Shih v. Blue Cross and Blue Shield of Texas

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PATRICK SHIH,
Plaintiff,
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v. 	CIVIL ACTION NO. H-25-2274
BLUE CROSS AND BLUE SHIELD OF
TEXAS,
Defendant.
MEMORANDUM AND OPINION
Patrick Shih is an emergency neurosurgeon. He has sued Blue Cross and Blue Shield of
Texas, seeking full reimbursement for the medical services he provided patients insured by Blue
Cross. 	After this court dismissed Shih’s complaint without prejudice and with leave to amend,
(Docket Entry No. 19), Shih filed his first amended complaint, (Docket Entry No. 22). Blue Cross
has now moved to dismiss Shih’s complaint under Rule 12(c). (Docket Entry No. 23). Based on
the pleadings, the motion, the record, and the applicable law, the court grants in part and denies in
part the motion to dismiss.
I. 	Background
Patrick Shih is outside Blue Cross’s insurance network. (Docket Entry No. 22 ¶ 1). Under
state law, Shih is required to provide “emergent care to all patients, regardless of their ability to
pay or the source of payment.” (Id. ¶ 8). In many cases, Shih renders “necessary post-stabilization,
non-emergency services that [are] part of the same episode of care.” (Id.). Shih alleges that he
rendered such services for about 30 Blue Cross insureds. (Docket Entry No. 22-1).
Shih alleges that he submitted his charges for reimbursement to Blue Cross. (Docket Entry
No. 22 ¶¶ 22–23). 	Blue Cross allegedly accepted coverage on behalf of its insureds and made
United States District Court
Southern District of Texas
ENTERED
June 10, 2026
Nathan Ochsner, Clerk
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partial payments for most patients. (Id.). Shih alleges that these payments were well below the
usual and customary rates required by Texas law and the terms of coverage between Blue Cross
and the insureds. (Id. ¶¶ 22–23, 40). Shih alleges that Blue Cross systemically failed and refused
to pay him for his outstanding claims for full reimbursement in connection with providing these
services. 	(Id. ¶¶ 25–27). 	Shih alleges that the aggregate amount due on these claims exceeds
$249,561.24, plus applicable interest, penalties, and attorneys’ fees. (Id. ¶ 30).
Shih alleges four counts in his complaint: (1) violations of the Texas Prompt Pay Act; (2)
violations of the Texas laws requiring payment of emergency services; (3) breach of an implied-
in-law contract; and (4) money had and received. (See id. ¶¶ 34–66). Shih also requests attorneys’
fees. 	(Id. ¶¶ 67–69). 	Blue Cross moves to dismiss the breach of an implied contract and the
money-had-and-received claims, as well as the request for attorneys’ fees. (See Docket Entry No.
23 at 2).
II. 	The Legal Standard
A motion to dismiss under Rule 12(c) is evaluated under the same standard as a motion
under Rule 12(b)(6). Q Clothier New Orleans, L.L.C. v. Twin City Fire Ins. Co., 29 F.4th 252,
256 (5th Cir. 2022). Rule 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which
relief can be granted.” Fed. R. Civ. P. 12(b)(6). Rule 12(b)(6) must be read in conjunction with
Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). “[A] complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Rule 8 “does not require ‘detailed factual allegations,’ but it demands more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at 678 (quoting Twombly, 550
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U.S. at 555). “A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for
more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550
U.S. at 556). “Conversely, when the allegations in a complaint, however true, could not raise a
claim of entitlement to relief, this basic deficiency should be exposed at the point of minimum
expenditure of time and money by the parties and the court.” Cuvillier v. Taylor, 503 F.3d 397,
401 (5th Cir. 2007) (cleaned up).
III. 	Analysis
The court dismisses Shih’s claims for an implied-in-law contract and for money had and
received. 	Texas law does not allow emergency-care professionals to pursue common-law
equitable claims against insurance companies for the medical services provided to insureds.
Because one basis for Shih to seek attorneys’ fees remains, the court does not dismiss this part of
Shih’s complaint.
A. 	The Implied-in-Law Contract Claim
Shih alleges that the law implies a contract between himself and Blue Cross. (Docket Entry
No. 22 ¶¶ 51–62). An implied-in-law contract is “not a contract at all but an obligation imposed
by law to do justice even though it is clear that no promise was ever made or intended.” Fortune
Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000) (citation omitted). 	“The principal
function of quasi-contract is generally said to be that of prevention of unjust enrichment.” Id. at
683 (citation omitted). “A contract implied in law, or a quasi-contract, is distinguishable from a
true contract because a quasi-contract is a legal fiction, an obligation imposed by law regardless
of any actual agreement between the parties.” Graves v. Logan, 404 S.W.3d 582, 585 (Tex. App.—
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Houston 2010, no pet.) (quoting Fraud–Tech, Inc. v. Choicepoint, Inc., 102 S.W.3d 366, 386 (Tex.
App.—Fort Worth 2003, pet. ref’d)).
This court has previously dismissed a similar implied-in-law contract claim alleged by
emergency-medicine providers. W. Grey Props., LLC v. Blue Cross & Blue Shield of Texas, No.
CV H-24-1275, 2024 WL 4374128, at *3–4 (S.D. Tex. Oct. 2, 2024). 	This court held that the
providers in that case failed to allege that Blue Cross “would be unjustly enriched if the court did
not find and enforce an implied-in-law contract.” Id. at *4. Shih’s complaint includes allegations
that attempt to correct this deficiency. 	Shih alleges that he conferred a benefit on Blue Cross
because “the emergency care of out-of-network specialists at emergency departments is essential
and necessary to allow [Blue Cross] to satisfy its contractual and other legal obligations to its
members and dependents of members.” (Docket Entry No. 22 ¶ 61).
The problem with Shih’s allegation is that Texas law does not permit such an implied-in-
law contract claim against an insurance company. 	The Texas Supreme Court has rejected the
theory that, as a matter of law, an emergency medicine physician or facility confers a benefit on
an insurance company in providing emergency services to the insurance company’s insureds. Tex.
Med. Res., LLP v. Molina Healthcare of Texas, Inc., 659 S.W.3d 424, 436–37 (Tex. 2023). 	In
holding that an emergency-room physician’s quantum-meruit claims against insurance companies
failed, the Texas Supreme Court explained that an “emergency-room physician does not undertake
to provide life-saving treatment for an HMO or any other kind of insurance company.” Id. at 437.
The court held that doctors could not “satisfy the second element of a quantum meruit claim as a
matter of law,” because serving an insured “is hardly the same as serving” the insurance company
itself. 	Id. (quoting Angelina Emergency Med. Assocs. P.A. v. Health Care Serv. Corp., 506 F.
Supp. 3d 425, 432 (N.D. Tex. 2020)). Simply put, “[r]ecovery in quantum meruit cannot be had
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from an insurer based on services rendered to an insured, because those services aren’t directed to
or for the benefit of the insurer.” Id. (quoting Angelina Emergency Med., 506 F. Supp. 3d at 432).
Although Shih technically asserts an implied-in-law contract claim, not a quantum-meruit
claim, this is a distinction without a difference. “[Q]uantum meruit, quasi-contract, and an implied
at law contract are equivalent terms for an equitable remedy.” 26 W ILLISTON ON CONTRACTS §
68:1 (4th ed. 2026); see Black Lake Pipe Line Co. v. Union Const. Co., Inc., 538 S.W.2d 80, 86
(Tex. 1976) (“[T]he right to recover in [q]uantum meruit is based upon a promise implied by law
to pay for beneficial services rendered and knowingly accepted.”). 	The “principal function of
quasi-contract is” the “prevention of unjust enrichment.” 	Fortune Prod., 52 S.W.3d at 684
(citation omitted). 	The Texas Supreme Court’s holding in Texas Medicine that doctors cannot
state a claim for quantum meruit precludes Shih’s claim for breach of an implied-in-law contract.
Cf. Molina Healthcare of Texas, Inc. v. ACS Primary Care Physicians Sw., PA, No. 01-21-00727-
CV, 2024 WL 3608192, at *1, *3 & n.1 2024 WL 3608192 (Tex. App.—Houston [1st Dist.] Aug.
1, 2024) (noting the parties’ agreement that, as a result of the Texas Supreme Court’s decision, the
plaintiff could not state a quantum meruit or implied-in-law contract claim).
Shih’s implied-in-law contract claim is dismissed, with prejudice because amendment
would be futile.
B. 	The Money-Had-and-Received Claim
Shih also asserts a claim for money had and received. (Docket Entry No. 22 ¶¶ 22–66).
To state a claim for money had and received, a plaintiff must allege (1) that the defendant received
money and (2) that the money belongs to the plaintiff, in equity and good conscience. Yowell v.
Granite Operating Co., 630 S.W.3d 566, 578 (Tex. App.—Amarillo 2021, pet. denied). A claim
for money had and received “belongs conceptually to the doctrine of unjust enrichment.” Edwards
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v. Mid-Continent Office Distributors, L.P., 252 S.W.3d 833, 837 (Tex. App.—Dallas 2008, pet.
denied) (quoting Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.—El Paso 1997, no
writ)).
Because Shih asserts a claim in equity, Texas Medicine bars relief. Doctors cannot satisfy
the second element of a quantum-meruit claim as a matter of law because serving an insurance
company’s insureds does not benefit the insurance company itself. See Tex. Med., 659 S.W.3d at
436–37. 	“[C]ourts have refused to recognize an unjust enrichment or quantum meruit cause of
action against the insurer ‘based on healthcare services provided to a participant or beneficiary of
a healthcare insurance policy or plan.’” Windmill Wellness Ranch, L.L.C. v. Blue Cross & Blue
Shield of Texas, No. SA-19-CV-01211-OLG, 2020 WL 7017739, at *7 (W.D. Tex. Apr. 22, 2020)
(quoting Electrostim Med. Servs., Inc. v. Health Care Serv. Corp., 962 F. Supp. 2d 887, 898 (S.D.
Tex. 2013), aff’d in part, rev’d in part on other grounds, 614 Fed. App’x 731 (5th Cir. 2015)).
Equitable claims to recover specific funds, like claims for money had and received, are not
cognizable under Texas law in this context: “providing health care services to” a company’s
“members or beneficiaries . . . is not the type of ‘benefit’ that can support a quantum meruit or
unjust enrichment claim” against Blue Cross. Id. at *7. Under the applicable law, Blue Cross did
not receive money or services of value from Shih that should, in equity, belong to him.
Shih’s 	argument 	that 	he 	provides 	Blue 	Cross 	a 	benefit 	by 	bearing 	the 	costs 	of
underpayment and foregoing the interest on the balance that Blue Cross retained does not plead
Shih out of Texas Medicine’s bar. 	(See Docket Entry No. 25 at 4). 	This argument restates the
contention that Texas Medicine rejected. It assumes that Shih conferred a benefit on Blue Cross
by servicing its insureds and that Blue Cross’s failure to pay the full amount for that benefit means
that Blue Cross has retained money to which Shih has a right. 	But if Blue Cross does not face
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unjust-enrichment liability for the services Shih rendered to Blue Cross’s patients, then it cannot
face unjust-enrichment liability for the costs Shih allegedly bore in providing those services.
Because Shih did not provide Blue Cross a benefit, Blue Cross does not possess money that is
rightly Shih’s. 	Shih’s claim for money had and received is dismissed, with prejudice because
amendment would be futile.
C. 	Attorneys’ Fees
With Shih’s equitable claims dismissed, the remaining question is whether Shih can
recover attorneys’ fees in connection with his surviving claims under the Texas Prompt Pay Act
and the Texas Emergency Care Statute. Shih effectively concedes that he can recover fees only
under Sections 843.342(g) and 1301.137 of the Texas Insurance Code. (See Docket Entry No. 25
at 7–9). Blue Cross did not move to dismiss Shih’s request for fees under these sections of the
Texas Insurance Code. 	(See Docket Entry No. 23 at 8–9; see generally Docket Entry No. 30).
Shih’s request for attorneys’ fees under Chapter 1467 of the Texas Insurance Code and Section
38.001 of the Texas Civil Practice and Remedies Code is dismissed, with prejudice.
IV. 	Conclusion
For these reasons, the motion to dismiss, (Docket Entry No. 23), is granted in part and
denied in part. Shih’s implied-in-law contract claim, money-had-and-received claim, and request
for attorneys’ fees under Chapter 1467 of the Texas Insurance Code and Section 38.001 of the
Texas Civil Practice and Remedies Code are dismissed, with prejudice. 	Shih’s request for fees
under Sections 843.342(g) and 1301.137 of the Texas Insurance Code survive dismissal.
SIGNED on June 10, 2026, at Houston, Texas.
________________________________
Lee H. Rosenthal
Senior United States District Judge
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