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Boateng v. TrailBlazer Health Enterprises7/26/2005
At issue in this case is the propriety of the trial court's granting of a bill of review and dismissal of the underlying case for lack of jurisdiction at the preliminary hearing stage of the bill-of-review proceeding. Appellants, a group of judgment creditors, filed a garnishment suit and obtained a default judgment against a privately owned Texas limited liability company. Though not apparent from the face of the garnishment judgment, the garnishee is a fiscal intermediary of the federal government with respect to certain Medicare funds in its possession. More than a year after the garnishment judgment was signed, the United States and the garnishee sought a bill of review, asserting sovereign immunity. The trial court held a preliminary hearing under Baker v. Goldsmith, 582 S.W.2d 404 (Tex. 1979), to determine whether the United States and the garnishee had presented prima facie proof of a meritorious defense. After completing the preliminary hearing and taking the matter under consideration, the trial court, without notice, summarily granted the bill of review, declared the garnishment judgment void based on sovereign immunity, and dismissed the underlying garnishment action for lack of jurisdiction. We reverse and remand.
I. Factual and Procedural Background
On December 21, 2001, appellants Afuah Boateng, Johnell Sanders Fernandez, Sharon Long Gay, Joel S. Hochman, Rosalind Hull, Gloria Ann Tucker, and Missy L. Walker (collectively the "Boateng Parties") obtained a judgment in the amount of $838,466.63 against Rosa Alsobrooks and three of her entities, J&L Community Center, Inc., Houston Southwest Health Services, Inc., and Houston Northeast Health Services, Inc., (collectively the "Alsobrooks Entities") for failure to pay wages and independent contractor fees. Realizing that Alsobrooks and the Alsobrooks Entities could not pay the judgment, on that same day, the Boateng Parties, as judgment creditors, filed a garnishment action against appellee TrailBlazer Health Enterprise, L.L.C. ("TrailBlazer"), alleging that it "is indebted or has in hand effects belonging to one or more of the above described Defendant debtors or the parties named above." On December 21, 2001, the Boateng Parties also sent a fax to TrailBlazer stating that they had filed a garnishment action against TrailBlazer.
The garnishee, TrailBlazer, is a privately owned limited liability company that serves as a fiscal intermediary for the Medicare program. In the simplest terms, a fiscal intermediary acts as a conduit between the government and Medicare providers by determining the amounts to be paid on Medicare claims and disbursing funds provided by the government. Although the Secretary of the United States Department of Health and Human Services ("HHS") is officially charged with the administration of the Medicare Act, the Secretary delegates that task to the Centers for Medicare and Medicaid Services ("CMS"). Marsaw v. Trailblazer Health Enters., L.L.C., 192 F. Supp. 2d 737, 740 (S.D. Tex. 2002). The Secretary authorizes CMS to contract with private insurance companies to act as fiscal intermediaries or "carriers" by administering certain Medicare reimbursements. Id. (citing 42 C.F.R. ยง 421.5); see also Matranga v. Travelers Ins. Co., 563 F.2d 677 (5th Cir. 1977). CMS contracted with TrailBlazer to administer the Medicare program. At the time of the garnishment, the United States was TrailBlazer's primary customer and most of the funds TrailBlazer handled were Medicare funds. According to the record, however, TrailBlazer also maintained bank accounts containing other funds and held assets owned exclusively by TrailBlazer.
The Alsobrooks Entities, as Medicare providers, regularly pres
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