Opinion
No. 01-04-01189-CV
Opinion Issued August 10, 2006.
On Appeal from the 55th District Court, Harris County, Texas, Trial Court Cause No. 2003-69268.
Panel consists of Justices TAFT, HIGLEY, and BLAND.
MEMORANDUM OPINION
Betty Cartmell, Ph.D. sued Rainbow Healthcare Services, P.A. for breach of contract and deceptive trade practices, arising from Rainbow's alleged failure to bill Cartmell's patients and their insurers or to remit those payments to Cartmell. The trial court granted Rainbow's motion for summary judgment, from which Cartmell appeals. We agree with the trial court that Cartmell failed to raise a genuine issue of fact as to an element of each of her causes of action, and therefore we affirm.
Facts
From 1999 through 2002, Cartmell, a clinical psychologist, saw patients at Rainbow's office facility. Cartmell paid a monthly fee, ranging from $300 to $550, in exchange for office space, supplies, and billing services. Cartmell alleges that she and Rainbow orally agreed that Rainbow would bill her patients and their insurers and pass all payments received to Cartmell directly and in full. Cartmell became concerned that the payments she received from Rainbow were inadequate. In March 2000 she discussed the issue with Rainbow's administrator, C.J. Pincheck. As she described it in her deposition:
I was grossly underpaid. It was like I had only received 50%, approximately, of what I would have expected at that point in time. So, I knew on a gross basis. . . . I knew about how many patients I saw every week. I also know the lag in insurance. I knew what I should have been getting, and it wasn't — it wasn't happening.
Cartmell approached Rainbow about her billing concerns again in October 2000, and sent it a letter in April 2001. Cartmell alleged in the letter that she saw Rainbow shred documents shortly after she expressed her concerns about billing, and these documents could have confirmed her billing allegations. Pincheck responded to Cartmell in a letter in May 2001, asking Cartmell to provide Rainbow specific billing questions. In the letter, Pincheck provided details of particular accounts and explained some of the disparities between Cartmell's actual collections and the amounts Cartmell charged her patients for office visits.
Cartmell attempted to discuss the problem with Dr. Lawrence Root, the owner of Rainbow, in June 2001, but he became angry. Cartmell remained at Rainbow because she felt attached to some of her patients, but she reduced her hours, and eventually left in October 2002.
Cartmell sued Rainbow in December 2003 for breach of contract and deceptive trade practices. After completion of discovery, Rainbow moved for a traditional and a no-evidence summary judgment, contending that (1) the oral agreement Cartmell alleges is an unenforceable guaranty agreement; (2) Cartmell failed to mitigate her damages; (3) Cartmell's damages models constitute no evidence of damages; (4) Cartmell's DTPA claims are barred by limitations, and (5) Cartmell fails to raise a fact issue with respect to each element of her causes of action, including the breach element of her contract claim and the deceptive act element of her DTPA claim. Rainbow included excerpts from selected patient files, including two explanation of benefits ("EOBs") transmittals from insurance carriers that reported either a denial of coverage for office visit charges or application of the charges to the patient's deductible.
Cartmell responded that she does not allege a guaranty agreement, her damages models show a discrepancy between the amount she expected to receive from patients and insurers and the amount she actually received, and fact issues exist on each element of each of her causes of action. Cartmell included a transcript of her deposition, the April letter she wrote to Pincheck, several letters from Pincheck, a letter to Dr. Root, and her damages models as summary judgment evidence.
Standard of Review
We review the trial court's ruling on a summary judgment motion de novo. Provident Life Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). We view the evidence in a light most favorable to the non-movant, making all reasonable inferences and resolving all doubts in the non-movant's favor. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex. 1999). Because the summary judgment order does not specify the ground or grounds on which the trial court relied for its ruling, we affirm the summary judgment if any of the summary judgment grounds is meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex. 2000).
Here, Rainbow sought either a traditional or a no-evidence summary judgment. The movant for a traditional summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). Once the movant shows it is entitled to judgment as a matter of law, the burden shifts to the non-movant to present evidence raising a fact issue to defeat the motion for summary judgment. Haight v. Savoy Apartments, 814 S.W.2d 849, 851 (Tex.App.-Houston [1st Dist.] 1991, writ denied).
In a no-evidence summary judgment, the movant represents that no evidence exists as to one or more essential elements of the non-movant's claims, upon which the non-movant would have the burden of proof at trial. TEX. R. CIV. P. 166a(i); Jackson v. Fiesta Mart, 979 S.W.2d 68, 70-71 (Tex.App.-Austin 1998, no pet.). On review, we ascertain whether the non-movant produced more than a scintilla of probative evidence to raise a genuine issue of material fact. Id. More than a scintilla of evidence exists if the evidence "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). If the evidence does no more than create a mere surmise or suspicion of fact, less than a scintilla of evidence exists. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). Although the non-moving party is not required to marshal its proof, it must present evidence that raises a genuine fact issue on each of the challenged elements. TEX. R. CIV. P. 166a(i). The fact that evidence is attached to a motion requesting summary judgment on both traditional and no-evidence grounds does not foreclose a party from also asserting that there is, in fact, no evidence with regard to a particular element. Binur v. Jacobo, 135 S.W.3d 646, 651 (Tex. 2004). Rather, if a no-evidence motion attaches evidence, we examine that evidence to determine whether it creates a fact question. Id.
Breach of Contract
Cartmell contends the trial court improperly granted summary judgment because she presented more than a scintilla of evidence on each element of her breach of contract cause of action. The elements of breach of contract include (1) the existence of a valid contract, (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Eckland Consultants, Inc. v. Ryder, Stilwell Inc. , 176 S.W.3d 80, 86 (Tex.App.-Houston [1st Dist.] 2004, no pet.). A breach of contract occurs when a party fails to perform an act that it has expressly or impliedly promised to perform. Methodist Hosps. of Dallas v. Corporate Communicators, Inc., 806 S.W.2d 879, 882 (Tex.App.-Dallas 1991, writ denied). Here, Cartmell alleges that Rainbow breached an oral contract by failing to bill, collect, and remit payments to her. Cartmell contends that a deficiency between the amount Rainbow remitted to her and the amount she expected to receive for her services raises a fact issue that Rainbow breached its agreement by failing to properly bill and collect payment from patients and insurance carriers.
At oral argument, Cartmell's counsel represented that this case arises from Rainbow's failure to properly bill insurance carriers and patients, and Cartmell does not allege fraud or any intentional withholding of payments.
As evidence of breach by Rainbow, Cartmell submitted a spreadsheet to the trial court. The spreadsheet shows each patient's name, the amount Cartmell expected to receive for services rendered to that patient, and the amount of payment she had in fact received. Evidence of a difference between the amount Cartmell expected to receive for her services and the amount she actually received, however, is not evidence of breach of an agreement to collect and remit payment. Such evidence assumes that the third party payors — insurance companies and patients — paid Cartmell's charges in line with her expectations. Cartmell presents no other evidence to suggest that Rainbow failed to bill her patients, or that it collected any payments that it failed to remit to her. In other words, Cartmell offers no evidence from patients or third party payors that (1) they had not been billed for Cartmell's services; or (2) they were billed and had paid amounts toward those bills greater than the amounts Rainbow remitted to Cartmell. Though the trial court ordered Rainbow to produce all of its billing records, none of these are attached as summary judgment evidence to raise a fact issue that the reason Cartmell's payments from insurers and patients fell below her expectations was because Rainbow failed to properly bill or remit payments received.
Rainbow presented summary judgment evidence that it had unsuccessfully attempted to collect on at least three of the accounts listed on Cartmell's damages model. Rainbow sent Cartmell a letter in May 2001 detailing some of her accounts and explaining that her alleged payment deficiencies were the result not of Rainbow's failure to bill, but of Medicare refusing to pay all or part of the claims it submitted or taking a long time to pay claims. Cartmell acknowledged in her deposition that there were other reasons besides breach by Rainbow — such as a patient's refusal or inability to pay, patient deductibles that must be met, and negotiated insurance rates or reduced Medicare rates — all of which could explain the difference between her actual and expected collections. Cartmell offered no records from Rainbow to show billing that was not done, or any evidence or testimony from patients or insurance companies that they had never received her bills or had paid Rainbow more than the amounts Rainbow remitted to Cartmell.
In her brief, Cartmell alleges that she did not prove the amounts actually billed and collected by Rainbow in part because Rainbow shredded documents and refused to allow her access to computer records, during the course of their pre-suit dealings, and such evidence would demonstrate the amounts Rainbow billed and paid to her. Cartmell presents no evidence, however, that Rainbow improperly withheld responsive billing documents from discovery — nor did the trial court make such a finding. Accordingly, Cartmell's contention that she failed to produce summary judgment evidence because the necessary documents were shredded or withheld pre-suit does not raise a fact issue regarding Rainbow's billing or remittance of payments.
Cartmell's deposition testimony exemplifies the gap between the evidence Cartmell submitted and her claim of breach. After acknowledging that the amounts paid by Medicare, Medicaid, insurers, and patients for office visits would be substantially less than the amounts charged for various reasons — among these, lack of ability to pay, lack of coverage, reduced benefits, or negotiated allowables — Cartmell could not testify as to her method for determining the amount she "expected to receive" pursuant to her agreement with Rainbow. In describing the expected amount for one entry that forms the basis of the summary judgment evidence, she stated, "[I]t's a best guess as to what her insurance might reimburse. . . . [S]o, this is reasonably close to what her insurance would most likely pay." Later, she reiterated that she did not know the precise amount that would be paid by patients and third parties but instead made a "best guess," and could not re-create the process for establishing the amounts Rainbow owed. We hold the fact that the amounts Cartmell received did not meet her general expectations does not constitute evidence of a breach of contract, unless the contract obligates the party in alleged breach to provide an amount that meets those expectations. See Prime Prods., Inc. v. S.S.I. Plastics, 97 S.W.3d 631, 637 (Tex.App.-Houston [1st Dist.] 2002, pet. denied) (affirming summary judgment on breach element where summary judgment evidence lacked facts to support allegation that performance provided was inadequate other than general conclusion that breaching party failed to provide "full and adequate" protection for parties' "business interests").
Moreover, as Rainbow observes, if Cartmell alleges breach of a promise to collect monies equal to her expectations or else be liable for the difference, regardless of the true amounts remitted by insurance carriers and patients, then the alleged breach is of a surety agreement, not merely of failing to bill and collect payments made by third parties. See TEX. BUS. COM. CODE ANN. § 26.01(b)(2) (Vernon 2002) ("a promise by one person to answer for the debt, default, or miscarriage of another person" must be in writing); Gulf Liquid Fertilizer Co. v. Titus, 354 S.W.2d 378, 382 (Tex. 1962) (observing that surety agreement imposes secondary liability for debt of another). If Cartmell contends that Rainbow agreed to pay her one hundred percent of the amounts she expected to receive, rather than actual collections, then the summary judgment evidence she offered as to the difference between the amounts she expected to receive and the amounts actually remitted to her would be evidence of breach. In such a case, however, Cartmell's claim is barred by the statute of frauds, which requires surety agreements to be in writing. See TEX. BUS. COM. CODE ANN. § 26.01(b)(2).
If, in contrast, and as Cartmell contends on appeal, she seeks damages resulting only from Rainbow's failure to bill patients and/or remit those payments actually made by patients or third parties, then she has the burden to overcome Rainbow's no-evidence challenge by presenting evidence that Rainbow actually failed to bill patients or failed to remit payments, not merely provide the difference between amounts she expected to receive and the amounts she actually received. Because she has failed to do so, we hold that Cartmell did not raise a fact issue to defeat Rainbow's no-evidence summary judgment motion, and the trial court properly granted summary judgment on this ground. Accordingly, we need not address Rainbow's other grounds for summary judgment. See FM Props. Operating Co., 22 S.W.3d at 872-73.
DTPA
Cartmell contends the trial court improperly granted summary judgment on her DTPA claim because her allegation that Rainbow claimed to have performed services that it did not actually perform is sufficient evidence that Rainbow committed deceptive acts in violation of the DTPA. See TEX. BUS. COM. CODE ANN. § 17.46 (Vernon Supp. 2005). Rainbow's no-evidence summary judgment motion alleges that Cartmell presented no evidence raising a fact issue regarding the commission of any deceptive acts by Rainbow. Cartmell did not respond with any evidence, but instead relied upon Arthur Andersen Co. v. Perry Equipment Corp. for the proposition that Rainbow's failure to verify that it ever billed or collected for Cartmell's services is evidence that it committed a deceptive act by representing that it had billed patients when it had not. 945 S.W.2d 812, 815 (Tex. 1997). In Arthur Andersen, an expert testified that the auditor had failed to follow accepted procedures, and the evidence at trial demonstrated that the auditor failed to verify facts necessary to the audit. Id. Nothing in Arthur Andersen suggests that an allegation of deceptive acts creates a burden on the defendant to prove that it did not engage in deceptive acts. Id. Allegations in one's own pleadings do not constitute competent summary judgment evidence. Flameout Design Fabrication, Inc. v. Pennzoil Caspian, 994 S.W.2d 830, 838 (Tex.App.-Houston [1st Dist.] 1999, no pet.). Cartmell's allegation that Rainbow failed to bill her patients or remit payments to her after it represented to her that it did, without more, does not constitute evidence that Rainbow engaged in deceptive acts, so as to raise a fact issue under the DTPA. Accordingly, we need not address Cartmell's other issues regarding her DTPA claim. See FM Props. Operating Co., 22 S.W.3d at 872-73.
Conclusion
Cartmell failed to present evidence raising a fact issue as to whether Rainbow breached its alleged agreement with her, or whether it engaged in deceptive acts or practices. We therefore hold that summary judgment was proper as to Cartmell's breach of contract and DTPA claims, and affirm the judgment of the trial court.