Fort Bend County v. Melissa Ann Norsworthy

Affirmed and Majority and Dissenting Opinions filed March 21, 2019.

In The

Fourteenth Court of Appeals

NO. 14-17-00520-CV

FORT BEND COUNTY, Appellant
V.
MELISSA ANN NORSWORTHY, Appellee

On Appeal from the 268th District Court
Fort Bend County, Texas
Trial Court Cause No. 14-DCV-213052B

DISSENTING OPINION

The Supreme Court of Texas has considered the right of a workers’
compensation carrier to treat a third-party recovery as an advance against future
benefits in a case involving multiple beneficiaries of the same covered employee.
In binding judicial dicta, the high court has pronounced that the determination
should be made on a collective-recovery basis. Applying that rule to today’s case
means that the trial court erred in granting summary judgment and ordering the
carrier to pay workers’ compensation benefits to the deceased employee’s widow.
 An employee who suffers a compensable injury under the Texas Workers’
Compensation Act may seek damages from a liable third party in addition to
pursuing a claim for compensation benefits. 1 When an employee or beneficiary
claims benefits, “the insurance carrier is subrogated to the rights of the injured
employee [up to the total benefits paid or assumed] and may enforce the liability of
the third party in the name of the injured employee or the legal beneficiary.” 2 The
carrier is entitled to reimbursement from the third-party recovery under the
following scheme:

(a) The net amount recovered by a claimant in a third-party action
shall be used to reimburse the insurance carrier for benefits, including
medical benefits, that have been paid for the compensable injury.

(b) Any amount recovered that exceeds the amount of the
reimbursement required under Subsection (a) shall be treated as an
advance against future benefits, including medical benefits, that the
claimant is entitled to receive under this subtitle.

(c) If the advance under Subsection (b) is adequate to cover all future
benefits, the insurance carrier is not required to resume the payment of
benefits. If the advance is insufficient, the insurance carrier shall
resume the payment of benefits when the advance is exhausted.3

In State Office of Risk Management v. Carty, the Supreme Court of Texas
concluded that the statutorily undefined term “claimant,” as used in Labor Code
section 417.002, refers to the covered employee or the beneficiaries recovering
workers’ compensation benefits through that employee. 4 Thus, under the Carty

1
Tex. Lab. Code Ann. § 417.001(a)(West, Westlaw through 2017 R.S.).
2
Id. § 417.001(b)(West, Westlaw through 2017 R.S.).
3
Tex. Lab. Code Ann. § 417.002 (West, Westlaw through 2017 R.S.).
4
See 436 S.W.3d 298, 304, 305 (Tex. 2014).

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court’s construction of the statute, Labor Code section 417.002(b) provides that
any amount recovered by the employee or the employee’s beneficiaries in a third-
party action that exceeds the amount of the reimbursement required under section
417.002(a) must be treated as an advance against future workers’ compensation
benefits that the employee or the employee’s beneficiaries are entitled to receive.5

The Carty court stated that, until a workers’ compensation carrier is
reimbursed in full, the employee or the employee’s representatives have no right to
any of the third-party recovery. 6 The Carty court concluded that the net amount
recovered by the “claimant” referenced in Labor Code section 417.002(a), from
which the workers’ compensation carrier must be reimbursed for benefits already
paid, is the collective third-party recovery by the employee or the employee’s
beneficiaries.7 The Carty court reasoned that, because a beneficiary’s right to
death benefits and a carrier’s right to reimbursement both flow through the covered
employee, it makes sense to calculate the reimbursement right in relation to the
total third-party recovery by a particular employee or the employee’s legal
beneficiaries.8 According to the Carty court, because the law undisputedly treats
past benefits collectively under section 417.002(a), future benefits should be
treated the same way under section 417.002(b). 9

The Carty court agreed that even if multiple beneficiaries recover in a third-
party settlement, courts should treat the settlement as a single recovery when
enforcing the compensation carrier’s right to treat the recovery as an advance

5
Tex. Lab. Code Ann. § 417.002; Carty, 436 S.W.3d at 302–04.
6
See Carty, 436 S.W.3d at 303.
7
See id.
8
See id. at 304.
9
See id.

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against future benefits. 10 The Carty court concluded that “[c]onsistent with the text
and purpose of the reimbursement scheme under the Texas Workers’
Compensation Act, a workers’ compensation carrier’s right under section 417.002
to treat a third-party recovery as an advance of future benefits in a case involving
multiple beneficiaries of the same covered employee should be determined on a
collective-recovery basis.”11 After acknowledging that the collective-recovery rule
might produce results that some might find inequitable, the Carty court stated that
“[a]ddressing the potential inequities that subsection 417.002(b) can generate is a
policy decision for the Legislature, not the courts.”12

Appellant Fort Bend County, the workers’ compensation carrier in today’s
case, asserts that the Carty court’s construction of section 417.002 as mandating a
collective-recovery rule applies to this case. The majority concludes that the Carty
court’s construction of section 417.002 does not apply because one of the
beneficiaries in today’s case, appellee Melissa Ann Norsworthy, did not recover
any amount against a third party in her individual capacity. 13 Melissa14 did not
recover against any third party in her individual capacity, and the facts of today’s
case are not the same as the facts in the Carty case. 15 Thus, today’s case does not
fall within the Carty court’s holding.16 Nonetheless, under the doctrine of judicial
dictum, the Supreme Court of Texas’s construction of a statute may be binding on

10
See id. at 302–03.
11
See id. at 307.
12
Id. at 306.
13
See ante at 11.
14
Because this case involves several people with the same last name, individuals in the family
are referred to by their first names.
15
See Carty, 436 S.W.3d at 300–01.
16
See id. at 302–06.

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this court even in cases in which the facts do not fall within the scope of the high
court’s holding. 17 The Carty court made deliberate statements for future guidance
in the conduct of litigation.18 These statements are judicial dicta that bind this
court.19

Because Melissa receives workers’ compensation benefits through the
covered employee (her deceased husband, Deputy Sheriff John Norsworthy), under
the Carty judicial dicta Melissa falls within the definition of “claimant.” 20 Under
these statements, Melissa, Katlyn, and Jacob all fall within the meaning of
“claimant” so that a recovery by Katlyn means that the “claimant” has recovered
against a third party, entitling Fort Bend County to an advance under section
417.002(b) against the future benefits of Melissa, Katlyn, and Jacob.21 The Carty
court spoke in broad terms as to section 417.002’s meaning, and the high court did
not state that it was limiting this construction to the fact pattern in Carty or to a
particular factual situation. 22

Under Carty, if there are two beneficiaries entitled to future benefits, and
one secures a net recovery of $1,000,000 against a third party while the other
secures a net recovery of $1,000 against the third party, without any deduction
based on the workers’ compensation lien, then neither beneficiary gets any future
workers’ compensation benefits until the aggregate of the past benefits paid to each
beneficiary and the amount of future benefits not paid to each beneficiary under
17
See Allstate Cnty. Mut. Ins. Co. v. Wootton, 494 S.W.3d 825, 834 (Tex. App.—Houston [14th
Dist.] 2016, pet. denied).
18
See id.
19
See id.
20
See Carty, 436 S.W.3d at 302–06.
21
See id. In this dissenting opinion, it is not necessary to address the effect of Jacob’s settlement
with Fort Bend County.
22
See Carty, 436 S.W.3d at 302–06.

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section 417.002(b) equals $1,001,000. 23 The Carty court’s analysis and
pronouncements on the meaning of section 417.002 do not provide any basis for
concluding that the result should be different if the second beneficiary has a net
recovery of zero rather than a net recovery of $1,000.24 Though some might view
this result as unfair, the high court has instructed that the remedy lies in the
legislative branch of Texas government rather than in the judicial branch.25

Under the Carty’s court’s construction of section 417.002(b) as
implementing a collective-recovery rule, the trial court erred in granting summary
judgment, ordering Fort Bend County to pay Melissa workers’ compensation
benefits, and failing to give Fort Bend County any advance under section
417.002(b) against Melissa’s future benefits. Because the majority reaches the
opposite conclusion, I respectfully dissent.

/s/ Kem Thompson Frost
Chief Justice

Panel consists of Chief Justice Frost and Justices Spain and Poissant. (Poissant, J.,
majority).

23
See id.
24
See id.
25
See id. at 306.

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