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.