Methodist Hospital Dodging FOIA Request

The leader of Vaccine Mandates is Using a Shell Company to Hide its Assets

Houston Methodist Hospital, a self-declared non-profit hospital with one of the most prolific fund-raising efforts in Houston, claims it does not receive enough in donations to require it to disclose its financial statements. The hospital responded to my FOIA request first by completely ignoring me then by requesting summary judgement (dismissal) from the courts.

A hearing is set for Monday at 11:00am at the Harris County Courthouse to determine whether the case will move forward. Here is the response we filed to the court last night:

CAUSE NO. 2022-02976

MARY T. BOWDEN, M.D. AND DOLCEFINO COMMUNICATIONS, LLC D/B/A DOLCEFINO CONSULTING v. METHODIST HOSPITAL AND TMH PHYSICIAN ORGANIZATION

IN THE DISTRICT COURT OF HARRIS COUNTY, TEXAS

234th JUDICIAL DISTRICT

PLAINTIFFS’ RESPONSE TO DEFENDANTS TRADITIONAL MOTION FOR SUMMARY JUDGMENT

Introduction

This Court should deny Defendants (collectively, “Houston Methodist”)’s Motion for Summary Judgment. Houston Methodist has jumped the gun by moving for summary judgment before Plaintiffs have had a meaningful opportunity to conduct discovery. Houston Methodist wants this Court and Plaintiffs to accept on blind faith that Houston Methodist does not “solicit” or “receive” donations from members of the public, exempting it from the transparency and disclosure requirements of Tex. Bus. Org. Code § 22.353(b).

In fact, Houston Methodist’s position is not supported by the record. Houston Methodist’s own public statements and press releases refute Houston Methodist’s argument. For example, as recently as April 2022, Houston Methodist boasted on its website that it had “received an anonymous gift for $50 million to support a variety of programs and services across the hospital system.” Houston Methodist also clarifies on its website that the Houston Methodist Hospital Foundation (the “Foundation”) “accepts all gifts on behalf of Houston Methodist for the benefit of the organization.” In other words, as Houston Methodist makes clear, the Foundation is merely an agent of Houston Methodist to receive gifts for the hospital system’s benefit. Because of this admitted agency relationship, payments to the Foundation are payments to Houston Methodist under Texas law. Metro. Ins. & Annuity Co. v. Peachtree Settlement Funding, LLC, 500 S.W.3d 5, 17 (Tex. App.—Houston [1 st Dist], 2016, no pet.). Houston Methodist cannot avoid compliance with Tex. Bus. Org. Code § 22.353(b) by pointing to the existence of this captive organization.

Houston Methodist is one of the most prolific fundraisers in Houston and both solicits and receives donations from members of the public. But even if this Court were inclined to disregard Houston Methodist’s own statements on its website, Plaintiffs – at the very minimum – are entitled to conduct discovery into the facts. Plaintiffs should certainly have an opportunity to depose Edward L. Tyrell, who submitted a self-serving affidavit which appears to contradict Houston Methodist’s prior public statements.

Houston Methodist is desperate to avoid fair inquiry into its activities as a charitable organization, which is why it has taken the unusual step of moving for summary judgment while simultaneously seeking protection from discovery. Plaintiffs should not have to accept Houston Methodist’s arguments on faith. Houston Methodist has not met the heavy burden of negating any genuine issue of material fact. This Court should deny the Motion and permit discovery to proceed.

Objections to Inadmissible Evidence

As a threshold matter, Houston Methodist has no admissible evidence in support of its

position. Plaintiffs object because Houston Methodist’s “evidence” is hearsay.

The affidavit of Edward L. Tyrell exemplifies these deficiencies.1

Mr. Tyrell’s affidavit does not include any facts indicating that he has personal knowledge. Most glaringly, the affidavit does not even identify Mr. Tyrell’s job title or role at Houston Methodist or how he came by the alleged “knowledge” he claims to have. Without facts showing personal knowledge, the Tyrell affidavit is inadmissible. See, e.g., Kerlin v. Arias, 274 S.W. 3d 666, 668 (Tex. 2008) (“An affidavit showing no basis for personal knowledge is legally insufficient”).

Even if the Court were to overlook this obvious foundational problem, Mr. Tyrell provides nothing more than conclusory statements about Houston Methodist. He does not attempt to explain the role of the Foundation or Houston Methodist’s public fundraising statements.

His affidavit instead recites legal boilerplate. Anderson v. Snider, 808 S.W.2d 54, 55 (Tex.1991). For this reason, also, the affidavit is inadmissible and should be struck. 801 Nolana, Inc. v. RTC Mortg. Trust, 944 S.W.2d 751, 754 (Tex.App.—Corpus Christi 1997, writ denied),

Legal Argument

A. Legal Standard: Genuine issues of material fact preclude summary judgment.

Houston Methodist claims that it is entitled to summary judgment based on the exceptions contained in Tex. Bus. Org. Code §§ 22.355. Houston Methodist bears the burden of proving that there are no genuine issues of material fact regarding those exceptions and that Houston Methodist should receive judgment as a matter of law. See ; ; Tex. R. Civ. P. 166a(c) Draughon v. Johnson, 631 S.W.3d 81, 88 (Tex. 2021) Eagle Oil & Gas Co. v. TRO-X, L.P., 619 S.W.3d 699, 705 (Tex. 2021); ; Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 593 (Tex. 2017) Long Distance Int'l, Inc. v. Telefonos de Mex., S.A. de C.V., 49 S.W.3d 347, 350–51 (Tex. 2001) For the reasons discussed below, Houston Methodist cannot meet this burden.

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1 Defendant’s Motion for Traditional Summary Judgment, Attachment 1.

2 Id. Attachment 1 at para. 2.

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B. Houston Methodist is subject to the requirements of Tex. Bus. Org. Code § 22.353(b).

The Texas Business Organizations Code imposes transparency and disclosure requirements on charitable organizations in Texas. “A corporation shall maintain current and accurate financial records with complete entries as to each financial transaction of the corporation, including income and expenditures, in accordance with generally accepted accounting principles.” Tex. Bus. Org. Code § 22.352. “A corporation shall keep records, books, and annual reports of the corporation's financial activity at the corporation's registered or principal office in this state for at least three years after the close of the fiscal year.” Tex. Bus. Org. Code § 22.353(a). “The corporation shall make the records, books, and reports available to the public for inspection and copying at the corporation's registered or principal office during regular business hours. The corporation may charge a reasonable fee for preparing a copy of a record or report.” Tex. Bus. Org. Code § 22.353(b). A violation of this section is a Class B Misdemeanor. Tex. Bus. Org. Code § 22.354.

Houston Methodist admits it is subject to these sections of the Business Organizations Code. However, Houston Methodist contends that two exceptions to these requirements apply: namely, the provisions that exempt (1) a “corporation that solicits funds only from members of the corporation” and (2) a “corporation that does not intend to solicit and receive and does not actually raise or receive during a fiscal year contributions in an amount exceeding $10,000 from a source other than its own membership.” Tex. Bus. Org. Code §§ 22.355(1) and 22.355(2). Houston Methodist is wrong for the reasons set forth below. Neither exception applies to its operations.

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3 Defendants’ Motion for Summary Judgment, p. 3 (claiming Defendants are “exempt” from disclosures under § 22.353.

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C. Houston Methodist admits on its website that it solicits donations from the public.

Houston Methodist admits that it solicits donations from the public but argues that it funnels those donations through a separate foundation – i.e., the Houston Methodist Hospital Foundation (the “Foundation”) – and that this separate entity insulates Methodist from the obligation to comply with Tex. Bus. Org. Code § 22.353(b).4

Houston Methodist’s use of that Foundation is immaterial to its legal duties under Section 22.353(b). First, Houston Methodist undoubtedly solicits donations from the public. The Houston Methodist website states that gifts to the Foundation are “for the benefit of” Methodist. This is explicit from the donations section of the Methodist website:

The Houston Methodist Hospital Foundation was established to ensure that Houston Methodist has the support needed to achieve its vision for excellence in research, education and patient care. Governed by a board of directors, the foundation accepts all gifts on behalf of Houston Methodist for the benefit of the organization. The foundation helps to accomplish institutional priorities through fundraising, gift management and stewardship.

In other words, Houston Methodist has made the Foundation its agent for purposes of collecting and receiving donations – even though Methodist actively solicits those donations in its own name. Under Texas law, “[p]ayment to an authorized agent of the obligee constitutes payment to the principal.” Metro. Ins. & Annuity Co. v. Peachtree Settlement Funding, LLC, 500 S.W.3d 5, 17 (Tex. App.—Houston [1 st Dist], 2016, no pet.).

Houston Methodist has also issued press releases touting large donations that it has received from members of the public. In those press releases, Methodist does not mention the Foundation but rather characterizes those donations as direct contributions to Methodist. For example, as recently as April 27, 2022, Houston Methodist announced that it had “received ananonymous gift for $50 million to support a variety of programs and services across the hospital system.”

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4 Id.

5 Exhibit 1, printout of webpage at https:// (“everything we do at Houston Methodist…”). www.houstonmethodist.org/giving last visited on May 17, 2022

6 Id.; Exhibit 2, Certificate of Assumed Name for “Houston Methodist” filed by The Methodist Hospital. example, as recently as April 27, 2022, Houston Methodist announced that it had “received an anonymous gift for $50 million to support a variety of programs and services across the hospital system.”

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In the press release, Houston Methodist’s CEO, Dr. Marc Boom, stated that “‘Houston Methodist is honored to have the support of generous donors who entrust us to continue building on our legacy of leading medicine.’” Houston Methodist and Dr. Boom identified multiple “support areas” for which the gift was “earmarked,” including “Physician Scholars, neuroprosthetics, orthopedics and sports medicine, gastrointestinal medicine, immunology and current and future priorities in other health care specialties.”

The message of Houston Methodist’s press release is clear: the $50 million gift went directly to Houston Methodist to help with medical research and services that Houston Methodist provides as part of its operations. Even if that gift happened to pass through the Foundation, the ultimate recipient was Houston Methodist and the gift was “earmarked” for operations in which Houston Methodist, not the Foundation, engages.

The Methodist Hospital Foundation’s messaging conveys the same message. The 2021 Annual Report for The Methodist Hospital Foundation gives preeminence to the CEO of Methodist Hospital, not the CEO of the Foundation. Articles regarding donations tout only the benefits to the Defendants and their employees and do not cite a benefit to the Foundation. These statements in the Foundation’s report make it clear that donations are made to the hospital and are directed to the Foundation as the Hospital’s agent.

https://www.houstonmethodist.org/newsroom/houston-methodist-receivesanonymous-gift-for-50-million-to-support-current-and-future-health-care/

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7 Exhibit 3, printout of webpage at https://www.houstonmethodist.org/newsroom/houston-methodist-receives-anonymous-gift-for-50-million-to-support-current-and-future-health-care/. See also Exhibit 6 https://givingforms.houstonmethodist.org/generalgivingform (“Houston Methodist Hospital Foundation accepts each and every gift on behalf of the Houston Methodist system.”).

8https://issuu.com/instituteforacademicmedicine/docs/hm_foundation_annual_report_2021, 2021 Annual Report ofThe Methodist Hospital Foundation, pp. 2-3. Susan Coulter is listed on p. 60 as the CEO of the Foundation. A link to the Annual Report may be found at https://www.houstonmethodist.org/giving/publications/houston-methodist-foundation-magazine/. The document at this link is not downloadable.

9 Id. at pp. 30 ("They decided to make a 2021 gift to Houston Methodist …”), 36 (“In collaboration with Marvy and Elaine [Finger], Houston Methodist also established the Marvy Finger Family Internship Program at Houston

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The Foundation is purely an agent of Houston Methodist and passes donations along to Houston Methodist as the ultimate recipient. For this reason, the exception found in Subsection (2) does not apply. Methodist intends to solicit and receive donations from the public, even if it uses the Foundation to collect those donations. See (exemption only applies to a “corporation that does not intend to solicit and receive and does not actually raise or receive during a fiscal year contributions in an amount exceeding $10,000 from a source other than its own membership”). Tex. Bus. Org. Code §§ 355(2).

D. The Foundation is not a member of Houston Methodist – and Houston Methodist does not claim otherwise.

Second, the Foundation is not a “member” of Methodist and Methodist certainly does not “solicit[] donations” “only” from the Foundation. Tex. Bus. Org. Code §§ 355(1). Quite the contrary. As shown above, Methodist solicits donations from the public and boasts about the massive donations it receives. Methodist is one of the most prolific fundraisers in Houston and solicits donations large and small, from private citizens, corporations, and charitable foundations. Methodist brags about and publicizes how it uses those donations – all as part of a strategy to get more donations. Methodist undoubtedly solicits donations from the public, even if Methodist funnels those donations through the Foundation. The Foundation is an agent of Methodist, not the other way around. The exception provided by Tex. Bus. Org. Code §§ 355(1) does not apply.

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Methodist”), 40-41 (“the Pate family was keen on supporting a new initiative” at Houston Methodist, The Woodlands), 42 (“their recent estate gift to their favorite hospital”), 44

10 Exhibit 4, Certificate of Merger and Restated and Amended Articles of Formation for The Methodist Hospital, p. 19 of 19, Article XI, declaring that The Methodist Hospital does not have members.

11 Exhibits 1 and 2

12 Exhibit 5, printout of webpage at , inviting the public to make donations in honor or Methodist employees.https://www.houstonmethodist.org/giving/ways-to-give/giving-societies/gifts-of-gratitude-grateful-patient-program

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E. Houston Methodist’s reliance on Knapp Medical Center, Inc. v. Grass is misplaced.

Houston Methodist relies primarily on Knapp Medical Center, Inc. v. Grass in support of their position that the exemption Section 355(2) applies. 443 S.W.3d 182 (Tex. App. –Corpus Christi, 2013, pet. denied). Knapp is not applicable. In Knapp, the question was whether the foundation was a sham entity and consequently the court of appeals analyzed the issue under the difficult standard of piercing a corporate veil. 443 S.W.3d at 189. Here, Plaintiffs do not contend that the Foundation is a sham entity or that this Court must pierce any corporate veil. Plaintiffs rather contend (a) that the Foundation is an agent of Houston Methodist that collects donations on Houston Methodist’s behalf; and (b) that Houston Methodist directly solicits donations as shown by its website. See Peachtree Settlement Funding, LLC, 500 S.W.3d at 17. Neither of these issues was presented in Knapp; indeed, the Knapp court never addressed the question of agency at all.

Texas App. Prac. & Educ. Res. Ctr. v. Patterson is equally inapplicable. 902 S.W.2d 686, 688 (Tex. App—Austin 1995, writ denied). Patterson addressed whether government grants qualified as “contributions” under the Texas Bus. Org. Code. The case did not consider whether a non-profit entity can use an agent to collect funds donated to that entity. Therefore, neither Peachtree Settlement Funding nor Patterson instruct the Court how to rule on the facts and evidence present here.

Further, neither Knapp, Patterson, or Defendants’ Motion for Traditional Summary Judgement address whether either of Defendants “raise” contributions from persons other than their members. Under ordinary rules of statutory construction, Defendants do not have to received funds in order to have raised those funds because such a construction would render the provision “raise…contributions” as surplusage. Tex. Gov’t Code § 311.021(2); TIC Energy and Chemical, Inc. v. Martin, 498 S.W.3d 68, 74 (Tex. 2016) (“we consider the statute as a whole, giving effect to each provision so that none is rendered meaningless or mere surplusage”). Defendants play the central role in soliciting contributions, touting their accomplishments as a key reason donors should make such contributions and being the intended beneficiaries for those contribution. Therefore, a fact issue exists regarding the dollar amount of contributions that Defendants “raise” during a given fiscal year and summary judgement should be denied on that basis.

E. This Court should – at the very least – continue the summary judgment hearing so discovery can take place.

If the Court is not inclined to deny summary judgment outright, the Court, at the very least, should continue the summary judgment hearing and permit Plaintiffs’ conduct discovery related to Houston Methodist’s fundraising activities. As shown above, there is ample evidence that Houston Methodist “solicits” and “receives” donations from the public and uses the Foundation as its agent for fundraising purposes. Yet Houston Methodist has produced minimal documents and has simultaneously filed a motion for protection to resist discovery. At a minimum, Plaintiffs are entitled to conduct discovery into the issues raised by Houston Methodist in its motion.

13 Conclusion

Houston Methodist is trying to win this case without any discovery and by ignoring public statements on its website that refute its position. That shows desperation. Houston Methodist does not want Plaintiffs to find out the nature of its fundraising activities or the exact role of the Foundation in raising money for the benefit of the hospital system. Fact issues require denial of Houston Methodist’s Motion for Summary Judgment. And, at the very least, Plaintiffs should be able to challenge Houston Methodist’s conclusory assertions through discovery. This Court should deny the motion.

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13 Exhibit 7, Affidavit of Michael Barnhart

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Respectfully submitted,

MITBY PACHOLDER JOHNSON PLLC

/s/ Steven J. Mitby

Steven J. Mitby

State Bar No.24037123

smitby@mitbylaw.com

Michael K. Barnhart

State Bar No. 24040472

Mbarnhart@mitbylaw.com

9450 Pinecroft Avenue

Post Office Box 7280

Spring, Texas 77387

(713) 234-1446 CERTIFICATE OF SERVICE

I certify that a true and correct copy of this document has been filed with the Court and served on all counsel of record via the Court’s electronic filing system on June 20, 2022.

/s/ Steven J. Mitby

Steven J. Mitby