Martinez v. Second Injury Fund of Texas

OPINION

MAUZY, Justice.

The issue in this workers’ compensation action is whether suits against the Second Injury Fund (Fund) must be filed within the same time period prescribed for actions to set aside decisions of the Industrial Accident Board (Board). We hold that notice to the Board is deemed and considered notice to and filing of a claim against the Fund.

Vera N. Martinez, whose right leg was impaired by childhood polio, injured her left leg at work. The Standard Fire Insurance Company contested its liability for the extent of the work injury both before the Board and the trial court.

Before trial, Standard Fire Insurance Company conceded its liability for 100 percent permanent disability to Martinez’ left leg, and obtained leave of court to join the Second Injury Fund as a third party. Thereafter, Martinez filed a third party petition against the Second Injury Fund to obtain compensation for the remainder of total and permanent disability benefits. The Fund moved to dismiss both claims against it for want of jurisdiction on the ground that neither was filed within twenty days after Martinez’ notice to the Board that she would not abide by its decision, the period prescribed by article 8307, section 5, TEX.REV.ClV.STAT.ANN. (Vernon Supp. 1990).1 The district court denied the Fund’s motion.

Trial was to a jury, which found that Martinez had lost the use of her right leg due to polio, and that the lost use of both legs had left her totally and permanently incapacitated for work. Based upon the jury’s findings, Martinez recovered judgment against Standard Fire for 100 percent permanent disability to her left leg (representing 200 weeks of compensation to the date of the jury verdict), and the balance of compensation due for her total and permanent incapacity benefits from the Fund.

Holding that the district court lacked jurisdiction against the Fund as a party not named to the action within the time permitted by article 8307, section 5, the court of appeals reversed and rendered judgment that Martinez recover nothing from the Fund. 756 S.W.2d 877.

The Fund’s History

The Second Injury Fund was created by the Legislature in 19472 to remedy an inequity in the Workmen’s Compensation Law of 1917.3 Part I, section 12c of the 1917 law4 provided that an employee incapacitated by a combination of injuries over a period of time could recover for the later injury only the compensation to which he would have been entitled had he not been previously injured. As explained in Miears v. Industrial Accident Board, 149 Tex. 270, 232 S.W.2d 671, 672 (1950), the purpose of this provision was

to encourage the employment of persons physically handicapped by previous injuries. Obviously, an employer would be discouraged from employing such persons if he knew that under the law his insurer would become liable in the event of a second injury for the disability resulting from the combined effect of the two injuries, and not merely for the disability resulting from the second injury considered alone.

*269The salutary purpose notwithstanding, the result was that an employee would recover less compensation if he were totally and permanently incapacitated by a series of injuries than he would recover were he to suffer the same incapacity from a single injury. Id. 232 S.W.2d at 673. To alleviate this inequity without impinging upon the policy supporting section 12c, the Legislature amended that section and added sections 12c-l and 12c-25 to create a Second Injury Fund from which an employee who is totally and permanently incapacitated by successive specific injuries can recover the additional compensation due for such incapacity over the amount due for the later injury. See id. 232 S.W.2d at 673-676; Second Injury Fund v. Keaton, 162 Tex. 250, 345 S.W.2d 711 (1961).

Application of Article 8307, Section 5 to the Fund

Article 8307, section 5 provides in pertinent part:

Whenever [a workers’ compensation] suit is brought, the rights and liability of the parties thereto shall be determined by the provisions of this law, and the suit of the injured employee or person suing on account of the death of such employee shall be against the Association, if the employer of such injured or deceased employee at the time of such injury or death was a subscriber as defined in this law. If the final order of the Board is against the Association, then the Association and not the employer shall bring suit to set aside said final ruling and decision of the Board, if it so desires, and the Court shall in either event determine the issues in such cause ... (1977) (emphasis added).

As the Fund concedes in its brief to this court, this article mandates not only when suit should be instituted but also against whom such suit should be brought within the specified limitations period. Neither this nor any other statute specifies that its provisions apply to actions involving the Fund.

By statute, the Fund is neither “the association” nor an insurance company. “Association” is defined in article 8309, section 1 as follows:

Definitions ...
“Association” shall mean the “Texas Employers’ Insurance Association” or other insurance company authorized under this Act to insure the payment of compensation to injured employees or to the beneficiaries of deceased employees.

An “insurance company” is defined in article 8309, section 2 as an insurance company lawfully transacting a liability or accident business in Texas. Neither definition mentions or includes the Fund. Further, article 8306, section 12c-2 which creates the Fund and defines its procedures, does not include the Fund as an “insurer” or “the Association.” Indeed, the statute provides that the Fund is essentially a bank account, comprised of payments by insurance companies from workers’ compensation death benefits due workers with no beneficiaries. Article 8306, sections 12c and 12c-l prescribe the manner in which the Fund must pay out money. Neither these nor any other section of the Workers’ Compensation Act provide that suits against the Fund are subject to the provisions of article 8307, section 5. Nor does any section incorporate article 8307, section 5 by reference. The Legislature has carefully specified that the only cases to which article 8307, section 5 applies are those governed by its own terms and those in which its terms are incorporated by reference.

In Johnson v. Second Injury Fund, 688 S.W.2d 107 (Tex.1985), we held that the Fund is not the same as an insurer, procedurally or substantively. In Johnson, the Fund sought to establish for itself the right of subrogation that insurers have, even though the statutes creating the Fund are silent on the question of subrogation. This Court expressly rejected this argument, *270since although given the opportunity, the Legislature had not added the rights sought by the Fund.6 The Court held that neither rights nor duties of the Fund could be created by implication. Id. at 109. The Court further held that the rule of construction concerning proceedings involving the Second Injury Fund is “expressio unius est exclusio alterius;” enumeration in a statute of a particular person, thing, consequence or class is equivalent to an express exclusion of all others. Id. at 108-109. Article 8307, section 5 enumerates provisions applicable to the Association and employers, but does not mention the Fund. Because it is not listed in article 8307, section 5, the fund is not included in the mandatory procedures of that statute.

In fact, the only statute that does prescribe any procedure for a claimant to follow in pursuing a claim against the Fund is article 8306, section 12c, which provides in pertinent part:

“... notice of injury to the employer and filing a claim with the Industrial Accident Board as required by law shall also be deemed and considered notice to and filing of a claim against the ‘Second Injury Fund.’ ”

No other provision in the Act regulates the filing of suits against the Fund. No other provision mandates a separate suit, a separate proceeding at the Board, a separate award, a separate appeal, a separate trial, or any other procedural event to bring an action against the Fund. Indeed, the Legislature amended the statute in 1977 to add the clear language of article 8306, section 12c that once notice is given the Board, the case shall be considered to include a claim against the Fund.7 The Legislature could have taken the opportunity in 1977 to add procedural steps to Second Injury Fund cases. It could have done so by express provision in the Second Injury Fund statutes or by defining the Fund as “the association” or as an “insurance company.” It could have done so by adding the Fund to the list of parties to suits when it amended article 8307, section 5. However, the Legislature did exactly the opposite when it removed procedural steps for claimants in Second Injury Fund cases. Thus, the current statutes only require claimants to give notice of injury to the employer and file a claim with the Board against the insurer. Such action is deemed notice and claim against the Fund by the express terms of article 8306, section 12c.

Evidence in the record shows that Martinez both timely notified her employer and timely filed her claim with the Board. The executive director of the Board, Mr. William Treacy, testified that Martinez’ employer timely filed a report of injury with the Board. Further, Mr. Treacy testified that the Board is fully aware that notice of injury to the employer and filing a claim within one year is deemed and considered notice to and filing of a claim against the Second Injury Fund. The Board agreed that it is required by article 8307, section 7b to fully advise claimants of the requirements to file claims. The uncontroverted evidence in the record, however, shows that there is no statute or rule of the Board requiring the use of any particular words *271or the phrase “Second Injury Fund” in making a claim. Nor is there any document, claim form, or instruction either provided by the Board or required by law that instructs any claimant to do anything differently to make a claim against the Fund other than to make an ordinary claim.

The Texas Legislature has mandated the method by which the Second Injury Fund shall be given notice of a claim against it. Thus, we hold that pursuant to article 8306, section 12c, Martinez’ notice to the Board is deemed and considered notice to and as filing of a claim against the Fund. The trial court was correct in dismissing the Second Injury Fund’s plea to the jurisdiction. We therefore reverse the judgment of the court of appeals and affirm the judgment of the trial court.

HECHT, J., files a dissenting opinion in which PHILLIPS, C.J., and COOK, J., join.

. Except as otherwise noted, all statutory references are to TEX.REV.CIV.STAT.ANN. (Vernon 1967, Supp.1990).

. Second Injury Fund Act, ch. 349, 1947 Tex. Gen.Laws 690 (amending Tex.Rev.Civ.Stat. art. 8306 (1925)).

. Workmen's Compensation Law of 1917, ch. 103, 1917 Tex.Gen.Laws 269 (later codified in the 1925 revision of the civil statutes at art. 8306-8309). The 1917 law amended the first version of the law, Law of April 16, 1913, ch. 179, 1913 Tex.Gen.Laws 429.

.Ch. 103, § 1, 1917 Tex.Gen.Laws 269, 278, codified as article 8306, section 12c.

. Ch. 349, 1947 Tex.Gen.Laws 690, amending Tex.Rev.Civ.Stat.Ann. art. 8306 (1925) (section 2: "there is an urgent need to facilitate the employment of handicapped persons including a large number of returning veterans through the establishment of a Special Fund out of which such persons may be compensated when they sustain a subsequent injury.”)

. Forty-four days later the Legislature amended article 8307, section 6a to give the Fund the same right of subrogation as compensation carriers. Law of June 8, 1985, ch. 326, 1985 Tex.Gen.Laws 1387.

. Previously, the Workers’ Compensation Act was silent as to the manner in which a claim against the Fund was to be perfected and considered. The question as to when notice to the Fund must be given, and as to when the claim against the Fund must be filed was first considered by this court in Industrial Accident Board v. Guidry, 162 Tex. 160, 345 S.W.2d 509 (1961). In holding that the jurisdictional prerequisites of section 4a applied to claims against the Fund, we stated:

If the legislature had intended to provide other and different periods of time within which to give notice and file claims against the Second Injury Fund, it could have easily incorporated such provisions in the Second Injury Fund amendment to the Workmen’s Compensation Act. The power rests with the legislature to prescribe the method of procedure under the Act.

Id. 345 S.W.2d at 512. As stated above, the 1977 legislative amendments to the Fund provisions prescribed the method of procedure to file a claim against the Fund. This legislative act effectively overruled the holding of Guidry.