Opinion issued July 6, 2007
In The
Court of Appeals
For The
First District of Texas
NO. 01-06-00029-CV
SOUTHERN INSURANCE COMPANY, Appellant
V.
MICHAEL S. BREWSTER, Appellee
On Appeal from the 152nd District Court
Harris County, Texas
Trial Court Cause No. 2004-58245
Appellant, Southern Insurance Company, sought judicial review in the trial court of a decision of the appeals panel of the Texas Workers' Compensation Commission (TWCC). (1) On modified de novo review, the trial court resolved cross-motions for traditional summary judgment to confirm the duty imposed on Southern to pay benefits to appellee, Michael Brewster. (2) Southern (the carrier) provides worker's compensation insurance coverage to Brewster's employer, Spectrum Corporation. Brewster is a service technician for Spectrum (the employer), which installs and repairs electronic scoreboards for sports stadiums. The carrier and Brewster filed cross-motions for summary judgment, and the carrier brings this appeal to challenge the summary judgment rendered in favor of Brewster. Brewster has filed a motion to dismiss the appeal for want of jurisdiction, which has been ordered taken with this case.
We deny the motion to dismiss and affirm.
Facts and Procedural Background
On September 13, 2000, Brewster sustained neck injuries when an 18-wheeler truck rear-ended Brewster's vehicle as he was driving on Highway 59. The carrier stipulates that the collision occurred while Brewster was in the course and scope of employment. Brewster reported the accident to his work supervisor, but no worker's compensation claim was pursued with the carrier. (3) Brewster sought medical attention instead through his group insurance coverage. He continued to work, while undertaking physical therapy treatment, but his neck pain continued, and an MRI examination of his cervical spine, performed on April 3, 2001, showed that Brewster had herniated cervical discs and a disc protrusion. While continuing to work and to receive treatment, he learned in June 2001 that he would likely require surgery. In June 2001, Brewster sued the driver and owner of the 18-wheeler.
But Brewster sustained another injury before the scheduled surgery. On July 5, 2001, while he was pulling a cable through a conduit at a worksite, the cable snapped, and Brewster fell. He immediately felt burning pain all along his spine. He received pain medication at a hospital emergency room and sought medical attention several times during the following week for neck and back pain. Brewster sought medical assistance from a chiropractor, Dr. Al-Sahli, who ultimately concluded that Brewster had aggravated the neck injury he sustained in the automobile collision and ordered him not to work.
On July 11, 2001, Brewster filed with the TWCC a "TWCC-41" notice of claim of an injury to his "back and neck." In this notice, Brewster stated that the date of injury was July 5, 2001, and that July 6, 2001 was the first work day that he missed. On July 16, 2001, an adjuster for carrier took a statement from Brewster by recorded telephone interview. During the interview, in response to the adjuster's questions about prior injuries, Brewster described the back and neck injuries sustained in the rear-end collision and replied that the injuries were work-related in response to the adjuster's inquiry. (4)
On September 17, 2001, the carrier submitted a "TWCC-21" Notice of Refused/Disputed Claim to the TWCC. This notice recites that the carrier first received written notice of Brewster's claim on July 16, 2001. The carrier's notice (1) challenged whether the July 5, 2001 incident was the producing cause to the injuries to Brewster's "back/right shoulder and right knee" and (2) denied the back, right shoulder, and right knee in its [sic] entirety. (5) The carrier investigated and eventually agreed to compensate Brewster, but limited payments to treatment for his back injuries and did not compensate for any injuries to his neck from that point forward.
With the diagnosis that the July 5, 2001 injury had aggravated the September 13, 2000 injury to his neck, Brewster filed with the TWCC a "TWCC-41" notice of claim for injuries arising from the September 2000 automobile collision. (6) Brewster filed this notice on October 26, 2001, and thus beyond the one-year anniversary of the collision on September 13, 2000, the date of the injury from the truck collision. Brewster's notice stated that the date of his injury was September 13, 2000 and restated that July 6, 2001 was the first work day that Brewster had missed. He described back and neck injuries, headaches, and nose bleeds arising from the collision with the 18-wheeler truck on September 13, 2000. It is undisputed that Brewster's TWCC-41 notice was not timely under Tex. Lab. Code Ann. § 409.003 (Vernon 2006) (imposing duty on employee or person acting on employee's behalf to file claim for compensation for injury not later than one year after injury); cf., Tex. Lab. Code Ann. § 409.001(a) (Vernon 2006) (imposing duty on employee to report injury to employer within 30 days of injury). The carrier has not challenged whether Brewster complied with the 30-day deadline of section 409.001(a).
On February 25, 2002, the employer filed a "First Report of Injury" to notify the carrier of Brewster's September 2000 collision and his resulting injury to Brewster's "shoulder." The carrier concedes that it did not respond timely to this notice. See Act of May 12, 1993, 73rd Leg., R.S., ch. 269, § 1, 1119 Tex. Gen. Laws 987, 1195 (amended 2003) (former version) (imposing duty on carrier to either (1) begin paying benefits or (2) provide notice of refusal to pay benefits within seven days of receiving "written notice of an injury") (current version at Tex. Lab. Code Ann. § 409.021(a) (Vernon 2006); see also 25 Tex. Reg. 2096 (to be codified at 28 Tex. Admin. Code § 124.3(a)(2)(B)(3)) (proposed 2000) (amended 2004) (former version) (describing essentially same duties). (7) It is also undisputed that the carrier did not assert that the employer's notice of Brewster's September 13, 2000 injury was not timely. Instead, on March 22, 2002, the carrier filed with the TWCC a "TWCC-21" Notice of Refused or Disputed Claim" reporting that the carrier had denied owing Brewster any benefits arising from the September 2000 collision, as follows:
Carrier admits that claimant was involved in an accident in [the] course and scope of employment on 09/13/2000. The claimant did not sustain any disability as there was no lost time from employment. Carrier denies any and all disability and impairment due to the date of injury of 9/13/2000. Carrier raises issues of extent and duration.
The TWCC received this notice on March 25, 2002.
A. Administrative Review Process
Brewster requested administrative review process to challenge the carrier's decision to refuse to pay benefits for his neck injuries. Two Benefit-Review Conference (BRC) hearings took place before the TWCC to address that issue. During the first hearing, on July 15, 2002, Brewster's counsel (8) raised an issue whether the carrier had waived its right to dispute compensability as to the September 2000 injury by not contesting compensability in accordance with the notice requirements of chapter 28 of the Administrative Code. See 25 Tex. Reg. 2096 (to be codified at 28 Tex. Admin. Code § 124.3(a)(2)(B)(3)) (amended 2004); see also Act of May 12, 1993, 73rd Leg., R.S., ch. 269, § 1, 1119 Tex. Gen. Laws 987, 1195 (amended 2003) (imposing same, seven-day opportunity to contest claim). The July 15, 2002 BRC hearing resulted in a ruling that Brewster's "compensable injury does not extend to and include an injury to the neck." The TWCC appeals panel affirmed this decision on September 9, 2002.
In response to Brewster's request for another BRC hearing to challenge the carrier's refusal to pay benefits arising from the September 2000 collision, a second BRC hearing was held on May 5, 2004. Despite not having contested timeliness earlier and having not provided section 409.021(a) notice under the Labor Code, the carrier challenged whether Brewster had waived his claim, pursuant to section 409.004 of the Labor Code, by not filing a notice of claim with the TWCC within one year of the September 13, 2000 injury. See Tex. Lab. Code Ann. § 409.004 (Vernon 2006); see also Tex. Lab. Code Ann. § 409.001, 409.003 (generally requiring, respectively, that worker notify employer of injury within 30 days of injury, and that worker or employer notify TWCC of claim within one year of injury).
The record of the May 5, 2004 BRC hearing reflects a determination that Brewster's July 5, 2001 injury constituted a "reaggravation" of his September 13, 2000 injury. The hearing resulted in the following rulings:
1. [Brewster] sustained a compensable injury on 9/13/00.
2. The carrier is relieved from liability under Tex. Lab. Code Ann. § 409.004 because of the claimant's failure to timely file a claim for compensation with the [TWCC] within one year of the injury, as required by Tex. Lab. Code Ann. § 409.003.
3. [Brewster] is not barred from pursuing Texas workers' compensation benefits because of an election to receive benefits under a group health insurance policy.
4. [Brewster's] injury does include an injury to the cervical.
Brewster challenged these rulings in a TWCC contested-case hearing on July 1, 2004. The record of the this hearing reflects that both Brewster and the carrier "understood" that the issues decided at the May 5, 2004 hearing would be resolved at the hearing. The hearing officer reached the same conclusions reached at the BRC hearing for issues one, three, and four, but reached a different conclusion on the second issue, concerning the effect of the Brewster's failure to file timely notice of his claim for compensation (a TWCC-41) for his September 13, 2000 injury within one year of the injury. See Tex. Lab. Code Ann. § 409.003. The hearing officer acknowledged the lack of timely filing, but ruled that the carrier was "not relieved from liability under Tex. Lab. Code Ann. [§] 409.004 because [c]arrier failed to timely contest compensability of the claim."
The carrier appealed this ruling to the TWCC appeals panel, which affirmed the decision of the contested-case hearing on September 29, 2004. Clarifying certain dates in the history of the case, the panel determined that February 22, 2002 was the latest date on which the carrier received Brewster's TWCC-21 notice of injury arising from the September 2000 injury. In addition, the panel acknowledged that the carrier disputed Brewster's claim on a TWCC-21 notice of disputed claim that lists July 16, 2001 as the date on which the carrier first received written notice of Brewster's claim and determined that the earliest date that the carrier disputed Brewster's claim was March 25, 2002.
Rejecting the carrier's contention that the hearing officer at the contested-case hearing improperly determined that the carrier had not timely contested liability, as required by section 409.021(a) of the Labor Code, the appeals panel concluded that "the hearing officer had to determine whether the carrier contested the claimed injury under [s]ection 409.021, to ultimately determine whether the carrier is relieved of liability under [s]ection 409.004(2)." By not complying with section 409.021(a), therefore, the carrier could not assert the section 409.004(2) defense--that Brewster did not timely file a claim for compensation--and, therefore, was not relieved of liability under that section. In reaching this conclusion, the appeals panel applied the reasoning of the majority opinion in Continental Cas. Co. v. Downs, 81 S.W.3d 803 (Tex. 2002).
C. Judicial Review in the Trial Court
The carrier sought review in the trial court pursuant to Tex. Lab. Code Ann. § 410.258(a) (Vernon 2006). In moving for summary judgment, the carrier restricted the parties' dispute to the following legal questions: (1) whether Brewster's failure to file his claim timely barred his recovery of workers' compensation benefits, and (2) whether Brewster was barred from recovery because he did not present a issue of carrier waiver at the administrative level. After Brewster filed a cross-motion for summary judgment, the trial court rendered summary judgment in favor of Brewster and denied the carrier's motion. After resolving a pending issue concerning attorney's fees, the trial court rendered final judgment confirming the decision of the appeals panel.
Motion to Dismiss--Validity of Judgment
Brewster has moved to dismiss carrier's appeal on the grounds that the carrier did not comply with section 410.258(a) of the Labor Code. See Tex. Lab. Code Ann. § 410.258(a) (Vernon 2006). Section 410.258(a) requires that a copy of any proposed judgment or settlement be provided to the TWCC (now the DWC) at least 30 days "before the date on which the court is scheduled to enter the judgment or approve the settlement." Id. "A judgment entered or settlement approved without complying with the requirement of this section is void." Id.; see Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 962 (Tex. 1999).
Brewster contends that compliance with section 410.258(a) is mandatory and jurisdictional. We agree, having recently confirmed this principle in Metro. Transit Auth. v. Jackson, 212 S.W.3d 797, 800 (Tex. App.--Houston [1st Dist.] 2007, pet. denied) (citing Albertson's, 984 S.W.2d at 962; Ins. Co. of Pa. v. Martinez, 18 S.W.3d 844, 847 (Tex. App.--El Paso 2000, no pet.). In Jackson, however, both parties acknowledged the lack of compliance with section 410.258(a). See id. Because the failure to notify the TWCC was undisputed and affirmatively demonstrated by the record, the consequence was that the trial court had no power to award relief, and the judgment rendered was void, as expressly stated in section 410.258(f) of the Labor Code. Id. at 801 (citing Tex. Lab. Code Ann. § 410.258(f) (Vernon 2006)); see Tex. Lab. Code Ann. § 410.257(a), (f) (Vernon 2006).
In contrast to the Jackson case, the record of this case demonstrates compliance with section 410.258(a). Brewster does not dispute that the face of the final judgment signed in this case on November 11, 2005 recites that,
A copy of this judgment having been served by certified mail, return receipt requested, upon the Executive Director, Texas Workers' Compensation Commission, at least thirty (30) days before entry of this final judgment, and the Texas Workers' Compensation Commission having filed no intervention in this matter within thirty-one (31) days of receipt of this judgment, pursuant to Texas Labor Code [§] 410.258[,] the Court hereby enters final judgment as set forth that Plaintiff Southern Insurance Company is liable for benefits as provided by this Final Judgment and otherwise set forth by law to Defendant, Michael Brewster.
In protesting that this recital is false, Brewster has attempted to demonstrate that the carrier, who submitted this proposed judgment form to the trial court, did not, despite the recital, provide the required copy to the TWCC. In view of the recital, however, Brewster cannot rely on the record to support his contention. Brewster relies instead on a sworn Certification of No Records Found, as executed by the DWC (formerly TWCC) custodian of records on January 18, 2006, who avers that a proposed copy of the judgment signed by the trial court on November 11, 2005 was not provided to the DWC 30 days before that date.
As confirmed in Jackson, however, when a trial court renders judgment without compliance with section 410.258(a), the judgment is a legal nullity. Jackson, 212 S.W.3d at 803-04. Because the judgment is a legal nullity, the trial court retains plenary power to set it aside. Id. A void judgment need not be appealed for it to be declared void. See id. at 803 n.3 (citing Fulton v. Finch, 346 S.W.2d 823, 830 (Tex. 1961)).
But, the record before us does not establish that the judgment is void. As section 410.257 of the Labor Code recognizes, in stating that "a judgment entered by a court on judicial review of an appeals panel decision . . . must comply with all appropriate provisions of the law[,] . . . [a] judgment that on its face does not comply with this section is void." Tex. Lab. Code Ann. § 410.257(a), (f) (emphasis added). As demonstrated by the excerpt above, the face of the judgment in this case reflects compliance with section 410.258(a) and not lack of compliance.
Well-settled law compels that we presume that proceedings in the trial court, as well as its judgment, are regular and correct. See McElyea v. Parker, 81 S.W.2d 649, 653 (Tex. 1935) (holding that all that is not contradicted by the record must be presumed in favor of the judgment); Gen. Elec. Capital Assurance Co. v. Jackson, 135 S.W.3d 849, 853 (Tex. App.--Houston [1st Dist.] 2004, pet. denied); see also Casillas v. State Office of Risk Mgmnt., 146 S.W.3d 735, 738 (Tex. App.--El Paso 2004, no pet.) ("We presume the regularity of a judgment absent controverting matter in the record.") (emphasis added; decided in context of claim of lack of compliance with section 410.258 of Labor Code, for judgment that contained no recitals concerning compliance with 410.258(a)); Ins. Co. of Pa. v. Orosco, 170 S.W.3d 129, 134 (Tex. App.--San Antonio 2005, no pet.) (same); In re B.D., 16 S.W.3d 77, 80 (Tex. App.--Houston [1 Dist.], 2000. pet. denied) (applying presumption of regularity to recital that "due notice has been issued to all parties" for transfer of juvenile to prison); Vickery v. Comm'm for Lawyer Discipline, 5 S.W.3d 241, 251 (Tex. App.--Houston [14th Dist.] 1999, pet. denied) (stating that all reasonable presumptions must be indulged to uphold binding effect of judgment, whether attack on judgment is direct or collateral).
The presumption of regularity applies only when the record does not controvert the presumption. Casillas, 146 S.W.3d at 738. In accordance with the presumption, the complaining party carries the burden to establish why we may not apply the presumption. See Vickery, 5 S.W.3d at 252; Garza v. Tex. Alcoholic Bev. Comm'n, 83 S.W.3d 161, 166 (Tex. App.--El Paso 2000), aff'd, 89 S.W.3d 1 (Tex. 2002). Because the record does not controvert the presumed regularity of the recitals in the judgment here, Brewster relies on independent proof, in the form of the certification by DWC custodian, that a copy of the judgment signed on November 11, 2005 was not provided 30 days before that date. If the judgment were void for that reason, however, the invalidity of the judgment was properly a matter for the trial court, which would have continuing, plenary jurisdiction to set it aside, and this Court would have no jurisdiction over the carrier's appeal. See Jackson, 212 S.W.3d at 803-04. Had Brewster chosen to direct his jurisdictional challenge to the trial court and provided the DWC custodian's certification, the record on appeal would properly have encompassed that evidence if the trial court had denied Brewster's challenge. See Tex. R. App. P. 34.5 (contents of appellate record).
Despite the compliance with section 410.258(a) recited on the face of the judgment, however, and although a void judgment need not be appealed for it to be declared void, see Jackson, 212 S.W.3d at 803 n.3, Brewster did not attempt to establish in the trial court that the recitals in the judgment challenged by the carrier in this appeal are incorrect and that the judgment is, therefore, void and has not shown why he did not present the DWC certification to the judicial officer who signed the allegedly void instrument. Instead, Brewster relies on proof that goes beyond the record on appeal, yet could have readily been made part of that record, and to controvert the judgment's recitals. Under these circumstances, well-settled law compels that we decline to exercise the authority granted us by section 22.220(c) of the Government Code to consider matters beyond the record in ascertaining our jurisdiction. See Tex. Gov't Code Ann. § 22.220(c) (Vernon 2004). See Casillas, 146 S.W.3d at 738-39 (also declining to consider non-record proof, citing same).
We deny Brewster's motion to dismiss for lack of jurisdiction and address the merits of the carrier's challenge on appeal.
Which Controls--Downs Waiver by Carrier or Lack of Notice by Brewster?
The carrier contends that the trial court erred by granting Brewster's motion for summary judgment and by denying the carrier's motion for summary judgment, thus confirming the decision of the appeals panel on judicial review, because Brewster waived any right to seek workers' compensation benefits by not timely filing notice of his claim with the TWCC, as required by section 409.004 of the Labor Code. Brewster contends that Continental Cas. Co. v. Downs, 81 S.W.3d 803 (Tex. 2002), controls and that the trial court ruled correctly, because the carrier waived any right to rely on section 409.004 as a defense to liability by neither contesting Brewster's claim, nor beginning payments to him, within seven days of receiving notice of Brewster's injury, as required by the versions of the Labor Code and chapter 28 of the Administrative Code that applied to Brewster's pre-2003 claim. See Act of May 12, 1993, 73rd Leg., R.S., ch. 269, § 1, 1119 Tex. Gen. Laws 987, 1195 (amended 2003) (current version at Tex. Lab. Code Ann. § 409.021(a)); 25 Tex. Reg. 2096 (to be codified at 28 Tex. Admin. Code § 124.3(a)(2)(B)(3)) (proposed 2000) (amended 2004). We agree with Brewster.
Standard and Scope of Review
A. Judicial Review of Compensability--Modified De Novo
The administrative and judicial processes of this case address compensability under the Labor Code for the injuries Brewster sustained in his on-the-job injury on September 13, 2000. See Downs, 81 S.W.3d at 804 (categorizing refusal to pay benefits as issue of compensability). We review TWCC appeals panel decisions on issues pertaining to "compensability or eligibility for or the amount of income or death benefits" under the modified, de novo standard that controls review in the trial court. We construe administrative rules, which have the same force as statutes, in the same manner as statutes, and we must ensure that the agency, here the TWCC, has interpreted its rules in harmony with its enabling statute. See Rodriguez v. Serv. Lloyds Ins. Co., 997 S.W.2d 248, 254 (Tex. 1999); Continental Cas. Co. v. Rivera, 124 S.W.3d 705, 710 (Tex. App.--Austin 2003, pet. denied). As applied to this case, we must ensure that the TWCC interpreted the regulations regarding notice of disputed claim by the carrier of section 124.3(a)(2)(B)(3) of chapter 28 of the Administrative Code in accordance with section 409.021(a) of the Labor Code. See 25 Tex. Reg. 2096 (to be codified at 28 Tex. Admin. Code § 124.3(a)(2)(B)(3)) (amended 2004); Act of May 12, 1993, 73rd Leg., R.S., ch. 269, § 1, 1119 Tex. Gen. Laws 987, 1195 (amended 2003) (former version) (imposing same, seven-day opportunity to contest claim). In addition, and in accordance with the Code Construction Act, we must defer to the TWCC's interpretation of its own rules, as long as its interpretation is reasonable. See Rodriguez, 997 S.W.2d at 257 (Philips, C.J., concurring ) (citing Tex. Gov't Code Ann. § 311.023(6) (Vernon 2006)); Pub. Util. Comm'n v. Gulf States Util. C., 809 S.W.2d 201, 207 (Tex. 1991)).
B. Cross-Motions for Summary Judgment
We review all summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Because both parties filed traditional motions for summary judgment under rule 166a(c), the usual standard of review for these judgments applies. See Tex. R. Civ. P. 166a(a)-(c); Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). When, as here, both parties move for summary judgment, the appealing party may challenge the denial of its own motion as well as the judgment in favor of the prevailing party. CU Lloyd's of Texas v. A. Feldman, 977 S.W.2d 568, 569 (Tex. 1998). We review the summary judgment evidence of both parties, determine all questions presented, and render the judgment that the trial court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000); see also Ins. Co of Pa. v. Hartford Underwriters Ins. Co., 164 S.W.3d 747, 748-49 (Tex. App.--Houston [14th Dist.] 2005, no pet.) (stating cross-motion standards in similar context of appeal from judicial review of appeals-panel decision construing section 409.021(a) of Labor Code).
C. Scope of Judicial Review
We first address the carrier's preliminary contention that we may not address Brewster's section 409.021(a), or "Downs" waiver, contentions because he did not present them during the administrative process and, therefore, waived reliance on Downs waiver by the carrier. We do not agree.
In a trial to the court on judicial review pursuant to Tex. Lab. Code Ann. §§ 410.301-.308 (Vernon 2006) and the modified de novo standard, the trial court properly considered the decision of the appeals panel, as certified by the TWCC, in accordance with Tex. Lab. Code Ann. § 410.304(a), (b). See Nat'l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 528 (Tex. 2000). Trial on judicial review is "limited to issues decided by the commission appeals panel and on which judicial review is sought." Tex. Lab. Code Ann. § 410.302 (emphasis added); see Krueger v. Atascosa County, 155 S.W.3d 614, 619-20 (Tex. App.--San Antonio 2004, no pet.) (holding that claimant could not assert Downs waiver contention in trial court, having not raised issue before appeals panel); Trinity Universal Ins. Co. v. Berryhill, No. 14-03-00629-CV, 2004 WL 744417, *2-3 (Tex. App.--Houston [14th Dist.] April 8, 2004, no pet.) (mem. op.) (same); see also Hefley v. Sentry Ins. Co., 131 S.W.3d 63, 65-66 (Tex. App.--San Antonio 2003, pet. denied) (holding that trial court properly struck pleadings asserting Downs waiver contention not raised before appeals panel).
The issues decided by the appeals panel are those decided in the contested-case hearing, as developed by the record of that hearing. Tex. Lab. Code Ann. § 410.203. The hearing officer at the contested-case hearing is limited, in turn, to issues raised at a BRC. Tex. Lab. Code Ann. § 410.151. See Tex. Workers' Comp. Ins. Fund v. Simon, 980 S.W.2d 730, 734 (Tex. App.--San Antonio, 1998, no pet.); Cardenas v. Continental Ins. Co., 960 S.W.2d 401, 403 (Tex. App.--Corpus Christi 1998, pet. denied) (waiver claim must be preserved at BRC).
The administrative-review process of this case establishes that Brewster preserved his issues and that the carrier's "waiver of the waiver" contention lacks merit. At the BRC conducted on July 15, 2002, Brewster's counsel challenged whether the carrier could properly contest compensability, having not contested liability within the seven-day period established by section 124.3 of the Administrative Code. See 25 Tex. Reg. 2096 (to be codified at 28 Tex. Admin. Code § 124.3(a)(2)(B)(3)) (amended 2004).; see also Tex. Lab. Code Ann. § 409.021(a) (authorizing statute for code provision); Downs, 81 S.W.3d at 805-06 (establishing Downs waiver principle by applying section 409.021(a)).
As the record further reflects, the second BRC, conducted on May 5, 2004, resulted in a ruling that the carrier was "relieved from liability" under section 409.004 of the Labor Code because Brewster had not filed his claim within one year of the September 13, 2001 rear-end collision in which he was injured. Brewster then challenged that determination at the contested-case hearing on July 1, 2004. The record of that hearing reflects the parties' stipulation that the issues to be addressed encompassed that determination. The record of the contested-case hearing reflects the hearing officer's contrary determination--that the carrier was not relieved of liability because it had not timely contested compensability. And the appeals panel affirmed that ruling, reasoning that the hearing officer could not determine whether any late notice by Brewster relieved the carrier of liability under Labor Code, section 409.004(2) without deciding whether the carrier had timely contested Brewster's claim, as required by the supreme court's interpretation, in Downs, of the duty imposed on the carrier by section 409.021(a) of the Labor Code.
To summarize, the record of the summary judgment proceedings in the suit for judicial review demonstrate the following. As recited on the face of the appeals-panel opinion, the panel "decided" Brewster's section 409.021(a), or Downs waiver, issue. See Tex. Lab. Code Ann. § 410.302. The record further demonstrates, not only that Brewster raised the carrier's lack of compliance with section 409.021(a) at a BRC hearing, Tex. Lab. Code Ann. § 401.151, but also that the appeals panel deemed that issue joined because of the carrier's contention, at the previous BRC and contested-case hearing, that the lack of compliance with section 409.004(2) by Brewster, as demonstrated by the record, relieved the carrier of any duty to pay benefits.
Accordingly, we do not conclude that Brewster waived his Downs waiver contention and further conclude, therefore, that the scope of our and the trial court's review, as dictated by section 410.151 of the Labor Code, encompasses the substantive legal consequences of the carrier's lack of compliance with section 409.021(a).
No Contest by Carrier Bars Carrier's Reliance on Claimant's Lack of Notice
The version of section 409.021 of the Labor Code that governs Brewster's claim states the carrier's obligations after receiving a notice of injury, as follows:
(a) An insurance carrier shall initiate compensation . . . promptly. Not later than the seventh day after the date on which an insurance carrier receives written notice of an injury, the insurance carrier shall:
(1) begin the payment of benefits as required by this subtitle; or
(2) notify the commission and the employee in writing of its refusal to
pay and advise the employee of:
(A) the right to request a benefit review conference; and
(B) the means to obtain additional information from the commission.
...
(c) If an insurance carrier does not contest the compensability of an injury on or before the 60th day after the date on which the insurance carrier is notified of the injury, the insurance carrier waives its right to contest compensability. The initiation of payments by an insurance carrier does not affect the right of the insurance carrier to continue to investigate or deny the compensability of an injury during the 60-day period.
Act of May 12, 1993, 73rd Leg., R.S., ch. 269, § 1, 1119 Tex. Gen. Laws 987, 1195 (amended 2003) (current version at Tex. Lab. Code Ann. § 409.021) (emphasis added). (9)
As construed in Downs, section 409.021(a) imposes a mandatory duty on the carrier to perform either of the options listed in the statute. Downs, 81 S.W.3d at 806-07. Within seven days of notice of an injury, a carrier must either (1) initiate benefits or (2) file a notice of refusal. See id. at 806. Taking either action within seven days of receiving notice of injury entitles the carrier to a 60-day period in which to investigate or deny compensability. See id. at 807; see also Downs v Continental Cas. Co., 32 S.W.3d 260, 263 (Tex. App.--San Antonio 2000), aff'd, 81 S.W.3d 803 (Tex. 2002) (determining that Legislature "sought to encourage a carrier uncertain of the compensability of an injury to pay the benefits pending a full investigation of the claim").
Conversely, if a carrier neither initiates benefits, nor files a notice of refusal within seven days of receiving notice of injury, the carrier may not contest compensability. See Downs, 81 S.W.3d at 807. The consequences of inaction by the carrier within the statutory seven-day, pay-or-dispute, deadline are thus two-fold: the carrier is (1) obligated to pay benefits and (2) may not avail itself of the section 409.021(c) 60-day period in which to investigate or deny compensability. See id.; see also Ins. Co. of Pa. v. Hartford Underwriters Ins. Co., 164 S.W.3d at 749 (applying Downs reasoning) (10); State Office of Risk Management v. Peeples, No. 07-04-00408-CV, 2006 WL 2056684 (Tex. App.--Amarillo 2006, pet. denied) (mem. op.) (same); S.W. Bell Tel. Co. v. Mitchell, No. 04-04-00466-CV, 2005 WL 154203 (Tex. App.--San Antonio 2005) (mem op.), pet. granted Feb. 24, 2006) (same; also holding that Downs applies retroactively).
As the appeals panel determined, and the carrier did not dispute in the trial court, the latest date on which the carrier received notice of Brewster's September 13, 2000 injury was February 22, 2002. (11) Further, the earliest date that the carrier disputed Brewster's claim was March 25, 2002. The March 25, 2002 notice of disputed claim was issued more than seven days after February 22, 2002 and was, therefore, not timely under section 409.021(a) and Downs.
We further hold that the trial court properly rejected the carrier's reliance on the lack of compliance with claimant duties by Brewster, as demonstrated by the record, and, like the appeals panel, deemed the issue of lack of compliance with the section 409.004(2) by Brewster, as demonstrated by the record, properly joined to the issue of the carrier's duty to pay or dispute under section 409.021(a).
A claimant's failure to comply with section 409.003 by timely filing a claim for compensation with the TWCC division will not relieve either the employer or the carrier of liability to pay benefits unless (1) good cause exists for failure to file a claim in a timely manner; or (2) the employer or the employer's insurance carrier does not contest the claim. Tex. Lab. Code Ann § 409.004; see Act of May 12, 1993, 73rd Leg., R.S., ch. 269, § 1, 1119 Tex. Gen. Laws 987, 1195 (amended 2003) (current version at Tex. Lab. Code Ann. § 409.021(a)) (governing timely contest by carrier). Considering sections 409.004(2) and former 409.021(a) together compels the conclusion that by not timely contesting Brewster's claim on a timely basis under former section 409.021(a) once it was received on February 22, 2002, the carrier may not avoid the consequences of its lack of compliance by relying on the lack of compliance by Brewster, as demonstrated by the record, with section 409.003.
We hold that the trial court properly rendered summary judgment in favor of Brewster and properly denied the carrier's motion, and we overrule the carrier's sole issue.
Conclusion
We deny the carrier's motion to dismiss and affirm the judgment of the trial court.
Sherry Radack
Chief Justice
Panel consists of Chief Justice Radack and Justices Jennings and Bland.
1. The TWCC is now known as the Texas Department of Insurance Division of
Workers' Compensation (DWC). See Tex. Lab. Code Ann. § 402.001(b) (Vernon
2006).
2. The appeals panel relied on 3. Brewster has consistently maintained that his employer instructed him to seek medical
attention through the company's group health-insurance coverage, and that he was not
aware of potential workers' compensation recovery until after he sustained a second
work-related injury on July 5, 2001 and learned, during treatment for that injury, of
the need to notify the TWCC, of any work-related injury and promptly provided
notice of that injury. Under the Labor Code, the duty to notify the TWCC of injury
is imposed on both the claimant and the employer. See 4. The carrier attempted once to exclude this evidence during the review process, but did
not succeed.
5. The record contains a notice of disputed claim filed by a different carrier on March
22, 2003, which was initially, but erroneously, attributed to carrier.
6. The record shows that Brewster understood that his counsel had previously filed a
workers' compensation claim based on the September 2000 collision in August 2001.
7. Section 409.021(a) has been amended to allow a carrier 15 days to initiate benefits or
notify the commission and the claimant of its refusal to pay benefits. See Act of May
12, 1993, 73rd Leg., R.S., ch. 269, 8. This was the last time during the administrative process that Brewster appeared
through counsel. He was assisted by TWCC ombundsmen through the remaining
steps.
9. As amended after Downs, the statute provides that a carrier that fails to comply with
section 409.021(a) does not waive the right to contest the compensability, but
commits an administrative violation. See Tex. Lab. Code Ann. § 409.021(a-1). 10. We distinguish 11. It is undisputed that Brewster filed with the TWCC a TWCC-41 notice of injury for
the September 13, 2000 injury on October 26, 2001, and thus beyond the one-year
deadline of