Hartford Insurance Company v. John Crain, No. 03-07-00202-CV (Tex.App. - Austin, Feb. 8, 2008)(Opinion by Justice Henson ) (TWCC judicial review suit, applicable deadline, timeliness) (Before Chief Justice Law, Justices Waldrop and Henson)
Hartford Insurance Company v. John Crain
Appeal from 33rd District Court of Blanco County
FROM THE DISTRICT COURT OF BLANCO COUNTY, 33RD JUDICIAL DISTRICT
NO. CV05952, HONORABLE V. MURRAY JORDAN, JUDGE PRESIDING
O P I N I O N
Hartford Insurance Company appeals from the dismissal of its suit for judicial review of a final decision by the Texas Workers' Compensation Commission (TWCC) appeals panel. (1) Hartford appealed the appeals-panel decision in district court within 40 days after the date the appeals panel filed its decision with the TWCC. Crain subsequently filed a plea to the jurisdiction, arguing that the appeal was untimely because Hartford failed to meet the 30-day deadline for seeking judicial review of a contested case under the Texas Administrative Procedure Act (APA). See Tex. Gov't Code Ann. § 2001.176 (West 2000).
After a hearing, the trial court granted Crain's plea to the jurisdiction. Because we hold that the 40-day deadline provided by section 410.252 of the labor code applies to Hartford's petition for judicial review, we will reverse the trial court's order granting the plea to the jurisdiction and remand for further proceedings consistent with this opinion. See Tex. Lab. Code Ann. § 410.252 (West 2006).
BACKGROUND
The administrative dispute that gave rise to this case involves the necessity of spinal surgery to treat an injury sustained by Crain. The parties agree that Crain's injury is a compensable workers' compensation injury.
Within the workers' compensation system, when a dispute arises over the medical necessity of a health care service, the medical necessity is reviewed by an independent review organization (IRO). Tex. Lab. Code Ann. § 413.031(d), (e) (West 2006 & Supp. 2007). If the dispute remains unresolved after the IRO's review, a party to the dispute has the opportunity to appeal the IRO's decision. Id. § 413.031(k), (l). In all medical-necessity disputes other than those involving spinal surgery, the party may appeal to the State Office of Administrative Hearings, where a hearing is conducted in the manner provided for in the APA. Id. § 413.031(k). However, a party to a medical-necessity dispute regarding spinal surgery that remains unresolved after the IRO's review must follow the dispute-resolution procedures provided by chapter 410 of the labor code. Id. § 413.031(l).
Chapter 410 of the labor code provides a dispute-resolution process that includes a contested-case hearing before a TWCC hearing officer and the opportunity for an appeal of the hearing officer's findings to the TWCC appeals panel. Id. §§ 410.151, 410.202 (West 2006). If a party is dissatisfied with the appeals panel's decision, it may request judicial review by the district court. Id. § 410.251 (West 2006).
On July 27, 2004, an IRO concluded that spinal surgery was reasonable and medically necessary to treat Crain's injury. Hartford timely appealed the IRO's decision and requested a contested-case hearing under chapter 410 of the labor code. After the hearing, a TWCC hearing officer issued a decision and order affirming the IRO decision. Hartford then appealed the hearing officer's findings to the TWCC appeals panel.
On January 18, 2005, the TWCC provided notice to Hartford that the appeals panel had not issued a written decision on Hartford's appeal within 30 days after the response was filed with the TWCC and that therefore the hearing officer's decision and order were final. The notice specifically stated that the hearing officer's decision and order became final on January 18, 2005, and that if the parties were not satisfied with the decision, they could file suit for judicial review of the appeals panel's decision in district court no later than the 40th day after that date. Hartford filed its petition for judicial review within the filing period given on the notice from the TWCC. (2)
Crain filed a plea to the jurisdiction, arguing that Hartford's petition should have been filed within 30 days after the appeals-panel decision was filed with the TWCC, pursuant to the APA. See Tex. Gov't Code Ann. § 2001.176. Hartford argued that petitions for judicial review of appeals-panel decisions involving spinal-surgery disputes are not governed by the 30-day deadline of the APA, and instead must be filed within 40 days after the appeals-panel decision is filed with the TWCC, pursuant to section 410.252 of the labor code. The trial court granted Crain's plea to the jurisdiction, and this appeal followed.
STANDARD OF REVIEW
Whether a court has subject-matter jurisdiction is a question of law reviewed de novo. Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).
The facts of this case are undisputed and the question of whether the trial court had subject-matter jurisdiction turns solely on an issue of statutory construction. Statutory construction is a legal question that we review de novo, ascertaining and giving effect to the legislature's intent as expressed by the plain and common meaning of the statute's words. State v. Schumake, 199 S.W.3d 279, 284 (Tex. 2006). We must read the statute as a whole, rather than just isolated portions, giving meaning to the language that is consistent with other provisions in the statute. Dallas County Cmty. Coll. Dist. v. Bolton, 185 S.W.3d 868, 872-73 (Tex. 2005); Texas Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 642 (Tex. 2004).
DISCUSSION
This case turns entirely on a determination of whether a petition for judicial review of medical-necessity disputes regarding spinal surgery must be filed in accordance with the 40-day deadline provided in section 410.252 of the labor code or the 30-day deadline provided by the APA.
The parties agree that dispute resolution involving the medical necessity of spinal surgery is governed by chapter 410 of the labor code. Within chapter 410, subchapter F is entitled, "Judicial Review - General Provisions." Subchapter F contains section 410.252, which states, "A party may seek judicial review by filing suit not later than the 40th day after the date on which the decision of the appeals panel was filed with the division." Hartford argues that, based on section 410.252, the 40-day deadline applies in this case and therefore Hartford's petition for judicial review was timely filed.
However, subchapter F also contains section 410.255, which states, "For all issues other than those covered under Section 410.301(a), judicial review shall be conducted in the manner provided for judicial review of a contested case under Subchapter G, Chapter 2001, Government Code." Tex. Lab. Code Ann. § 410.255 (West 2006). This reference to the government code encompasses the judicial-review provisions of the APA. See Tex. Gov't Code §§ 2001.171-.178 (West 2000). The exclusionary language of section 410.255 requires us to look to section 410.301(a), located in subchapter G, which states, "Judicial review of a final decision of the appeals panel regarding compensability or eligibility for or the amount of income or death benefits shall be conducted as provided by this subchapter." Tex. Lab. Code Ann. § 410.301(a) (West 2006). Reading these two provisions together, it becomes clear that appeals-panel decisions regarding compensability or income or death benefits are reviewed as required by subchapter G of chapter 410, while all other decisions are reviewed as provided by the APA.
Crain argues that petitions for judicial review of appeals-panel decisions regarding issues other than compensability or income or death benefits must be filed within the 30-day deadline set forth in the APA. See Tex. Gov't Code Ann. § 2001.176(a) ("A person initiates judicial review in a contested case by filing a petition not later than the 30th day after the day on which the decision that is the subject of the complaint is final and appealable."). Crain further argues that a spinal-surgery dispute does not constitute an issue regarding compensability or income or death benefits, making the decision in this case subject to the 30-day deadline.
Hartford, while contending that a spinal-surgery dispute affects compensability or income or death benefits, asserts that the 30-day deadline created by the APA is inapplicable, regardless of whether judicial review of a spinal-surgery dispute is to be conducted under the APA or subchapter G of chapter 410. Hartford argues that the 40-day deadline provided by section 410.252 applies to all appeals-panel decisions, and that section 410.255, which provides that judicial review should be conducted under the APA, simply refers to the manner in which judicial review is to be conducted, rather than the relevant deadlines. In light of the traditional statutory-construction principle that more specific statutes control over those that are more general, we agree. See Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 901 (Tex. 2000).
Subchapter F of chapter 410 is titled "Judicial Review - General Provisions," while subchapter G is titled "Judicial Review of Issues Regarding Compensability or Income or Death Benefits." Section 410.252 specifically states that a party has 40 days to file suit once an appeals-panel decision has been filed. There is no mention in section 410.252--which is contained in the general provisions of subchapter F--that the 40-day deadline is limited to those decisions that are reviewed under subchapter G. Three provisions later, section 410.255 states that "judicial review shall be conducted in the manner provided for judicial review of a contested case" under the APA (emphasis added). The APA sets forth general procedures for administrative contested cases, including the applicable standard of review and the requirement that the review be conducted without a jury. See Tex. Gov't Code Ann. §§ 2001.171-.178 (West 2000). Because section 410.252 of the labor code specifically creates a deadline applicable to the judicial review of appeals-panel decisions, it controls over the more general provision of section 410.255, which merely provides that judicial review of certain appeals-panel decisions shall be conducted in the manner provided for judicial review under the APA. We read section 410.255's requirement that review of appeals-panel decisions be conducted "in the manner provided for judicial review" under the APA as relating to matters such as the standard of review and the lack of a jury trial, rather than the deadline for filing a petition.
Furthermore, the placement of 410.252 in subchapter F, under "Judicial Review - General Provisions," is further evidence that the legislature intended the 40-day deadline to apply to all appeals-panel decisions. If the legislature intended the 40-day deadline to apply solely to appeals panel decisions regarding compensability or income or death benefits, it could easily have included the deadline provision under subchapter G, which is titled, "Judicial Review of Issues Regarding Compensability or Income or Death Benefits." In construing a statute, we must ascertain the legislative intent by looking to the entire act, including the caption and body. Trawalter v. Schaefer, 179 S.W.2d 765, 767 (Tex. 1944).
Our interpretation of chapter 410 of the labor code is consistent with the language of the notice sent to Hartford by the TWCC, which advises parties that they have 40 days from the date the decision is filed with the TWCC to file a petition for judicial review. While the record does not conclusively establish whether the TWCC has taken an official position on this issue, the language of the notice suggests that the TWCC interprets the labor code to provide a 40-day deadline for filing a petition in cases such as Crain's. An agency's interpretation of its enabling statute is entitled to deference by the courts so long as it is reasonable and does not contradict the plain language of the statute. Public Util. Comm'n v. Gulf States Util. Co., 809 S.W.2d 201, 207 (Tex. 1991).
Crain cites to a number of cases in which courts have noted that the 30-day deadline for filing a petition for review under the APA applies to decisions by the TWCC appeals panel regarding issues other than compensability or income or death benefits. See State Office of Risk Mgmt. v. Herrera, 189 S.W.3d 405, 407 (Tex. App.--Amarillo 2006, no pet.) (stating that "according to all involved," if disputed issues encompass matters of compensability or coverage, "then the 30-day period supposedly applies"); Beaumont Indep. Sch. Dist. v. Parkerson, 105 S.W.3d 761, 763 (Tex. App.--Beaumont 2003, no pet.) (finding that petition for review filed on 39th day was timely because disputed issue fell under 410.301 and therefore 40-day limit applied); Walker v. Argonaut Southwest Ins. Co., 929 S.W.2d 499, 501 (Tex. App.--Texarkana 1996, pet. denied) ("[I]f Walker sought judicial review for any purpose other than the panel's determinations on compensability or eligibility for or the amount of income or death benefits, he was required to file his suit within thirty days of the decision."). We are not persuaded by these cases, however, because any statements to the effect that the APA's 30-day deadline applies to certain decisions by the TWCC appeals panel were dicta; none of the cited cases hold that a trial court lacked subject-matter jurisdiction to review a TWCC appeals-panel decision because a party failed to meet the APA's 30-day deadline. (3)
The parties have exhaustively briefed the issue of whether a spinal-surgery dispute is an issue regarding compensability or income or death benefits, and the resulting standard of review to be applied to appeals-panel decisions regarding spinal surgery. Issues regarding compensability or income or death benefits are to be reviewed using a modified de novo standard, Tex. Lab. Code Ann. § 410.301, while all other issues are reviewed using the substantial evidence rule, Tex. Lab. Code Ann. § 410.255(b). Based on our holding, however, the issues of whether spinal-surgery disputes affect compensability or income or death benefits, and whether such disputes should be reviewed using modified de novo or substantial evidence standards are not relevant to this appeal. Because we hold that the 40-day deadline provided in section 410.252 applies to all appeals-panel decisions, regardless of whether the issue relates to compensability or income or death benefits, the trial court erred in granting Crain's plea to the jurisdiction. (4)
CONCLUSION
Because we have determined that Hartford's petition for judicial review of the appeals panel's decision is governed by the 40-day deadline set forth in section 410.252 of the labor code, we reverse the trial court's order and remand this case for further proceedings consistent with this opinion.
__________________________________________
Diane Henson, Justice
Before Chief Justice Law, Justices Waldrop and Henson
Reversed and Remanded
Filed: February 8, 2008
1. The TWCC was abolished as of September 1, 2005, and its functions were assumed by the division of workers' compensation within the Texas Department of Insurance. Because the majority of the underlying decisions in this case were issued by the TWCC, we will refer to both the TWCC and its successor as the TWCC.
2. The 40th day after January 18, 2005, was Sunday, February 27, 2005. However, title 28, section 102.3(a)(3) of the Texas Administrative Code, which governs the computation of time for TWCC purposes, provides that "unless otherwise specified, if the last day of any period is not a working day, the period is extended to include the next day that is a working day." Therefore, the deadline to appeal the decision was Monday, February 28, 2005. Hartford mailed its petition for judicial review on February 25, 2005, and it was received by the Court on Monday, February 28, 2005.
3. In Morales v. Liberty Mut. Ins. Co., 169 S.W.3d 485 (Tex. App.--El Paso 2005), rev'd, No. 05-0754, 2007 Tex. App. LEXIS 1080 (Tex. Dec. 7, 2007), the court affirmed an order of dismissal for want of jurisdiction because the appellant had filed a petition for judicial review in the employee's county of residence, as required by section 410.252(b) of the labor code, rather than Travis County, the required venue provision of the APA. See Tex. Gov't Code Ann. § 2001.176 (West 2000). However, the supreme court reversed this decision, finding that the appellant's dispute concerned compensability and therefore that the employee's county of residence was not an improper venue. Morales v. Liberty Mut. Ins. Co., No. 05-0754, 2007 Tex. App. LEXIS 1080 (Tex. Dec. 7, 2007). While the supreme court's opinion states in dicta that "[a]n appeal from a decision that does not concern compensability must be filed in Travis County," id. at *6, the holding is that the underlying dispute is an issue regarding compensability and is therefore subject to judicial review under section 410.310. See id. at *15. Like the cases cited by Crain, Morales does not specifically hold that a trial court lacks subject-matter jurisdiction to review a TWCC appeals-panel decision because a party followed the filing deadlines set forth in section 410.252, rather than the APA.
4. We express no opinion regarding the appropriate standard of review for spinal-surgery disputes or whether a spinal-surgery dispute relates to compensability or income or death benefits.
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Saturday, February 16, 2008
Thursday, August 2, 2007
American Protection Ins. Co. v. Leordeanu (Tex.App.- Austin, Aug. 2, 2007)
American Protection Insurance Company vs. Liana Leordeanu, No. 03-06-00529-CV (Tex.App.- Austin, August 2, 2007)(Majority Opinion by Justice Waldrop)(worker's comp)(Before Justices Patterson, Pemberton and Waldrop)
Appeal from 201st District Court of Travis County
Disposition: Reversed and Rendered (with one justice dissenting)
Also see Dissent in American Protection Insurance Company v. Liana Leordeanu
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
NO. D-1-GN-04-001199, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING
OPINION BY JUSTICE WALDROP
American Protection Insurance Company appeals a district court judgment awarding workers' compensation benefits to appellee Liana Leordeanu based on a jury's finding that Leordeanu sustained a compensable injury while in the course and scope of her employment with American Protection's insured, Schering Plough, Inc.
The issue presented involves the application of section 401.011(12)(B) of the Texas Workers' Compensation Act which is known as the "dual purpose rule." This section governs the compensability of injuries sustained by an employee while traveling for both personal and business purposes. See Tex. Lab. Code Ann. § 401.011(12)(B) (West 2006).
American Protection argues that there is no evidence to support the jury's finding that Leordeanu's injury was compensable and that the trial court erred as a matter of law in applying the dual purpose rule of section 401.011(12)(B).
We conclude that there is no evidence to support the jury's finding that Leordeanu sustained a compensable injury under the Texas Workers' Compensation Act. Accordingly, we reverse the judgment of the district court and render judgment that Leordeanu take nothing on her claims for workers' compensation benefits.
At the time of her injury, Leordeanu worked for Schering Plough as a pharmaceutical sales representative. Her job duties required that she spend a significant portion of her time traveling to pharmacies and doctors' offices within a designated area. Schering Plough provided Leordeanu with a car and with a storage unit for storing drug samples and marketing materials. Leordeanu's storage unit was located at a storage facility next door to the apartment complex where she lived. In addition, Leordeanu testified that she maintained a business office in her apartment. From time to time as part of her job, Leordeanu would entertain doctors and their staff at local restaurants and pay for their drinks and food.
On March 21, 2003, Leordeanu met with a doctor and members of his staff for dinner at La Feria Restaurant in south Austin. After dinner and on her way home from the restaurant, Leordeanu was involved in a single car accident and sustained serious injury. According to Leordeanu, she had intended to stop at the storage unit next door to her apartment complex on her way home from the restaurant and then to finish job-related paper work at her home office.
American Protection, the workers' compensation carrier for Schering Plough, denied Leordeanu's claim for compensation for the injuries she sustained in the accident. Leordeanu then submitted the dispute to the Texas Department of Insurance Workers' Compensation Commission Division.
The Division held a contested case hearing and determined that Leordeanu did not have a compensable claim because she was not in the course and scope of employment at the time of the accident. (1) An appeals panel of the Division affirmed.
Leordeanu sought judicial review of the appeals panel's decision. American Protection filed a motion for summary judgment arguing that the dual purpose rule of the Workers' Compensation Act barred Leordeanu's claim for benefits "because there has been no evidence offered that Ms. Leordeanu would not have gone home (that she would have abandoned the trip home) absent a business reason for going to the [storage unit] . . . ." The district court denied American Protection's motion for summary judgment, and the case was tried to a jury. The jury found that Leordeanu sustained a compensable injury, and the district court entered judgment in favor of Leordeanu.
On appeal, American Protection argues that there is no evidence to support the jury's finding that Leordeanu sustained a compensable injury. In reviewing no evidence points, we consider only the evidence and inferences that tend to support the finding and disregard all evidence and inferences to the contrary. Orozco v. Sander, 824 S.W.2d 555, 556 (Tex. 1992). If there is more than a scintilla of evidence to support the finding, the no evidence challenge must fail. Id. We will sustain a no evidence point of error when (1) the record discloses a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence establishes conclusively the opposite of the vital fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998); Juliette Fowler Homes, Inc. v. Welch Assocs., Inc., 793 S.W.2d 660, 666 n.9 (Tex. 1990) (citing Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361, 362-63 (1960)).
Under the Texas Workers' Compensation Act, an insurance carrier is liable for compensation for an employee's injury if the injury arises out of and in the course and scope of employment. Tex. Lab. Code. Ann. § 406.031 (West 2006).
Generally, an employee is not in the course and scope of his employment while driving his own vehicle to and from his place of work. Soto v. Seven Seventeen HBE Corp., 52 S.W.3d 201, 205 (Tex. App.--Houston [14th Dist.] 2000, no pet.); Upton v. Gensco, Inc., 962 S.W.2d 620, 621 (Tex. App.--Fort Worth 1997, pet. denied). The reasoning underlying this general rule is that injury incurred in such travel does not arise out of that person's employment, but rather is suffered due to the dangers and risks to which all traveling persons are exposed. Evans v. Illinois Employers Ins., 790 S.W.2d 302, 304 (Tex. 1990). Stated another way, the general rule is that travel to and from work, without some special instruction or "special mission" from the employer directing the employee to proceed from one place to another, is considered travel for personal purposes rather than travel for business purposes. See id. Thus, travel for exclusively business purposes is considered within the course of employment and travel for exclusively personal purposes is not within the course and scope of employment under the Workers' Compensation Act. See Tex. Lab. Code Ann. § 401.011(12).
A different situation is presented when an employee is engaged in travel that has both personal and business-related purposes. The dual purpose rule is designed to address whether an employee is in the course and scope of employment for the purpose of coverage when injury occurs during travel that is for both personal and business purposes. See Tex. Lab. Code Ann. § 401.011(12)(B). The rule provides that injuries incurred during travel for the dual purpose of furthering the affairs or business of the employer and of furthering the employee's personal or private affairs shall not be deemed in the course of employment unless (1) the travel to the place of occurrence of the injury would have been made even had there been no personal or private affairs of the employee to be furthered by the travel; and (2) the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel. Id.; Janak v. Texas Employers' Ins. Assoc., 381 S.W.2d 176, 179 (Tex. 1964). In order to be entitled to workers' compensation benefits in dual purpose situations, the employee or his survivors must satisfy both prongs of section 401.011(12)(B). Janak, 381 S.W.2d at 180; Tramel v. State Farm Fire & Cas. Co., 830 S.W.2d 754, 756 (Tex. App.--Fort Worth 1992, writ denied). This means that the travel would have occurred even if the personal purpose were removed from the analysis and the travel would not have occurred if the business purpose of the travel were removed from the analysis. See Tex. Lab. Code Ann. § 401.011(12)(B).
It is undisputed that Leordeanu was injured while traveling from the business-related dinner meeting to her apartment and the storage unit next door to her apartment. Leordeanu testified that upon leaving the restaurant on the night of the accident, she intended to travel first to the storage unit next door to her apartment and then to her apartment to finish certain job-related paper work. These tasks furthered the business affairs of Leordeanu's employer, Schering Plough, and were, therefore, business purposes for the travel.
Leordeanu also testified that when she left La Feria Restaurant on the night of the accident, she was "planning on going first to the storage unit and then to the office, to my home." She gave the following testimony during cross-examination:
[Counsel]: Now, I understand that you left the restaurant and you drove from La Feria on Loop 360; is that correct?
[Leordeanu]: Uh-huh.
. . .
[Counsel]: And then you would turn west on Highway 22; is that correct?
[Leordeanu]: Yes, sir.
[Counsel]: And you would do those things to go to your home; is that correct?
[Leordeanu]: I would do those things to go in the direction of first the storage unit, as well as the direction of home as well as the office, yes.
[Counsel]: And I understand your testimony is that you were going to the storage locker.
[Leordeanu]: That's right.
[Counsel]: And I'm asking you about if you were leaving La Feria and going home and not going to the storage locker, that's the same route you would take, correct?
[Leordeanu]: That's right.
[Counsel]: So the routes are identical at that point in time in the travel, leaving the restaurant and going to either the storage unit or your apartment?
[Leordeanu]: That's right.
[Counsel]: Now, did you intend to spend the night at home that night?
[Leordeanu]: Yes.
[Counsel]: So you were also going home as well as going to the storage locker?
[Leordeanu]: Yes.
Leordeanu added that she intended to stay at her apartment after finishing her work there. Thus, she was also traveling home from the restaurant--a personal purpose for the same travel. See Evans, 790 S.W.2d at 305 (stating employee's trip from work to home was "purely personal"); Tramel, 830 S.W.2d at 757 (noting that employee's trip from home to work serves "private, personal purpose"). Leordeanu's travel from the restaurant that night was, therefore, for both business and personal purposes, and the question of whether she was acting in the course and scope of employment is governed by the dual purpose rule of section 401.011(12)(B).
Under the dual purpose rule of section 401.011(12)(B), it is not enough that Leordeanu intended to finish certain job-related paper work upon returning to her apartment for her injury to be compensable. Rather, under the rule, Leordeanu was required to show that she would not have made the travel that resulted in her injuries had there been no business of her employer to be furthered by the travel. In other words, Leordeanu had to show that she would not have returned home after dinner on the night of the accident, but for the need to complete business-related paperwork. However, there is no evidence in the record to that effect.
Leordeanu urges this Court to view her intended travel on the night of the accident as two separate, single purpose segments of travel--from the restaurant to the storage unit and from the storage unit to her apartment--and to analyze each segment of her travel separately. She argues that the first phase of her intended travel, from the restaurant to the storage unit, was not dual purpose travel because she had no personal reason for going to the storage unit. She contends that the dual purpose aspect of the trip did not occur until the second phase of her intended travel, from the storage unit to her apartment, because she had both a business reason (finishing her paper work) and a personal reason (going home) for traveling from the storage unit to her apartment. Thus, according to Leordeanu, because the accident occurred during the first phase of her travel and because that phase of the travel was not a dual purpose trip, she was in the course and scope of employment at the time of the accident.
The San Antonio Court of Appeals adopted a similar approach to dual purpose travel in St. Paul Fire & Marine Insurance Co. v. Confer, 956 S.W.2d 825 (Tex. App.--San Antonio 1997, pet. denied). In that case, Dr. Ronald Confer was killed in an automobile accident while traveling home from work. He had left work early so that he could also run a business errand to purchase computer supplies for use at his office. See id. at 827. The route to the computer supply store was along Dr. Confer's normal route home, and Dr. Confer intended to continue home after running the business errand. See id. However, Dr. Confer was killed before he reached the computer supply store. (2) See id. Dr. Confer's widow sued for death benefits under the Workers' Compensation Act, and a jury found that Dr. Confer was in the course and scope of his employment at the time he was killed. See id. The issue on appeal was whether the evidence adduced at trial satisfied both prongs of the dual purpose rule of the Workers' Compensation Act. See id. at 828. The court addressed several cases concerning injuries sustained by employees while traveling from home on a business errand. See Evans, 790 S.W.2d at 305 (holding employee's death not compensable where employee was on way from home to pre-work safety meeting); Meyer v. Western Fire Ins. Co., 425 S.W.2d 628, 629 (Tex. 1968) (holding injury compensable where employee was involved in accident on way to work after having taken work-related telephone calls from home); Janak, 381 S.W.2d at 182 (holding injury compensable where accident occurred on way to work after employee had deviated from his normal route in order to pick up ice for use during work). It then distinguished the facts presented in Dr. Confer's case as follows:
the controlling issue in cases such as this is during what segment of a trip did the injury occur; the segments being home to business errand and business errand to work. These segments are reversed in the present case. In other words, Dr. Confer's fatal trip consisted of segments including work to business errand and business errand to home. Applying the logic of the cases discussed above, an injury occurring between work and the business errand would be compensable because the employee has not completed work, while an injury occurring between the business errand and home would not be compensable because the employee's work would be finished. Id. at 830.
We are of the view that the approach taken in Confer--separating dual purpose travel into "business related" and "personal related" segments--departs from the mandatory requirements of the dual purpose rule as set out in the Workers' Compensation Act. Section 401.011(12)(B), when it applies, does not contemplate analyzing a claimant's dual purpose travel and determining whether particular segments or portions of that travel are for a single, business-related purpose. If travel is exclusively for a business-related purpose, section 401.011(12)(B) does not apply at all. Section 401.011(12)(B) only applies whenever the travel is for both business and personal purposes (dual purpose) and the travel cannot be ascribed a single purpose.
When travel is dual purpose, the dual purpose rule requires the court to determine the answers to two questions: (1) would the travel during which the claimant was injured have occurred even if there were no personal purpose; and (2) would the travel not have occurred if there were no business purpose. (3) If the answer to either of these questions is "no," then the employee is not deemed to be in the course and scope of employment. If the answers to both questions are "yes," the employee is deemed to be in course and scope of employment and the injury is potentially compensable. The statute does not allow a court to approach the analysis of compensability of dual purpose travel in any other way.
The dual purpose rule, applied correctly, can be an effective mechanism for ferreting out whether dual purpose travel is primarily business travel or primarily personal travel, and the pertinent questions can be posed and answered for any point in a claimant's travel. The dual purpose rule as it is currently formulated in the Workers' Compensation Act does not, however, allow for assigning single purpose segments or phases to dual purpose travel. Evidence as to whether a person is on the "business-related segment" of dual purpose travel when an accident occurs is not relevant to the analysis because it does not answer either question set out in section 401.011(12)(B), the key inquiries of the dual purpose rule. Rather, the evidence must support answers to the questions in section 401.011(12)(B)(i) and (ii), regardless of whether the business purpose for the travel had been completed at the time of the accident.
The Confer court articulated its reasoning as follows:
The evidence supports a finding that Dr. Confer would not have been on Interstate 35 at 4:20 p.m. if he had not been going to Altex [a business errand for his employer]. The fact that Altex happens to be along the same route as his route home should be of little consequence. Why should the result be any different if Altex had been located somewhere off of Interstate 35, forcing Dr. Confer to travel away from his regular route? The controlling issue should be whether the employee is traveling on behalf of his employer at the time of the accident, not on what road he happens to be traveling. 956 S.W.2d at 830 (emphasis in original).
This approach basically concludes that, since the portion of Dr. Confer's travel from the office to Altex (the stop on the business errand) had a business-related component, such travel would be in the course and scope of employment even though it was also personal travel to the doctor's home. The portion of the travel from Altex to Dr. Confer's home then lacks any business-related component and is, therefore, not in the course and scope of employment, even though the personal travel home would necessarily include both portions of the trip if Dr. Confer were not stopping at Altex.
The Confer approach adopts a policy position to the effect that if a claimant is traveling for a business purpose at all, even if there is also a personal purpose, then the travel is in the course and scope of employment and any injury incurred during the travel compensable. This might arguably be a reasonable policy position. It would allow injuries to be compensable any time there is a business-related component to travel no matter how incidental. However, this is not the policy position that the Legislature has taken in section 401.011(12). The statute mandates that if the travel has dual purposes--both business and personal--it is only within the course and scope of employment and, therefore, compensable, if it meets the requirements of section 401.011(12)(B).
If the Confer approach were correct, section 401.011(12)(B) would not exist. The statute would simply provide that if travel had any business purpose at all, it is in the course and scope of employment. There would not be a dual purpose rule because there would be no special treatment of dual purpose travel. Dual purpose travel would, by definition, have a business purpose component and, therefore, would always be travel in the course and scope of employment. Thus, if we are to grant section 401.011(12)(B) any meaning at all, we cannot take the approach proposed in the Confer opinion.
The answer to the Confer court's rhetorical question "Why should the result be any different if Altex had been located somewhere off of Interstate 35, forcing Dr. Confer to travel away from his regular route?" is twofold: first, the statute expressly declines to adopt the policy of allowing coverage whenever there is any business-related component to travel, and it mandates a different result for dual purpose travel based on specific statutory criteria; second, the statutory scheme has a rational basis in that a policymaker could well come to the conclusion that dual purpose travel should not be compensable unless it is predominately for a business-related purpose rather than predominately for a personal purpose with an incidental business-related component. Section 401.011(12)(B) appears to be an attempt to create a statutory system for distinguishing between predominately business-related travel and predominately personal travel. Consequently, in Dr. Confer's case, the result would be different if Altex were not located on Interstate 35 because Dr. Confer's travel to Altex would then not have happened at all but for the business purpose. Since, instead, Dr. Confer was on his route home when the accident happened, it was travel that he would have made in any event and the business purpose of stopping at Altex was incidental. Under the language of section 401.011(12)(B), this travel was not in the course and scope of Dr. Confer's employment. The notion that the timing of the travel is significant--i.e. leaving early from work in order to make the business stop and get home at the usual time--appears nowhere in the statute.
In applying the dual purpose rule, we ask the statutory questions about the travel at the point that the claimant is injured. (4) In this case, we know that Leordeanu was traveling to both her home and the storage unit at the point at which she was injured. The route of travel to both destinations was identical. Thus, her travel at that point was dual purpose and the provisions of section 401.011(12)(B) apply. We then ask the statutory questions. First, would her travel have been made even had there been no personal or private affairs to be furthered by the travel? In this case, Leordeanu concedes she was going home for the evening from the restaurant, but was going to drop off some items at the storage unit on the way. There is nothing in the evidence to suggest that Leordeanu would have traveled to the storage unit even if she were not going home. Thus, on this record, the answer to the first question, rather than being a conclusive "yes," is, at best, equivocal. (5) Second, would the travel not have been made had there been no affairs or business of the employer to be furthered by the travel? Once again, Leordeanu concedes that she was going home for the evening from the restaurant. There is no evidence that Leordeanu would not have made this travel if she did not intend to drop off items at the storage unit. (6) On the contrary, Leordeanu concedes that she was going home whether or not she dropped items off at the storage unit. Therefore, on this record, the answer to the second question is "no," and it precludes a finding that Leordeanu was in the course and scope of her employment at the time of her injury.
We conclude that there is no evidence in the record to satisfy the second prong of the dual purpose rule which requires that the travel would not have occurred if the business purpose of the travel were removed from the equation. There is no evidence that Leordeanu would have been traveling on some other route to her home when she was injured had she not intended to stop by the storage unit next door to her apartment. The evidence is conclusive that Leordeanu's travel from the restaurant to her home at the point where she was injured would have been identical whether she had intended to stop by the storage unit or not. There is no evidence that she would not have made the travel that resulted in her injuries had there been no business of her employer to be furthered by the travel.
The dual purpose rule of the Workers' Compensation Act bars Leordeanu's claim for workers' compensation benefits. Therefore, we conclude that there is no evidence to support the jury's finding that Leordeanu sustained a compensable injury. Accordingly, we reverse the judgment of the district court and render judgment that Leordeanu take nothing on her claims for workers' compensation benefits.
__________________________________________
G. Alan Waldrop, Justice
Before Justices Patterson, Pemberton and Waldrop;
Dissenting Opinion by Justice Patterson
Reversed and Rendered
Filed: August 2, 2007
1. The Division also concluded that "the carrier [American Protection] is relieved of liability for compensation because the claimed injury occurred while the claimant [Leordeanu] was in a state of intoxication." However, on judicial review of the Division's decision, a jury found that Leordeanu was not intoxicated at the time of the accident. This finding is not challenged on appeal.
2. Interestingly, the Confer court expressly found that Dr. Confer's travel at the place of occurrence of the injury was dual purpose travel and section 401.011(12)(B) was applicable. See 956 S.W.2d at 829.
3. Part of the difficulty with this statute is that the provisions of section 401.011(12)(B)(i) and (ii) are exceptions to the general rule of section 401.011(12)(B) which is itself an exception to the general definition of "course and scope of employment." This difficulty is compounded by the fact that the requirements of section 401.011(12)(B)(i) and (ii) are conjunctive, but section 401.011(12)(B)(ii) is drafted in the form of a double negative--"the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel." Thus, to address an issue such as the one presented by this case, the courts and lay juries are faced with a rule that (translated) looks something like this:
An employee is in the course and scope of employment when engaging in any activity of any kind that has to do with the business of the employer while the employee is engaged in the furtherance of the affairs of the employer except when the employee is traveling for both business and personal purposes unless the travel would have been made even if there were no personal purpose involved and the travel would not have been made had there been no business purpose involved.
Although semantically challenging, the rule can be deciphered and appears to work when applied correctly. However, the way it works is not readily apparent. Expecting juries to consistently and knowledgeably apply a charge instruction based on the structure of this statute is problematic.
4. Section 401.011(12)(B)(i) of the Texas Labor Code refers to the "travel to the place of the occurrence of the injury."
5. Since there is insufficient information in the record to answer the question posed by the first prong of section 401.011(12)(B) "yes," one could argue that Leordeanu has failed to satisfy either prong of the statute. However, the case was briefed and argued as a failure by Leordeanu to satisfy the second prong of section 401.011(12)(B), and even if we assume the answer to the first prong of section 401.011(12)(B) is "yes," the lack of evidence as to the second prong of the statute is dispositive.
6. Here the problem of the double negative in the statute comes up again. Dealing with a question that involves a double negative and to which the answer is "no" can create confusion. Here the question can be rephrased: "If Leordeanu had not planned to drop by the storage unit, would she have cancelled (or not made) the travel?" The answer to this question is more easily seen to be "no" because she concedes that she was going to go home in any event and the route of travel to both the storage unit and her apartment at the time of the injury was the same.
Appeal from 201st District Court of Travis County
Disposition: Reversed and Rendered (with one justice dissenting)
Also see Dissent in American Protection Insurance Company v. Liana Leordeanu
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
NO. D-1-GN-04-001199, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING
OPINION BY JUSTICE WALDROP
American Protection Insurance Company appeals a district court judgment awarding workers' compensation benefits to appellee Liana Leordeanu based on a jury's finding that Leordeanu sustained a compensable injury while in the course and scope of her employment with American Protection's insured, Schering Plough, Inc.
The issue presented involves the application of section 401.011(12)(B) of the Texas Workers' Compensation Act which is known as the "dual purpose rule." This section governs the compensability of injuries sustained by an employee while traveling for both personal and business purposes. See Tex. Lab. Code Ann. § 401.011(12)(B) (West 2006).
American Protection argues that there is no evidence to support the jury's finding that Leordeanu's injury was compensable and that the trial court erred as a matter of law in applying the dual purpose rule of section 401.011(12)(B).
We conclude that there is no evidence to support the jury's finding that Leordeanu sustained a compensable injury under the Texas Workers' Compensation Act. Accordingly, we reverse the judgment of the district court and render judgment that Leordeanu take nothing on her claims for workers' compensation benefits.
At the time of her injury, Leordeanu worked for Schering Plough as a pharmaceutical sales representative. Her job duties required that she spend a significant portion of her time traveling to pharmacies and doctors' offices within a designated area. Schering Plough provided Leordeanu with a car and with a storage unit for storing drug samples and marketing materials. Leordeanu's storage unit was located at a storage facility next door to the apartment complex where she lived. In addition, Leordeanu testified that she maintained a business office in her apartment. From time to time as part of her job, Leordeanu would entertain doctors and their staff at local restaurants and pay for their drinks and food.
On March 21, 2003, Leordeanu met with a doctor and members of his staff for dinner at La Feria Restaurant in south Austin. After dinner and on her way home from the restaurant, Leordeanu was involved in a single car accident and sustained serious injury. According to Leordeanu, she had intended to stop at the storage unit next door to her apartment complex on her way home from the restaurant and then to finish job-related paper work at her home office.
American Protection, the workers' compensation carrier for Schering Plough, denied Leordeanu's claim for compensation for the injuries she sustained in the accident. Leordeanu then submitted the dispute to the Texas Department of Insurance Workers' Compensation Commission Division.
The Division held a contested case hearing and determined that Leordeanu did not have a compensable claim because she was not in the course and scope of employment at the time of the accident. (1) An appeals panel of the Division affirmed.
Leordeanu sought judicial review of the appeals panel's decision. American Protection filed a motion for summary judgment arguing that the dual purpose rule of the Workers' Compensation Act barred Leordeanu's claim for benefits "because there has been no evidence offered that Ms. Leordeanu would not have gone home (that she would have abandoned the trip home) absent a business reason for going to the [storage unit] . . . ." The district court denied American Protection's motion for summary judgment, and the case was tried to a jury. The jury found that Leordeanu sustained a compensable injury, and the district court entered judgment in favor of Leordeanu.
On appeal, American Protection argues that there is no evidence to support the jury's finding that Leordeanu sustained a compensable injury. In reviewing no evidence points, we consider only the evidence and inferences that tend to support the finding and disregard all evidence and inferences to the contrary. Orozco v. Sander, 824 S.W.2d 555, 556 (Tex. 1992). If there is more than a scintilla of evidence to support the finding, the no evidence challenge must fail. Id. We will sustain a no evidence point of error when (1) the record discloses a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence establishes conclusively the opposite of the vital fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998); Juliette Fowler Homes, Inc. v. Welch Assocs., Inc., 793 S.W.2d 660, 666 n.9 (Tex. 1990) (citing Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361, 362-63 (1960)).
Under the Texas Workers' Compensation Act, an insurance carrier is liable for compensation for an employee's injury if the injury arises out of and in the course and scope of employment. Tex. Lab. Code. Ann. § 406.031 (West 2006).
Generally, an employee is not in the course and scope of his employment while driving his own vehicle to and from his place of work. Soto v. Seven Seventeen HBE Corp., 52 S.W.3d 201, 205 (Tex. App.--Houston [14th Dist.] 2000, no pet.); Upton v. Gensco, Inc., 962 S.W.2d 620, 621 (Tex. App.--Fort Worth 1997, pet. denied). The reasoning underlying this general rule is that injury incurred in such travel does not arise out of that person's employment, but rather is suffered due to the dangers and risks to which all traveling persons are exposed. Evans v. Illinois Employers Ins., 790 S.W.2d 302, 304 (Tex. 1990). Stated another way, the general rule is that travel to and from work, without some special instruction or "special mission" from the employer directing the employee to proceed from one place to another, is considered travel for personal purposes rather than travel for business purposes. See id. Thus, travel for exclusively business purposes is considered within the course of employment and travel for exclusively personal purposes is not within the course and scope of employment under the Workers' Compensation Act. See Tex. Lab. Code Ann. § 401.011(12).
A different situation is presented when an employee is engaged in travel that has both personal and business-related purposes. The dual purpose rule is designed to address whether an employee is in the course and scope of employment for the purpose of coverage when injury occurs during travel that is for both personal and business purposes. See Tex. Lab. Code Ann. § 401.011(12)(B). The rule provides that injuries incurred during travel for the dual purpose of furthering the affairs or business of the employer and of furthering the employee's personal or private affairs shall not be deemed in the course of employment unless (1) the travel to the place of occurrence of the injury would have been made even had there been no personal or private affairs of the employee to be furthered by the travel; and (2) the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel. Id.; Janak v. Texas Employers' Ins. Assoc., 381 S.W.2d 176, 179 (Tex. 1964). In order to be entitled to workers' compensation benefits in dual purpose situations, the employee or his survivors must satisfy both prongs of section 401.011(12)(B). Janak, 381 S.W.2d at 180; Tramel v. State Farm Fire & Cas. Co., 830 S.W.2d 754, 756 (Tex. App.--Fort Worth 1992, writ denied). This means that the travel would have occurred even if the personal purpose were removed from the analysis and the travel would not have occurred if the business purpose of the travel were removed from the analysis. See Tex. Lab. Code Ann. § 401.011(12)(B).
It is undisputed that Leordeanu was injured while traveling from the business-related dinner meeting to her apartment and the storage unit next door to her apartment. Leordeanu testified that upon leaving the restaurant on the night of the accident, she intended to travel first to the storage unit next door to her apartment and then to her apartment to finish certain job-related paper work. These tasks furthered the business affairs of Leordeanu's employer, Schering Plough, and were, therefore, business purposes for the travel.
Leordeanu also testified that when she left La Feria Restaurant on the night of the accident, she was "planning on going first to the storage unit and then to the office, to my home." She gave the following testimony during cross-examination:
[Counsel]: Now, I understand that you left the restaurant and you drove from La Feria on Loop 360; is that correct?
[Leordeanu]: Uh-huh.
. . .
[Counsel]: And then you would turn west on Highway 22; is that correct?
[Leordeanu]: Yes, sir.
[Counsel]: And you would do those things to go to your home; is that correct?
[Leordeanu]: I would do those things to go in the direction of first the storage unit, as well as the direction of home as well as the office, yes.
[Counsel]: And I understand your testimony is that you were going to the storage locker.
[Leordeanu]: That's right.
[Counsel]: And I'm asking you about if you were leaving La Feria and going home and not going to the storage locker, that's the same route you would take, correct?
[Leordeanu]: That's right.
[Counsel]: So the routes are identical at that point in time in the travel, leaving the restaurant and going to either the storage unit or your apartment?
[Leordeanu]: That's right.
[Counsel]: Now, did you intend to spend the night at home that night?
[Leordeanu]: Yes.
[Counsel]: So you were also going home as well as going to the storage locker?
[Leordeanu]: Yes.
Leordeanu added that she intended to stay at her apartment after finishing her work there. Thus, she was also traveling home from the restaurant--a personal purpose for the same travel. See Evans, 790 S.W.2d at 305 (stating employee's trip from work to home was "purely personal"); Tramel, 830 S.W.2d at 757 (noting that employee's trip from home to work serves "private, personal purpose"). Leordeanu's travel from the restaurant that night was, therefore, for both business and personal purposes, and the question of whether she was acting in the course and scope of employment is governed by the dual purpose rule of section 401.011(12)(B).
Under the dual purpose rule of section 401.011(12)(B), it is not enough that Leordeanu intended to finish certain job-related paper work upon returning to her apartment for her injury to be compensable. Rather, under the rule, Leordeanu was required to show that she would not have made the travel that resulted in her injuries had there been no business of her employer to be furthered by the travel. In other words, Leordeanu had to show that she would not have returned home after dinner on the night of the accident, but for the need to complete business-related paperwork. However, there is no evidence in the record to that effect.
Leordeanu urges this Court to view her intended travel on the night of the accident as two separate, single purpose segments of travel--from the restaurant to the storage unit and from the storage unit to her apartment--and to analyze each segment of her travel separately. She argues that the first phase of her intended travel, from the restaurant to the storage unit, was not dual purpose travel because she had no personal reason for going to the storage unit. She contends that the dual purpose aspect of the trip did not occur until the second phase of her intended travel, from the storage unit to her apartment, because she had both a business reason (finishing her paper work) and a personal reason (going home) for traveling from the storage unit to her apartment. Thus, according to Leordeanu, because the accident occurred during the first phase of her travel and because that phase of the travel was not a dual purpose trip, she was in the course and scope of employment at the time of the accident.
The San Antonio Court of Appeals adopted a similar approach to dual purpose travel in St. Paul Fire & Marine Insurance Co. v. Confer, 956 S.W.2d 825 (Tex. App.--San Antonio 1997, pet. denied). In that case, Dr. Ronald Confer was killed in an automobile accident while traveling home from work. He had left work early so that he could also run a business errand to purchase computer supplies for use at his office. See id. at 827. The route to the computer supply store was along Dr. Confer's normal route home, and Dr. Confer intended to continue home after running the business errand. See id. However, Dr. Confer was killed before he reached the computer supply store. (2) See id. Dr. Confer's widow sued for death benefits under the Workers' Compensation Act, and a jury found that Dr. Confer was in the course and scope of his employment at the time he was killed. See id. The issue on appeal was whether the evidence adduced at trial satisfied both prongs of the dual purpose rule of the Workers' Compensation Act. See id. at 828. The court addressed several cases concerning injuries sustained by employees while traveling from home on a business errand. See Evans, 790 S.W.2d at 305 (holding employee's death not compensable where employee was on way from home to pre-work safety meeting); Meyer v. Western Fire Ins. Co., 425 S.W.2d 628, 629 (Tex. 1968) (holding injury compensable where employee was involved in accident on way to work after having taken work-related telephone calls from home); Janak, 381 S.W.2d at 182 (holding injury compensable where accident occurred on way to work after employee had deviated from his normal route in order to pick up ice for use during work). It then distinguished the facts presented in Dr. Confer's case as follows:
the controlling issue in cases such as this is during what segment of a trip did the injury occur; the segments being home to business errand and business errand to work. These segments are reversed in the present case. In other words, Dr. Confer's fatal trip consisted of segments including work to business errand and business errand to home. Applying the logic of the cases discussed above, an injury occurring between work and the business errand would be compensable because the employee has not completed work, while an injury occurring between the business errand and home would not be compensable because the employee's work would be finished. Id. at 830.
We are of the view that the approach taken in Confer--separating dual purpose travel into "business related" and "personal related" segments--departs from the mandatory requirements of the dual purpose rule as set out in the Workers' Compensation Act. Section 401.011(12)(B), when it applies, does not contemplate analyzing a claimant's dual purpose travel and determining whether particular segments or portions of that travel are for a single, business-related purpose. If travel is exclusively for a business-related purpose, section 401.011(12)(B) does not apply at all. Section 401.011(12)(B) only applies whenever the travel is for both business and personal purposes (dual purpose) and the travel cannot be ascribed a single purpose.
When travel is dual purpose, the dual purpose rule requires the court to determine the answers to two questions: (1) would the travel during which the claimant was injured have occurred even if there were no personal purpose; and (2) would the travel not have occurred if there were no business purpose. (3) If the answer to either of these questions is "no," then the employee is not deemed to be in the course and scope of employment. If the answers to both questions are "yes," the employee is deemed to be in course and scope of employment and the injury is potentially compensable. The statute does not allow a court to approach the analysis of compensability of dual purpose travel in any other way.
The dual purpose rule, applied correctly, can be an effective mechanism for ferreting out whether dual purpose travel is primarily business travel or primarily personal travel, and the pertinent questions can be posed and answered for any point in a claimant's travel. The dual purpose rule as it is currently formulated in the Workers' Compensation Act does not, however, allow for assigning single purpose segments or phases to dual purpose travel. Evidence as to whether a person is on the "business-related segment" of dual purpose travel when an accident occurs is not relevant to the analysis because it does not answer either question set out in section 401.011(12)(B), the key inquiries of the dual purpose rule. Rather, the evidence must support answers to the questions in section 401.011(12)(B)(i) and (ii), regardless of whether the business purpose for the travel had been completed at the time of the accident.
The Confer court articulated its reasoning as follows:
The evidence supports a finding that Dr. Confer would not have been on Interstate 35 at 4:20 p.m. if he had not been going to Altex [a business errand for his employer]. The fact that Altex happens to be along the same route as his route home should be of little consequence. Why should the result be any different if Altex had been located somewhere off of Interstate 35, forcing Dr. Confer to travel away from his regular route? The controlling issue should be whether the employee is traveling on behalf of his employer at the time of the accident, not on what road he happens to be traveling. 956 S.W.2d at 830 (emphasis in original).
This approach basically concludes that, since the portion of Dr. Confer's travel from the office to Altex (the stop on the business errand) had a business-related component, such travel would be in the course and scope of employment even though it was also personal travel to the doctor's home. The portion of the travel from Altex to Dr. Confer's home then lacks any business-related component and is, therefore, not in the course and scope of employment, even though the personal travel home would necessarily include both portions of the trip if Dr. Confer were not stopping at Altex.
The Confer approach adopts a policy position to the effect that if a claimant is traveling for a business purpose at all, even if there is also a personal purpose, then the travel is in the course and scope of employment and any injury incurred during the travel compensable. This might arguably be a reasonable policy position. It would allow injuries to be compensable any time there is a business-related component to travel no matter how incidental. However, this is not the policy position that the Legislature has taken in section 401.011(12). The statute mandates that if the travel has dual purposes--both business and personal--it is only within the course and scope of employment and, therefore, compensable, if it meets the requirements of section 401.011(12)(B).
If the Confer approach were correct, section 401.011(12)(B) would not exist. The statute would simply provide that if travel had any business purpose at all, it is in the course and scope of employment. There would not be a dual purpose rule because there would be no special treatment of dual purpose travel. Dual purpose travel would, by definition, have a business purpose component and, therefore, would always be travel in the course and scope of employment. Thus, if we are to grant section 401.011(12)(B) any meaning at all, we cannot take the approach proposed in the Confer opinion.
The answer to the Confer court's rhetorical question "Why should the result be any different if Altex had been located somewhere off of Interstate 35, forcing Dr. Confer to travel away from his regular route?" is twofold: first, the statute expressly declines to adopt the policy of allowing coverage whenever there is any business-related component to travel, and it mandates a different result for dual purpose travel based on specific statutory criteria; second, the statutory scheme has a rational basis in that a policymaker could well come to the conclusion that dual purpose travel should not be compensable unless it is predominately for a business-related purpose rather than predominately for a personal purpose with an incidental business-related component. Section 401.011(12)(B) appears to be an attempt to create a statutory system for distinguishing between predominately business-related travel and predominately personal travel. Consequently, in Dr. Confer's case, the result would be different if Altex were not located on Interstate 35 because Dr. Confer's travel to Altex would then not have happened at all but for the business purpose. Since, instead, Dr. Confer was on his route home when the accident happened, it was travel that he would have made in any event and the business purpose of stopping at Altex was incidental. Under the language of section 401.011(12)(B), this travel was not in the course and scope of Dr. Confer's employment. The notion that the timing of the travel is significant--i.e. leaving early from work in order to make the business stop and get home at the usual time--appears nowhere in the statute.
In applying the dual purpose rule, we ask the statutory questions about the travel at the point that the claimant is injured. (4) In this case, we know that Leordeanu was traveling to both her home and the storage unit at the point at which she was injured. The route of travel to both destinations was identical. Thus, her travel at that point was dual purpose and the provisions of section 401.011(12)(B) apply. We then ask the statutory questions. First, would her travel have been made even had there been no personal or private affairs to be furthered by the travel? In this case, Leordeanu concedes she was going home for the evening from the restaurant, but was going to drop off some items at the storage unit on the way. There is nothing in the evidence to suggest that Leordeanu would have traveled to the storage unit even if she were not going home. Thus, on this record, the answer to the first question, rather than being a conclusive "yes," is, at best, equivocal. (5) Second, would the travel not have been made had there been no affairs or business of the employer to be furthered by the travel? Once again, Leordeanu concedes that she was going home for the evening from the restaurant. There is no evidence that Leordeanu would not have made this travel if she did not intend to drop off items at the storage unit. (6) On the contrary, Leordeanu concedes that she was going home whether or not she dropped items off at the storage unit. Therefore, on this record, the answer to the second question is "no," and it precludes a finding that Leordeanu was in the course and scope of her employment at the time of her injury.
We conclude that there is no evidence in the record to satisfy the second prong of the dual purpose rule which requires that the travel would not have occurred if the business purpose of the travel were removed from the equation. There is no evidence that Leordeanu would have been traveling on some other route to her home when she was injured had she not intended to stop by the storage unit next door to her apartment. The evidence is conclusive that Leordeanu's travel from the restaurant to her home at the point where she was injured would have been identical whether she had intended to stop by the storage unit or not. There is no evidence that she would not have made the travel that resulted in her injuries had there been no business of her employer to be furthered by the travel.
The dual purpose rule of the Workers' Compensation Act bars Leordeanu's claim for workers' compensation benefits. Therefore, we conclude that there is no evidence to support the jury's finding that Leordeanu sustained a compensable injury. Accordingly, we reverse the judgment of the district court and render judgment that Leordeanu take nothing on her claims for workers' compensation benefits.
__________________________________________
G. Alan Waldrop, Justice
Before Justices Patterson, Pemberton and Waldrop;
Dissenting Opinion by Justice Patterson
Reversed and Rendered
Filed: August 2, 2007
1. The Division also concluded that "the carrier [American Protection] is relieved of liability for compensation because the claimed injury occurred while the claimant [Leordeanu] was in a state of intoxication." However, on judicial review of the Division's decision, a jury found that Leordeanu was not intoxicated at the time of the accident. This finding is not challenged on appeal.
2. Interestingly, the Confer court expressly found that Dr. Confer's travel at the place of occurrence of the injury was dual purpose travel and section 401.011(12)(B) was applicable. See 956 S.W.2d at 829.
3. Part of the difficulty with this statute is that the provisions of section 401.011(12)(B)(i) and (ii) are exceptions to the general rule of section 401.011(12)(B) which is itself an exception to the general definition of "course and scope of employment." This difficulty is compounded by the fact that the requirements of section 401.011(12)(B)(i) and (ii) are conjunctive, but section 401.011(12)(B)(ii) is drafted in the form of a double negative--"the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel." Thus, to address an issue such as the one presented by this case, the courts and lay juries are faced with a rule that (translated) looks something like this:
An employee is in the course and scope of employment when engaging in any activity of any kind that has to do with the business of the employer while the employee is engaged in the furtherance of the affairs of the employer except when the employee is traveling for both business and personal purposes unless the travel would have been made even if there were no personal purpose involved and the travel would not have been made had there been no business purpose involved.
Although semantically challenging, the rule can be deciphered and appears to work when applied correctly. However, the way it works is not readily apparent. Expecting juries to consistently and knowledgeably apply a charge instruction based on the structure of this statute is problematic.
4. Section 401.011(12)(B)(i) of the Texas Labor Code refers to the "travel to the place of the occurrence of the injury."
5. Since there is insufficient information in the record to answer the question posed by the first prong of section 401.011(12)(B) "yes," one could argue that Leordeanu has failed to satisfy either prong of the statute. However, the case was briefed and argued as a failure by Leordeanu to satisfy the second prong of section 401.011(12)(B), and even if we assume the answer to the first prong of section 401.011(12)(B) is "yes," the lack of evidence as to the second prong of the statute is dispositive.
6. Here the problem of the double negative in the statute comes up again. Dealing with a question that involves a double negative and to which the answer is "no" can create confusion. Here the question can be rephrased: "If Leordeanu had not planned to drop by the storage unit, would she have cancelled (or not made) the travel?" The answer to this question is more easily seen to be "no" because she concedes that she was going to go home in any event and the route of travel to both the storage unit and her apartment at the time of the injury was the same.
Justice Patterson Dissents in Workers Compensation Appeal: American Protection Ins. Co. v. Leordeanu
American Protection Insurance Company vs. Liana Leordeanu, No. 03-06-00529-CV (Tex.App.- Austin, August 2, 2007)(Dissenting Opinion by Justice Patterson)(workers compenstation appeal)(Before Justices Patterson, Pemberton and Waldrop)
Appeal from 201st District Court of Travis County
Also see Majority Opinion in American Protection Ins. Co. v. Leordeanu
Appeal from 201st District Court of Travis County
Also see Majority Opinion in American Protection Ins. Co. v. Leordeanu
DISSENT: The majority is correct that the statute is semantically challenging. But the trial court gave a correct statement of the law in its instruction and identified the ultimate destination for the jury's journey. The jury accomplished the task it was asked to do. Because the evidence in this case, assessed under the appropriate standard, was clearly sufficient to support the jury's finding of course and scope of employment, Justice Patterson respectfully dissents.
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
NO. D-1-GN-04-001199, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING
DISSENTING OPINION BY JUSTICE JAN PATTERSON
Liana Leordeanu was a pharmaceutical sales representative injured in an accident while driving from a business dinner to a storage unit to unload and reorganize the sales materials in her company car. This case hinges on a single issue: was Leordeanu in the course and scope of her employment at the time of her injury? The jury answered the question in the affirmative. Because there is ample evidence to support the jury's finding, and the evidence is legally and factually sufficient, I would affirm the judgment.
Workers' compensation benefits are recoverable only where the death or injury in question occurs in the course and scope of the employee's employment. Deatherage v. International Ins. Co., 615 S.W.2d 181, 182 (Tex. 1981). "'Course and scope of employment' means an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer." Tex. Lab. Code Ann. § 401.011(12) (West 2006). The term includes activities conducted on the premises of the employer or at other locations. Id. Work that is directed or authorized by the employer is within the course of employment regardless of whether the work benefits the employer's business. Burkett v. Welborn, 42 S.W.3d 282, 287-88 (Tex. App.--Texarkana 2001, no pet.). An injury "arises out of" employment if it would not have occurred if the conditions and obligations of employment had not placed the claimant in harm's way. Tex. Workers' Comp. Ins. Fund v. Simon, 980 S.W.2d 730, 735-36 (Tex. App.--San Antonio 1998, no pet.).
It is well settled that courts should construe the Workers' Compensation Act liberally in order to carry out the legislature's evident purpose of compensating injured workers and their dependents. Texas Workers' Compensation Comm'n v. Patient Advocates of Texas, 136 S.W.3d 643, 652 (Tex. 2004); Ackerson v. Claredon Nat'l Ins. Co., 168 S.W.3d 273, 275 (Tex. App.--Austin 2005, pet. denied); see also Liberty Mut. Ins. Co. v. Camacho, __ S.W.3d __, 2007 Tex. App. LEXIS 4856 *9-10 (Tex. App.--Beaumont June 21, 2007, no pet. h.). Its provisions "should not be hedged about with a strict construction but should be given a liberal construction to carry out its evident purpose." Lujan v. Houston General Ins. Co., 756 S.W.2d. 295, 297 (Tex. 1998) (quoting Yeldell v. Holiday Hills Retirement & Nursing Center, Inc., 701 S.W.2d 243, 245 (Tex.1985)).
With that context, we begin our analysis from the vantage point of a well-established rule: Ordinarily an employee is not within the course and scope of his employment when he is injured going to and coming from work. Tex. Lab. Code Ann. § 401.011(12)(A); Evans v. Illinois Employers Ins., 790 S.W.2d 302, 304 (Tex. 1990); Texas General Indemnity Co. v. Bottom, 365 S.W.2d 350, 353 (Tex. 1963). The rationale for this rule is that such injuries do not arise out of a person's employment, but are suffered as a consequence of the risk to which all traveling persons are exposed. Evans, 790 S.W.2d at 304.
There are some exceptions to this general rule. Transportation to and from the place of employment may be in the course and scope of employment if the transportation is furnished as part of the contract of employment or is paid for by the employer. Tex. Lab. Code Ann. § 401.011(12)(A)(i); Bottom, 365 S.W.2d at 353-54; see also Poole v. Westchester Fire Ins. Co., 830 S.W.2d 183, 185-87 (Tex. App.--San Antonio 1992, writ denied) (issue of fact as to whether sales manager on way to work in company car with logo fell within exception to general commute rule). The key issue in determining whether compensation is available for an injury incurred while traveling to or from work under this exception is whether the employer's furnishing or paying for the transportation was an integral part of the employment contract or merely an accommodation to the employee. In the former case, the injury is within the course of employment and is compensable; in the latter, it is not. See Rose v. Odiorne, 795 S.W.2d 210, 214-15 (Tex. App.--Austin 1990, writ denied) (oil rig employee entitled to compensation if employer's transportation plan (1) was essential for transporting employees to remote job site, (2) benefitted employer, and (3) was needed to operate rig).
An exception has also been created for "special missions" when an employee is directed in his employment to proceed from one place to another. See Tex. Lab. Code Ann. § 401.011(12)(A)(iii); Evans, 790 S.W.2d at 304. The supreme court has construed this exception to include "those situations in which the employee proceeds from one place to another under the terms of an employment which expressly or impliedly requires that he do so to discharge the duties of his employment." Jecker v. Western Alliance Ins. Co., 369 S.W.2d 776, 778 (Tex. 1963), overruled on other grounds by McKelvy v. Barber, 381 S.W.2d 59 (Tex. 1964).
Known as the "dual purpose rule," section 01.011(12)(B) of the labor code addresses situations in which an employee is injured while traveling for both personal and business reasons. Tex. Lab. Code Ann. § 401.011(12)(B). The rule provides that injuries incurred during travel for the dual purpose of furthering the affairs or business of the employer and of furthering the employee's personal or private affairs shall not be deemed in the course of employment unless (1) the trip to the place of the accident would have been made even had there been no personal or private affairs of the employee to be furthered by the trip, and (2) the trip would not have been made had there been no affairs or business of the employer to be furthered by the trip. Id.; Janak v. Texas Employers' Ins. Ass'n, 381 S.W.2d 176, 180-81 (Tex. 1964); Wausau Underwriters Ins. Co. v. Potter, 807 S.W.2d 419, 422-23 (Tex. App.--Beaumont 1991, writ denied). Texas courts have held that to be entitled to workers' compensation benefits in dual purpose situations, the employee or his survivors must satisfy both prongs of the dual purpose rule. Janak, 381 S.W.2d at 180; Tramel v. State Farm Fire & Cas. Co., 830 S.W.2d 754, 756 (Tex. App.--Fort Worth 1992, writ denied).
Citing to Evans that an employee's trip from "work to home" was "purely personal" and to Tramel "noting that an employee's trip from home to work serves 'private, personal purpose[s],'" the majority concludes that Leordeanu's travel from the restaurant on the night in question was for both business and personal purposes, and that she did not satisfy both prongs of the dual purpose test. Although arguing that "this is a simple case involving a single issue," American Protection variously urges that (i) unless the motivating purpose for the travel to the place of occurrence of the accident is a work purpose, travel in service of a personal purpose is not covered under the Act, (ii) travel from work to home is inherently personal, and (iii) the work must be the primary reason for the travel, without which reason, the trip would not have occurred. American Protection acknowledges that Leordeanu submitted sufficient evidence to prove a business reason for the trip, but asserts that unless she "can show that she would have not returned to home on the evening of her accident," she is not entitled to recovery under the Act.
We will sustain no-evidence points of error only if the record shows (1) a complete absence of evidence of a vital fact; (2) rules of law or rules of evidence bar the appellate court from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the opposite of a vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810-11 (Tex. 2005). We must view the evidence in the light most favorable to the verdict, crediting favorable evidence where reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. Id. at 827. The final test for legal sufficiency must always be whether the evidence at trial would allow reasonable and fair-minded people to reach the verdict under review. Id. "It is the court's charge, not some other unidentified law, that measures the sufficiency of the evidence when the opposing party fails to object to the charge." Soto v. Seven Seventeen HBE Corporation, 52 S.W.3d 201, 209-10 (Tex. App.--Houston [14th Dist.] 2000, no. pet.) (quoting Osterberg v. Peca, 12 S.W.2d 31, 55 (Tex. 2000)).
The trial court rejected American Protection's motion for summary judgment asserting that the dual purpose rule barred Leordeanu's claim for benefits "because there has been no evidence offered that Ms. Leordeanu would not have gone home (that she would have abandoned the trip home) absent a business reason for going to the [storage unit] . . . ." As the trial court correctly recognized in denying summary judgment, the disputed question as to whether Leordeanu was acting within the course and scope of employment was a question for the jury.
The evidence showed that, as a traveling pharmaceutical sales representative, Leordeanu marketed pharmaceutical products to pharmacies and approximately 400 doctors in a designated territory that included Austin, Bastrop, La Grange, New Braunfels, and San Marcos. According to her testimony, Leordeanu often hosted physicians and their staffs at work-related events at local restaurants. Her job description included calling on doctors, hosting events, and marketing to doctors, pharmacies and their staffs. Each sales call was reported to the company and the job contemplated extensive administrative tasks, including documenting each contact, distributing and accounting for manufacturers' samples, and submitting expense reports. To accomplish these administrative tasks, Leordeanu maintained a home office in her apartment.
American Protection adduced testimony from a representative of the employer that Leordeanu's place of employment was her home and that the company did not maintain an office in the State of Texas. Leordeanu converted an extra room into her home office where she maintained office equipment, including a computer, printer, and facsimile machine--all paid for and maintained by the company. She also maintained sales materials and manuals in her home office. Another sales representative testified that each sales representative has a similar setup. Leordeanu did her extensive paperwork in her home office. She sometimes did paperwork at night and on the weekend. The company also provided Leordeanu with a company vehicle for which it paid for business-related gas and repair expenses.
Each sales representative also had the option of maintaining a storage area in his home for which he was paid a monthly stipend or maintaining a separate storage unit off site which was paid for by the company. Leordeanu opted to maintain a storage unit in a nearby storage facility that was temperature controlled. She stored samples and marketing materials and kept no personal items in the storage unit. The storage unit was on the road to her home. She would go to her storage unit frequently, "twice a day," "quite a few times," often on weekends. A representative of her employer testified that it was at her discretion when to go to the storage unit.
On the day of the accident, Leordeanu completed a sales call at a doctor's office in Bastrop and then drove to La Feria Restaurant in Austin to host a dinner for medical personnel. It is undisputed that the event at the La Feria Restaurant was hosted by the company and was a company event. It was a "standard" event for a customer. Approximately ten employees and the doctor from the clinic attended. The sales representatives often hosted similar events each week that were considered part of their work.
Leordeanu testified that on the evening of the accident, after the restaurant event, she was going first to her storage unit to unload and organize her car and was then headed home to complete an "hour, hour and a half of paperwork, to enter the calls for the day." Although Leordeanu was a well-regarded employee, she had received an unfavorable report for her administrative "paperwork" tasks. Thus, she testified that she had a "serious deadline" that night because she was going out of town and needed to put her paperwork in the mail the next day so it would be received by her district manager on time: "I had to put that stuff in the mail to him that Friday. It had to be done." She recognized her performance on administrative tasks was "not where it should be," and that she had a deadline she had to meet.
After dinner, Leordeanu traveled from South Austin via Loop 360, a major artery, intending to exit at F.M. 2222. The route to the storage unit was also in the direction of her home. Before she reached the storage unit, and while she was still on Loop 360, Leordeanu suffered serious injuries in a car accident.
If facts raise the dual purpose doctrine for injury incurred during travel, the jury--as it was here--must be instructed as to the dual purpose rule. (1) Wausau Underwriters, 807 S.W.2d at 422-23; Texas Workers' Comp. Ins. Fund v. Bridwell, No. 14-02-00643-CV, 2003 Tex. App. LEXIS 9443 *6-7 (Tex. App.--Houston [14th Dist.] Nov. 6, 2003, no pet.) (mem. op., not designated for publication); Argonaut Southwest Ins. Co. v. Brewer, No. 09-93-005-CV, 1994 WL 312909 *4 (Tex. App.--Beaumont June 30, 1994, writ denied) (mem. op., not designated for publication). As the trial judge correctly recognized, the determination of whether the evidence adduced at trial establishes that an employee was in the course and scope of employment is a fact question for the jury. The jury answered this fact question in a general verdict, finding that Leordeanu was in the course and scope of her employment at the time she was injured. American Protection did not challenge the instruction, and the instruction is consistent with this court's analyses of the dual purpose rule as it applies in the context of the course and scope of employment. Nor is it disputed that the court's instruction to the jury provided an accurate statement of the law. If American Protection had desired findings other than the general verdict, it could have posed separate questions to the jury. See Tex. R. Civ. P. 278. It did not. The disputed question was whether the plaintiff was acting within the course and scope of employment; this was a question for the jury to which the parties sought a general verdict.
Just as driving in a company car festooned with a company logo does not necessarily bring the employee within coverage of the Act, neither does the fact that the employee will eventually end up at home at the close of day exclude him from coverage. If an employee is injured while running an errand for the employer either on the way to work or on the way home from work, the controlling issue remains whether the employee was in the course and scope of his employment. One court reasoned that the inquiry requires the fact finder to determine during which segment of the trip the injury occurred--the segment between the errand and work or the segment between the errand and home. St. Paul Fire & Marine Ins. Co. v. Confer, 956 S.W.2d 825, 830 (Tex. App.--San Antonio 1997, pet. denied). In its well-reasoned analysis of a case similar to this one, the San Antonio court of appeals upheld a jury verdict that an employee was in the course and scope of his employment when he had an accident that occurred while he was driving to a store for office supplies after which he would have driven home. As in this case, in Confer, the route home coincided with the route to the business errand. The majority does not distinguish Confer, but finds that it "departs" from the statute. I disagree.
The court in Confer parsed a difficult statute concluding that the "controlling issue should be whether the employee is traveling on behalf of his employer at the time of the accident, not on what road he happens to be traveling." Id. at 830. The court reasoned that the fact that the office supply store happened to be along the same route as the employee's route home "should be of little consequence." Id. at 829. Both Confer and Leordeanu were traveling on major highway arteries--Confer on Interstate Highway 35 and Leordeanu on Loop 360. As the Confer court correctly asked: "Why should the result be any different if [the office supply company] had been located somewhere off of Interstate 35, forcing Dr. Confer to travel away from his regular route?" There is no language in the statute suggesting that the legislature intended such a random factor to inform its statutory scheme. Nor can one assume that the fact that Leordeanu organized her sales travels and chores to eventually end up at home just off of Loop 360 would automatically exclude her from coverage.
By the majority's reasoning, Leordeanu was on a dual purpose trip that would exclude her from coverage when she left the doctor's office in Bastrop for the business dinner in Austin. Even though she was traveling from one business errand to another, and was clearly in the course and scope of employment, she was also traveling the same route that she would have to traverse to return to her home in Austin later that night even in the absence of a business purpose. Under the majority's erroneous application of the statute, this trip would be no different than her trip from the restaurant to the storage unit. Both the storage unit and restaurant were mere stops on a trip that would ultimately take her home. The issue is not whether she would end up at home at the end of her workday--most workers do. The issue is whether she was in the course and scope of her employment at the time of her accident.
The majority's reading makes it impossible for the statute to achieve its legislative purpose by extirpating its provisions for persons without a fixed workplace. The coming and going rule originates from the proposition that an injury occurring while using the public streets or highways in commuting to and from work is non-compensable because the employee is not exposed to any risk of the workplace that any other driver is not exposed to. A different situation is presented when an injury occurs as the result of travel pursuant to express or implied requirements of an employment contract. Jecker, 369 S.W.2d. at 778. The rationale for the exception is that since it is the employment that exposes the employee to the risks of the public streets and highways, his injuries arise from the employment. Id. Further, the statutory definition of course and scope of employment contemplates coverage for activities conducted on the work premises and "at other locations." Tex. Lab. Code Ann. § 401.011(12). When travel upon public roadways is an integral or necessary part of one's employment, and it is as much a part of one's work as the actual arrival at a workplace--or if there is no actual workplace other than a home office--travel is an element of the employment, and courts have held that such traveling is in the course and scope of employment. See, e.g., Jecker, 369 S.W.2d 776 (holding that salesman's death was compensable when he was in accident on return trip from a service call); Employee Cas. Co. v. Hutchinson, 814 S.W.2d 539 (Tex. App.--Austin 1991, no writ) (holding that dual purpose rule did not bar recovery for customer service employee killed in an accident on trip from family reunion to customer's home); Rose, 795 S.W.2d 210.
It would defeat the legislative scheme to simply label all travel in the direction of home as "inherently personal" and automatically exclude it from coverage under the dual purpose rule. Surely, a salesperson who organized his stops from the furthest stop to the closest one to home and began his work with the stop at the longest distance from home cannot be said to be excluded by the dual purpose rule as he works his way home.
This is not a typical commuter case. Leordeanu was a traveling sales representative who worked out of her car, storage unit and home office. Unlike the normal commuter who travels to and from a set place, or places, of employment, she was directed in her employment to travel from place to place within her designated territory on a daily basis. On the day of her injury she traveled to a health care provider's office in Austin, to offices in Bastrop, back to a restaurant in Austin, and was then injured in an accident as she drove towards her employer's storage unit after 9 p.m.
Leordeanu is not like a normal commuter, and was not injured as a consequence of a risk to which all traveling persons are exposed. Her accident arose out of the traveling nature of her employment. It arose from an activity that "originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer." See Tex. Lab. Code Ann. § 401.011(12). More than sufficient evidence was provided at trial for the jury to find that, at the time of her accident, Leordeanu was traveling from a business dinner to a storage unit, and even then to her home office, for the sole purpose of furthering her employer's affairs.
The jury's finding, and the San Antonio court's holding in Confer, are in accord with Evans and other cases relied on by the majority. In Evans, the Texas Supreme Court held that an employee's death was not compensable when he was killed in an accident on his way to a pre-work safety meeting because he had not yet "begun work" and coverage was therefore barred under the coming and going rule. 790 S.W.2d at 305. The court stated, however, that the death would have been compensable if the accident had occurred between the safety meeting and the work site.
In Tramel, the Fort Worth court of appeals held that an injury was not compensable when the employee was injured during her regular trip to the bank on behalf of her employer before work. 830 S.W.2d at 757. The accident occurred on a point in the trip that she would have traveled on her way from home to either the bank or work. Id. Unlike the employees in both of these cases, Leordeanu was not merely driving to work at the time of her injury but was in fact in the course and scope of her employment as a traveling pharmaceutical sales representative. Once she began her work for the day, Leordeanu's situation became analogous to the Evans court's hypothetical in which the employee injury was compensable because it occurred during travel between the pre-work safety meeting and the work site. This case is even more compelling as Leordeanu operated out of her home office and her storage facility and drove a company car.
The facts of the present case are more like those in Meyer v. Western Fire Ins. Co., 425 S.W.2d 628, 629 (Tex. 1968), than Evans or Tramel. In Meyer, the Texas Supreme Court held that an employee's accident on the way to work was in the course and scope of employment when the employee had taken work-related phone calls from home before departing. Id. at 629. The employee was a service supervisor who worked partly at home, partly at his employer's office and partly in making service calls to homes built by his employer. Id. He drove his own vehicle and had discretion as to when he made his service calls. He was not required to stop by the office at any given time, but tried to stop by once a day to pick up messages. Id. The court framed the question whether he was already working at the time of the accident or whether he was merely on his way to work. Id. at 628. In determining whether his accident was in the course and scope of employment, the court reflected on the legislature's adoption of the "coming and going" and "dual purpose" rules:
[T]he Legislature surely did not intend to provide that an employee whose employment requires him to travel at his own expense in his own automobile on streets and highways, either constantly or intermittently, should be denied compensation if accidently injured while thus exposed to risks growing out of his employment. Any such holding would be wholly unjust to salesmen, servicemen, repairmen, deliverymen, and a host of others who may be required to use their own automobiles in their work, and would be a strict rather than a liberal interpretation of the Workmen's Compensation Act. Id. at 630 (quoting Jecker, 369 S.W.2d at 779). The court held that there was evidence that the employee was impliedly directed in his employment to travel to the office on the day of the accident and that the dual purpose rule did not bar him from recovering benefits. Id. at 630-31.
In a similar manner to the employee in Meyer, Leordeanu worked partly in making sales calls, partly out of her storage facility and partly at home. She had discretion as to when she would make her calls, and as the employee in Meyer did, she would visit the storage unit on a regular basis in the course of her duties. Unlike the employee in Meyer, Leordeanu was furnished with a company car she used to further her employer's affairs--making the case that her accident was in the course and scope of employment even more compelling. Leordeanu is precisely the kind of employee that the Jecker and Meyer courts warned would be unjustly denied recovery under a "strict rather than a liberal interpretation" of the statute. See id.
The majority is correct that the statute is semantically challenging. But the trial court gave a correct statement of the law in its instruction and identified the ultimate destination for the jury's journey. The jury accomplished the task it was asked to do. Because the evidence in this case, assessed under the appropriate standard, was clearly sufficient to support the jury's finding of course and scope of employment, I respectfully dissent.
__________________________________________
Jan P. Patterson, Justice
Before Justices Patterson, Pemberton and Waldrop
Filed: August 2, 2007
1. Where evidence of dual purposes existed and the court did not include a charge, it was reversed. See, e.g., Wausau Underwriters Ins. Co. v. Potter, 807 S.W.2d 419, 422-23 (Tex. App.--Beaumont 1991, writ denied). Despite the fact that this case may not raise the issue of dual purpose travel and require such a charge, the cautious trial court gave one.
Monday, July 30, 2007
Pickett v. Texas Mutual Insurance Co. ___ S.W.3d ___ (Tex.App.- Austin 2007)
Mark Pickett and Barbara Pickett vs. Texas Mutual Insurance Co., f/k/a Texas Workers' Compensation Insurance Fund, No. 03-04-00374-CV (Tex.App. - Austin, July 26, 2007)(Opinion by Justice Waldrop)(worker's compensation, exhaustion of administrative remedies)(Before Justices Puryear, Waldrop and Henson)
Appeal from 345th District Court of Travis County
Holding: The exhaustion process required by Fodge is constitutional and applies to all of the Picketts' claims, including tort and statutory claims for damages other than workers' compensation benefits, arising from an alleged delay or denial of benefits. The trial court correctly dismissed the Picketts' claims concerning alleged delays or denials of medical benefits for which the Picketts did not obtain a timely final determination from the Commission that Ms. Pickett was entitled to the benefits in dispute. The trial court had jurisdiction over the Picketts' claims arising from the billing disputes between Dr. Kiser and Texas Mutual, which resulted in three final Commission orders adverse to Texas Mutual. However, because Texas Mutual is not liable to the Picketts for any alleged damage the Picketts may have incurred as a result of receiving additional collection notices from Dr. Kiser regarding the benefits that were the subject of the three billing disputes that were heard before the Commission, we conclude that the trial court correctly granted summary judgment against the Picketts on those claims.
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. 99-15029, HONORABLE PATRICK O. KEEL, JUDGE PRESIDING
OPINION BY JUSTICE G. ALLAN WALDROP
This appeal concerns the requirement that a party seeking damages for a workers' compensation insurance carrier's alleged delay or denial of medical benefits in bad faith must exhaust administrative remedies at the Texas Workers' Compensation Commission before filing suit. See American Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 804-05 (Tex. 2001).
Appellants Mark Pickett and Barbara Pickett sued Texas Mutual Insurance Company for allegedly delaying or denying medical benefits to Barbara Pickett in bad faith. The trial court dismissed most of the Picketts' claims for want of jurisdiction for failure to exhaust their administrative remedies at the Commission and granted a take-nothing summary judgment against the Picketts on their claims arising from three medical disputes for which the administrative remedies had been exhausted. We affirm.
In December 1995, Barbara Pickett suffered a back injury while performing her job duties for Molly Maid, a home cleaning service. She claims that her back injury resulted in depression and chronic pain in her neck, arms, lower back, and legs. Since 1995, Ms. Pickett has been repeatedly hospitalized for attempted suicide and self-mutilation. She contends that her work-related injury aggravated preexisting psychological conditions.
Texas Mutual is the workers' compensation insurance carrier for Molly Maid. It has paid income and disability benefits to Ms. Pickett for her work-related injury as well as hundreds of thousands of dollars for her healthcare. Beginning in 1997, Texas Mutual denied preauthorization for certain chronic pain management services related to Ms. Pickett's psychological disorders on the basis that those medical services were not related to her compensable injuries or were not reasonable and medically necessary.
Under the Texas Workers' Compensation Act, Ms. Pickett was entitled to contest those denied preauthorization requests through an administrative dispute resolution procedure conducted by the Commission's Medical Review Division. See Tex. Lab. Code Ann. § 413.031 (West 2006). Ms. Pickett did not, however, submit any disputes concerning the denied preauthorization requests for administrative review at the Commission.
Beginning in 1999, Dr. Sanford Kiser, one of Ms. Pickett's healthcare providers, submitted several billing disputes to the Commission for administrative review. These disputes concerned medical services that Ms. Pickett had already received and for which Texas Mutual had denied reimbursement to Dr. Kiser. The Picketts were not involved in or parties to the billing disputes between Dr. Kiser and Texas Mutual. As a result of the billing disputes, Dr. Kiser obtained three final orders--two from the Commission and one from the State Office of Administrative Hearings--directing Texas Mutual to reimburse him. (1)
In October 1999, Texas Mutual and Ms. Pickett entered into a Benefit Dispute Agreement. The purpose of the Agreement was to determine which of Ms. Pickett's psychological disorders were causally related to her compensable back injury. Texas Mutual and Ms. Pickett agreed that her diagnosis of major depressive disorder and pain disorder were causally related to the compensable back injury, but that her diagnosis of post-traumatic stress disorder, mixed personality disorder, and dissociative disorder were not related to the compensable back injury.
The Agreement did not address or determine what medical treatments were related to Ms. Pickett's compensable psychological conditions, what treatments would be medically necessary and reasonable for those conditions, or what fees should be paid under the Commission's rules for treating those conditions. Therefore, Texas Mutual remained responsible for reviewing all of Ms. Pickett's submitted medical bills and preauthorization requests to determine whether a medical treatment related to her compensable injuries or her non-compensable injuries. The Agreement did not relieve Ms. Pickett or her healthcare providers of their obligations to exhaust administrative remedies regarding any disputes over specific medical benefits.
Two months after entering into the Agreement, the Picketts sued Texas Mutual asserting violations of the Texas Insurance Code and the Deceptive Trade Practices Act, breach of fiduciary duty and duty of good faith and fair dealing, intentional infliction of emotional distress, negligence, and negligent misrepresentation. They alleged that Texas Mutual wrongfully delayed or denied preauthorization for certain medical services and prescriptions related to Ms. Pickett's chronic pain condition, causing physical and psychological injury to Ms. Pickett beyond the extent of her work-related injury. (2)
In 2001, the Texas Supreme Court decided American Motorists Insurance Co. v. Fodge, which held that a trial court does not have subject matter jurisdiction over bad faith claims arising from allegedly delayed or denied workers' compensation benefits unless and until the worker obtains a timely, final administrative decision from the Texas Workers' Compensation Commission that the worker is entitled to the medical benefits in dispute. 63 S.W.3d at 804-05.
Although Texas Mutual filed a motion to dismiss before Fodge was decided, the suit was abated by agreement of the parties until the issuance of that opinion. After Fodge was decided, the trial court held a hearing and initially denied the motion. Texas Mutual then filed a motion for reconsideration, a motion for partial summary judgment, a no evidence motion for summary judgment, and a traditional motion for summary judgment. The trial court granted the motion to reconsider, the motion to dismiss, and the motion for summary judgment. Because the Picketts did not obtain administrative orders from the Commission that Ms. Pickett was entitled to any of the medical benefits they claim were improperly delayed or denied, the trial court dismissed most of the Picketts' claims for want of jurisdiction. The trial court also granted a take-nothing summary judgment against the Picketts on their claims arising from the only final administrative orders in the record--the three orders directing Texas Mutual to reimburse Dr. Kiser for medical services that Ms. Pickett had already received. The court entered findings of fact and conclusions of law in support of the order of dismissal.
On appeal, the Picketts assert that (1) the application of the Fodge opinion to their case is unconstitutional; (2) their tort and statutory claims seeking damages other than the payment of workers' compensation benefits do not require administrative exhaustion; (3) claims subject to the Benefit Dispute Agreement do not require administrative exhaustion; (4) Texas Mutual waived the requirement that the Picketts exhaust their administrative remedies or, alternatively, that they exhausted their administrative remedies; (5) the futility exception to the exhaustion requirement applies; (6) the trial court erred in admitting certain evidence; (7) summary judgment is improper on claims over which the trial court had jurisdiction; and (8) the trial court's summary judgment is not a final judgment.
The Constitutional Application of Fodge
The Picketts assert numerous violations of their constitutional rights from the trial court's application of the Fodge opinion to their claims. First, they contend that the Fodge opinion established a new rule of law and, as such, cannot be applied retroactively to their claims arising before the issuance of that opinion.
Prior to the issuance of Fodge, it was well established that the Texas Workers' Compensation Act vested the power to award compensation benefits solely in the Commission, subject to judicial review. Saenz v. Fidelity & Guar. Ins. Underwriters, 925 S.W.2d 607, 612 (Tex. 1996) (citing Brannon v. Pacific Employers Ins. Co., 224 S.W.2d 466, 468 (Tex. 1949); Traders & Gen. Ins. Co. v. Bailey, 94 S.W.2d 134, 135 (Tex. 1936); Commercial Casualty Ins. Co. v. Hilton, 87 S.W.2d 1081, 1083 (Tex. 1935)). In Saenz, the Texas Supreme Court stated that "[a]llowing courts to award damages for wrongful deprivation of benefits would circumvent the Commission's jurisdiction." 925 S.W.2d at 612. Relying on Saenz, the Fodge court held that "just as a court cannot award compensation benefits, except on appeal from a Commission ruling, neither can it award damages for a denial in payment of compensation benefits without a determination by the Commission that such benefits were due." 63 S.W.3d at 804. Thus, the Fodge opinion interpreted existing law concerning exhaustion of administrative remedies in the workers' compensation context and did not, as the Picketts contend, establish a new rule of law.
Additionally, there are no constitutional prohibitions against applying the Fodge opinion to the Picketts' claims that arose prior to the issuance of that opinion in 2001. Instead, the general rule is that decisions of the supreme court apply retrospectively. Bowen v. Aetna Cas. & Sur. Co., 837 S.W.2d 99, 100 (Tex. 1992); Elbaor v. Smith, 845 S.W.2d 240, 250 (Tex. 1992). The decision of whether a supreme court case applies only prospectively lies within the discretion of the supreme court. See Lohec v. Galveston County Comm'rs Court, 841 S.W.2d 361, 366 (Tex. 1992). In Lohec, the supreme court stated:
Our decisions operate retroactively unless this court exercises its discretion to modify that application. When determining whether to exercise our discretion to modify retroactive application, this court weighs, among other things, considerations of fairness, equity and policy including whether the decision involves an issue of first impression and whether retroactive application could produce substantial inequitable results. Id. (citations omitted).
Because the Fodge opinion does not contain language indicating an intent to apply only prospectively, we conclude that the supreme court intended Fodge to apply retrospectively. See Camacho v. Samaniego, 954 S.W.2d 811, 825 (Tex. App.--El Paso 1997, writ denied).
The Picketts also assert that the administrative exhaustion process required by Fodge violates their constitutional rights. In particular, they challenge the trial court's application of an administrative rule that limits the time in which a party can seek a review of a medical dispute with the Commission to one year from the date(s) of the medical service in dispute. See 28 Tex. Admin. Code § 133.307(d)(1) (2004). (3) The Fodge court considered the effect of such a rule:
American Motorists argues that the time for Fodge to assert claims for medical benefits in the Commission has expired. If that be true, and she can no longer obtain the benefits she says she should have had, then her damage claims related to American Motorists' refusal to provide her such benefits would no longer be viable and should be dismissed. 63 S.W.3d at 804.
Similarly, the trial court in this case issued a conclusion of law that "the time for Barbara Pickett or her healthcare providers to pursue adjudication of the medical benefits that Pickett identified in her discovery responses in this case has expired because more than one year has passed from the date of service."
The Picketts first contend that the application of the Commission's one-year rule violates the constitutional prohibition against retroactive laws. See Tex. Const. art. I. § 16 ("No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made."). "'While statutory retroactivity has long been disfavored, deciding when a statute operates 'retroactively' is not always a simple or mechanical task.'" Quick v. City of Austin, 7 S.W.3d 109, 132 (Tex. 1999) (quoting Landgraf v. USI Film Prods., 511 U.S. 244, 280 (1994)). In Quick, the Texas Supreme Court took particular note of the following language from the U.S. Supreme Court's opinion in Landgraf :
A statute does not operate "retrospectively" merely because it is applied in a case arising from conduct antedating the statute's enactment, or upsets expectations based in prior law. Rather, the court must ask whether the new provision attaches new legal consequences to events completed before its enactment. The conclusion that a particular rule operates "retroactively" comes at the end of a process of judgment concerning the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event. Id. (quoting Langraf, 511 U.S. at 269-70) (citations and footnote omitted).
Applying these principles, this Court has held that a statute is not retroactive merely because it draws upon antecedent facts for its operation. Board of Med. Examiners for Tex. v. Nzedu, No. 03-05-00032-CV, 2007 Tex. App. LEXIS 3419, at *17-18 (Tex. App.--Austin May 4, 2007, no pet.); General Dynamics Corp. v. Sharp, 919 S.W.2d 861, 866 (Tex. App.--Austin 1996, writ denied); see also Southwestern Bell Tel. Co. v. Public Util. Comm'n, 31 S.W.3d 631, 639 (Tex. App.--Austin 2000), aff'd, 92 S.W.3d 434 (Tex. 2002); Upjohn Co. v. Rylander, 38 S.W.3d 600, 612 (Tex. App.--Austin 2000, pet. denied); American Home Assur. v. Texas Dep't of Ins., 907 S.W.2d 90, 94 (Tex. App.--Austin 1995, writ denied) (quoting Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 571 (1933)).
The Commission's one-year rule was adopted in 1991 and has been in effect at all times relevant to the Picketts' lawsuit. See 16 Tex. Reg. 2830 (1991) (originally codified at 28 Tex. Admin. Code § 133.305) (proposed May 21, 1991). The record reflects that the Picketts' claims began to accrue in 1997, almost six years after the rule's effective date. Thus, the rule is only retrospective in the sense that it looks back to the original date(s) of the medical service(s) in question to determine whether the Picketts could timely file any of their disputes at the Commission, which, in turn, governs the appropriate remedy for the trial court's lack of jurisdiction--abatement or dismissal. See Fodge, 63 S.W.3d at 805. Such a look-back feature in the application of the Commission's one-year rule to the Picketts' claims does not violate the constitutional prohibition against retroactivity. See Nzedu, No. 03-05-00032-CV, 2007 Tex. App. LEXIS 3419, at *17-18; General Dynamics Corp., 919 S.W.2d at 866.
The Picketts also contend that the administrative exhaustion process required by Fodge, including the application of the Commission's one-year rule, violates their due process rights. The due-course-of-law provision in article I, section 19 of the Texas Constitution, similar to the federal Due Process Clause, contains both procedural and substantive components. Tex. Const. art. I, § 19; see Rylander v. Palais Royal, 81 S.W.3d 909, 916 (Tex. App.--Austin 2002, pet. denied). Due process at a minimum requires notice and an opportunity to be heard at a meaningful time and in a meaningful manner. Texas Workers' Comp. Comm'n v. Patient Advocates, 136 S.W.3d 643, 658 (Tex. 2004) (citing Mathews v. Eldridge, 424 U.S. 319, 333 (1976); Perry v. Del Rio, 67 S.W.3d 85, 92 (Tex. 2001)).
Pursuant to section 413.031 of the Workers' Compensation Act, a party, including a healthcare provider, may submit disputes regarding medical services that have been provided or for which authorization is sought for review at the Commission. See Tex. Lab. Code Ann. § 413.031(a); Continental Cas. Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393, 396 (Tex. 2000). The Commission's one-year rule operates within this dispute resolution scheme to prospectively limit the amount of time a party may take to file a dispute at the Commission to one year from the date of the disputed medical service. See 28 Tex. Admin. Code § 133.307(d)(1).
Under Fodge, once a claimant receives a determination from the Commission that a claimant is entitled to a disputed benefit, the trial court will have subject matter jurisdiction over bad-faith claims arising from the alleged delay or denial of that benefit. See 63 S.W.3d at 804-05.
Requiring a party seeking damages for a workers' compensation insurance carrier's alleged delay or denial of medical benefits in bad faith to exhaust administrative remedies at the Commission before filing suit does not deprive that party an opportunity to be heard at a meaningful time and in a meaningful manner. Rather, the exhaustion process provides automatic access to the Commission's dispute resolution procedures and subsequent access to the courts if the Commission determines that a claimant is entitled to a disputed benefit. Accordingly, we hold that requiring the Picketts to exhaust their administrative remedies at the Commission did not violate their due process rights. Our holding also applies to the Picketts' arguments alleging violations of the Due Process Clause of the Fourteenth Amendment to the United States Constitution. U.S. Const. amend. XIV, § 1; Palais Royal, 81 S.W.3d at 916 (citing Norris v State, 788 S.W.2d 65, 72 (Tex. App.--Dallas 1990, writ ref'd.) (stating that courts have historically equated due-course-of-law provision of Texas Constitution with Due Process Clause of United States Constitution)).
Lastly, the Picketts contend that the exhaustion process required by Fodge violates the open courts provision of the Texas Constitution. The Texas open courts provision prohibits the legislature from abrogating well established, common law causes of action unless the reason for doing so outweighs a litigant's constitutional right of redress. See Tex. Const. art 1, §13; Subaru Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 227 (Tex. 2002). The Texas Supreme Court has consistently declined to construe statutes to deprive citizens of common law rights unless the legislature clearly expressed that intent. Cash Am. Int'l, Inc. v. Bennett, 35 S.W.3d 12, 16 (Tex. 2000). The Fodge court recognized that the legislature had not called for the complete removal of bad faith liability in the context of workers' compensation:
The Texas Workers' Compensation Insurance Fund argues as amicus curiae that the highly regulated nature of the compensation process should preclude liability for bad faith under any circumstances. While we need not go so far here, we do conclude that the process precludes bad faith liability for denying benefits to which the claimant is not entitled. 63 S.W.3d at 804.
Thus, the Fodge exhaustion requirement does not violate the open courts provision because a workers' compensation claimant who has received a final administrative decision from the Commission that he is entitled to a disputed benefit is not precluded from pursuing a bad faith claim against a workers' compensation insurance carrier in a court of law.
The Exclusive Jurisdiction of the Commission
The Picketts contend that the trial court had jurisdiction over their tort and statutory claims for damages other than the payment of workers' compensation benefits. They argue that because these claims are "not predicated on a denial of benefits," the Commission does not have exclusive jurisdiction over them. We disagree. The determination of whether any type of claim is within the exclusive jurisdiction of the Commission depends on whether the claim is based on a claimant's entitlement to benefits. See In re Texas Mut. Ins. Co., 157 S.W.3d 75, 81 (Tex. App.--Austin 2004, no pet.) (citing Fodge, 63 S.W.3d at 805).
The issue is not whether a particular type of claim, such as a tort or statutory claim, is within the exclusive jurisdiction of the Commission. Rather, the determination of whether any type of claim is within the exclusive jurisdiction of the Commission depends on whether the claim is based on an alleged delay or denial of a workers' compensation benefit.
The Fodge court recognized that the Commission's exclusive jurisdiction may extend to tort claims and statutory violations: "[Fodge's] claim for damages from denied medical treatment is made no more viable simply by restating it under the other legal authorities she asserted-- negligence, fraud, and statutory violations." 63 S.W.3d at 804. Similarly, in this case, the Picketts' tort and statutory claims are based on alleged denials, delays, interruptions, and premature terminations of medical treatment. The Picketts also alleged that Texas Mutual "represent[ed] certain benefits existed when they apparently did not, and delay[ed] or refus[ed] to allow [Ms. Pickett] to obtain her medications." On this record, it is difficult to see how any of the Picketts' claims are "not predicated on the denial of benefits."
The Picketts also argue that these claims do not fall within the exclusive jurisdiction of the Commission because they seek damages other than denied medical benefits. However, the Fodge court explained:
[t]o award damages equal to the cost of denied medical care is tantamount to ordering that the care be paid for and would, as we said in Saenz, circumvent the Commission's exclusive authority to decide that issue. The same is true for Fodge's other claims for damages based on a denial of benefits. 63 S.W.3d at 804.
These "other claims for damages" included statutory damages, mental anguish, past and future loss of wages, impairment of credit reputation, and attorney's fees. Id. at 803. Similarly, because all of the Picketts' claimed damages concern an alleged delay or denial of benefits, exhaustion of remedies is required.
The Picketts also assert that their claims premised on delay, as opposed to denial, in the payment or preauthorization of medical benefits do not require exhaustion at the Commission. However, the holding of Fodge does not except from exhaustion claims premised on an insurance carrier's alleged bad faith delay in paying or preauthorizing benefits. Ms. Fodge was allowed to seek judicial review of one claim based on the carrier's bad faith delay in handling her claim and paying her compensation benefits. Id. The court distinguished this claim from other "claims for benefits on which [Fodge] has never prevailed." Id. at 804-05. This distinction suggests that the court determined that Ms. Fodge had exhausted her administrative remedies on this one claim, not that exhaustion was excused for all claims based on an alleged delay in the payment of benefits. Furthermore, the Fort Worth Court of Appeals has held that the process described in Fodge applies to claims based on an alleged delay in payment of benefits. See Malish v. Pacific Employers Ins. Co., 106 S.W.3d 744, 746-47 (Tex. App.--Fort Worth 2003, no pet.). Therefore, the Picketts' claims based on alleged delays in the payment or preauthorization of medical benefits are not exempt from exhaustion at the Commission.
Lastly, the Picketts argue that Texas Mutual waived its right to demand exhaustion by not filing certain required notices contesting the compensability or relatedness of Ms. Pickett's medical services. We disagree. The Commission's exclusive jurisdiction affects a trial court's subject matter jurisdiction over the controversy. Subaru, 84 S.W.3d at 221. Subject matter jurisdiction is an issue that may be raised for the first time on appeal, and it may not be waived by the parties. Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 850 (Tex. 2000) (citing Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 445 (Tex. 1993)). Therefore, the Picketts' argument that Texas Mutual waived its right to contest the compensability or relatedness of the Picketts' claims is not a basis for defeating jurisdiction but merely identifies one of the issues that the Commission would consider when determining Ms. Pickett's benefits claims. In re Texas Mut. Ins. Co., 157 S.W.3d at 81.
The Benefit Dispute Agreement
The Picketts contend that any claims that were subject to the October 1999 Benefit Dispute Agreement do not require exhaustion at the Commission. However, the Agreement between Texas Mutual and Ms. Pickett only determined which of Ms. Pickett's psychological disorders were causally related to her compensable back injury. The Agreement did not determine which medical treatments were appropriate for those psychological disorders or address Ms. Pickett's entitlement to medical benefits in any way. We believe that Fodge is dispositive in situations where, as here, the parties have only agreed as to the extent of the claimant's compensable injuries. Ms. Fodge and her insurance carrier had a dispute over the compensability of the injury in question and went through the benefit review process. See 63 S.W.3d at 802. The benefit review officer found that Ms. Fodge's injury, was, in fact, compensable. Id. Nevertheless, the court held that Ms. Fodge's claims arising from denied medical benefits were subject to the exhaustion requirement because "[n]ever in the proceedings at the Commission did Fodge claim medical benefits or complain that American Motorists had denied medical benefits, nor did any medical provider claim payment for medical services provided to Fodge." Id.
In this case, the record shows that the parties agreed that Ms. Pickett's diagnosis of major depressive disorder and pain disorder were causally related to the compensable back injury, but that Ms. Pickett's diagnosis of post-traumatic stress disorder, mixed personality disorder, and dissociative disorder were not related to the compensable back injury. Because this Agreement did not resolve any issues concerning Ms. Pickett's entitlement to medical benefits, the Picketts were required to exhaust their administrative remedies and obtain a favorable determination from the Commission before proceeding to court.
The Picketts argue that their case is controlled by Gregson v. Zurich American Insurance Co., 322 F.3d 883 (5th Cir. 2003). The insurance carrier in Gregson found the plaintiff's injury compensable and agreed to provide coverage for back surgery. Id. at 886. The carrier then refused payment for the medication prescribed to the plaintiff following surgery. Id. at 884. The plaintiff sued the carrier seeking to recover damages for bad faith. Id. The Gregson court recognized Fodge, but held that the plaintiff was not required to exhaust his administrative remedies because the insurance carrier had agreed to provide coverage for Gregson's back surgery and all other reasonable and necessary benefits incident to the treatment, including the post-surgery prescription. Id. at 886. Unlike the insurance carrier in Gregson, Texas Mutual never agreed to provide coverage to Ms. Pickett for any specific kind of medical treatment. Instead, Texas Mutual was, at all times, required to approve or deny requests for preauthorization for Ms. Pickett's various medical treatments based solely upon the reasonable and necessary medical health care required to treat her compensable injury. See 28 Tex. Admin. Code § 134.600 (2004). Texas Mutual was also required to retrospectively review all complete medical bills and pay for or deny payment in accordance with the Act, rules, and the appropriate Commission fee and treatment guidelines. Id. § 133.301 (2004). Thus, Gregson does not control here.
Exhaustion of Administrative Remedies
The Picketts contend that because of the large number of medical charges or claims in dispute, they should be excused from the requirement that they exhaust their administrative remedies because such exhaustion would be impractical. The requirement of exhaustion of administrative remedies does have a number of exceptions. Cases in which exhaustion of administrative remedies will cause irreparable harm, instances where administrative remedies are inadequate, and cases which involve a claim that the agency is acting beyond its jurisdiction or is applying an unconstitutional statute are examples of circumstances under which the requirement of exhaustion will be relaxed. See Central Power & Light Co. v. Sharp, 960 S.W.2d 617, 618 (Tex. 1997); Jones v. Dallas Indep. Sch. Dist., 872 S.W.2d 294, 296 (Tex. App.--Dallas 1994, writ denied); Texas State Bd. of Pharmacy v. Walgreen Texas Co., 520 S.W.2d 845, 848 (Tex. App.--Austin 1975, writ ref'd n.r.e.). However, the Picketts do not cite, and we have not found, any authority for the proposition that exhaustion will be or should be excused simply due to the number of medical charges or claims in dispute. Indeed, such an exception for claims subject to the Texas Workers' Compensation Commission's jurisdiction would be in direct conflict with the supreme court's decision in Fodge. Consequently, we decline to adopt such an exception here.
The Picketts also contend that they should be excused from exhausting their administrative remedies because the Commission does not have the statutory authority to grant the damages they seek for physical pain and suffering they claim is the result of Texas Mutual's denial of coverage. However, as noted in Fodge, claims for extracontractual damages based on a failure to pay or delay in paying medical benefits cannot relieve a claimant from exhausting administrative remedies before the Commission when the entitlement to the medical benefits is in dispute. See 63 S.W.3d at 804-05. Instead, under Fodge, the Picketts can only bring their claims for extracontractual damages based on an alleged delay or denial of medical benefits to court after obtaining a determination from the Commission that Ms. Pickett was entitled to the medical benefits in question. Id.
Lastly, the Picketts argue that the trial court's delay in deciding Texas Mutual's motion to dismiss should excuse their failure to exhaust administrative remedies. The record shows that after Texas Mutual filed its motion to dismiss in January 2000, the lawsuit was abated by agreement of the parties for three reasons: to discuss settlement, because of the Picketts' counsel's illness, and to await the supreme court's decision in Fodge. Because the Picketts agreed to abate their lawsuit, they cannot complain on appeal about the ensuing delay in deciding Texas Mutual's motion to dismiss. Throughout the period of abatement, the Picketts were entitled to exhaust their remedies at the Commission. They were also on notice that Texas Mutual's motion to dismiss was based on their failure to exhaust administrative remedies. Therefore, we are not persuaded that the Picketts' failure to exhaust their claims at the Commission should be excused.
Alternatively, the Picketts contend that the trial court should not have dismissed their claims because they "submitted" certain claims to the Commission and "orally requested" that the Commission reconsider certain claims. They assert that these actions constitute exhaustion. However, under Fodge, claims arising from an insurance carrier's alleged delay or denial of medical benefits are exhausted only when the claimant receives a final determination from the Commission that he was actually entitled to the medical benefits in dispute. 63 S.W.3d at 804. Aside from the three Commission orders concerning the billing disputes between Texas Mutual and Dr. Kiser, there is no evidence in the record that the Picketts received a final order from the Commission on any of their claims in this lawsuit. Assertions by the Picketts that they submitted certain claims to the Commission or made oral requests for the Commission to reconsider certain claims are not evidence that the Commission actually reviewed the Picketts' benefit disputes or issued orders that Ms. Pickett was actually entitled to medical benefits. Therefore, we overrule the Picketts' assertion that they had exhausted certain claims.
Evidentiary Rulings
The Picketts made the following evidentiary objections at the hearing on Texas Mutual's motion for reconsideration of the motion to dismiss, which they re-assert on appeal: (1) an objection to the introduction of oral testimony; (4) (2) an objection to the testimony of Texas Mutual's witnesses, Rick Ball, on the grounds that he was allegedly not disclosed as a witness in response to the Picketts' requests for disclosure or interrogatories; and (3) an objection to a chart documenting the requests for preauthorization of Ms. Pickett's medical care and Texas Mutual's responses, on the grounds that the underlying documents had not been produced. "To obtain reversal of a judgment based upon error of the trial court in admission or exclusion of evidence, the following must be shown: (1) that the trial court did in fact commit error; and (2) that the error was reasonably calculated to cause and probably did cause rendition of an improper judgment." See Tex. R. App. P. 44.1; Gee v. Liberty Mut. Fire Ins. Co., 765 S.W.2d 394, 396 (Tex. 1989).
First, the trial court did not abuse its discretion by permitting live testimony at the hearing on the motion for reconsideration of the motion to dismiss. A motion to dismiss is the functional equivalent of a plea to the jurisdiction challenging the trial court's authority to determine the subject matter of a cause of action. Lacy v. Bassett, 132 S.W.3d 119, 122 (Tex. App.--Houston [14th Dist.] 2004, no pet.) (citing Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000)). The Texas Supreme Court has held that "a court deciding a plea to the jurisdiction is not required to look solely to the pleadings but may consider other evidence and must do so when necessary to resolve the jurisdictional issues raised." Blue, 34 S.W.3d at 555. Because the record shows that the disputed testimony in this case went to the issue of the trial court's jurisdiction to hear the Picketts' claims, we conclude that the trial court did not abuse its discretion by allowing the disputed testimony at the hearing.
As for the Picketts' second objection, Texas Mutual's responses to the Picketts' requests for disclosure or interrogatories are not included in the record. The record does include two affidavits from Mr. Ball in support of Texas Mutual's motion for summary judgment and motion to dismiss. Additionally, Texas Mutual attempted to call Mr. Ball to testify at the first hearing on the motion to dismiss in July 2003. On this record, we conclude that the Picketts were not harmed or surprised when Mr. Ball was called to present testimony at the February 2004 hearing on the motion for reconsideration of the motion to dismiss, and that his testimony did not lead to the rendition of an improper judgment.
With respect to the Picketts' third objection, we conclude that the trial court's admission of the chart documenting the requests for preauthorization of Ms. Pickett's medical care and Texas Mutual's responses, if error, was harmless error. The Picketts contend that the chart should not have been admitted because the underlying documents were not produced. The record shows that counsel for the parties disagreed on whether another judge had denied the requested discovery or simply had not ruled on this issue. Whether or not this chart is a part of the evidentiary record, under Fodge, the trial court had jurisdiction only over claims arising from the three final Commission orders adverse to Texas Mutual concerning medical services that Ms. Pickett had already received from Dr. Kiser. We conclude that this chart documenting Ms. Pickett's preauthorization requests did not have any bearing on the trial court's lack of jurisdiction over the Picketts' unexhausted claims and did not lead to the rendition of an improper judgment.
The Picketts also contend that they were unable to adequately respond to Texas Mutual's motion for summary judgment and motion to dismiss due to an alleged lack of discovery. Under Texas law, when a party contends that it has not had an adequate opportunity for discovery before a summary judgment hearing, it must file in the trial court either an affidavit explaining the need for further discovery or a verified motion for continuance. Tenneco, Inc. v. Enterprise Prods. Co., 925 S.W.2d 640, 647 (Tex. 1996). The record shows that the Picketts filed two motions for continuance that were granted. However, the substance of these motions did not allege a need for further discovery to respond to Texas Mutual's motion for summary judgment. Therefore, we conclude that they have not preserved this point of error on appeal. See Tex. R. App. P. 33.1.
Summary Judgment
We review the district court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When the trial court does not specify the basis for its summary judgment, the appealing party must show it is error to base it on any ground asserted in the motion. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995). We must affirm the summary judgment if any of the grounds presented to the district court are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003); Sheshunoff v. Sheshunoff, 172 S.W.3d 686, 692 (Tex. App.--Austin 2005, pet. denied).
Pursuant to Fodge, the trial court had jurisdiction over and granted summary judgment on the Picketts' claims associated with the only three final Commission orders in the record: (1) a $48 bill for a hospital discharge report prepared by Dr. Kiser; (2) several bills for Dr. Kiser's inpatient encounters with Ms. Pickett during three periods of hospitalization; and (3) a $700 bill for psychotherapy services provided by Dr. Kiser. These three orders were entered in proceedings between Dr. Kiser and Texas Mutual and were not appealed by either party. The Picketts were not parties to these proceedings. In its motion for summary judgment, Texas Mutual asserted, among other things, that it is not legally responsible to the Picketts for the results of the Commission's denial of payment to Dr. Kiser in those disputes. We agree.
The Texas Workers' Compensation Act makes the employee's obligation to pay medical bills secondary to that of the insurer. Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994) (citing Smith v. Stephenson, 641 S.W.2d 900, 902 (Tex. 1982)). Moreover, it prohibits healthcare providers from trying to collect from the employee unless and until the Commission rules that the carrier is not responsible for payment. See id. As a result, the Texas Supreme Court will not hold an insurance carrier legally accountable to a claimant if the claimant is subjected to collection efforts by her healthcare providers before the Commission has determined that the carrier is not responsible for payment. See id.
The Picketts contend that they have incurred damages connected with Texas Mutual's denial of payment for these three benefits because they have "received numerous collection notices from healthcare providers for the medical expenses that have not been paid." However, there is no evidence in the record that the Commission ruled that Texas Mutual was not responsible for payment for any of these three benefits. Instead, the evidence is conclusive that the Commission ordered Texas Mutual to pay Dr. Kiser for these services. Accordingly, Texas Mutual is not liable to the Picketts for whatever damages they may have incurred as a result of receiving collection notices from Dr. Kiser for these medical treatments. See id. Any dispute regarding the collection efforts by Dr. Kiser against the Picketts is between the Picketts and Dr. Kiser under these circumstances.
Finality of Judgment
The Picketts argue that the trial court's judgment is not final because the trial court should not have dismissed some of their claims. The general rule, with a few exceptions not implicated here, is that an appeal may be taken only from a final judgment--that is, a judgment disposing of all pending parties and claims. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). Here, the judgment, which is labeled "final judgment," dismissed without prejudice the claims over which the trial court lacked jurisdiction and granted a take-nothing summary judgment on the claims over which it had jurisdiction. Because this judgment appears final on its face and disposes of all of the Picketts' claims, we conclude that it is a final judgment. Id. at 200.
Conclusion
The exhaustion process required by Fodge is constitutional and applies to all of the Picketts' claims, including tort and statutory claims for damages other than workers' compensation benefits, arising from an alleged delay or denial of benefits. The trial court correctly dismissed the Picketts' claims concerning alleged delays or denials of medical benefits for which the Picketts did not obtain a timely final determination from the Commission that Ms. Pickett was entitled to the benefits in dispute. The trial court had jurisdiction over the Picketts' claims arising from the billing disputes between Dr. Kiser and Texas Mutual, which resulted in three final Commission orders adverse to Texas Mutual. However, because Texas Mutual is not liable to the Picketts for any alleged damage the Picketts may have incurred as a result of receiving additional collection notices from Dr. Kiser regarding the benefits that were the subject of the three billing disputes that were heard before the Commission, we conclude that the trial court correctly granted summary judgment against the Picketts on those claims.
Affirmed.
___________________________________________
G. Alan Waldrop, Justice
Before Justices Puryear, Waldrop and Henson
Affirmed
Filed: July 26, 2007
1. The trial court's findings of fact provide the following information about the final administrative orders obtained by Dr. Kiser:
a. In MDR Tracking No. M5-00-0165-01, decided March 5, 2001, MRD determined that Texas Mutual incorrectly denied Dr. R. Sanford Kiser's $48.00 bill for preparation of Barbara Pickett's hospital discharge report on October 26, 1998.
b. In SOAH Docket No. 453-99-2609.M4, an administrative law judge found Texas Mutual responsible for paying Dr. Kiser's inpatient encounters with Barbara Pickett during three periods of her hospitalization (July 29, 1997 to August 15, 1997; September 15, 1997 to September 22, 1997, and from January 1, 1998 to February 6, 1998); and
c. In MDR Tracking No. M4-99-5645-01, decided April 11, 2000, MRD found that Texas Mutual owed Dr. Kiser $700.00 for Barbara Pickett's seven psychotherapy sessions during her hospitalization from January 5, 1998 to February 6, 1998.
2. The trial court entered a finding of fact that "Texas Mutual did not prospectively deny responsibility for any medication prescribed to Ms. Pickett." The Picketts do not dispute this finding of fact on appeal.
3. We cite to the version of the Texas Administrative Code that was in effect at the time of the trial court's final judgment in March 2004.
4. In their brief, the Picketts allege that the trial court allowed oral testimony at the hearing on Texas Mutual's motion for summary judgment. However, the record reflects that the disputed testimony was heard at the February 24, 2004 hearing on Texas Mutual's motion for reconsideration of its motion to dismiss.
Appeal from 345th District Court of Travis County
Holding: The exhaustion process required by Fodge is constitutional and applies to all of the Picketts' claims, including tort and statutory claims for damages other than workers' compensation benefits, arising from an alleged delay or denial of benefits. The trial court correctly dismissed the Picketts' claims concerning alleged delays or denials of medical benefits for which the Picketts did not obtain a timely final determination from the Commission that Ms. Pickett was entitled to the benefits in dispute. The trial court had jurisdiction over the Picketts' claims arising from the billing disputes between Dr. Kiser and Texas Mutual, which resulted in three final Commission orders adverse to Texas Mutual. However, because Texas Mutual is not liable to the Picketts for any alleged damage the Picketts may have incurred as a result of receiving additional collection notices from Dr. Kiser regarding the benefits that were the subject of the three billing disputes that were heard before the Commission, we conclude that the trial court correctly granted summary judgment against the Picketts on those claims.
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT
NO. 99-15029, HONORABLE PATRICK O. KEEL, JUDGE PRESIDING
OPINION BY JUSTICE G. ALLAN WALDROP
This appeal concerns the requirement that a party seeking damages for a workers' compensation insurance carrier's alleged delay or denial of medical benefits in bad faith must exhaust administrative remedies at the Texas Workers' Compensation Commission before filing suit. See American Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 804-05 (Tex. 2001).
Appellants Mark Pickett and Barbara Pickett sued Texas Mutual Insurance Company for allegedly delaying or denying medical benefits to Barbara Pickett in bad faith. The trial court dismissed most of the Picketts' claims for want of jurisdiction for failure to exhaust their administrative remedies at the Commission and granted a take-nothing summary judgment against the Picketts on their claims arising from three medical disputes for which the administrative remedies had been exhausted. We affirm.
In December 1995, Barbara Pickett suffered a back injury while performing her job duties for Molly Maid, a home cleaning service. She claims that her back injury resulted in depression and chronic pain in her neck, arms, lower back, and legs. Since 1995, Ms. Pickett has been repeatedly hospitalized for attempted suicide and self-mutilation. She contends that her work-related injury aggravated preexisting psychological conditions.
Texas Mutual is the workers' compensation insurance carrier for Molly Maid. It has paid income and disability benefits to Ms. Pickett for her work-related injury as well as hundreds of thousands of dollars for her healthcare. Beginning in 1997, Texas Mutual denied preauthorization for certain chronic pain management services related to Ms. Pickett's psychological disorders on the basis that those medical services were not related to her compensable injuries or were not reasonable and medically necessary.
Under the Texas Workers' Compensation Act, Ms. Pickett was entitled to contest those denied preauthorization requests through an administrative dispute resolution procedure conducted by the Commission's Medical Review Division. See Tex. Lab. Code Ann. § 413.031 (West 2006). Ms. Pickett did not, however, submit any disputes concerning the denied preauthorization requests for administrative review at the Commission.
Beginning in 1999, Dr. Sanford Kiser, one of Ms. Pickett's healthcare providers, submitted several billing disputes to the Commission for administrative review. These disputes concerned medical services that Ms. Pickett had already received and for which Texas Mutual had denied reimbursement to Dr. Kiser. The Picketts were not involved in or parties to the billing disputes between Dr. Kiser and Texas Mutual. As a result of the billing disputes, Dr. Kiser obtained three final orders--two from the Commission and one from the State Office of Administrative Hearings--directing Texas Mutual to reimburse him. (1)
In October 1999, Texas Mutual and Ms. Pickett entered into a Benefit Dispute Agreement. The purpose of the Agreement was to determine which of Ms. Pickett's psychological disorders were causally related to her compensable back injury. Texas Mutual and Ms. Pickett agreed that her diagnosis of major depressive disorder and pain disorder were causally related to the compensable back injury, but that her diagnosis of post-traumatic stress disorder, mixed personality disorder, and dissociative disorder were not related to the compensable back injury.
The Agreement did not address or determine what medical treatments were related to Ms. Pickett's compensable psychological conditions, what treatments would be medically necessary and reasonable for those conditions, or what fees should be paid under the Commission's rules for treating those conditions. Therefore, Texas Mutual remained responsible for reviewing all of Ms. Pickett's submitted medical bills and preauthorization requests to determine whether a medical treatment related to her compensable injuries or her non-compensable injuries. The Agreement did not relieve Ms. Pickett or her healthcare providers of their obligations to exhaust administrative remedies regarding any disputes over specific medical benefits.
Two months after entering into the Agreement, the Picketts sued Texas Mutual asserting violations of the Texas Insurance Code and the Deceptive Trade Practices Act, breach of fiduciary duty and duty of good faith and fair dealing, intentional infliction of emotional distress, negligence, and negligent misrepresentation. They alleged that Texas Mutual wrongfully delayed or denied preauthorization for certain medical services and prescriptions related to Ms. Pickett's chronic pain condition, causing physical and psychological injury to Ms. Pickett beyond the extent of her work-related injury. (2)
In 2001, the Texas Supreme Court decided American Motorists Insurance Co. v. Fodge, which held that a trial court does not have subject matter jurisdiction over bad faith claims arising from allegedly delayed or denied workers' compensation benefits unless and until the worker obtains a timely, final administrative decision from the Texas Workers' Compensation Commission that the worker is entitled to the medical benefits in dispute. 63 S.W.3d at 804-05.
Although Texas Mutual filed a motion to dismiss before Fodge was decided, the suit was abated by agreement of the parties until the issuance of that opinion. After Fodge was decided, the trial court held a hearing and initially denied the motion. Texas Mutual then filed a motion for reconsideration, a motion for partial summary judgment, a no evidence motion for summary judgment, and a traditional motion for summary judgment. The trial court granted the motion to reconsider, the motion to dismiss, and the motion for summary judgment. Because the Picketts did not obtain administrative orders from the Commission that Ms. Pickett was entitled to any of the medical benefits they claim were improperly delayed or denied, the trial court dismissed most of the Picketts' claims for want of jurisdiction. The trial court also granted a take-nothing summary judgment against the Picketts on their claims arising from the only final administrative orders in the record--the three orders directing Texas Mutual to reimburse Dr. Kiser for medical services that Ms. Pickett had already received. The court entered findings of fact and conclusions of law in support of the order of dismissal.
On appeal, the Picketts assert that (1) the application of the Fodge opinion to their case is unconstitutional; (2) their tort and statutory claims seeking damages other than the payment of workers' compensation benefits do not require administrative exhaustion; (3) claims subject to the Benefit Dispute Agreement do not require administrative exhaustion; (4) Texas Mutual waived the requirement that the Picketts exhaust their administrative remedies or, alternatively, that they exhausted their administrative remedies; (5) the futility exception to the exhaustion requirement applies; (6) the trial court erred in admitting certain evidence; (7) summary judgment is improper on claims over which the trial court had jurisdiction; and (8) the trial court's summary judgment is not a final judgment.
The Constitutional Application of Fodge
The Picketts assert numerous violations of their constitutional rights from the trial court's application of the Fodge opinion to their claims. First, they contend that the Fodge opinion established a new rule of law and, as such, cannot be applied retroactively to their claims arising before the issuance of that opinion.
Prior to the issuance of Fodge, it was well established that the Texas Workers' Compensation Act vested the power to award compensation benefits solely in the Commission, subject to judicial review. Saenz v. Fidelity & Guar. Ins. Underwriters, 925 S.W.2d 607, 612 (Tex. 1996) (citing Brannon v. Pacific Employers Ins. Co., 224 S.W.2d 466, 468 (Tex. 1949); Traders & Gen. Ins. Co. v. Bailey, 94 S.W.2d 134, 135 (Tex. 1936); Commercial Casualty Ins. Co. v. Hilton, 87 S.W.2d 1081, 1083 (Tex. 1935)). In Saenz, the Texas Supreme Court stated that "[a]llowing courts to award damages for wrongful deprivation of benefits would circumvent the Commission's jurisdiction." 925 S.W.2d at 612. Relying on Saenz, the Fodge court held that "just as a court cannot award compensation benefits, except on appeal from a Commission ruling, neither can it award damages for a denial in payment of compensation benefits without a determination by the Commission that such benefits were due." 63 S.W.3d at 804. Thus, the Fodge opinion interpreted existing law concerning exhaustion of administrative remedies in the workers' compensation context and did not, as the Picketts contend, establish a new rule of law.
Additionally, there are no constitutional prohibitions against applying the Fodge opinion to the Picketts' claims that arose prior to the issuance of that opinion in 2001. Instead, the general rule is that decisions of the supreme court apply retrospectively. Bowen v. Aetna Cas. & Sur. Co., 837 S.W.2d 99, 100 (Tex. 1992); Elbaor v. Smith, 845 S.W.2d 240, 250 (Tex. 1992). The decision of whether a supreme court case applies only prospectively lies within the discretion of the supreme court. See Lohec v. Galveston County Comm'rs Court, 841 S.W.2d 361, 366 (Tex. 1992). In Lohec, the supreme court stated:
Our decisions operate retroactively unless this court exercises its discretion to modify that application. When determining whether to exercise our discretion to modify retroactive application, this court weighs, among other things, considerations of fairness, equity and policy including whether the decision involves an issue of first impression and whether retroactive application could produce substantial inequitable results. Id. (citations omitted).
Because the Fodge opinion does not contain language indicating an intent to apply only prospectively, we conclude that the supreme court intended Fodge to apply retrospectively. See Camacho v. Samaniego, 954 S.W.2d 811, 825 (Tex. App.--El Paso 1997, writ denied).
The Picketts also assert that the administrative exhaustion process required by Fodge violates their constitutional rights. In particular, they challenge the trial court's application of an administrative rule that limits the time in which a party can seek a review of a medical dispute with the Commission to one year from the date(s) of the medical service in dispute. See 28 Tex. Admin. Code § 133.307(d)(1) (2004). (3) The Fodge court considered the effect of such a rule:
American Motorists argues that the time for Fodge to assert claims for medical benefits in the Commission has expired. If that be true, and she can no longer obtain the benefits she says she should have had, then her damage claims related to American Motorists' refusal to provide her such benefits would no longer be viable and should be dismissed. 63 S.W.3d at 804.
Similarly, the trial court in this case issued a conclusion of law that "the time for Barbara Pickett or her healthcare providers to pursue adjudication of the medical benefits that Pickett identified in her discovery responses in this case has expired because more than one year has passed from the date of service."
The Picketts first contend that the application of the Commission's one-year rule violates the constitutional prohibition against retroactive laws. See Tex. Const. art. I. § 16 ("No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made."). "'While statutory retroactivity has long been disfavored, deciding when a statute operates 'retroactively' is not always a simple or mechanical task.'" Quick v. City of Austin, 7 S.W.3d 109, 132 (Tex. 1999) (quoting Landgraf v. USI Film Prods., 511 U.S. 244, 280 (1994)). In Quick, the Texas Supreme Court took particular note of the following language from the U.S. Supreme Court's opinion in Landgraf :
A statute does not operate "retrospectively" merely because it is applied in a case arising from conduct antedating the statute's enactment, or upsets expectations based in prior law. Rather, the court must ask whether the new provision attaches new legal consequences to events completed before its enactment. The conclusion that a particular rule operates "retroactively" comes at the end of a process of judgment concerning the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event. Id. (quoting Langraf, 511 U.S. at 269-70) (citations and footnote omitted).
Applying these principles, this Court has held that a statute is not retroactive merely because it draws upon antecedent facts for its operation. Board of Med. Examiners for Tex. v. Nzedu, No. 03-05-00032-CV, 2007 Tex. App. LEXIS 3419, at *17-18 (Tex. App.--Austin May 4, 2007, no pet.); General Dynamics Corp. v. Sharp, 919 S.W.2d 861, 866 (Tex. App.--Austin 1996, writ denied); see also Southwestern Bell Tel. Co. v. Public Util. Comm'n, 31 S.W.3d 631, 639 (Tex. App.--Austin 2000), aff'd, 92 S.W.3d 434 (Tex. 2002); Upjohn Co. v. Rylander, 38 S.W.3d 600, 612 (Tex. App.--Austin 2000, pet. denied); American Home Assur. v. Texas Dep't of Ins., 907 S.W.2d 90, 94 (Tex. App.--Austin 1995, writ denied) (quoting Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 571 (1933)).
The Commission's one-year rule was adopted in 1991 and has been in effect at all times relevant to the Picketts' lawsuit. See 16 Tex. Reg. 2830 (1991) (originally codified at 28 Tex. Admin. Code § 133.305) (proposed May 21, 1991). The record reflects that the Picketts' claims began to accrue in 1997, almost six years after the rule's effective date. Thus, the rule is only retrospective in the sense that it looks back to the original date(s) of the medical service(s) in question to determine whether the Picketts could timely file any of their disputes at the Commission, which, in turn, governs the appropriate remedy for the trial court's lack of jurisdiction--abatement or dismissal. See Fodge, 63 S.W.3d at 805. Such a look-back feature in the application of the Commission's one-year rule to the Picketts' claims does not violate the constitutional prohibition against retroactivity. See Nzedu, No. 03-05-00032-CV, 2007 Tex. App. LEXIS 3419, at *17-18; General Dynamics Corp., 919 S.W.2d at 866.
The Picketts also contend that the administrative exhaustion process required by Fodge, including the application of the Commission's one-year rule, violates their due process rights. The due-course-of-law provision in article I, section 19 of the Texas Constitution, similar to the federal Due Process Clause, contains both procedural and substantive components. Tex. Const. art. I, § 19; see Rylander v. Palais Royal, 81 S.W.3d 909, 916 (Tex. App.--Austin 2002, pet. denied). Due process at a minimum requires notice and an opportunity to be heard at a meaningful time and in a meaningful manner. Texas Workers' Comp. Comm'n v. Patient Advocates, 136 S.W.3d 643, 658 (Tex. 2004) (citing Mathews v. Eldridge, 424 U.S. 319, 333 (1976); Perry v. Del Rio, 67 S.W.3d 85, 92 (Tex. 2001)).
Pursuant to section 413.031 of the Workers' Compensation Act, a party, including a healthcare provider, may submit disputes regarding medical services that have been provided or for which authorization is sought for review at the Commission. See Tex. Lab. Code Ann. § 413.031(a); Continental Cas. Ins. Co. v. Functional Restoration Assocs., 19 S.W.3d 393, 396 (Tex. 2000). The Commission's one-year rule operates within this dispute resolution scheme to prospectively limit the amount of time a party may take to file a dispute at the Commission to one year from the date of the disputed medical service. See 28 Tex. Admin. Code § 133.307(d)(1).
Under Fodge, once a claimant receives a determination from the Commission that a claimant is entitled to a disputed benefit, the trial court will have subject matter jurisdiction over bad-faith claims arising from the alleged delay or denial of that benefit. See 63 S.W.3d at 804-05.
Requiring a party seeking damages for a workers' compensation insurance carrier's alleged delay or denial of medical benefits in bad faith to exhaust administrative remedies at the Commission before filing suit does not deprive that party an opportunity to be heard at a meaningful time and in a meaningful manner. Rather, the exhaustion process provides automatic access to the Commission's dispute resolution procedures and subsequent access to the courts if the Commission determines that a claimant is entitled to a disputed benefit. Accordingly, we hold that requiring the Picketts to exhaust their administrative remedies at the Commission did not violate their due process rights. Our holding also applies to the Picketts' arguments alleging violations of the Due Process Clause of the Fourteenth Amendment to the United States Constitution. U.S. Const. amend. XIV, § 1; Palais Royal, 81 S.W.3d at 916 (citing Norris v State, 788 S.W.2d 65, 72 (Tex. App.--Dallas 1990, writ ref'd.) (stating that courts have historically equated due-course-of-law provision of Texas Constitution with Due Process Clause of United States Constitution)).
Lastly, the Picketts contend that the exhaustion process required by Fodge violates the open courts provision of the Texas Constitution. The Texas open courts provision prohibits the legislature from abrogating well established, common law causes of action unless the reason for doing so outweighs a litigant's constitutional right of redress. See Tex. Const. art 1, §13; Subaru Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 227 (Tex. 2002). The Texas Supreme Court has consistently declined to construe statutes to deprive citizens of common law rights unless the legislature clearly expressed that intent. Cash Am. Int'l, Inc. v. Bennett, 35 S.W.3d 12, 16 (Tex. 2000). The Fodge court recognized that the legislature had not called for the complete removal of bad faith liability in the context of workers' compensation:
The Texas Workers' Compensation Insurance Fund argues as amicus curiae that the highly regulated nature of the compensation process should preclude liability for bad faith under any circumstances. While we need not go so far here, we do conclude that the process precludes bad faith liability for denying benefits to which the claimant is not entitled. 63 S.W.3d at 804.
Thus, the Fodge exhaustion requirement does not violate the open courts provision because a workers' compensation claimant who has received a final administrative decision from the Commission that he is entitled to a disputed benefit is not precluded from pursuing a bad faith claim against a workers' compensation insurance carrier in a court of law.
The Exclusive Jurisdiction of the Commission
The Picketts contend that the trial court had jurisdiction over their tort and statutory claims for damages other than the payment of workers' compensation benefits. They argue that because these claims are "not predicated on a denial of benefits," the Commission does not have exclusive jurisdiction over them. We disagree. The determination of whether any type of claim is within the exclusive jurisdiction of the Commission depends on whether the claim is based on a claimant's entitlement to benefits. See In re Texas Mut. Ins. Co., 157 S.W.3d 75, 81 (Tex. App.--Austin 2004, no pet.) (citing Fodge, 63 S.W.3d at 805).
The issue is not whether a particular type of claim, such as a tort or statutory claim, is within the exclusive jurisdiction of the Commission. Rather, the determination of whether any type of claim is within the exclusive jurisdiction of the Commission depends on whether the claim is based on an alleged delay or denial of a workers' compensation benefit.
The Fodge court recognized that the Commission's exclusive jurisdiction may extend to tort claims and statutory violations: "[Fodge's] claim for damages from denied medical treatment is made no more viable simply by restating it under the other legal authorities she asserted-- negligence, fraud, and statutory violations." 63 S.W.3d at 804. Similarly, in this case, the Picketts' tort and statutory claims are based on alleged denials, delays, interruptions, and premature terminations of medical treatment. The Picketts also alleged that Texas Mutual "represent[ed] certain benefits existed when they apparently did not, and delay[ed] or refus[ed] to allow [Ms. Pickett] to obtain her medications." On this record, it is difficult to see how any of the Picketts' claims are "not predicated on the denial of benefits."
The Picketts also argue that these claims do not fall within the exclusive jurisdiction of the Commission because they seek damages other than denied medical benefits. However, the Fodge court explained:
[t]o award damages equal to the cost of denied medical care is tantamount to ordering that the care be paid for and would, as we said in Saenz, circumvent the Commission's exclusive authority to decide that issue. The same is true for Fodge's other claims for damages based on a denial of benefits. 63 S.W.3d at 804.
These "other claims for damages" included statutory damages, mental anguish, past and future loss of wages, impairment of credit reputation, and attorney's fees. Id. at 803. Similarly, because all of the Picketts' claimed damages concern an alleged delay or denial of benefits, exhaustion of remedies is required.
The Picketts also assert that their claims premised on delay, as opposed to denial, in the payment or preauthorization of medical benefits do not require exhaustion at the Commission. However, the holding of Fodge does not except from exhaustion claims premised on an insurance carrier's alleged bad faith delay in paying or preauthorizing benefits. Ms. Fodge was allowed to seek judicial review of one claim based on the carrier's bad faith delay in handling her claim and paying her compensation benefits. Id. The court distinguished this claim from other "claims for benefits on which [Fodge] has never prevailed." Id. at 804-05. This distinction suggests that the court determined that Ms. Fodge had exhausted her administrative remedies on this one claim, not that exhaustion was excused for all claims based on an alleged delay in the payment of benefits. Furthermore, the Fort Worth Court of Appeals has held that the process described in Fodge applies to claims based on an alleged delay in payment of benefits. See Malish v. Pacific Employers Ins. Co., 106 S.W.3d 744, 746-47 (Tex. App.--Fort Worth 2003, no pet.). Therefore, the Picketts' claims based on alleged delays in the payment or preauthorization of medical benefits are not exempt from exhaustion at the Commission.
Lastly, the Picketts argue that Texas Mutual waived its right to demand exhaustion by not filing certain required notices contesting the compensability or relatedness of Ms. Pickett's medical services. We disagree. The Commission's exclusive jurisdiction affects a trial court's subject matter jurisdiction over the controversy. Subaru, 84 S.W.3d at 221. Subject matter jurisdiction is an issue that may be raised for the first time on appeal, and it may not be waived by the parties. Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 850 (Tex. 2000) (citing Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 445 (Tex. 1993)). Therefore, the Picketts' argument that Texas Mutual waived its right to contest the compensability or relatedness of the Picketts' claims is not a basis for defeating jurisdiction but merely identifies one of the issues that the Commission would consider when determining Ms. Pickett's benefits claims. In re Texas Mut. Ins. Co., 157 S.W.3d at 81.
The Benefit Dispute Agreement
The Picketts contend that any claims that were subject to the October 1999 Benefit Dispute Agreement do not require exhaustion at the Commission. However, the Agreement between Texas Mutual and Ms. Pickett only determined which of Ms. Pickett's psychological disorders were causally related to her compensable back injury. The Agreement did not determine which medical treatments were appropriate for those psychological disorders or address Ms. Pickett's entitlement to medical benefits in any way. We believe that Fodge is dispositive in situations where, as here, the parties have only agreed as to the extent of the claimant's compensable injuries. Ms. Fodge and her insurance carrier had a dispute over the compensability of the injury in question and went through the benefit review process. See 63 S.W.3d at 802. The benefit review officer found that Ms. Fodge's injury, was, in fact, compensable. Id. Nevertheless, the court held that Ms. Fodge's claims arising from denied medical benefits were subject to the exhaustion requirement because "[n]ever in the proceedings at the Commission did Fodge claim medical benefits or complain that American Motorists had denied medical benefits, nor did any medical provider claim payment for medical services provided to Fodge." Id.
In this case, the record shows that the parties agreed that Ms. Pickett's diagnosis of major depressive disorder and pain disorder were causally related to the compensable back injury, but that Ms. Pickett's diagnosis of post-traumatic stress disorder, mixed personality disorder, and dissociative disorder were not related to the compensable back injury. Because this Agreement did not resolve any issues concerning Ms. Pickett's entitlement to medical benefits, the Picketts were required to exhaust their administrative remedies and obtain a favorable determination from the Commission before proceeding to court.
The Picketts argue that their case is controlled by Gregson v. Zurich American Insurance Co., 322 F.3d 883 (5th Cir. 2003). The insurance carrier in Gregson found the plaintiff's injury compensable and agreed to provide coverage for back surgery. Id. at 886. The carrier then refused payment for the medication prescribed to the plaintiff following surgery. Id. at 884. The plaintiff sued the carrier seeking to recover damages for bad faith. Id. The Gregson court recognized Fodge, but held that the plaintiff was not required to exhaust his administrative remedies because the insurance carrier had agreed to provide coverage for Gregson's back surgery and all other reasonable and necessary benefits incident to the treatment, including the post-surgery prescription. Id. at 886. Unlike the insurance carrier in Gregson, Texas Mutual never agreed to provide coverage to Ms. Pickett for any specific kind of medical treatment. Instead, Texas Mutual was, at all times, required to approve or deny requests for preauthorization for Ms. Pickett's various medical treatments based solely upon the reasonable and necessary medical health care required to treat her compensable injury. See 28 Tex. Admin. Code § 134.600 (2004). Texas Mutual was also required to retrospectively review all complete medical bills and pay for or deny payment in accordance with the Act, rules, and the appropriate Commission fee and treatment guidelines. Id. § 133.301 (2004). Thus, Gregson does not control here.
Exhaustion of Administrative Remedies
The Picketts contend that because of the large number of medical charges or claims in dispute, they should be excused from the requirement that they exhaust their administrative remedies because such exhaustion would be impractical. The requirement of exhaustion of administrative remedies does have a number of exceptions. Cases in which exhaustion of administrative remedies will cause irreparable harm, instances where administrative remedies are inadequate, and cases which involve a claim that the agency is acting beyond its jurisdiction or is applying an unconstitutional statute are examples of circumstances under which the requirement of exhaustion will be relaxed. See Central Power & Light Co. v. Sharp, 960 S.W.2d 617, 618 (Tex. 1997); Jones v. Dallas Indep. Sch. Dist., 872 S.W.2d 294, 296 (Tex. App.--Dallas 1994, writ denied); Texas State Bd. of Pharmacy v. Walgreen Texas Co., 520 S.W.2d 845, 848 (Tex. App.--Austin 1975, writ ref'd n.r.e.). However, the Picketts do not cite, and we have not found, any authority for the proposition that exhaustion will be or should be excused simply due to the number of medical charges or claims in dispute. Indeed, such an exception for claims subject to the Texas Workers' Compensation Commission's jurisdiction would be in direct conflict with the supreme court's decision in Fodge. Consequently, we decline to adopt such an exception here.
The Picketts also contend that they should be excused from exhausting their administrative remedies because the Commission does not have the statutory authority to grant the damages they seek for physical pain and suffering they claim is the result of Texas Mutual's denial of coverage. However, as noted in Fodge, claims for extracontractual damages based on a failure to pay or delay in paying medical benefits cannot relieve a claimant from exhausting administrative remedies before the Commission when the entitlement to the medical benefits is in dispute. See 63 S.W.3d at 804-05. Instead, under Fodge, the Picketts can only bring their claims for extracontractual damages based on an alleged delay or denial of medical benefits to court after obtaining a determination from the Commission that Ms. Pickett was entitled to the medical benefits in question. Id.
Lastly, the Picketts argue that the trial court's delay in deciding Texas Mutual's motion to dismiss should excuse their failure to exhaust administrative remedies. The record shows that after Texas Mutual filed its motion to dismiss in January 2000, the lawsuit was abated by agreement of the parties for three reasons: to discuss settlement, because of the Picketts' counsel's illness, and to await the supreme court's decision in Fodge. Because the Picketts agreed to abate their lawsuit, they cannot complain on appeal about the ensuing delay in deciding Texas Mutual's motion to dismiss. Throughout the period of abatement, the Picketts were entitled to exhaust their remedies at the Commission. They were also on notice that Texas Mutual's motion to dismiss was based on their failure to exhaust administrative remedies. Therefore, we are not persuaded that the Picketts' failure to exhaust their claims at the Commission should be excused.
Alternatively, the Picketts contend that the trial court should not have dismissed their claims because they "submitted" certain claims to the Commission and "orally requested" that the Commission reconsider certain claims. They assert that these actions constitute exhaustion. However, under Fodge, claims arising from an insurance carrier's alleged delay or denial of medical benefits are exhausted only when the claimant receives a final determination from the Commission that he was actually entitled to the medical benefits in dispute. 63 S.W.3d at 804. Aside from the three Commission orders concerning the billing disputes between Texas Mutual and Dr. Kiser, there is no evidence in the record that the Picketts received a final order from the Commission on any of their claims in this lawsuit. Assertions by the Picketts that they submitted certain claims to the Commission or made oral requests for the Commission to reconsider certain claims are not evidence that the Commission actually reviewed the Picketts' benefit disputes or issued orders that Ms. Pickett was actually entitled to medical benefits. Therefore, we overrule the Picketts' assertion that they had exhausted certain claims.
Evidentiary Rulings
The Picketts made the following evidentiary objections at the hearing on Texas Mutual's motion for reconsideration of the motion to dismiss, which they re-assert on appeal: (1) an objection to the introduction of oral testimony; (4) (2) an objection to the testimony of Texas Mutual's witnesses, Rick Ball, on the grounds that he was allegedly not disclosed as a witness in response to the Picketts' requests for disclosure or interrogatories; and (3) an objection to a chart documenting the requests for preauthorization of Ms. Pickett's medical care and Texas Mutual's responses, on the grounds that the underlying documents had not been produced. "To obtain reversal of a judgment based upon error of the trial court in admission or exclusion of evidence, the following must be shown: (1) that the trial court did in fact commit error; and (2) that the error was reasonably calculated to cause and probably did cause rendition of an improper judgment." See Tex. R. App. P. 44.1; Gee v. Liberty Mut. Fire Ins. Co., 765 S.W.2d 394, 396 (Tex. 1989).
First, the trial court did not abuse its discretion by permitting live testimony at the hearing on the motion for reconsideration of the motion to dismiss. A motion to dismiss is the functional equivalent of a plea to the jurisdiction challenging the trial court's authority to determine the subject matter of a cause of action. Lacy v. Bassett, 132 S.W.3d 119, 122 (Tex. App.--Houston [14th Dist.] 2004, no pet.) (citing Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000)). The Texas Supreme Court has held that "a court deciding a plea to the jurisdiction is not required to look solely to the pleadings but may consider other evidence and must do so when necessary to resolve the jurisdictional issues raised." Blue, 34 S.W.3d at 555. Because the record shows that the disputed testimony in this case went to the issue of the trial court's jurisdiction to hear the Picketts' claims, we conclude that the trial court did not abuse its discretion by allowing the disputed testimony at the hearing.
As for the Picketts' second objection, Texas Mutual's responses to the Picketts' requests for disclosure or interrogatories are not included in the record. The record does include two affidavits from Mr. Ball in support of Texas Mutual's motion for summary judgment and motion to dismiss. Additionally, Texas Mutual attempted to call Mr. Ball to testify at the first hearing on the motion to dismiss in July 2003. On this record, we conclude that the Picketts were not harmed or surprised when Mr. Ball was called to present testimony at the February 2004 hearing on the motion for reconsideration of the motion to dismiss, and that his testimony did not lead to the rendition of an improper judgment.
With respect to the Picketts' third objection, we conclude that the trial court's admission of the chart documenting the requests for preauthorization of Ms. Pickett's medical care and Texas Mutual's responses, if error, was harmless error. The Picketts contend that the chart should not have been admitted because the underlying documents were not produced. The record shows that counsel for the parties disagreed on whether another judge had denied the requested discovery or simply had not ruled on this issue. Whether or not this chart is a part of the evidentiary record, under Fodge, the trial court had jurisdiction only over claims arising from the three final Commission orders adverse to Texas Mutual concerning medical services that Ms. Pickett had already received from Dr. Kiser. We conclude that this chart documenting Ms. Pickett's preauthorization requests did not have any bearing on the trial court's lack of jurisdiction over the Picketts' unexhausted claims and did not lead to the rendition of an improper judgment.
The Picketts also contend that they were unable to adequately respond to Texas Mutual's motion for summary judgment and motion to dismiss due to an alleged lack of discovery. Under Texas law, when a party contends that it has not had an adequate opportunity for discovery before a summary judgment hearing, it must file in the trial court either an affidavit explaining the need for further discovery or a verified motion for continuance. Tenneco, Inc. v. Enterprise Prods. Co., 925 S.W.2d 640, 647 (Tex. 1996). The record shows that the Picketts filed two motions for continuance that were granted. However, the substance of these motions did not allege a need for further discovery to respond to Texas Mutual's motion for summary judgment. Therefore, we conclude that they have not preserved this point of error on appeal. See Tex. R. App. P. 33.1.
Summary Judgment
We review the district court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When the trial court does not specify the basis for its summary judgment, the appealing party must show it is error to base it on any ground asserted in the motion. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995). We must affirm the summary judgment if any of the grounds presented to the district court are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003); Sheshunoff v. Sheshunoff, 172 S.W.3d 686, 692 (Tex. App.--Austin 2005, pet. denied).
Pursuant to Fodge, the trial court had jurisdiction over and granted summary judgment on the Picketts' claims associated with the only three final Commission orders in the record: (1) a $48 bill for a hospital discharge report prepared by Dr. Kiser; (2) several bills for Dr. Kiser's inpatient encounters with Ms. Pickett during three periods of hospitalization; and (3) a $700 bill for psychotherapy services provided by Dr. Kiser. These three orders were entered in proceedings between Dr. Kiser and Texas Mutual and were not appealed by either party. The Picketts were not parties to these proceedings. In its motion for summary judgment, Texas Mutual asserted, among other things, that it is not legally responsible to the Picketts for the results of the Commission's denial of payment to Dr. Kiser in those disputes. We agree.
The Texas Workers' Compensation Act makes the employee's obligation to pay medical bills secondary to that of the insurer. Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994) (citing Smith v. Stephenson, 641 S.W.2d 900, 902 (Tex. 1982)). Moreover, it prohibits healthcare providers from trying to collect from the employee unless and until the Commission rules that the carrier is not responsible for payment. See id. As a result, the Texas Supreme Court will not hold an insurance carrier legally accountable to a claimant if the claimant is subjected to collection efforts by her healthcare providers before the Commission has determined that the carrier is not responsible for payment. See id.
The Picketts contend that they have incurred damages connected with Texas Mutual's denial of payment for these three benefits because they have "received numerous collection notices from healthcare providers for the medical expenses that have not been paid." However, there is no evidence in the record that the Commission ruled that Texas Mutual was not responsible for payment for any of these three benefits. Instead, the evidence is conclusive that the Commission ordered Texas Mutual to pay Dr. Kiser for these services. Accordingly, Texas Mutual is not liable to the Picketts for whatever damages they may have incurred as a result of receiving collection notices from Dr. Kiser for these medical treatments. See id. Any dispute regarding the collection efforts by Dr. Kiser against the Picketts is between the Picketts and Dr. Kiser under these circumstances.
Finality of Judgment
The Picketts argue that the trial court's judgment is not final because the trial court should not have dismissed some of their claims. The general rule, with a few exceptions not implicated here, is that an appeal may be taken only from a final judgment--that is, a judgment disposing of all pending parties and claims. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). Here, the judgment, which is labeled "final judgment," dismissed without prejudice the claims over which the trial court lacked jurisdiction and granted a take-nothing summary judgment on the claims over which it had jurisdiction. Because this judgment appears final on its face and disposes of all of the Picketts' claims, we conclude that it is a final judgment. Id. at 200.
Conclusion
The exhaustion process required by Fodge is constitutional and applies to all of the Picketts' claims, including tort and statutory claims for damages other than workers' compensation benefits, arising from an alleged delay or denial of benefits. The trial court correctly dismissed the Picketts' claims concerning alleged delays or denials of medical benefits for which the Picketts did not obtain a timely final determination from the Commission that Ms. Pickett was entitled to the benefits in dispute. The trial court had jurisdiction over the Picketts' claims arising from the billing disputes between Dr. Kiser and Texas Mutual, which resulted in three final Commission orders adverse to Texas Mutual. However, because Texas Mutual is not liable to the Picketts for any alleged damage the Picketts may have incurred as a result of receiving additional collection notices from Dr. Kiser regarding the benefits that were the subject of the three billing disputes that were heard before the Commission, we conclude that the trial court correctly granted summary judgment against the Picketts on those claims.
Affirmed.
___________________________________________
G. Alan Waldrop, Justice
Before Justices Puryear, Waldrop and Henson
Affirmed
Filed: July 26, 2007
1. The trial court's findings of fact provide the following information about the final administrative orders obtained by Dr. Kiser:
a. In MDR Tracking No. M5-00-0165-01, decided March 5, 2001, MRD determined that Texas Mutual incorrectly denied Dr. R. Sanford Kiser's $48.00 bill for preparation of Barbara Pickett's hospital discharge report on October 26, 1998.
b. In SOAH Docket No. 453-99-2609.M4, an administrative law judge found Texas Mutual responsible for paying Dr. Kiser's inpatient encounters with Barbara Pickett during three periods of her hospitalization (July 29, 1997 to August 15, 1997; September 15, 1997 to September 22, 1997, and from January 1, 1998 to February 6, 1998); and
c. In MDR Tracking No. M4-99-5645-01, decided April 11, 2000, MRD found that Texas Mutual owed Dr. Kiser $700.00 for Barbara Pickett's seven psychotherapy sessions during her hospitalization from January 5, 1998 to February 6, 1998.
2. The trial court entered a finding of fact that "Texas Mutual did not prospectively deny responsibility for any medication prescribed to Ms. Pickett." The Picketts do not dispute this finding of fact on appeal.
3. We cite to the version of the Texas Administrative Code that was in effect at the time of the trial court's final judgment in March 2004.
4. In their brief, the Picketts allege that the trial court allowed oral testimony at the hearing on Texas Mutual's motion for summary judgment. However, the record reflects that the disputed testimony was heard at the February 24, 2004 hearing on Texas Mutual's motion for reconsideration of its motion to dismiss.
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