Port Elevator-Brownsville, L.L.C. v. Rogelio Casados and Rafaela Casados, Individually and as Representatives of the Estate of Their Son, Rafael Casados

NUMBER 13-08-00150-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

PORT ELEVATOR-BROWNSVILLE, L.L.C., Appellant,

v.

ROGELIO CASADOS AND RAFAELA CASADOS,
INDIVIDUALLY AND AS REPRESENTATIVE OF
THE ESTATE OF THEIR SON, RAFAEL CASADOS, Appellees.

On appeal from the 404th District Court of
Cameron County, Texas.

OPINION

Before Chief Justice Valdez and Justices Yañez and Vela
Opinion by Justice Yañez

By a single issue, appellant, Port Elevator–Brownsville, L.L.C. (“Port Elevator”),

contends the trial court erred in denying its motion for summary judgment and in granting
the cross-motion for partial summary judgment filed by appellees, Rogelio and Rafaela

Casados.1 Specifically, Port Elevator contends that appellees’ claims against it are barred

by the exclusive remedy provision of the Texas Workers’ Compensation Act (“TWCA”).2

We affirm. I. Background

Staff Force, Inc. (“Staff Force”) is a temporary employment agency that hires

temporary workers and assigns them to work for its client companies.3 Rafael Casados

was hired by Staff Force and assigned to work at Port Elevator’s grain storage facility at

the Port of Brownsville. Shortly after his assignment to Port Elevator’s facility, Casados

died when he was buried beneath twenty feet of grain.4

Appellees sued Port Elevator, Staff Force, and others for wrongful death.5 Port

Elevator filed a traditional and no-evidence motion for summary judgment. In its traditional

1
Appellees, plaintiffs below, are acting individually and as representatives of their deceased son,
Rafael Casados. Casados was unm arried and had no children when he died.

2
See T EX . L ABO R C OD E A N N . §§ 406.034(a), 408.001 (Vernon 2006). Port Elevator briefed a second
issue, arguing that if there is a fact question regarding whether Casados was Port Elevator’s em ployee, the
trial court erred in refusing to subm it a jury question on the issue. However, the parties do not dispute that
Casados was an em ployee of both Port Elevator and Staff Force, Inc. (“Staff Force”). In its reply brief, Port
Elevator notes that we need not reach the second issue because the parties agree that Casados was Port
Elevator’s em ployee.

3
The record reflects that Staff Force entered into a Staff Leasing Agreem ent with E-Z Bookkeepers,
Inc. d/b/a Professional Business Solutions (“PBS”) pursuant to the Staff Leasing Services Act (“SLSA”). See
id. §§ 91.001-.063 (Vernon 2006 & Supp. 2009). Thus, with respect to PBS (the license holder), Staff Force
was a “client com pany.” See id. § 91.001 (3), (11) (Vernon Supp. 2009). Then, Staff Force, acting as a
“general em ployer,” provided tem porary workers to its “client com panies,” including Port Elevator. See
W ingfoot Enters. v. Alvarado, 111 S.W .3d 134, 136 n.9 (Tex. 2003); W estern Steel Co., Inc. v. Altenburg,
169 S.W .3d 347, 350 (Tex. App.–Corpus Christi 2005) rev’d on other grounds, 206 S.W .3d 121, 124 (Tex.
2006). The effect of this arrangem ent is that PBS, the license holder, leased Casados to Staff Force, the
client com pany, which in turn, leased Casados to Port Elevator.

4
The record shows that Staff Force’s work order assigning Casados to Port Elevator reflects a “start
date” of April 25, 2005. Casados’s death occurred on April 26, 2005.

5
The only appellant in this appeal is Port Elevator.

2
motion, Port Elevator argued that: (1) Casados was Port Elevator’s employee; (2) at the

time of Casados’s death, Port Elevator was a subscriber to workers’ compensation

insurance; and (3) appellees’ claims are therefore barred by the exclusive remedy provision

of the workers’ compensation statute. Port Elevator also argued that appellees are barred

from recovering exemplary damages because they are not “within the defined class of

beneficiaries who may recover exemplary damages” under the statute.6 As summary

judgment evidence, Port Elevator attached: (1) the affidavit of its general manager, Craig

Elkins; (2) the declarations page of its insurance policy; and (3) excerpts from the

deposition testimony of its employee, Javier Saldivar. In its second supplemental motion,

Port Elevator provided a complete copy of its insurance policy. Port Elevator also argued

that appellees’ claims were barred because Staff Force’s workers’ compensation carrier

paid all available benefits.7

In the no-evidence section of its motion, Port Elevator argued that the Texas

Department of Insurance, Division of Workers’ Compensation has exclusive jurisdiction to

determine compensability and there is “no evidence that [appellees] have exhausted their

administrative remedies as required.”

Appellees filed a response to Port Elevator’s motion and a cross-motion for partial

summary judgment on Port Elevator’s affirmative defenses. In their traditional and no-

6
See T EX . L ABO R C OD E A N N . § 408.001(b) (Vernon 2006) (“This section does not prohibit the recovery
of exem plary dam ages by the surviving spouse or heirs of the body of a deceased em ployee whose death was
caused by an intentional act or om ission of the em ployer or by the em ployer’s ‘gross negligence.’”).

7
Port Elevator references exhibits attached to Staff Force’s “Plea to Jurisdiction and Motion to
Dism iss or Abate,” which are included in the record before us. Those docum ents purportedly show that Dallas
Fire Insurance Com pany (“Dallas Fire”), PBS’s workers’ com pensation carrier, paid $56,238.00 to the
subsequent injury fund of the Division of W orkers’ Com pensation because Casados had no legal
beneficiaries. See id. § 403.007 (Vernon 2006).

3
evidence motion, appellees argued that as a temporary worker, Casados was not covered

under Port Elevator’s workers’ compensation policy. Specifically, appellees argued that

(1) the exclusive remedy provision is an affirmative defense for which Port Elevator bore

the burden of proof, and (2) Port Elevator had no evidence that it paid a workers’

compensation insurance premium covering Casados and other temporary employees.

Appellees also argued that they were not required to exhaust their administrative remedies

because they were not seeking workers’ compensation benefits. As summary judgment

evidence, appellees attached: (1) Port Elevator’s responses to appellees’ discovery

requests; (2) the deposition testimony of Elkins; (3) the deposition testimony of Veronica

Castro, then branch manager of Staff Force’s Brownsville office; (4) a Staff Force work

order reflecting Casados’s classification code; (5) Casados’s “First Report of Injury” form;

and (6) an affidavit from appellees’ attorney. Appellees filed an “Amended Motion for

Partial Summary Judgment,” in which they argued that the exclusive-remedy affirmative

defense was not available to Port Elevator because its workers’ compensation policy did

not cover the temporary employees it obtained from Staff Force. Appellees also asserted

that they were entitled to a no-evidence partial summary judgment because Port Elevator

has no evidence that it was a subscriber to a policy that covered Casados. As additional

summary judgment evidence, appellees attached: (1) Port Elevator’s second supplemental

responses to appellee’s requests for disclosure; and (2) the deposition testimony of Ernest

Stokey, a vice president of Texas Mutual Insurance Company, Port Elevator’s workers’

compensation carrier. Appellees and Port Elevator also filed various responses,

supplemental responses, and replies, and submitted additional evidence.

The trial court denied Port Elevator’s motion for summary judgment and granted

4
appellees’ amended motion for partial summary judgment. A jury found Port Elevator liable

for negligence and awarded appellees and Casados’s estate approximately $2.7 million

in damages. The trial court entered judgment on the verdict. Port Elevator filed a motion

for reconsideration of the trial court’s rulings on the motions for summary judgment and a

motion for judgment notwithstanding the verdict, both of which the trial court denied. This

appeal ensued.

II. Standard of Review and Applicable Law

Here, both Port Elevator’s motion for summary judgment and appellees’ amended

cross-motion for partial summary judgment were combined “traditional” and “no-evidence”

motions. We review the trial court's grant of summary judgment de novo.8 “When, as

here, both parties file a motion for summary judgment with the trial court, and one is

granted and one is denied, the reviewing court determines all questions presented and

renders the judgment that should have been rendered by the trial court.”9 When the trial

court does not specify the basis for its ruling, it is the appellant's burden on appeal to show

that none of the independent grounds that were asserted in support of summary judgment

is sufficient to support the judgment.10 Thus, when the trial court's order granting summary

judgment does not specify the grounds on which it was granted, we will affirm the summary

judgment if any of the advanced theories support the judgment.11

8
D.R. Horton-Tex., Ltd. v. Markel Int’l Ins. Co., 300 S.W .3d 740, 743 (Tex. 2009).

9
HC Beck, Ltd. v. Rice, 284 S.W .3d 349, 352 (Tex. 2009).

10
Coffey v. Singer Asset Fin. Co., 223 S.W .3d 559, 562-63 (Tex. App.–Dallas 2007, no pet.) (citing
Star-Telegram, Inc. v. Doe, 915 S.W .2d 471, 473 (Tex. 1995)).

11
Browning v. Prostok, 165 S.W .3d 336, 344 (Tex. 2005) (citing Provident Life Ins. Co. v. Knott, 128
S.W .3d 211, 216 (Tex. 2003)); Coffey, 223 S.W .3d at 563.

5
 As the Texas Supreme Court recently noted,

The purpose of the Texas Workers’ Compensation Act is to provide
employees with certainty that their medical bills and lost wages will be
covered if they are injured. An employee benefits from workers’
compensation insurance because it saves the time and litigation expense
inherent in proving fault in a common law tort claim. But a subscribing
employer also receives a benefit because it is then entitled to assert the
statutory exclusive remedy defense against the tort claims of its employees
for job related injuries.[12]

The exclusive remedy provision provides that, “[r]ecovery of workers’ compensation

benefits is the exclusive remedy of an employee covered by workers’ compensation

insurance coverage . . . for the death of or a work-related injury sustained by the

employee.”13 When a defendant moves for summary judgment based on an affirmative

defense, like the exclusive remedies provision of the TWCA, the defendant must

conclusively prove each element of the defense as a matter of law.14 Thus, Port Elevator

had the summary judgment burden of proving its exclusive-remedy affirmative defense as

a matter of law.15 The Texas Supreme Court has recognized that temporary employees,

like Casados, may have more than one employer for the purposes of the TWCA and its

exclusive remedy provision.16 A borrowed servant is properly covered by the borrowing

12
HC Beck, Ltd., 284 S.W .3d at 350.

13
See T EX . L ABO R C OD E A N N . § 408.001(a).

14
Funes v. Eldridge Elec. Co., 270 S.W .3d 666, 668 (Tex. App.–San Antonio 2008, no pet.); Morales
v. Martin Res., Inc., 183 S.W .3d 469, 471 (Tex. App.–Eastland 2005, no pet.); W estern Steel Co., Inc., 169
S.W .3d at 349.

15
See Morales, 183 S.W .3d at 471.

16
Id. (citing Garza v. Exel Logistics, Inc., 161 S.W .3d 473, 475 (Tex. 2005); W ingfoot Enters., 111
S.W .3d at 144).

6
employer’s workers’ compensation insurance.17 Here, in order to be entitled to the

exclusive-remedy affirmative defense, Port Elevator was required to plead and prove: (1)

Casados was its borrowed servant; (2) he was entitled to workers’ compensation benefits;

and (3) Port Elevator had workers’ compensation insurance that covered claims asserted

by borrowed servants.18

III. Discussion

We begin by addressing whether Port Elevator met its burden to establish its

exclusive-remedy affirmative defense as a matter of law.19 In its motion for summary

judgment and on appeal, Port Elevator argued that it was entitled to the exclusive-remedy

affirmative defense because it established that: (1) Casados was its employee (which is

undisputed); and (2) at the time of Casados’s death, it was a subscriber to workers’

compensation insurance. In support of its position, Port Elevator cites Garza v. Exel

Logistics, Inc.20 Port Elevator argues that because “an employer may not split its workforce

by providing workers’ compensation insurance to some workers while leaving others

without coverage,” all of its employees—including Casados—were covered by its workers’

compensation policy. Essentially, Port Elevator’s position is that if it purchased workers’

17
Guerrero v. Harmon Tank Co., 55 S.W .3d 19, 25 (Tex. App.–Am arillo 2001, pet. denied).

18
See W esby v. Act Pipe & Supply, Inc., 199 S.W .3d 614, 617-18 (Tex. App.–Dallas 2006, no pet.);
W estern Steel Co., Inc., 169 S.W .3d at 350; Univ. of Houston–Clear Lake v. Marsh, 981 S.W .2d 912, 914
(Tex. App.–Houston [1st Dist.] 1998, no pet.).

19
W e note that in its m otion for sum m ary judgm ent, Port Elevator argued that appellees had “no
evidence” that appellees exhausted their adm inistrative rem edies. Port Elevator has not raised this argum ent
on appeal, and we do not address it. See T EX . R. A PP . P. 38.1(i).

20
See Garza, 161 S.W .3d at 478 (“The Act does not perm it a tem porary em ploym ent agency like
Interim to obtain coverage for a client sim ply by obtaining coverage for itself. There m ust be explicit coverage
for the client.”).

7
compensation insurance for one of its employees, then all of its employees are

covered—regardless of whether it intended to cover all of its employees, whether the code

classifications in the policy reflect coverage for all employees, and whether it paid

premiums for temporary employees like Casados.

In its response and on appeal, appellees contend that Port Elevator was required

to establish not only that it was a subscriber to workers’ compensation insurance, but that

Casados was an employee covered by Port Elevator’s policy. Thus, the controlling

question before the trial court, and now before this Court, is whether Port Elevator indeed

could meet its burden by establishing only that (1) Casados was its employee and (2) it

was a subscriber to workers’ compensation insurance.

We begin by examining Port Elevator’s argument and summary judgment evidence.

Port Elevator submitted the affidavit of Elkins, which stated that: (1) Port Elevator was a

subscriber to workers’ compensation insurance, and (2) Casados was Port Elevator’s

employee at the time of his death. It also submitted excerpts from the deposition testimony

of Saldivar, which shows that: (1) on the day he died, Casados was removing grain from

a bulkhead door; and (2) all of Port Elevator’s employees—including its temporary

employees—were a “necessary” part of Port Elevator’s grain elevator operations. With

respect to the controlling issue, Port Elevator submitted its insurance policy, issued by its

carrier, Texas Mutual Insurance Company (“Texas Mutual”). The policy reflects that Port

Elevator was a subscriber to workers’ compensation insurance covering its operations in

Texas for the relevant policy period.21 The information page of the policy, which lists the

21
The policy period is July 12, 2004 through July 12, 2005. Casados’s fatal accident occurred on
April 26, 2005.

8
classification codes describing the type of work performed by the employees, lists only two

classifications: “clerical office employees” and “grain elevator operation & local managers,

drivers.” With regard to the information page, Port Elevator makes two arguments: (1)

Casados was included in the category of employees working in support of grain elevator

operations; and (2) classification codes do not establish coverage, but merely govern

premium calculations.

In support of its argument that an employer may not “split” its workforce by covering

some of its employees and not covering others, Port Elevator cites Texas Workers’

Compensation Insurance Fund v. Del Industrial, Inc.,22 Maryland Casualty Co. v. Sullivan,23

and Texas Employers’ Insurance Ass’n v. Stanton.24

Appellees respond that the supreme court in Del Industrial also recognized that the

case law in this area is dated and noted that “the Texas cases prohibiting ‘split workforces’

do not address staff-leasing relationships, and were decided prior to the Legislature’s

passage of the SLSA.”25 Appellees further argue that Sullivan and Stanton are

distinguishable because neither case addresses workers’ compensation in the context of

temporary employees.

In Del Industrial, the supreme court held that “the Staff Leasing Services Act does

22
Tex. W orkers’ Compensation Ins. Fund v. Del Industrial, Inc., 35 S.W .3d 591, 596 (Tex. 2000) (“It
has long been the law in T exas that an em ployer m ay not split its workforce by providing workers’
com pensation insurance to som e workers while leaving others without coverage.”).

23
Md. Cas. Co. v. Sullivan, 334 S.W .2d 783, 786 (Tex. 1960).

24
Tex. Employers’ Ins. Ass’n v. Stanton, 140 S.W .2d 337, 339 (Tex. Civ. App.–Am arillo 1940, writ
ref’d).

25
See D el Industrial, Inc., 35 S.W .3d at 596 (citing T EX . L ABO R C OD E A N N . §§ 91.001-.063) (the
SLSA).

9
not require a [client] company that purchases workers’ compensation insurance for its

employees to pay premiums for employees whom the company leases from a staff leasing

company when the staff leasing company declines to purchase coverage for those leased

workers.”26 Thus, in construing the provisions of the SLSA, the court permitted “the

practical effect” that only part of the employer’s work force (the direct non-leased-employee

part) was covered by workers’ compensation insurance.27

Del Industrial is distinguishable from the present case because it involved a “staff-

leasing relationship” between a staff-leasing company and its client company pursuant to

the SLSA.28 In the present case, Staff Force is not a staff leasing company within the

purview of the SLSA.29 Thus, although Del Industrial is distinguishable from the facts

before us, we recognize that it supports Port Elevator’s position that non-SLSA-governed

cases—like the present case—are subject to the general rule “that an employer may not

split its workforce by providing workers’ compensation insurance to some workers while

leaving others without coverage.”30

We next address the evidence presented by appellees. Appellees contend that Port

26
Id.

27
See id.

28
See id.

29
Neither party asserts that Staff Force is a staff leasing agency pursuant to the SLSA. Port Elevator
characterizes Staff Force as a “tem porary em ploym ent agency.” Appellees characterize Staff Force as a
“tem porary staffing com pany.” As noted, Staff Force was a “client com pany” under the SLSA because it
entered into a staff leasing agreem ent with PBS. Evidence in the record shows that PBS carried workers’
com pensation insurance coverage for the applicable period through Dallas Fire. Staff Force was not a nam ed
insured on the Dallas Fire policy or on any other policy that appears in the record.

30
Del Industrial, Inc., 35 S.W .3d at 596.

10
Elevator’s workers’ compensation policy covered only its direct employees, not its

temporary employees like Casados. Appellees argue that to establish its exclusive remedy

affirmative defense, Port Elevator must show not only that it is a subscriber to workers’

compensation insurance, but that Casados was “an employee covered by workers’

compensation insurance coverage.”31

Appellees point to the information page of Port Elevator’s policy, which lists the

classification codes of covered employees: “8810" for “clerical office employees” and

“8304" for “grain elevator operation & local managers, drivers.” Appellees assert that as

a temporary laborer, Casados fit into neither category, and was therefore not covered by

the policy. In support, appellees cite the deposition testimony of Elkins, who testified that

Casados was a “laborer,” not a “manager,” an “operator,” or “clerical staff.” Appellees also

provided Staff Force’s work order assigning Casados to Port Elevator; the work order

identifies Casados’s workers’ compensation classification code as “5160.” The

classification code “5160" does not appear on the information page of Port Elevator’s

insurance policy showing covered employees.32

Appellees also rely on the deposition testimony of Stokey, “vice president of

premium audit and premium recovery” at Texas Mutual, Port Elevator’s workers’

compensation carrier. Stokey explained that his duties include “securing payroll

31
See T EX . L ABO R C OD E A N N . § 408.001 (em phasis added).

32
In its appellate brief, Port Elevator cites Bradley v. Phillips Chem. Co., 484 F.Supp.2d 604, 615 (S.
D. Tex. 2007), for the proposition that the code classifications do not lim it coverage under the policy and
cannot be used to exclude em ployees from coverage. However, Port Elevator did not m ake this argum ent
in its m otion for sum m ary judgm ent or in its responses to appellees’ m otion. Accordingly, we do not consider
it. See T EX . R. C IV . P. 166a(c) (“Issues not expressly presented to the trial court by written m otion, answer
or other response shall not be considered on appeal as grounds for reversal.”).

11
information from our policyholders to determine what their premiums are due [sic] based

on their organization, their activity, as well as their payroll.” Stokey testified, in relevant

part, as follows:

Q [by appellees’ counsel]: Do you know whether or not Staff Force
employees were included in the calculations of Port Elevator–Brownsville,
L.C.’s Workers’ Comp premiums?

A [Stokey]: Yes, I know.

Q: Were they?

A: No.

Q: Should they have been, in your opinion?

A: No.

Q: Why not?

A: Because from what we—what we’ve seen, that Staff Force has their own
Workers’ Compensation policy, and we do not—that would be double
charging if we had included any of those employees, and that’s contrary to
the labor code of regulations. We can’t—

Q: What regulation?

A: We can’t double charge our policyholders in the State of Texas. You’d
have Staff Force being charged for premium and then I’m going to be
penalizing our policyholder if we’d have done something like that, and that’s
not being good stewards for our policyholder’s premium.

Q: Well, actually what you’d have is each company paying to cover its own
employees, isn’t that right?

. . . . [Objection and discussion]

A: This is not a situation, from my perspective, where someone truly is
working for two different companies. I—this is an employee that’s working
for one company that’s in a type of business. As I understand, it’s a
temporary agency, I believe, Staff Force is; that the normal course of duty is
that they go out and work for other clients of that—of Staff Force that need
someone to do whatever type of task it is. That doesn’t make them an

12
employee of Port Elevator, especially in lieu of the fact that Staff Force
already has their own Workers’ Compensation policy.

Q: Have you analyzed Staff Force’s policy?

A: No.

Q: Okay. So you don’t really know whether or not they have a policy that
covers Mr. Casados or not, do you?

[Objection]

A: I haven’t seen it, no.

Q: You’ve been told that?

A: By reliable sources, I think.

Q: Who told you that?

A: It’s consultation with counsel.

Q: Okay. So we’re clear, Port Elevator did not pay a premium that included
calculations for the payroll of Staff Force employees for 2003 through 2005,
right?

A: That’s correct.

....

Q: Did Texas Mutual charge any premiums for Staff Force employees—let
me restate that. Did Texas Mutual charge Port Elevator any premiums for
Workers’ Compensation for Staff Force employees after its end-of-the-year
audit in 2002, 2003, 2004, or 2005?

[Objection]

A: No, it did not.

Q: Did any Staff Force employee make a Workers’ Compensation claim
under Port Elevator’s policy in 2002?

A: No.

Q: Did any Staff Force employee make such a claim in 2003?

13
A: No.

Q: How about in 2004?

A: I believe that might be the year, the policy year where Mr. Casados’ claim
came into our organization. I can’t remember exactly. There’s only one
claim from—and that’s Mr. Casados’[s], and I can’t recall if it was ‘04 or ‘05,
but that’s the only one.

Q: Okay. I believe it was ‘05.

A: Okay.

Q: I think it was April of ‘05. So I understand what you’re saying, the only
Workers’ Compensation claim that’s ever been made by a Staff Force
employee on Port Elevator’s Workers’ Compensation policy was the claim
for Mr. Casados?

A: That’s correct.

Q: Who made that claim?

A: I don’t know.

Q: That claim was denied, right?

A: Yes.

[Objection]

A: Yes, it was.

Q: Why was that claim denied?

A: I don’t know.

Q: Certainly Port Elevator didn’t pay a premium to cover any Staff Force
employees, right?

[Objection]

A: No, they did not.

....

14
Q: Okay. So you’re certain, then, that for the years 2002 through 2005 the
payroll for Staff Force was not included in the premium calculations for Port
Elevator?

A: Correct.

....

Q: Okay. And this would be an example where that’s the payroll for Port
Elevator, but does not include payroll for Staff Force employees working at
Port Elevator, right?

A: Correct.

....

[Objection]

A: That was—that’s correct, it’s not the intent.

....

Stokey was cross-examined by Port Elevator’s counsel as follows:

Q [by Port Elevator’s counsel]: Okay. So just to use, then, that term, based
upon what you can see in Exhibit 3 there, Port Elevator was a subscriber as
of April 26, 2005?

A: That’s correct. Yes, sir.

....

On further examination by appellees’ counsel, Stokey testified:

Q [by appellees’ counsel]: Okay. So the term ‘subscriber’ doesn’t define
who is or who isn’t covered by Workers’ Comp, it just describes whether or
not somebody has a Workers’ Comp policy or not?

[Objection]

A: If I’m an employer and I’m a subscriber to Workers’ Compensation, then
my employees are covered.

Q: Well, in this instance[,] Staff Force people weren’t covered, right?

15
 [Objection]

A: From what I’m seeing on this—in this situation, you’ve got a situation
where the claimant in question was not an employee of our policyholder.

Q: All right. I apologize if I’ve asked you some of these questions I’m about
to ask you again. I just want to get them clear on the record so that we don’t
have to bother you again with another deposition prior to trial.

Port Elevator did not pay for Workers’ Compensation insurance for
Staff Force employees working at Port Elevator’s facility, correct?

[Objection]

A: That’s correct.

Q: And Texas Mutual did not charge Port Elevator for Workers’
Compensation coverage for Staff Force employees working at Port
Elevator’s facility, correct?

[Objection]

A: Correct.

Q: And Texas Mutual did not intend to cover Staff Force employees under
Port Elevator’s Workers’ Compensation policy, correct?

[Objection]

A: Correct.

....

On further examination by Port Elevator’s counsel, Stokey testified:

Q [by Port Elevator’s counsel]: It is the intent of Texas Mutual to cover all
those persons who are in an employee/employer relationship with Port
Elevator during the policy period at issue?

[Objection]

A: Yes. Correct.

Appellees’ summary judgment evidence also included Elkins’s deposition testimony,

16
which included the following:

Q [by appellees’ counsel]: Did you have a conversation or [sic] any sort of
at Staff Force if who, if anybody, was supposed to provide worker’s comp for
the Staff Force employees?

A [Elkins]: Yes, I asked Staff Force all your—in the price you’re charging me
what’s included, and they said workers’ comp all of that is included in the
price we’re charging.

Q: So you guys didn’t get workers’ comp for the Staff Force employees?

[Port Elevator’s counsel]: Object to form.

A: At the—we have workers’ comp and if Staff Force’s people were not
covered under Staff Force’s comp then I believe my policy automatically
charges me a premium based on the wages I pay Staff Force.

Q: That’s what you believe?

A: That’s what I believe, yes.

On further examination by Staff Force’s counsel, Elkins testified:

Q [by Staff Force’s counsel]: Now, when you had the discussion with Staff
Force, the question was asked, do you have workers’ compensation
insurance included in this rate?

A [Elkins]: Yes, sir.

Q: All right. And what were you told?

A: Yes, we do.

Q: Did you ask which worker’s compensation carrier they had worker’s comp
insurance with?

A: No, we didn’t.

Q: Was there any discussion that if they had worker’s compensation who
would be insured under the policy, being Staff Force and the client company
or did you get into that explanation?

A: They didn’t get into that explanation. I just asked them for a binder.

17
 Elkins testified that the “binder” he referred to reflected that the insurer was Dallas

Fire. Elkins also testified that prior to Casados’s death, no Port Elevator temporary

employee had been injured.

Appellees also submitted a “Notice of Denial of Compensability/Liability and

Refusal to Pay Benefits” form issued by Texas Mutual, Port Elevator’s workers’

compensation carrier. The document contains the following explanation:

TEXAS MUTUAL INSURANCE COMPANY DENIES THE CLAIM IN ITS
ENTIRETY AS NO INJURY WAS SUSTAINED WITHIN THE COURSE AND
SCOPE OF EMPLOYMENT WITH OUR INSURED PORT ELEVATOR-
BROWNSVILLE. MR. CASADOS’S EMPLOYER AT ALL TIMES
RELEVANT TO THIS CLAIM WAS AMS STAFF LEASING, DBA STAFF
FORCE INC[.,] WHICH IS NOT COVERED BY A WORKERS
COMPENSATION POLICY ISSUED BY TEXAS MUTUAL INSURANCE
COMPANY. PER INVESTIGATION, THE CORRECT CARRIER IS DALLAS
FIRE INSURANCE COMPANY AND THE POLICY NUMBER IS
DWC020005-01[.33]

In their “Amended Motion for Partial Summary Judgment on the Affirmative Defense

of the Workers’ Compensation Bar,” appellees cited the supreme court’s opinion in Garza

in support of their position that Port Elevator was required to show that it was covered by

a policy for an injury to Casados.34 We agree that Garza supports appellees’ position. In

Garza, the supreme court held that a temporary employment agency cannot obtain

workers’ compensation insurance for a client simply by obtaining coverage for itself; rather,

there must be explicit coverage for both employers.35 In so holding, the court explained:

33
In its “Supplem ental Response to Plaintiffs’ Am ended Motion for Sum m ary Judgm ent,” Port
Elevator noted that the denial statem ent was m ade by Texas Mutual, not by Port Elevator, and that Texas
Mutual’s position is “wholly im m aterial” to Port Elevator’s position.

34
See Garza, 161 S.W .3d at 481.

35
See id. at 479.

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 The Staff Leasing Services Act does not apply to temporary or seasonal
employment, but the specificity with which it addresses workers'
compensation strongly indicates that a leasing company cannot accomplish
under the general workers' compensation provisions of the Labor Code what
it is prohibited from accomplishing under the Staff Leasing Services Act,
which is also a part of the Labor Code. Suppose, for example, that the
leasing company and the client decided not to expressly agree in a written
contract that the client shares the right of direction and control of employees,
but in fact, the parties contemplated they would share actual control and did
so. The Staff Leasing Services Act would not apply. Did the Legislature
intend to allow the leasing company and its client nevertheless to agree that
the leasing company would obtain a policy for itself, based on its own
experience rating, and that such a policy would also cover leased employees
while working under the actual control of the client? The answer is no, this
is not contemplated by the Labor Code. The specificity and details of the
Staff Leasing Services Act negate the notion that parties can, by private
agreement, decide that a single policy naming only one insured will cover
one company's employees while they are working under the direct control of
another company, or that the experience rating of one and not the other will
determine who the named insured will be.[36]

Here, Port Elevator argues that because it can show that it had explicit workers’

compensation insurance coverage for itself, it established the exclusive remedy affirmative

defense, and is not required to show that its workers’ compensation policy covered

Casados. We disagree.

In Garza, the supreme court stated: “Accordingly, Exel has not established that it

is ‘covered by workers’ compensation insurance coverage’ for a work-related injury

sustained by the employee,’ in this case, Garza, which is a prerequisite to the application

of the exclusive remedy provision in section 408.001(a).”37

We hold that the summary judgment evidence conclusively established that

Casados was not a covered employee under Port Elevator’s workers’ compensation

36
Id. (internal footnotes om itted).

37
Id. at 481 (em phasis added).

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insurance policy. Following Garza, we hold that Port Elevator has not established that it

is covered by workers’ compensation insurance coverage for a work-related injury

sustained by the employee, in this case, Casados, which is a prerequisite to the application

of the exclusive remedy provision in section 408.001(a).38 We overrule Port Elevator’s sole

issue. In so holding, we are mindful that the workers’ compensation statute is liberally

construed in the worker’s favor.39

IV. Conclusion

We hold that the trial court did not err in denying Port Elevator’s motion for summary

judgment and in granting appellees’ motion for partial summary judgment. We affirm the

trial court’s judgment.

LINDA REYNA YAÑEZ,
Justice

Delivered and filed the
27th day of May, 2010.

38
See id. (em phasis added).

39
See Navarette v. Temple Indep. Sch. Dist., 706 S.W .2d 308, 309 (Tex. 1986).

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