d 926, 930 (Tex. App.—El Paso 2021, no pet.) (collecting cases in which an
appellate court refused to affirm based on a ground not presented to the trial court).
Moreover, even assuming for the moment that Rule 403 were properly in play, we
respectfully differ in our estimation of how the Rule 403 balancing test applies in this
case. Our starting point is that “[r]elevant evidence is presumed to be admissible.” JBS
Carriers, 564 S.W.3d at 836 (citing Tex. R. Evid. 402). We have already set forth our
47
view that this evidence carried great probative value, and only if that probative value
were “substantially outweighed” by the danger of unfair prejudice or confusion could
the evidence be excluded under Rule 403. See id. The dissent identifies Featherly’s
personal injury settlement as a likely source of unfair prejudice, but the discovery
responses had little to do with that settlement. We fail to see how discovery responses
reflecting that Featherly incurred $24,682.00 in hospital expenses would have informed
the jury that Featherly reached a sizable settlement, as the dissent suggests, because the
discovery responses never mentioned the settlement. And the dissent does not identify
any other prejudicial aspect to the discovery responses that could have substantially
outweighed the evidence’s value, which would seem to leave the admission of the
responses entirely within bounds under Rule 403.
For all of these reasons, we sustain the Hospital’s fourth point. The Hospital is
entitled to a new trial.
This conclusion renders it unnecessary to consider the Hospital’s first point, in
which the Hospital argues that it was improper for the trial court to declare the lien
partially invalid because Featherly’s prayer was to declare the whole lien invalid.26 It also
26But see Garner v. City of Houston, 323 S.W.2d 659, 662 (Tex. App.—Houston
1959, no writ) (“We are unable to agree that the specific prayer for cancellation of the
whole debt and the lien would prevent the rendition of a judgment cancelling only a
part of the debt which would carry with it the extent of the security, that is, the lien.
Though he might not on the evidence introduced on a trial be entitled to a cancellation
of the whole debt, he would be entitled to a cancellation of so much as was in excess
of that which was reasonable. The prayer for cancellation of the whole is not
inconsistent with a cancellation of a part. The whole includes the items of which it is
48
renders it unnecessary to consider the Hospital’s third point, through which the
Hospital complains of charge error. “Because the remaining . . . jury-charge issues may
not recur during the new trial on remand, we do not address them.” Sw. Energy Prod. Co.
v. Berry-Helfand, 491 S.W.3d 699, 728 (Tex. 2016). However, while we generally would
not address the Hospital’s second issue either, we nonetheless address two questions of
law presented by that issue because they are “critical to the correct re-trial of this case.”
Steak & Ale of Tex., Inc. v. Borneman, 62 S.W.3d 898, 901 (Tex. App.—Fort Worth 2001,
no pet.).
B. Availability of Attorney’s Fees
In its second point, the Hospital argues that the determination of what
constituted “a reasonable and regular rate” for its services under the hospital lien statute
was a question of fact that is not the proper subject of a declaratory judgment. To that
end, the Hospital urges us to adopt the holding of Shahin v. Memorial Hermann Health
System, which stated that the reasonable rate for hospital services was a fact question
that did not belong in a declaratory judgment. 527 S.W.3d 484, 491 (Tex. App.—
Houston [1st Dist.] 2017, pet. denied). In that case, the court held, “While resolving
what rates a hospital may charge patients is arguably useful, declaratory judgment is not
the proper vehicle, because the question would require the resolution of a factual
dispute by competent evidence.” Id.
composed and a prayer for the cancellation of the whole encompasses a prayer to cancel
parts.”).
49
Like the Shahin court, we have also adopted the general principle that
“[d]eclaratory relief is inappropriate where the only issue involved is a question of fact.”
City of Watauga v. Taylor, 752 S.W.2d 199, 205 (Tex. App.—Fort Worth 1988, no writ).
But that principle does not apply here because the issues in this case were not solely
factual. Indeed, there would be no issue of what constitutes a reasonable and regular
rate without the written instrument that is at the heart of Featherly’s suit: the Hospital’s
lien. Any factual issues were adjacent to, and inhered in, Featherly’s declaratory action
to construe that instrument. Under binding precedent and the text of the Declaratory
Judgments Act itself, issues of fact may fairly be resolved in an otherwise proper
declaratory action. “A court having jurisdiction to render a declaratory judgment has
power to determine issues of fact . . . .” United Servs. Life Ins. v. Delaney, 396 S.W.2d 855,
858 (Tex. 1965); In re Estate of Bryant, No. 07-18-00429-CV, 2020 WL 1174586, at *2
(Tex. App.—Amarillo Mar. 11, 2020, no pet.) (mem. op.). As the Declaratory
Judgments Act expressly provides, “If a proceeding under this chapter involves the
determination of an issue of fact, the issue may be tried and determined in the same
manner as issues of fact are tried and determined in other civil actions in the court in
which the proceeding is pending.” Tex. Civ. Prac. & Rem. Code Ann. § 37.007; see
Trinity Universal Ins. v. Sweatt, 978 S.W.2d 267, 270 (Tex. App.—Fort Worth 1998, no
pet.) (“Further, although resolution of the case involved fact issues because Appellee
disputed the conclusions of Appellant’s investigation, determination of those fact issues
in the same manner as in other civil actions is specifically provided for in the
50
Declaratory Judgments Act.” (cleaned up)). The trial court was fully entitled to resolve
any questions of fact that inhered in the construction of the Hospital’s lien. See N.
Cypress, 559 S.W.3d at 130 (entertaining a declaratory suit challenging the reasonableness
of charges under a hospital lien).
Moreover, we see no reason to closely scrutinize whether this suit runs afoul of
City of Watauga’s rule that declaratory relief is inappropriate where the only issue
involved is a question of fact. Overzealous application of this rule could only bring to
the fore the often-elusive distinction between questions of fact and law, forcing litigants
to guess whether their declaratory suits, though seemingly based on the construction of
written instruments, might nonetheless ultimately be deemed too “factual” to be
proper. See Collier v. Civ. Serv. Comm’n of Wichita Falls, 764 S.W.2d 364, 366 (Tex. App.—
Fort Worth 1989, writ denied) (“The distinction between law and fact has never been a
well-settled area of law; the U.S. Supreme Court noted it does not know any ‘rule or
principle that will unerringly distinguish a factual finding from a legal conclusion.’”
(quoting Pullman–Standard v. Swint, 456 U.S. 273, 288, 102 S. Ct. 1781, 1790 (1982))).
And elevating this issue of form any further would only serve the interest of putting an
ever-finer point on the “broad and general terms” of the Declaratory Judgments Act,
which is meant to be “liberally construed and administered,” and would do so at the
expense of convenience to practitioners and parties alike. Cobb v. Harrington, 190 S.W.2d
709, 714 (Tex. 1945). We therefore side against the Hospital to the extent that it brings
an argument in reliance on Shahin.
51
Next, the Hospital contends that it was improper to award Featherly attorney’s
fees because the hospital lien statute does not provide for attorney’s fees, and therefore
attorney’s fees should not be available in Featherly’s declaratory action. According to
the Hospital, parties frequently plead other substantive claims as declaratory actions in
an effort to obtain attorney’s fees, but there are rules in place to prevent the use of
duplicative declaratory claims to manufacture the availability of attorney’s fees. The
Hospital asserts that those rules should apply here.
A party may not use the Declaratory Judgments Act as a vehicle for recovering
attorney’s fees when the declaratory claims merely duplicate other claims already before
the trial court for which attorney’s fees are not permitted. Jackson v. State Off. of Admin.
Hearings, 351 S.W.3d 290, 301 (Tex. 2011); MBM Fin. Corp. v. Woodlands Operating Co.,
292 S.W.3d 660, 669 (Tex. 2009). Thus, in MBM, the court held that because the
plaintiff was ineligible to receive attorney’s fees on his breach of contract claim, he
should not receive attorney’s fees for a declaratory claim that was “merely tacked onto
a standard suit based on a matured breach of contract.” 292 S.W.3d at 666, 670.
Likewise, in Jackson, because the plaintiff failed to meet the requirements for recovery
of attorney’s fees under the Texas Public Information Act, he could not use an
“incidental” claim for declaratory relief to obtain the attorney’s fees. 351 S.W.3d at 301.
The principle of MBM and Jackson most clearly applies when a declaratory claim is
“substantively subsumed within” another claim for which attorney’s fees are not
available, when the declaratory claim is “part and parcel” of the other claim, or when
52
the declaratory claim “merely duplicates issues already before the trial court” because
of the other claim. 12636 Research Ltd. v. Indian Bros., Inc., No. 03-19-00078-CV, 2021
WL 417027, at *18 (Tex. App.—Austin Feb. 5, 2021, no pet.) (mem. op.) (cleaned up).
In this case, however, Featherly pleaded only a claim for declaratory relief and
no other causes of action; there was no other fee-ineligible claim for the declaratory
claim to mirror. When the declaratory claim stands alone, courts have held that the rule
described in MBM and Jackson does not bar attorney’s fees. See Handwerker Hren Legal
Search, Inc. v. Recruiting Partners GP, Inc., No. 03-13-00239-CV, 2015 WL 4999054, at *6
(Tex. App.—Austin Aug. 19, 2015, pet. denied) (mem. op.); Hansen v. JP Morgan Chase
Bank, N.A., 346 S.W.3d 769, 775 (Tex. App.—Dallas 2011, no pet.); ProFinance Assocs.,
Inc. v. Cohen-Sagi, No. 04-10-00242-CV, 2011 WL 2150356, at *5 (Tex. App.—San
Antonio June 1, 2011, pet. denied) (mem. op.); see also Wells Fargo Bank, N.A. v. Murphy,
458 S.W.3d 912, 915–16 (Tex. 2015).
Indeed, it is debatable that Featherly could have brought any claim for his
declaratory action to overlap with, such as by pleading a cause of action to challenge
the lien under the hospital lien statute itself, because the hospital lien statute does not
clearly provide a private cause of action to challenge hospital liens. To determine
whether a statutory provision gives rise to a private cause of action to enforce the
provision, our duty is to ascertain the drafters’ intent. Brown v. De La Cruz, 156 S.W.3d
560, 563 (Tex. 2004). The Legislature can signal its intent to create a private right of
53
action either expressly27 or through implication.28 Tex. Med. Res., LLP v. Molina
Healthcare of Tex., Inc., 620 S.W.3d 458, 463 (Tex. App.—Dallas 2021, pet. filed). We
strictly construe statutory enforcement schemes and infer a private cause of action only
when the drafters’ intent is clearly expressed in the language as written. Id. at 464;
Cernosek Enters., Inc. v. City of Mont Belvieu, 338 S.W.3d 655, 663 (Tex. App.—Houston
[1st Dist.] 2011, no pet.); Witkowski v. Brian, Fooshee & Yonge Props., 181 S.W.3d 824, 831
(Tex. App.—Austin 2005, no pet.) (op. on reh’g).
Chapter 55 of the property code does not appear to contain a clear expression
of intent, either express or implied, to grant litigants a private cause of action to
challenge hospital liens. Thus, it is doubtful whether there was any cause of action under
the hospital lien statute for Featherly’s declaratory claim to mimic. And even assuming
that such a cause of action exists, it is not one that he has pleaded. We therefore
conclude that MBM and Jackson do not preclude Featherly’s claim for attorney’s fees.29
We overrule the Hospital’s second point.
27See, e.g., Exxon Corp. v. Emerald Oil & Gas Co., L.C., 331 S.W.3d 419, 422 (Tex.
2010) (op. on reh’g).
28See, e.g., ACS Primary Care Physicians Sw., P.A. v. UnitedHealthcare Ins., 514 F. Supp.
3d 927, 935–37 (S.D. Tex. 2021) (order).
29Finally, the Hospital challenges the amount of the attorney’s fees. At this
juncture, before a new trial, any opinion on that argument would be advisory. See Steak
& Ale, 62 S.W.3d at 901.
54
Outcome: We reverse the trial court’s judgment and remand for a new trial consistent with
this opinion.
Plaintiff's Experts:
Defendant's Experts:
Comments: