ACCEPTED
03-14-00012-CV
3703647
THIRD COURT OF APPEALS
AUSTIN, TEXAS
1/8/2015 4:20:48 PM
JEFFREY D. KYLE
CLERK
NO. 03-14-00012-CV
FILED IN
3rd COURT OF APPEALS
IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS
AUSTIN, TEXAS 1/8/2015 4:20:48 PM
____________________________________________________________
JEFFREY D. KYLE
Clerk
STATE OFFICE OF RISK MANAGEMENT
Appellant
v.
KATINA A. EDWARDS
Appellee
On Appeal from the
rd
53 Judicial District Court of Travis County, Texas
APPELLANT’S REPLY BRIEF
J. Red Tripp
State Bar No. 00790257
Assistant General Counsel
State Office of Risk Management
P.O. Box 13777
Austin, Texas 78711-3777
(512) 936-1516
Fax (512) 370-9189
Red.Tripp@sorm.state.tx.us
Counsel for Appellant
ORAL ARGUMENT REQUESTED
1
TABLE OF CONTENTS
Page
Table of Contents…………………………………………………………..…….2
Index of Authorities…………………………………………………………..…..3
Reply Argument………………………………………………………………..…5
I. The Texas Department of Insurance, Division of Workers’
Compensation (DWC), deprived SORM of its due process
right to a fair hearing……………………………….……………………5
II. Appellant raised a Substantial Evidence Due Process Issue
in its Original Petition. Appellant withdrew only its challenge
to the issues of compensability and indemnity in its Amended
Petition. Accordingly, venue is mandatory in Travis County,
Texas…………………………………………………………………..…5
a. Substantial Evidence Issue was Raised in the Original
Petition…………………………………………………………….....5
b. Venue Is Mandatory in Travis County…………………………….6
c. De Novo Review Does Not Cure the Due Process
Violation………………………………………………………………8
III. Appellant Is Not Required By Any Rule or Statute to File a
Declaratory Judgment Action Against DWC To Resolve The
Issues In This Case…………………………………………………...9
Conclusion and Prayer…………………………………………………………11
Certificate of Service……………………………………………………………12
Certificate of Compliance………………………………………………………13
2
INDEX OF AUTHORITIES
CASES
Ross v. Kornrumpf, 46 Texas 390, 393 (1885) ………………………………6
Morales v. Liberty Mutual Insurance Co.,
241 S.W.3d 514, 517 (Tex. 2007)…………………………….…………7
STATUTES
Tex. Gov’t Code Subchapter G, §2001.174(2)……………………..…7, 8, 11
Tex. Gov’t Code Subchapter G, §2001.175…………………………………10
Tex. Gov’t Code Subchapter G, §2001.176………………………….…….…7
Tex. Labor Code §410.252(b)(1)……………………………………………….7
Tex. Labor Code §410.253…………………………………………………….10
Tex. Labor Code §410.255……..…………………………………5, 7, 8, 9, 10
Tex. Labor Code §410.258(b)…………………………………………………10
Tex. Labor Code §410.301…………………………………………………8, 10
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NO. 03-14-00012-CV
IN THE THIRD COURT OF APPEALS
AUSTIN, TEXAS
____________________________________________________________
STATE OFFICE OF RISK MANAGEMENT
Appellant
v.
KATINA A. EDWARDS
Appellee
On Appeal from the
rd
53 Judicial District Court of Travis County, Texas
APPELLANT’S REPLY BRIEF
TO THE HONORABLE JUSTICES OF THE TEXAS THIRD COURT OF
APPEALS:
COMES NOW, Appellant, State Office of Risk Management and files
this its Reply Brief to Appellee, Katina A. Edwards’ Response brief, and
would show as follows:
4
REPLY ARGUMENT
I. THE TEXAS DEPARTMENT OF INSURANCE, DIVISION OF
WORKERS’ COMPENSATION (DWC), DEPRIVED APPELLANT
OF ITS DUE PROCESS RIGHT TO A FAIR HEARING
DWC deprived Appellant of its due process right to a fair hearing by
failing to require Appellee to provide evidence-based expert medical
evidence to prove her claim of occupational disease, thereby failing to
properly place the burden of proof on Appellee. Appellee has not provided
any argument contrary to Appellant’s position. It must, therefore, be
presumed that Appellee concurs with Appellant’s position as to this Issue.
To the extent that a reply is necessary, Appellant incorporates, in full, its
argument as set forth in its original brief on the merits.
II. APPELLANT RAISED A SUBSTANTIAL EVIDENCE DUE
PROCESS ISSUE IN ITS ORIGINAL PETITION. APPELLANT
WITHDREW ONLY ITS CHALLENGE TO THE ISSUES OF
COMPENSABILITY AND INDEMITY IN ITS AMENDED PETITION.
ACCORDINGLY, VENUE IS MANDATORY IN TRAVIS COUNTY,
TEXAS
a. Substantial Evidence Issue was Raised in the Original Petition
Appellee acknowledges that Appellant timely filed its original petition,
but argues that Appellant’s Amended Petition untimely sought judicial
review under subchapter F and Tex. Labor Code §410.255. However,
Appellant’s Amended Petition, filed on January 28, 2010, properly removed
5
only the issues of compensability and disability from its appeal without
adding any new cause of action.1 To the extent Appellee asserts that it
was improper for Appellant to amend its original petition to more specifically
describe the relief sought on its substantial evidence cause of action, this
argument has been soundly rejected by the Texas Supreme Court since
the 1800s. See Ross v. Kornrumpf, 46 Texas 390, 393 (1885) (A new
cause of action is not set up by specifying more particularly the relief
sought).
b. Venue Is Mandatory In Travis County
Appellee acknowledges that Appellant is not seeking a reversal of the
DWC’s decision regarding compensability and disability;2 rather, Appellant
is asking this court to remand this matter to DWC for a new hearing in order
that DWC make a determination in compliance with its statutory provisions
and authority that is properly supported by the substantial evidence. This
dispute is not over whether or not Appellee is entitled to benefits - this
dispute is over whether or not the administrative agency followed the law in
1
In its Original Petition to the Travis County District Court, Appellant stated that
“Defendant was not held to [her] burden of proof. Plaintiff is, therefore, aggrieved by the
improper application of the burden of proof…” CR at 5-6, and requested “such other and
further relief at law or in equity to which the Court finds it may be justly entitled.” CR at
7.
2
Appellee’s Response issue acknowledges “…the Insurance Carrier’s legal
insufficiency argument of the evidence at the administrative level does not matter as to
compensability and disability issues…” Response Brief at viii.
6
coming to its decision. This Court has the authority to remand specifically
for these reasons, but only under Tex. Gov’t Code §2001.174(2), after
which the DWC has the authority to either issue a new decision based
upon the existing record or reopen the record for new evidence. Thus, a
decision by this court to remand this matter to the DWC is not a de facto
reversal, nor is such a reversal sought by Appellant from the court.
Appellee’s proposition that Tex. Labor Code §410.252(b)(1)
statutorily mandates venue in Fort Bend County, the county of Appellee’s
residence, regardless of whether the proper standard of review is de novo
or substantial evidence is without merit. While Appellee contends that
venue is mandatory in her county of residence, Tex. Labor Code §410.255
provides otherwise. If a dispute does not concern compensability, income
or death benefits, the matter falls under Tex. Labor Code §410.255, which
instructs parties that judicial review is to be conducted under Subchapter G,
Chapter 2001, Government Code. Section 2001.176 of the Government
Code specifically places mandatory venue in Travis County. See Morales
v. Liberty Mutual Insurance Co., 241 S.W.3d 514, 517 (Tex. 2007).
Appellee’s contention that “if courts allow parties to seek review in
Travis County on alleged legal errors, then almost every administrative
7
hearing could be alleged to have jurisdictional grounds in Travis County,”3
is without merit. Appellant is requesting a remand back to DWC under Tex.
Gov’t Code §2001.174(2), because DWC did not properly apply the
established law and procedure in this claim. If an insurance carrier was to
file its petition in Travis County and the court determined that no legal or
procedural error occurred, then the petition would fail and the injured
worker would maintain their right to a jury trial in the county of their
residence with the burden on the insurance carrier on any remaining issues
concerning compensability, income or death benefits pursuant to Tex.
Labor Code §410.301. An insurance carrier’s appeal under Tex. Labor
Code §410.255 would fail if the DWC did not misapply the law or
procedure. Appellee’s contention that by granting Appellant’s request relief
almost every case could then be filed in Travis County would be true only if
“in almost every administrative hearing” the DWC misapplied the law or
committed another egregious legal or procedural error. Appellee has
offered no evidence that this is the case.
c. De Novo Review Does Not Cure the Due Process Violation
Issues of due process, burden of proof, and evidence are not issues
of compensability, eligibility to or the amount of income or death benefits,
3
Appellee’s Response Brief at 21.
8
under Tex. Labor Code §410.255. Under Appellee’s construction of the
law, Appellant’s only remedy would be to try the issues of compensability
and disability before a jury with the burden of proof being placed upon the
Appellant, thereby allowing the a party to continue to benefit from the
DWC’s erroneous placement of the burden of proof at the administrative
level. Appellant would then have to prove that something did not happen,
which is antithetical to statute and logic. The real issue of procedural error
would never be addressed, nor corrected, contrary to Appellee’s contention
that “modified de novo review protects parties’ rights to have errors
corrected in court.”4 Accordingly, contrary to Appellee’s contentions, de
novo review does not cure the due process violation.
III. APPELLANT IS NOT REQUIRED BY ANY RULE OR STATUTE TO
FILE A DECLARATORY JUDGMENT ACTION AGAINST DWC TO
RESOLVE THE ISSUES IN THIS CASE
Appellant has never pled a declaratory judgment action in this
matter.5 While Appellee argues that Appellant could have brought a
Uniform Declaratory Judgment Act claim, Appellee offers no support for the
contention that this was required under law.
4
Appellee’s Response Brief at 20.
5
While Appellee appears to contend that a UDJA is the only vehicle under which
SORM can obtain relief, she never explains what justiciable controversy or legal
misinterpretation exists and how the Court’s ruling between DWC and SORM in this
case would resolve such controversy.
9
Appellee does not explain how DWC is an indispensable party to this
litigation. There is no statutory requirement that DWC be made a party
under Tex. Labor Code §401.255 or §401.301. A copy of plaintiff’s original
petition was filed with DWC simultaneously with the filing of the petition with
the court, pursuant to Tex. Labor Code §410.253 and in compliance with
Tex. Gov’t Code §2001.175. The statute provides that “The division may
intervene in a [judicial review proceeding] not later than the 30th day after
the date of receipt of the proposed judgment or settlement.” Tex. Labor
Code §410.258(b) (emphasis added). DWC was also sent a copy of the
Final Judgment. On August 13, 2013, SORM mailed DWC its proposed
judgment by certified mail, return receipt requested. The DWC admits in its
Petition in Intervention that it received the proposed order on August 14,
2013, and admits that it did not makes its request to intervene until more
than 30 days had passed.6 Though DWC did not timely intervene in this
lawsuit and thus was not a party to the lawsuit, it has now filed an amicus
brief to this Court.
Appellee’s contention that, should this Court remand this case back
to DWC for proper application of the law, it would somehow “allow DWC to
continuously misapply and misinterpret the law without being held
6
Texas Department of Insurance-Division of Workers’ Compensation’s Petition in
Intervention, Page 2, Section III.
10
accountable…” is without merit, or explanation, and it is precisely the
consequence sought to be avoided in this matter. Appellee does not
indicate what relief would be achieved by Appellant under a declaratory
judgment action that would not be accomplished by a remand to DWC for
rehearing and a correction of the due process violation.
CONCLUSION AND PRAYER
WHEREFORE, Appellant timely requested substantial evidence
review, properly in Travis County and wherefore Appellant has shown that
its due process rights to a fair hearing were violated, Appellant requests
that this court grant its request to reverse the administrative order finding
that the Claimant sustained a compensable injury in the form of
hypersensitivity pneumonitis on June 17, 2008; and that she had disability
resulting from the compensable injury sustained on June 17, 2008, from
August 22, 2008, through May 12, 2009; specifically and only for the
purpose of remanding the case to the Texas Department of Insurance,
Division of Workers’ Compensation, for a proper application of the burden
of proof and evidence as permitted under Tex. Gov’t Code §2001.174(2).
11
Respectfully submitted,
//s// J. Red Tripp
J. Red Tripp
State Bar No. 00790257
Associate General Counsel
State Office of Risk Management
P.O. Box 13777
Austin, Texas 78711-3777
(512) 936-1516
(512) 370-9189 fax
Red.Tripp@sorm.state.tx.us
Counsel for Appellant
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of Appellant’s Reply Brief
was served on Appellee via electronic service pursuant to the TRAP on the
8th day of January, 2015.
Bradley Dean McClellan
State Bar No. 13395980
Of Counsel, Law Offices of Richard Pena
1701 Director’s Blvd., Suite 110
Austin, Texas 78744
(512) 327-6884 office
(512) 694-8843 cell
(512) 327-8354 fax
brad.mcclellan@yahoo.com
//s// J. Red Tripp
J. Red Tripp
12
CERTIFICATE OF COMPLIANCE
I hereby certify that per TRAP 9.4(i)(3) the Appellant’s Reply Brief
contains 2,051 words pursuant to the word count on the computer program
used to prepare the document.
//s// J. Red Tripp
J. Red Tripp
13