What Does In Re Allstate Mean for Defendants?

 

May 27, 2021

On May 7, 2021, the Texas Supreme Court issued its highly-anticipated opinion in In re Allstate Indemnity Company, No. 20-0071, 2021 Tex. LEXIS 375, 2021 WL 1822946 (Tex. May 7, 2021) .  On mandamus from Corpus Christi-Edinburg Court of Appeals, Justice Rebeca A. Huddle writing for the Court conditionally granted writ and held that the trial court abused its discretion by striking Defendant’s counter-affidavit under section 18.001 of the Texas Civil Practice & Remedies Code.  This opinion provides guidance to lower courts in what is currently an active and highly contentious area of personal injury law. 

 

The Plaintiff, Norma Alaniz, brought a first-party lawsuit against her insurer, Allstate Indemnity Company, arising out of a motor vehicle accident.  Alaniz brought contractual and extra-contractual claims against Allstate alleging that Allstate wrongfully failed to pay her UIM policy benefits.  Alaniz sought “reasonable and necessary” medical expenses as an element of her damage model.  She timely served Chapter 18.001 medical billing affidavits for several providers.  Allstate timely served a counter-affidavit from Christine Dickison, a registered nurse experienced in medical billing and coding, challenging the reasonableness of the providers’ charges.  Alaniz sought to strike Dickison’s counter-affidavit for failure to comply with Texas Civil Practice and Remedies Code section 18.001 (f).  The trial court granted Alaniz’s motion.  This mandamus proceeding followed.

 

After a short recitation of the statute’s history and purpose, the Court addressed Plaintiff’s arguments.  First, Alaniz argued that the counter-affidavit was defective because it was not on its face made by a person qualified to testify in contravention of all or part of any matters contained in the initial affidavit.  The Court reviewed Dickison’s experience as both a licensed registered nurse and expertise in medical billing.  Citing Gunn v. McCoy, 554 S.W.3d 645, 673 (Tex. 2018), the Court rejected Alaniz’s argument that charges must be challenged only by someone in the same filed of medicine.  Indeed, the Court noted that it's holding in Gunn was not limited to the initial affidavit, but also to counter-affidavits under section 18.001(f). 

 

Second, Alaniz argued that the counter-affidavit did not give reasonable notice of the bases of its conclusions.  Here, the Court states that “reasonable notice” under Chapter 18.001 means “fair notice” requirement for pleadings under Texas Rule of Civil Procedure 47.  The “fair notice” standard is met if the opposing party can ascertain from the pleading the nature and basic issues in controversy and what testimony will be relevant.  Applying this standard to Dickison’s affidavit, the Court referred to itemization of each charge that was controverted as unreasonable, together with Dickison’s comparison of the charges in the affidavit to the median charges for the same services during the same timeframe and in the same zip code according to Context4Healthcare database. 

 

Finally, Alaniz argued that Dickison’s opinions were unreliable.  Here, the issue boils down to whether the reliability requirement necessary for admissible expert opinion at trial is applicable to a Chapter 18.001 counter-affidavit.   Short answer: it does not.  The Court rejected a Rule of Evidence 702 analysis in the Chapter 18.001 context because, in part, a reasonable-notice standard does not so require.  A trial court should not impose an additional reliability requirement not prescribed by Chapter 18.001. 

 

In a departure from existing intermediate court case law, the Allstate Court also held that a defendant is not restricted to the counter-affidavit process as the only way to challenge the reasonableness of plaintiff’s medical expenses.  The full significance of this holding remains to be seen.

 

For our practice, this opinion provides a great deal of clarity when opposing plaintiff’s motions to strike a defendant’s counter-affidavit.  We will see how the lower appellate courts interpret and apply Allstate in the coming months.