IN THE SUPREME COURT OF TEXAS

 

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No. 02-0894

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The University of Texas

Southwestern Medical Center at Dallas, Petitioner,

 

v.

 

Donna Loutzenhiser, as Next Friend of

Stephen Luke Loutzenhiser, a Minor, Respondent

 

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On Petition for Review from the

Court of Appeals for the Fifth District of Texas

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Argued January 7, 2004

 

 

Justice Hecht delivered the opinion of the Court, joined by Chief Justice Phillips, Justice Owen, Justice Jefferson, Justice Wainwright, and Justice Brister.

 

Justice O=Neill filed a concurring opinion, joined by Justice Schneider and Justice Smith.

 

 

The Texas Tort Claims Act provides that A[s]overeign immunity to suit is waived and abolished to the extent of liability created by [the Act].@[1]  Section 101.101(a) of the Act states:

 

A governmental unit is entitled to receive notice of a claim against it under this chapter not later than six months after the day that the incident giving rise to the claim occurred.  The notice must reasonably describe:

 

(1)       the damage or injury claimed;

(2)       the time and place of the incident; and

(3)       the incident.[2]

 

Section 101.101(c) makes this requirement inapplicable Aif the governmental unit has actual notice . . . that the claimant has received some injury@.[3]  In this case we hold that the plaintiff did not give notice within the six-month period as required, that lack of notice is a complete defense to suit but does not deprive the court of subject matter jurisdiction, and that the defendant did not waive its complaint of no notice by delaying to raise it.  Accordingly, we modify the judgment of the court of appeals and affirm.[4]

I

Donna Loutzenhiser=s son Stephen was born with a severely deformed left hand which she claims was caused by a prenatal diagnostic test performed by a governmental unit C the University of Texas Southwestern Medical Center at Dallas[5] C more than six months earlier in her pregnancy.  The test, a chorionic villus sampling (CVS), involves inserting a needle through the uterus into the chorion C the section of the placenta providing the fetus with nutrients via its blood supply C and removing a part of it for chromosomal testing.  Limb reduction is a known risk of this procedure, particularly if performed early in a pregnancy.  The first attempt, on January 21, 1992, did not collect the proper tissue, but a second procedure performed a week later did.  Stephen was born on August 15, and seventeen days later, his father notified the Medical Center of Stephen=s birth defect.  In December 1994, Loutzenhiser and two other mothers, individually and on behalf of their respective children, sued the Medical Center alleging that its CVS testing caused birth defects.

In August 1996, one year and eight months after suit was filed, the Medical Center moved for summary judgment in part on the ground that its immunity from suit had not been waived under the Tort Claims Act because the plaintiffs had failed to give the six-month notice required by section 101.101(a), and therefore the court lacked jurisdiction over the case.  Several months later, the trial court granted the motion as to all of the plaintiffs except Stephen.[6]  At the time, the Medical Center could not appeal a refusal to dismiss a suit for want of jurisdiction based on sovereign immunity,[7] but two individual defendants could and did take an interlocutory appeal from the denial of their motion for summary judgment based on immunity.[8]  That appeal ended in April 2001.[9]  In July, the trial court set a trial date in February 2002.

In December 2001, seven weeks before trial and seven years after suit was filed, the Medical Center filed a plea to the jurisdiction, asserting as it had in its earlier motion for summary judgment that the court lacked jurisdiction because Loutzenhiser had not given notice as required by section 101.101(a).  The Medical Center also asserted that Loutzenhiser had not pleaded a claim involving the use of tangible personal property within the Tort Claims Act=s waiver of immunity.[10]  The Medical Center cited new authority but also candidly acknowledged that it had filed the plea so that it could take an interlocutory appeal from an adverse ruling C a right created in 1997[11] that it did not have when its motion for summary judgment was denied C further delaying trial of the case.  The trial court treated the notice argument as a motion to reconsider its denial of the motion for summary judgment, which it denied, and treated the no-use-of-property argument as a special exception, which it sustained.  Alternatively, the court held that the Medical Center had waived both arguments by waiting until the eve of trial to raise them and ordered that the plea be struck.

As promised, the Medical Center appealed.[12]  The court of appeals affirmed, holding as it had previously that the lack of notice required by section 101.101(a) does not deprive a court of jurisdiction over a claim.[13]  The court of appeals also held that the trial court had properly treated its no-use-of-property argument as a special exception and did not address the Medical Center=s contention that it had not waived its notice argument by delay.[14]

The Medical Center filed a petition for review limited to the notice and waiver issues, which we granted.[15]  We have jurisdiction over this interlocutory appeal[16] because the courts of appeals are in conflict over whether a court has jurisdiction over a claim, notice of which has not been given as required by section 101.101(a).[17]

II

We first consider whether Loutzenhiser gave notice as required by section 101.101(a).

The Medical Center argues that Loutzenhiser was required to notify it of Stephen=s claim that he had been injured by the CVS within six months of the date the procedure was performed, while Stephen was still in utero.  Loutzenhiser argues that to require notice on behalf of a fetus would violate constitutional guarantees of due process, equal protection, and open courts.  Loutzenhiser, according to her brief, Atakes no position with respect to the rights of minors in general regarding the notice provisions of the [Tort Claims] Act,@ and thus we limit our consideration to the effect of the notice requirement on the rights of the person injured in utero.  We need not reach Loutzenhiser=s constitutional arguments because we disagree with the Medical Center=s reading of the statute.

Section 101.101(a) requires Anotice of a claim . . . not later than six months after the day that the incident giving rise to the claim occurred.@[18]  As we have stated, Athe longstanding common law rule [is] that the rights of a fetus [are] contingent on live birth.@[19]  Under this rule, Stephen legally had no claim against the Medical Center before he was born, even if his injury had been manifest when the CVS was performed (it was not).  The Medical Center argues that Athe incident giving rise to the claim@ was the CVS, but the CVS was only an incident C one of two C giving rise to the claim.  The other such incident, and one equally necessary to the existence of the claim, was Stephen=s live birth.  If the notice period ran from the CVS, the statute required notice of a nonexistent claim.  ACourts should not read a statute to create such an absurd result.@[20]  We decline to do so here when there is a reasonable alternative construction of the statutory language.  Because Stephen=s live birth was an incident giving rise to his claim, and one essential to the existence of the claim, we hold that the six-month period for giving notice began when Stephen was born.

The Medical Center argues that this construction of section 101.101 is inconsistent with our decision in Brown v. Schwarts, where we held that limitations on a claim for negligent prenatal treatment began to run when the treatment was completed.[21]  But the controlling statute in Brown was materially different.  There, the statute of limitations prescribed that a claim for negligent medical or health care treatment be brought within two years of the date the treatment was completed A[n]otwithstanding any other law@.[22]  The statute did not require the claim to be in existence when limitations began to run, something that we acknowledged could yield harsh results in certain circumstances.[23]  But the two-year limitations period, even though it  began running when prenatal care was rendered, could not operate to bar the child=s claim before it came into existence because the limitations period was much longer than the gestation period. 

The Medical Center argues that even if the notice period did not begin to run until Stephen was born, it did not receive notice of his claim until more than two years later when Loutzenhiser filed suit.  Loutzenhiser argues that Stephen=s father=s telephone call to the Medical Center provided the required notice, but it clearly did not.  The only evidence of the substance of that call was Stephen=s father=s testimony as follows:

 

I called after he was born to inform them that he had C the situation with his hand C he had no fingers, thinking that they would want to be made aware of that.  The reason that I thought they may want to be made aware of that is because I thought it would be relevant to them, and that I had read in June or July a Newsweek article that said that CVS possibly causes limb reduction C is, I believe, the term that it used.  And since it happened to my son, I thought that they would want to know about it. . . .  [A]nd at that time I was told that it didn=t have anything to do with the test, and they didn=t act interested in finding out about it.  And I said, AWould you like some information for your records?@, and they never followed up on it.

 

Stephen=s father thought the call lasted about five minutes, and he could not recall with whom he spoke.  The most that can fairly be said from his testimony is that the Medical Center received notice from Stephen=s father that Loutzenhiser had had a CVS procedure and that Stephen had been born with a limb reduction.  It is not clear that the Medical Center was told that it had performed the CVS procedure; certainly it was not told the time.  More importantly, the Medical Center had no Anotice of a claim@, as section 101.101(a) requires.  Stephen=s father stated only that he thought Athey would want to be made aware@ of Stephen=s deformity Afor [their] records@.

Loutzenhiser argues that even if the Medical Center did not receive the notice required by section 101.101(a), it had actual notice which, under section 101.101(c), made the notice requirement in section 101.101(a) inapplicable.  But actual notice that an injury has occurred is not enough to satisfy section 101.101(c); as we hold today in another case, a governmental unit must also have Aa subjective awareness that its fault produced or contributed to the claimed injury.@[24]  There is no evidence that before suit was filed the Medical Center was ever subjectively aware, either from Stephen=s father=s telephone call or otherwise, that it was at fault for Stephen=s deformity, as Loutzenhiser eventually alleged.  Stephen=s father=s testimony suggests that the Medical Center had no such subjective awareness.

We therefore conclude that Loutzenhiser was required to give notice under section 101.101(a) and did not do so.

III

The Medical Center argues that notice of a claim under section 101.101(a) is a condition of the waiver of the government=s immunity from suit under the Tort Claims Act.  We have held that a court lacks subject matter jurisdiction over a suit barred by immunity.[25]  Thus, the Medical Center argues, the notice required by section 101.101(a) is jurisdictional.  As noted above, the courts of appeals are divided on whether this notice provision is jurisdictional.[26]

In Dubai Petroleum Co. v. Kazi, we concluded that any inquiry into whether the Legislature intended a particular statutory requirement to be jurisdictional as opposed to mandatory[27] must be conducted in light of Athe longstanding principle that subject-matter jurisdiction is a power that >exists by operation of law only, and cannot be conferred upon any court by consent or waiver=@.[28]  Not only may an issue of subject matter jurisdiction Abe raised for the first time on appeal by the parties or by the court@,[29] a court is obliged to ascertain that subject matter jurisdiction exists regardless of whether the parties have questioned it.[30]  Even after all proceedings have long ago come to an end:

 

a judgment will never be considered final if the court lacked subject‑matter jurisdiction.  AThe classification of a matter as one of [subject‑matter] jurisdiction . . . opens the way to making judgments vulnerable to delayed attack for a variety of irregularities that perhaps better ought to be sealed in a judgment.@[31]

 

The failure of a non-jurisdictional requirement mandated by statute may result in the loss of a claim, but that failure must be timely asserted and compliance can be waived.  The failure of a jurisdictional requirement deprives the court of the power to act (other than to determine that it has no jurisdiction), and ever to have acted, as a matter of law.  Since the Legislature is bound to know the consequences of making a requirement jurisdictional, one must ask, in trying to determine legislative intent, whether the Legislature intended those consequences.  In Dubai, we held that the Legislature did not intend the statutory requirements for suing in Texas for an injury or death that occurred in a foreign country to be jurisdictional and therefore subject to being raised at any time.[32]  We follow the same analysis here.

We start with the statutory language.  The language of section 101.101(a) is clearly mandatory, stating as it does that A[a] governmental unit is entitled to receive notice@.[33]  The Code Construction Act instructs that A>[i]s entitled to= creates or recognizes a right.@[34]  Given this meaning, section 101.101(a) gives governmental units a right to notice on which they can insist, but it does not specify the consequences if that right is denied.  Can a governmental unit waive its right to notice, or is notice essential to a waiver of immunity?  Before recodification of the Tort Claims Act in 1985,[35] which was intended to be Awithout substantive change@,[36] the six-month notice provision required that Aany person making a claim hereunder shall give notice@,[37] thereby indicating that the claimant had a duty to give notice.[38]  But like the recodified version, the former statute did not state the consequences for breach of the duty to notify.  By contrast, according to the conventions of the Code Construction Act, A>[m]ust= creates or recognizes a condition precedent@,[39] at least suggesting that a requirement could be jurisdictional.  The use of Ais entitled to@ rather than Amust@ C which was surely an intentional choice by the codifiers in deciding to abandon Ashall@ C is therefore some indication that the Legislature did not intend notice to be either a condition precedent to waiver of immunity or jurisdictional.

One indicator of legislative intent is a statute=s purpose.[40]  As noted above, the purpose of the notice requirement in section 101.101 is Ato ensure prompt reporting of claims in order to enable governmental units to gather information necessary to guard against unfounded claims, settle claims, and prepare for trial.@[41]  We do not see how this purpose is served by allowing lack of notice to be raised at any time, for the first time on appeal, or even later, long after the litigation has ended.  On the contrary, it appears that if a governmental unit is to avoid litigation to which it should not be subjected because of lack of notice, it should raise the issue as soon as possible.  Moreover, if in a particular case a governmental unit were not prejudiced by lack of notice and chose to waive it, we do not see how the statutory purpose would thereby be impaired.

But the Medical Center argues that it is the right to take an interlocutory appeal from a trial court=s refusal to dismiss the case, not the right to raise lack of notice at any time, that avoids the burden of litigation when immunity from suit has not been waived.  In creating the right of a governmental unit to appeal from the denial of a plea to the jurisdiction, the Legislature clearly assumed that at least some requirements of the Tort Claims Act=s waiver of immunity are jurisdictional, but we find nothing to indicate that the six-month notice requirement was one of them.  Certainly, not all requirements are jurisdictional.  For instance, section 101.102(a), adjacent section 101.101, mandates that A[a] suit under this chapter shall be brought in state court in the county in which the cause of action or a part of the cause of action arises.@[42]  We have previously held in Brown v. Owens that filing suit in the wrong county does not deprive the court of subject matter jurisdiction.[43]  The Medical Center does not challenge our holding in Brown but attempts to distinguish it by arguing that if the failure of a statutory requirement can be cured C in Brown, by transfer of venue C the requirement should not be jurisdictional.  Only if the failure of a statutory requirement cannot be cured C giving notice within six months after the six months has passed C should the requirement be jurisdictional.  While the distinction the Medical Center draws is a salient one, we think it is better applied with the purpose of the requirement in mind.  Although timely notice cannot be given after the stated time for it has passed, prejudice from lack of notice may be cured or may never arise at all.  While the government need not show prejudice to obtain dismissal for want of notice, if it chooses to try a case to judgment without complaining of a lack of notice, it suffers no impairment of right that would entitle it to complain of no notice for the first time on appeal.  In this regard, lack of notice should no more be jurisdictional than improper venue.  Thus, even using the curable/incurable distinction, we cannot tell that the Legislature intended a ruling on notice to be subject to interlocutory appeal when a ruling on venue is not.

The Medical Center argues that notice should be jurisdictional, even though venue is not, because notice implicates substantive rights and venue does not.  We are not convinced of the premise.  The Legislature itself included both the notice and venue provisions in a subchapter entitled AProcedures@, along with provisions relating to the legal representation of governmental units, evidence of insurance coverage, settlements, payment and collection of judgments, and other seemingly non-substantive matters.[44]  Although the Code Construction Act cautions that A[t]he heading of a . . . subchapter . . . does not limit or expand the meaning of a statute@,[45] the heading gives some indication of the Legislature=s intent to group what it considered to be procedural matters together.

The Medical Center argues that we have construed provisions similar to the notice requirement in section 101.101(a) to be jurisdictional.  But the three cases cited by the Medical Center all involve the failure to exhaust administrative remedies.[46]  In Essenburg v. Dallas County, we said that a Afailure to exhaust administrative remedies may deprive courts of subject matter jurisdiction in the dispute . . . because the Legislature in conferring jurisdiction upon an agency expresses its will to have the agency resolve disputed issues of fact and policy.@[47]  Indeed, an Aexhaustion requirement seeks to assure that the appropriate body adjudicates the dispute C  the hallmark of a jurisdictional statute.@[48]  By contrast, we held that a statute providing that A>a person may not sue on a claim against a county unless the person has presented the claim to the commissioners= court and the commissioners= court has neglected or refused to pay all or part of the claim=@ was not jurisdictional.[49]  This presentment requirement, we said, was to promote settlement, not to define subject matter jurisdiction.[50]  A requirement of presentment merely gives a governmental unit an opportunity to decide for itself whether to pay a claim.  A requirement of exhaustion of remedies ensures a decision on the merits by the authority designated to make it.

The court of appeals cited Essenberg in support of its conclusion that the notice requirement in section 101.101(a) is not jurisdictional.  The Medical Center argues that Essenberg is irrelevant because the statute there was not an integral part of a statute waiving immunity as section 101.101(a) is, and because a presentment requirement is curable by abatement.  Neither argument is persuasive.  Section 101.101(a) is certainly integral to the Tort Claims Act, but so is section 101.102(a), the venue requirement, yet it is not jurisdictional.  And though a failure to present a claim before suit is filed is curable while a failure to give notice of a claim within six months is not, we do not think, for the reasons we have explained, that the distinction can be used to determine whether the notice provision is jurisdictional.

Finally, the Medical Center argues that to hold that the six-month notice provision is not jurisdictional improperly expands the Tort Claims Act=s waiver of immunity.  The Medical Center argues that there should be a presumption of non-waiver like that reflected in the Code Construction Act, which states that Aa statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language.@[51]  Since this Court decided Hosner v. DeYoung in 1847, the Medical Center continues, the Court has held that the State Acan[not] be sued in her own courts without her consent, and then only in the manner indicated by that consent.@[52]  The notice requirement in section 101.101(a), the Medical Center insists, is part of the manner in which the Tort Claims Act waives immunity.  While we certainly do not disagree with the general principles the Medical Center asserts or recede from so venerable an authority as Hosner, we do not find them dispositive of whether the Legislature intended notice to be a condition of its waiver of immunity, for all of the reasons we have explained.

Thus, we conclude that the failure to give notice of a claim as required by section 101.101 does not deprive a court of subject matter jurisdiction over an action on the claim.  We note that in other jurisdictions when notice or limitations provisions pertaining to suits against the government are considered jurisdictional, the statutory language is much clearer than section 101.101.[53]  We disapprove the decisions of the courts of appeals to the contrary.[54]  The notice provision is not a condition of the Tort Claims Act=s waiver of immunity as other provisions are.  We emphasize that the requirement of notice is no less mandatory, and that a lack of notice bars any action under the Act.  But it does not deprive the court of subject matter jurisdiction.

IV

The Medical Center argues that it did not waive its contention that the lack of notice required by section 101.101(a) barred Loutzenhiser=s claim by raising it seven weeks before trial.  We agree.  For one thing, the Medical Center raised the issue by motion for summary judgment much earlier in the litigation, and it was entitled to seek reconsideration based on subsequent authority.  Even if its motive was purely to exercise its newly-created right to take an interlocutory appeal from an adverse ruling on the issues raised by its plea to the jurisdiction, thereby delaying the trial, there was nothing to prevent it from doing so.  The trial court was understandably irked that resolution of a case already delayed by one interlocutory appeal would be further delayed by another, but any fault was the Legislature=s, not the Medical Center=s.  The Medical Center had a valid argument that it had not received the notice required by section 101.101(a), as we have now held, and it was entitled to raise it.  Treating the Medical Center=s plea as a motion to reconsider the motion for summary judgment, the trial court should have granted summary judgment.

*          *          *          *          *

As we have said, the trial court=s order contained three rulings: it refused to dismiss the action based on the Medical Center=s arguments of no notice and no alleged use of property, and alternatively struck the plea as untimely.  The court of appeals simply Aaffirm[ed] the trial court=s judgment.@[55]  It should have affirmed only that portion of the order refusing to dismiss the case based on the Medical Center=s argument of no alleged use of property.[56]  It did not reach, and therefore could not affirm, the trial court=s alternative ruling striking the plea.  And having correctly concluded that the Medical Center=s notice argument was not jurisdictional, the court of appeals did not have interlocutory appellate jurisdiction to affirm that portion of the trial court=s order.[57]  Accordingly, we modify the judgment of the court of appeals to affirm only that portion of the trial court=s order refusing to dismiss the case because of inadequate allegations of use of property.  As modified, the judgment is affirmed.

 

                                                                            

Nathan L. Hecht

Justice

Opinion delivered: July 9, 2004