Methodist Hospitals of Dallas v. Wal-Mart Stores, Inc.,

Methodist Hospitals of Dallas v. Wal-Mart Stores, Inc.,

No. Civ. A. 3:02-CV-0656 (N.D. Tex., May 30, 2003)

A hospital sued an employee welfare benefit plan for breach of contract and
negligent misrepresentation to recover its costs after providing extensive services
to a patient injured in an automobile accident. The plan refused to pay for
the treatment because the patient tested positive for marijuana at the time
of the accident, a situation that the plan does not cover. The hospital alleged
that in communications with the plan it was told that the patient would be covered.
After finding that the hospital’s claims were not preempted by ERISA, the District
Court for the Northern District of Texas addressed the claims. The court dismissed
the breach of contract claim because the hospital would be unable to establish
that it was a third party beneficiary to the contract. The court declined to
dismiss the negligent misrepresentation claim, however. There were genuine issues
of fact regarding whether the plan exercised reasonable care or competence in
communicating the information to the hospital and whether a disclaimer was given.