ACCEPTED
01-15-00152-cv
FIRST COURT OF APPEALS
HOUSTON, TEXAS
8/26/2015 2:56:24 PM
CHRISTOPHER PRINE
CLERK
NO. 01-15-00152-CV
FILED IN
1st COURT OF APPEALS
In the Court of Appeals HOUSTON, TEXAS
For the First Judicial District of Texas 8/26/2015 2:56:24 PM
at Houston CHRISTOPHER A. PRINE
Clerk
DONALD B. MULLINS and BLUE SKY RIGHT OF WAY, LLC
Cross-Plaintiff(s) — Appellants
VS.
MARTINEZ R.O.W., L.L.C. f/k/a MARTINEZ INVESTMENTS, L.L.C.
Cross—Defendant — Appellee
On Appeal from the 149"‘ District Court of Brazoria County, Texas;
Trial Court Cause No. 79750—CV
BRIEF OF APPELLEE MARTINEZ R.O.W., LLC
F/K/A MARTINEZ INVESTMENTS, L.L.C.
WRIGHT & GREENHILL, P.C.
David P. Boyce
State Bar No. 02759770
dboyce@w—g.com
221 W. 6"‘ Street, Suite 1800
Austin, Texas 78701
512-476-4600
512-476-5382 (Fax)
ATTORNEYS FOR APPELLEE
IDENTITY OF PARTIES AND COUNSEL
Cross- Donald B. Mullins and Blue Sky Right of Way, L.L.C.‘
Plaintiffs
and
Appellants
Counsel for Patrick F. Timmons
Cross- Timmons Law Firm
Plaintiffs 8556 Katy Freeway, Suite 120
and Houston, Texas 77024-1806
Appellant 713/465-7638 — Telephone
713/465-9527 - Facsimile
Cross- Martinez R.O.W., L.L.C. f/k/a Martinez Investments, L.L.C.
Defendant
and
Appellee
Counsel for David P. Boyce
Cross- Wright & Greenhill, P.C.
Defendant 221 West 6"‘ Street, Suite 1800
and Austin, Texas 78701
Appellee 512/476-4600 — Telephone
512/476-5382 - Facsimile
'
Blue Sky Right of Way, L.L.C. (“Blue Sky”) is listed as Appellant on Appellant’s Briefbut was not a
party before the trial court and was not granted leave to appear as a cross-plaintiff in the Court below.
ii
TABLE OF CONTENTS
Identity of Parties and Counsel ................................................................................ ..
Table of Contents .............................................................................. .. iii
Index of Authorities ................................................................................................. ..
Statement of the Case ............................................................................................... ..
Issues Presented for Review .................................................................................... ..
Statement Regarding Oral Argument ....................................................................... ..
Citations to the Record ............................................................................................. ..
Statement of Facts .................................................................................................... ..
Scope and Standard of Review ................................................................................ ..
Summary of Argument ............................................................................................ ..
Argument ................................................................................................................. .. ll
I. The Court was correct in granting Appellee’s Motion for
Summary Judgment under Tex. Labor Code § 417.004
because itnegated the statutory exception and Appellant
failed to produce any evidence to satisfy the exception .................................... .. 11
II. The trial court correctly denied Appellant’s Motion to
Vacate Judgment and for New Trial and for Leave to File
Amended Pleading and Supplemental Material in
Response to Cross-Defendant Martinez R.O.W., L.L.C.’s
Motion for Summary Judgment ......................................................................... .. 21
Conclusion and Prayer ............................................................................................. .. 30
Certificate of Compliance ........................................................................................ .. 32
Certificate of Service ............................................................................................... .. 32
iii
Appendix
Tab 1 —— Tex. Civ. Stat. Ann., Art. 8306 § 3
Tab 2 — Tex. Civ. Stat. Ann., Art. 8306 § 3(d)
Tab 3 — Tex. Labor Code § 401.011
Tab 4 — Tex. Labor Code § 408.001
Tab 5 — Tex. Labor Code § 417.004
iv
INDEX OF AUTHORITIES
Cases
Automaker, Inc. v. CCRT Company, Ltd., 976 S.W.2d 744, 746
(Tex. App. — Houston [1" Dist] 1998, no pet.) ....................................................... .. 22
Boarder to Boarder Trucking C0,, Inc. v. Mondi, Inc., 831 S.W.2d
495, 498-99 (Tex. App. — Corpus Christi 1992, no writ) ......................................... .. 22
City ofBeaumont v. Graham, 441 S.W.2d 829 (Tex. 1969) .................................... .. 12
City 0fEl Paso v. Collins, 440 S.W.3d 879 (Tex. App. — E1Paso 2013, no pet.) 29
Ensearch Corp. v. Parker, 794 S.W.2d 2 (Tex. 1990) ............................................ .. 13
Fairfield Insurance Company v. Stephens Martin Paving, LL. ., C
246 S.W.3d 653 (Tex. 2008) .................................................................................... .. 24
Gilbane Building Co. v. Keystone Structural Concrete, 263 S.W.3d 291
(Tex. App. — Houston [151 Dist.]2007, no pet.) ....................................................... .. 14
Granite Construction Co. v. Bituminous Insurance Cos., 832 S.W.2d 427, 430
(Tex. App. — Amarillo 1992, no writ) Argument ..................................................... .. 16
Henkel v. Norman, 441 S.W.2d 925, 927 (Tex. 1996) ............................................ .. 8
Hill Milani, 678 S.W.2d 203, 205 (Tex. App. — Austin 1984)
v.
affd 686 S.W.2d 610 (Tex. 1985) ........................................................................... .. 22
Houston Lighting & Power Co. v. Eller Outdoor Advertising Company,
635 S.W.2d 133 (Tex. App. ~— Houston [1S' Dist.] 1982, writ ref’d n.r.e.) ............... .. 19
Johnson & Johnson Med, Inc. v. Sanchez, 924 S.W.2d 925, 927 (Tex. 1996) ....... .. 8
Koninklyke Nederlandsche Stoomboot Maalschappy, N. V v. Royal Netherlands
Steamship Company, 301 F.2d 741 (5‘“ Cir. 1962) .................................................. .. 26
Leinen Buflington 's Bayou City Service Co., 824 S.W.2d 682, 685
v.
(Tex. App. ~ Houston [14"' Dist] 1992, no writ) Argument ................................... .. 22
Monsanto Co. v. Owens-Corning Fiberglas Corp., 764 S.W.2d 293, 294
(Tex. App. ~ Houston [1s' Dist.] 1988) Argument ................................................... .. 18, 19
Nall v. Plunkett, 404 S.W.3d 552, 555 (Tex. 2013) ................................................. .. 8
Port Royal Development Corp. v. Braselton Construction Co.,
716 S.W.2d 630 (Tex. App. — Colpus Christi 1986, writ refused n.r.e.) ................. .. 13
Randall ’s Food Markets, Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995) ........ .. 8
Scottsdale Insurance Co. v. Shahinpour, 2006 WL 870642 (S.W.2d Tex) ............. .. 16
Texas General Indem. Co. v. Ellis, 888 S.W.2d 830, 831-32
(Tex. App. — Tyler 1994, no writ) ............................................................................ .. 22
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005) .................... .. 8
Varela v. American Petrofina Co. o_/‘Texas, Inc., 658 S.W.2d 561 (Tex. 1983) ..... .. 28
West Texas Renner, 32 S.W.2d 264 (Tex. Civ. App. — Eastland
Utilities Co. v.
1930, affd, 53 S.W.2d 451 (Tex. Comm’n App. 1932) .......................................... .. 25, 26
Westfall v. Lorenzo Gin Company, 287 S.W.2d 551 (Tex. Civ. App. ~ Eastland
1956, no writ) ........................................................................................................... .. 25, 26
Statutes and Rules
Tex. Labor Code
§401.011(18) ............................................................................................... .. 14
§408.001 ...................................................................................................... .. 14,30
§408.001(a), (b) .......................................................................................... .. 30
§408.001(b), (c) ~
30
§4l7.004 ...................................................................................................... .. 33,37
Tex. Civ. Stat. Ann.
Art. 8306 § 3 ................................................................................................ ..I7, 18, 19
Art. 8306
§ 3(d) ....... .. 17, 33
Art. 2212(a) (repealed) ................................................................................. 34
~
..
vi
Tex. Civ. Prac. & Rem. Code
§ 33.oo4(;)(1)(2) .. 35
§ 33.oo4(1)(1). 35
§33.o11(3).... 16
§ 33.011(6). 34
§ 33.015 ........................................................................................................ .. 34
vii
STATEMENT OF THE CASE
An entity owned or controlled by Appellant Donald Mullins (“Mullins”), Blue
Sky Right of Way, L.L.C. (“Blue Sky”) entered into a contract with Southern Brush
S.W., Inc. to perform certain clearing of land and trimming of trees along a right of way.
(lCR:l92—195). Blue Sky in turn subcontracted a portion of the work to Martinez Right
of Way, L.L.C. f/k/a Martinez Investments, L.L.C. (“Martinez”). (lCR:25). In the
course of performing that work, one of Martinez’s employees, Bonifacio Gomez, suffered
an injury in the course and scope of his employment and he later initiated an action for
damages against Mullins, among others. (lCR:5—12). Mullins asserted defenses to Mr.
Gomez’s allegations and filed a cross-claimz against Martinez, arguing that Martinez had
agreed to indemnify and hold harmless Blue Sky, as well as Mullins individually, for any
liability arising from Martinez’s work pursuant to its agreement with Blue Sky, including
supervision of its own employees at the job site. (lCR:5—12). Mullins sought indemnity
based on that alleged agreement, as well as contribution under Chapter 33 of the Tex.
Civ. Prac. & Rem. Code. (lCR:5—12).
Martinez’s answer included a general denial, as well as the affirmative defense
that it was afforded protection under the Texas Workers’ Compensation Act because it
was covered for workers’ compensation insurance at the time of the on the job injury
suffered by its employee, Bonifacio Gomez. (2CR:7—9).
Martinez then moved for a no evidence and traditional summary judgment with
respect to Mullins’ claims for indemnity and contribution, under § 417.004 of the Tex.
Labor Code. That provision insulates an employer protected by workers’ compensation
from any claim for reimbursement asserted by a third party in an action for damages
2
While incorrectly styled as a cross—claim, Mullins was actually asserting a third party action.
1
brought by the injured employee against that third party, unless the employer executed,
prior to the time of the on the job injury, a written agreement to assume the third party’s
liability. (lCR:l4-20).
Martinez presented summary judgment evidence that it was covered by a policy
of workers’ compensation at the time of Mr. Gomez’s accident and that there was no
written agreement under which Martinez assumed Mullins’ liability. (lCR:41-95).
Mullins filed a motion to continue the summary judgment hearing (lCR:98-101)
and a response in which he asserted that a certificate of insurance “authorized” by
Martinez and the existence of a liability policy covering Martinez demonstrated an intent
to indemnify Mullins and thus satisfied the statutory exception under Tex. Labor Code §
417.004. (lCR:l08-176).
The trial court denied Mullins’ motion for continuance (lCR:330) and granted the
Motion for Summary Judgment (2CR:24) and Martinez’s motion to sever the claims
Mullins had asserted against it from the main action (lCR:328—329). Mullins filed a
motion to vacate the judgment and for new trial, for leave to file an amended pleading,
and for leave to file supplemental materials in response to Martinez’s Motion for
Summary Judgment (2CR:366-372), relief that was overruled by operation of law on
February 9, 215 as to the Motion to Vacate and for New Trial, and denied by the Court on
February 10, 2015 (2CR:420) at the same time the Court sustained Appellee’s objections
to Mullins’ affidavit. This appeal followed.
ISSUE PRESENTED FOR REVIEW
Mullins presented no summary judgment evidence of any written agreement
executed by Martinez prior to Bonifacio Gornez’s on the job injury of June 7, 2010,
arguing instead that a certificate of insurance and the existence of a liability policy
covering Martinez sufficed to satisfy the statutory exception.
Did the district court properly grunt Martinez ’s Motion for Summary Judgment
under Tex. Labor Code § 417.004 absent evidence that any pre-accident written
agreement had been executed by Martinez under which it assumed Mullins’
liability?
STATEMENT REGARDING ORAL ARGUMENT
Oral argument should not be necessary. The statute in this case is unambiguous,
the limited and well defined exception is inapplicable here and the two additional
exceptions advanced by Appellant have no basis in law.
CITATIONS TO THE RECORD
“CR” refers to the two volume C1erk’s Record, with volume number listed before
“CR,” followed by a colon and then page number.
STATEMENT OF FACTS
The facts material to Martinez’s Motion for Summary Judgment are not disputed.
Appellant unsuccessfully attempted to supplement the summary judgment record with
deposition excerpts from Mr. Gomez and his own conclusory statements regarding
alleged gross negligence on the part of Martinez. The Court disallowed Mullins’ motion
for leave to supplement the summary judgment record. In any event, testimony allegedly
indicating gross negligence on the part of Martinez is irrelevant to the issue before the
Court.
Appellant Mullins owns Blue Sky Right of Way, L.L.C. (“Blue Sky”), whose
business includes the clearing of land, tree trimming and related work (1CR:1 16). Blue
Sky contracted with Southern Brush S.W., Inc. to perform certain clearance and tree
trimming work along a right—of—way (lCR:l92—195) and in turn entered into an
agreement with Martinez to provide labor at a location in Brazoria County, Texas.
(1CR:1 16). Bonifacio Gomez was an employee of Martinez, an employer covered by
workers’ compensation insurance. (lCR:4l—92; lCR:l09). Mr. Gomez was injured at
the job site while working for Martinez and performing the work Martinez had agreed to
undertake for Blue Sky. (1CR:116).
There was no written agreement between Martinez and Blue Sky or Mullins
pertaining to Martinez’s work on the “Southern Brush” job site in Brazoria County,
something Mullins acknowledged under oath in his deposition that was taken on June 5,
2013, well before Martinez’s entiy into the lawsuit. (lCR:94). It appears that either prior
to or contemporaneous with Martinez’s commencement of the work Mullins received a
certificate of insurance dated June 7, 2010, that shows as the insured Martinez
Investments, L.L.C., and identifies three separate policies of insurance issued by three
insurers for comprehensive general liability, automobile liability and workers’
compensation, respectively. The certificate identifies as “certificate holder” Blue Sky
Right of Way, L.L.C. It nowhere indicates that Blue Sky or Mullins would be shown as
an additional insured under any of the three policies. (lCR:l20).
Mullins contends that Martinez agreed to assume Blue Sky’s or his liability for
injuries to Martinez’s employees on the job, and to provide insurance for Blue Sky, but
there is no written proof to support either assertion. Martinez was protected by an
insurance policy issued by the Travelers’ Indemnity Company of Connecticut that
contained commercial general liability coverage, a (possibly incomplete) copy of which
was attached to Mullins’ summary judgment response, but the policy nowhere mentions
Blue Sky or Mullins, nor is there any evidence that it provided additional insurance
coverage for either at the time of the accident.
Mr. Gomez initiated a personal injury action against Mullins and others, in
response to which Mullins asserted certain affirmative defenses (lCR:5—l3). On March
27, 2014, Mullins included with his second amended answer what he titled as a “cross-
clairn,” although it initiated actions against persons and entities who were not prior
parties to the case (Martinez and Hallmark Specialty Insurance Company), and should
have been identified as an original third party action. (lCR:5—l3).
As to Martinez, Mullins sought contractual indemnity as well as contribution
pursuant to Chapter 33 of the Tex. Civ. Prac. & Rem. Code, noting he joined in a motion
to designate Martinez as a responsible third party.
Martinez filed its original answer on May 15, 2014, asserting a general denial and
as an affinnative defense, the protections afforded to it under the Texas Workers’
Compensation Act, in View of its position as a covered employer, as those terms are
defined in the Act. (2CR:7~9).
On October 17, 2014, Martinez filed its no evidence and traditional motion for
partial summary judgment.3 As a basis for its motion, Martinez relied on Tex. Labor
Code § 417.004, insulating a covered employer under the Act from a reimbursement
claim by a third party who is potentially liable to an injured employee, unless the
employer executed before the on the job injury a written agreement with that third party
to assume its liability. (1CR:l4—20).
Mullins filed a motion to continue the summary judgment hearing (lCR:98-101)
and a response to Martinez’s summary judgment motion (lCR:l08-176), with exhibits.
The trial court denied Mullins’ motion for continuance and granted Martinez’s summary
judgment motion (2CR:24) and its Motion for Severance (1CR:328—329). Thereafter,
Mullins filed a motion to vacate the judgment and for new trial, and for leave to file an
amended pleading and to supplement the summary judgment evidence. (2CR:366-372).
That motion was overruled by operation of law on February 9, 2015 and denied by the
Court on February 10, 2015, which further sustained Martinez’s objections to Mullins’
supplemental affidavit. (2CR:420). This appeal followed.
3
The motions were designated as “partial" because Mullins had cross-claims pending against Hallmark
and, of course, Plaintiff Bonifacio Gomez had asserted causes of action against a number of parties,
including Mullins and Southern Brush, S.W., Inc.
SCOPE AND STANDARD OF REVIEW
This Court’s review of the district court’s Order granting Martinez’s no evidence
and traditional motion for summary judgment is de novo. Valence Operating Co. v.
Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A defendant may move for summary
judgment on an affirmative defense that has been pled or raised in the motion itself.
Randall’s Food Markets, Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). When it
does so, it must prove each element of its defense as a matter of law. Johnson & Johnson
Med, Inc. v. Sanchez, 924 S.W.2d 925, 927 (Tex. 1996). A defendant may move for
summary judgment by disproving as a matter of law an essential element of the plaintiff’ s
cause of action. Henkel v. Norman, 441 S.W.3d 249, 251 (Tex. 2014); Nall v. Plunkett,
404 S.W.3d 552, 555 (Tex. 2013).
SUMMARY OF THE ARGUMENT
This case is controlled by statute, specifically § 417.004 of the Tex. Labor Code,
which effectively insulates a covered employer4 from an action seeking contribution and
indemnity brought by parties who have been sued by the subscribing employer’s
employee for injuries in the course and scope of employment. The exclusive remedy
provision of the Workers’ Compensation Act, Tex. Labor Code § 408.001, protects the
covered employer from a common law cause of action asserted by an employee or the
legal beneficiaries of an employee injured or killed in the course and scope of
employment, with the sole exception a suit for exemplary damages brought by the spouse
4
The Act defines “Employer” as “a person who makes a contract of hire, employs one or more employees,
and has workers‘ compensation coverage.” Tex. Labor Code § 401.011(18). By definition, an employer
carries workers’ compensation coverage.
or heirs of the body of the deceased employee for intentional or grossly negligent conduct
on the part of the employer.
Tex. Labor Code § 417.004 protects the employer from having to reimburse a
third party that is sued by the employee or his beneficiaries for damages, barring the
liable third party’s claims for contribution and indemnity unless the employer has
executed, before the on the job injury or death, a written agreement with the third party to
assume its liability.
Mullins’ “cross—claim” against Martinez was clearly an attempt by a third party
sued by the covered employee, Bonifacio Gomez, to obtain reimbursement from
Martinez in the form of contractual indemnity, or contribution under Chapter 33 of the
Tex. Civ. Prac & Rem Code.
Martinez promptly asserted the protections of the Texas Workers’ Compensation
Act in its initial pleading. Its summary judgment motion established its status as an
employer covered by a policy of workers’ compensation issued by Texas Mutual
Insurance Company. It further established the lack of any pre—injury written agreement
executed by Martinez to assume Mullins’ potential liability to Mar’tinez’s employees
injured on the job. Martinez negated as a matter of law the one exception to the statutory
protection afforded it against third party claims for contribution or indemnity, and indeed,
produced sworn testimony from Mullins acknowledging the absence of any written
agreement between Mullins (or Blue Sky) and Martinez relevant to the work underway at
the time of Mr. Gomez’s injuries.
At that point, the burden shifted to Mullins to present evidence of Martinez’s
execution of a written agreement under which it expressly assumed Mullins’ liability to
Martinez’s employees. Mullins presented no evidence to meet that burden, claiming
instead that the statutory exception could be satisfied with circumstantial proof that there
”
was an “inten on the part of Martinez to assume Mullins’ liability, namely, a certificate
of insurance delivered to Mullins at or before Martinez’s commencement of the work, as
well as a copy of Martinez’s general liability policy. (lCR:l08-l76). However, a
certificate of insurance is not the equivalent of a written agreement to indemnify a party,
and the policy simply shows that Martinez had insurance coverage in place at the time of
the accident. Neither document is evidence that Martinez undertook, in writing, on or
before June 7, 2010, to assume Mullins’ liability.
In Mullins’ belated motion to vacate, amend his pleading and supplement the
summary judgment record, he advanced for the first time the argument that there was
another exception to the statutory protection afforded covered employers from third party
claims, that being when the employee’s non-fatal injuries allegedly result from employer
gross negligence. Tex. Labor Code § 417.004 does not mention such an exception, nor
does any other Labor Code provision or case handed down in the last 50 years even hint
at such an exception.
Finally, Mullins’ post—hearing motion argued that because Martinez had been
designated as a responsible third party under Chapter 33 of the Tex. Civ. Prac. & Rem.
Code, it was subject to a claim for contribution under Chapter 33. That argument is
specious. Chapter 33 permits a defendant who is jointly and severally liable for damages
to the plaintiff to seek contribution against any other “liable defendant,” a term that is
defined in § 33.0ll(3) of the Tex. Civ. Prac. & Rem. Code in a way that clearly
distinguishes it from “responsible third party.” The fact that a party is designated as a
10
responsible third party does not make it a liable defendant. Because Martinez cannot be
liable to its employee, Bonifacio Gomez, for injuries in the course and scope of
employment, due to the exclusive remedy provisions of the Texas Workers’
Compensation Act, it cannot be a “liable defendant,” and accordingly, there is no viable
contribution claim against it under Chapter 33 of the Tex. Civ. Prac & Rem. Code.
ARGUMENT
I. The Court was correct in granting Appellee’s Motion for Summary
Judgment under Tex. Labor Code § 417.004 because it negated the statutory
exception and Appellant failed to produce any evidence to satisfy the
exception.
Mullins readily admits that there is no “separate contract of indemnity” that was
executed by Martinez prior to Mr. Gornez’s on the job injury on June 7, 2010.
(Appellant’s Brief, p. 8). He argues instead that Martinez “caused the delivery” of a
certificate of insurance referencing a liability policy (Id.), that it performed work pursuant
to an agreement (presumably oral) with Blue Sky, that it was later paid for that work, and
that Martinez’s liability policy “covers the activities undertaken by Blue Sky and Mullins
. .
.” (Appellant Brief, p. 15). Appellant nowhere explains how a certificate of insurance
or a liability insurance policy is the equivalent of a written agreement executed by the
employer to assume the liability of a third party. Those two documents, taken singly or
together, do not constitute an explicit written agreement to indemnify Mullins, as even a
cursory review of the applicable case law makes clear.
Cases construing Tex. Labor Code. § 417.004, and its predecessor under the prior
Workers’ Compensation Act, Tex. Civ. Stat. Ann. Art. 8306 § 3 (later Article 8306, §
3(d), have held that to satisfy the statutory exception to a covered employer’s protection
11
from third party “reimbursement” actions, there must be a written, signed, pre—injury
indemnity agreement under which the employer explicitly assumes the liability of the
third party that seeks reimbursement or indemnity.
The Texas Supreme Court considered the question of what sort of indemnity
language would satisfy the exception in the prior Workers’ Compensation Act, Art. 8306,
§ 3, in City 0fBeaumont v. Graham, 441 S.W.2d 829 (Tex. 1969). An employee of a
workers’ compensation subscriber, Texas Tower & Construction Company (Texas
Tower) was fatally injured while working in an elevated storage tank belonging to the
City of Beaumont. Id. at 832. His beneficiaries sued the City, which in turn filed a third-
party action against Texas Tower seeking indemnity or contribution. Id. The Texas
Supreme Court noted that Texas Tower, as a workers’ compensation subscriber, was
protected against claims for indemnity and contribution by Art. 8306, § 3. Id. at 837.
The City contended that its contract with Texas Tower contained indemnity language
sufficient to satisfy the statutory exception.
The Texas Supreme Court disagreed, concluding that the indemnity provisions
showed an intent to indemnify the City only for damages or claims resulting solely from
the acts or conduct of Texas Tower. Id. at 838. The Texas Supreme Court agreed with
the Court below that the language in the City of BeaumonUTexas Tower contract did not
“evidence an intention of the parties that Texas Tower should indemnify the City for the
consequences of its own negligent conduct, or for the consequences of the joint
negligence of the parties, or for the consequences of the negligent conduct of the City and
the non—negligent conduct of Texas Tower.” Id. at 838-839. The Court concluded that
the City’s contribution and indemnity claims were not sustainable.
12
In Port Royal Development Corp. V. Braselton Construction C0,, 716 S.W.2d 630
(Tex. App. — Corpus Christi 1986, writ refused n.r.e.), the Court considered whether an
indemnity agreement between the general contractor for the work, Port Royal
Development Corporation, and the injured person’s employer, Braselton Construction
Co., satisfied the statutory exception to the workers’ compensation bar to Port Royal’s
reimbursement claim. The Court reviewed the indemnity language, noting that it
specifically excluded indemnity for injury arising out of the act or neglect of Port Royal.
The Court concluded that in View of the fact the indemnity agreement did not indemnify
Port Royal for its own negligence, it did not satisfy the statutory exception set forth in the
prior Workers’ Compensation Act, Art. 8306 § 3, Tex. Civ. Stat. Ann.
The Texas Supreme Court again considered what language was sufficient to
satisfy the statutory exception to the workers’ compensation bar against third party
reimbursement actions in Ensearch Corp. v. Parker, 794 S.W.2d 2 (Tex. 1990). In that
case, the Court held that the Act did not bar a pipeline owner’s claim for indemnity from
an independent contractor whose employees were asphyxiated during their work. Under
the indemnity agreement in that case, the independent contractor assumed “entire
responsibility and liability for any claims or actions based on or arising out of injuries,
including death, to persons . . . sustained or alleged to have been sustained in connection
with or to have arisen out of or incidental to the performance of this contract by
[independent contractor] . . . regardless of whether such claims or actions are founded in
whole or in part upon alleged negligence of [pipeline owner] . . . Id. at 6-7.
13
The Court concluded that the indemnity language in question sufficed to show
that the employer expressly assumed third party liability for injuries to its own employees
and thus met the exception to the workers’ compensation bar. Id. at 8.
A more recent decision that addresses the current statutory bar, Tex. Labor Code
§ 417.004, is Gilbane Building Co. v. Keystone Structural Concrete, 263 S.W.3d 291
(Tex. App. — Houston [151 Dist.] 2007, no pet.). In that case, Gilbane Building Co.
(“Gilbane”) and Keystone Stuctural Concrete, Ltd. (“Keystone”) contracted for Keystone
to act as subcontractor on a construction project, during which a Keystone employee
suffered injuries and sued Gilbane, resulting in a settlement. Id. at 294. Gilbane and its
liability insurer, Zurich, sued Keystone for, among other things, contractual indemnity.
Id. The Court first determined that the indemnity language in the Gilbane/Keystone
contract did not satisfy the express negligence test and was thus unenforceable, affirming
the trial court’s grant of summary judgment as to Gilbane’s contractual indemnity claim.
However, Gilbane also argued that Keystone had breached contractual obligations
relating to use of equipment that was in a safe condition and in compliance with
applicable regulations, codes, ordinances, etc. Id. at 302. In response, Keystone asserted
that Gilbane’s claim for breach of contract was merely a reformulation of its indemnity
claim and that regardless of how Gilbane characterized that reimbursement action, it was
barred by Tex. Labor Code § 417.004. The Court of Appeals agreed, noting that the
statute prohibited indemnity absent an express agreement by the employer to indemnify
the third party in writing. Id. at 303. The Court concluded:
The indemnity agreement here unenforceable because it fails to comply with
is
the express negligence rule [citation omitted]. Accordingly, we hold that §
417.004 bars Gilbane’s breach of contract claims against Keystone.
14
Id.
In short, Texas courts that have considered the applicability of Tex. Labor Code §
417.004 and its predecessor have concluded that the exception to the bar against third
party reimbursement actions requires an exp_l§i_t written agreement by the employer to
assume the liability of the third party in the form of enforceable indemnity language that
satisfies the express negligence test. In this case, by Mullins’ own admission, there is Q
written agreement relating to Martinez’s work for Mullins or Blue Sky, much less a
conspicuous indemnity provision that meets the express negligence test.
Mullins does not cite any case holding that the statutory exception can be satisfied
by something other than a written contract of indemnity under which the employer
expressly assumes the third pa1'ty’s liability. Indeed, in the “contractual indemnity”
section of his brief (Appellant Brief, pp. 15-16), he cites no case at all. Rather, he argues
that there was in fact a written agreement to indemnify him evidenced by the certificate
of insurance he received and by Ma1tinez’s liability policy, which he attached to his
summary judgment response. (lCR:l23-176).5 The argument is unsuppoitable, for a
number of reasons.
First, the certificate of insurance that is dated June 7, 2010 specifically notes, at
the outset:
[THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR
NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE
AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF
INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN
THE ISSUING INSUR_ER(S), AUTHORIZED REPRESENTATIVE OR
PRODUCER, AND THE CERTIFICATE HOLDER]
5
The copy of the Travelers policy in the record is incomplete (lCR:l23-176); what appears to be a more
complete copy is attached in the appendix to Appellant’s Brief.
15
The law regarding certificates of insurance is well established. A certificate of
insurance is not the equivalent of an insurance policy, it cannot alter the terms of an
insurance policy, and it does not estabish any contractual relationship between the entity
issuing the certificate and the certificate holder. See, e.g., Scottsdale Insurance Co. v.
Shahinpour, 2006 WL 870642 (S.W.2d Tex) (certificate of insurance that states it does
not amend, extend or alter coverage afforded by the policies below, does not alter the
terms of any insurance policy, and creates no contract for insurance coverage); Granite
Construction Co. v. Bituminous Insurance Cos., 832 S.W.2d 427, 430 (Tex. App. -
Amarillo 1992, no writ) (any insurance afforded to Granite Construction Co., despite
being shown as an additional insured in a certificate of insurance, is afforded by the
policies and not the certificate itself). Accordingly, the certificate itself is not a written
“agreement” of any kind between Mullins or Blue Sky and the certificate issuer (an
insurance agency is identified as the producer), or any insurer of Martinez. It was not
executed by Martinez, and it certainly cannot constitute an express agreement by
Martinez to assume Blue Sky’s or Mullins’ liability for injury to one of Martinez’s
employees.
Second, setting aside the fact that the Martinez liability policy Mullins also relies
on is not certified or proven up through a business records affidavit of any kind, it has no
relevance here. The affidavit Mullins attached to his summary judgment response, in
paragraph 6 (lCR:ll6—ll7), offers his opinion that the policy in question “provides
liability insurance coverage for the officers and agents of covered organizations.”
Needless to say, the interpretation of an insurance policy presents an issue of law for the
Court, not susceptible to construction by interested parties.
l6
Mullins asserts in the summary judgment response itself that “Paragraphs l.a and
2.b(2) of the Coverage Form at pages 2 and 3 of 16” provide coverage for Blue Sky and
Mullins. (1CR:l 12). Mullins’ efforts at insurance policy construction do not avail him
here.
Paragraph l.a of the Commercial General Liability Coverage Form (lCR:134)
simply states that the insurer “will pay those sums that the insured becomes legally
obligated to pay as damages because of “bodily injury” or “property damage” to which
this insurance applies . .
.” That provision does not define the term “insured,” but
language preceding that provision on the same page of the policy indicates that the word
insured “means any person or organization qualifying as such under Section II — Who Is
An Insured.” (ICR: 134).
The Section II — Who Is An Insured provision of the Commercial General
Liability Coverage Form in the policy included in the appendix to Appellant’s Brief,
subpart (c), states that if the named insured is a limited liability company (the case here),
the entity itself is an insured, its members, “but only with respect to the conduct of your
business,” and the named insured’s managers. That definition does not include either
Mullins or Blue Sky.
Mullins also appears to cite Exclusion 2(b)(2) on page 2 of the Commercial
General Liability Coverage Form in the Travelers policy (in the appendix to Appellant’s
Brief), but that provision merely excludes coverage for bodily injury for which the
insured “is obligated to pay damages by reason of the assumption of liability in a contract
or agreement.” There is an exception to the contractual liability exclusion for, among
other things, an “insured contract,” but Appellant makes no argument that the exception
17
applies here.6 Of course, the fact that Martinez’s liability policy may include coverage
for certain of its indemnity obligations is not evidence that such an indemnity obligation
exists. Once again, Mullins appears to believe, mistakenly, that proof of liability
coverage for Martinez, either in the form of a certificate of insurance or the liability
policy itself, somehow equates to an explicit assumption of Mullins’ or Blue Sky’s
liability. Proof of insurance that might cover an obligation is not the same as an explicit
assumption of that obligation.
In short, after acknowledging in sworn testimony that there was no written
agreement between himself or Blue Sky and Martinez, Mullins’ only response to the
Appellee’s summary judgment motion was to produce documents that at most evidence
insurance coverage for Martinez. Mullins cites no case that has held that a party seeking
indemnity from a covered employer need not produce any writing actually executed by
the employer expressly assuming such liability. Having failed to present any evidence
that meets the statutory exception to the employer’s protection from third party suits,
Mullins has no basis to challenge the correctness of the summary judgment granted
against him.
Mullins argues that a contract of indemnity (and presumably one sufficient to
satisfy the requirements of Tex. Labor Code § 417.004) may be either express or implied,
citing Monsanto Co. v. 0wens—Coming Fiberglas Corp., 764 S.W.2d 293, 294 (Tex.
App. — Houston [lS‘ Dist.] 1988), which in turn cites Houston Lighting & Power Co. v.
°
The policy in question defines “insured contract” to include (subpart t): “That part of any other contract
or agreement pertaining to your business under which you assume the tort liability of another party to
. . .
pay for ‘bodily injury’ or ‘property damage’ to a third person or organization. Tort liability means the
liability that would be imposed by law in the absence of any contract or agreement.” In effect, the “insured
contract” exception restores coverage for explicit indemnity obligations by which the insured assumes the
tort liability of another party.
18
Eller Outdoor Advertising Company, 635 S.W.2d 133 (Tex. App. ~ Houston [ls' Dist.]
1982, writ ret’d n.r.e.). Neither case supports the notion that anything other than a
“written agreement” executed by the employer pre—injury satisfies the exception to the
statutory protection afforded employers from third party actions. Monsanto involved an
employee of a subcontractor, Owens~Corning Fiberglas Corp. (“Owens-Corning”), who
brought a personal injury action against the Monsanto Company (“Monsanto”). Id. at
294. Monsanto asserted a third party action against Owens-Corning based on the
indemnification language contained in a written contract between the two companies.
Citing the indemnity provision at length, the Court noted that the provision nowhere
included the word “negligence” or adequately defined the scope of the protection that
was provided and: “Because the intent of the parties is not specifically stated within the
four corners of the contract, we find that this indemnity provision does not satisfy the
express negligence test.” Id. at 295.
The Court concluded, in effect, that the failure of the written indemnity provision
to satisfy the express negligence test did not bring it within the exception of the statutory
protection provided the employer under the Texas Workers’ Compensation Act (albeit an
earlier version of the Act).
The Houston Lighting & Power decision did not involve a written contract of
indemnity. Rather, an employee of Eller Outdoor Advertising Company of Texas
(“Eller”) was electrocuted after contacting an HL&P line. His widow and children sued
HL&P, which settled that action and then sought indemnification from Eller pursuant to a
section of the Public Utilities Act setting forth the duties of any party working within six
feet of a high voltage line, a violation of which entitles the utility to indemnification
19
under an applicable provision of the Public Utilities Act. Eller argued the predecessor to
the Tex. Labor Code § 417.004 barred the indemnity action, but the Court concluded that
HL&P’s indemnity action was not “on account of’ injury to or death of Eller’s employee
but rather was an action arising from a breach of the duties Eller owed under the
applicable provision of the Public Utilities Act. Id. at 135.
The Court accepted HL&P’s reasoning, concluding that the “later, more specific
Public Utilities Act should be given controlling effect over the older, more general terms
of the Workers’ Compensation Act.” Id. The Houston Lighting & Power decision
simply recognizes that the specific indemnity granted to public utilities against entities
who violate the “six foot rule” trumps the statutory protection afforded employers under
the Texas Workers’ Compensation Act. It does not stand for the proposition that a third
party not entitled to statutory indemnity can dispense with the requirements of Tex. Labor
Code § 417.004 of a written agreement.
Finally, Mullins disputes the applicability of the express negligence rule. While
as noted above, numerous cases have held that written indemnity language that does not
satisfy the express negligence test does not meet the requirements of the statutory
exception in Tex. Labor Code § 417.004, that is not the dispositive issue here. While in
theory there may be language in a written agreement executed by the employer by which
it expressly assumes the liability of the third party that falls short of the express
negligence standard, that is not the case here. In the instant matter, there simply is Q
indemnity agreement of any kind executed by Martinez and accordingly, the question of
whether or not the indemnity language must satisfy the express negligence test to meet
the statutory exception is moot.
20
II. The court correctly denied Appellant’s Motion to Vacate Judgment and
trial
for NewTrial and for Leave to File Amended Pleading and Supplemental
Material in Response to Cross-Defendant Martinez R.O.W., L.L.C.’s Motion
for Summary Judgment.
It appears Mullins’ primary complaint with respect to the Court’s denial of his
motion to vacate, etc. is the refusal to permit him to amend his pleading to add a new
party and to assert an entirely new basis to circumvent the workers’ compensation bar to
his third party action, and to present additional summary judgment evidence to support
same.
The trial court was correct in denying the motion, for a number of reasons. First,
the proposed first amended cross—claim attempted to add an entirely new party, Blue Sky,
for reasons nowhere addressed in the motion for leave itself. Blue Sky was not a
defendant in the action initiated by Bonifacio Gomez and accordingly, there would be no
legal basis under any theory alleged by Mullins, or later by Blue Sky, for it to seek
indemnity for liability it could not have had to Mr. Gomez, who had never asserted
claims against Blue Sky. Blue Sky could not seek indemnity or contribution for liability
it could not have to Plaintiff Bonifacio Gomez, who had never sued it.
Second, the proposed amended pleading attempted to add an entirely new basis
for contribution or indemnity, namely that Martinez was guilty of gross negligence with
respect to Mr. Gomez’s injuries, and that somehow supported Mullins’ claim for
contribution or indemnity. The assertions of gross negligence had never been pleaded
previously, and Mullins did not make such contentions in any amended pleading that he
could have filed, without leave of court, after Martinez’s Motion for Summary Judgment
was filed on October 17, 2014, and before it was heard on November 25, 2014.
21
It is well established that a trial court does not abuse its discretion by refusing to
allow a non-movant to amend its pleadings after the summary judgment hearing has
taken place. Leinen v. Bujfngtons Bayou City Service Co., 824 S.W.2d 682, 685 (Tex.
App. — Houston [14”' Dist.] 1992, no writ); Hill v. Milani, 678 S.W.2d 203, 205 (Tex.
App. — Austin 1984) affld 686 S.W.2d 610 (Tex. 1985). Furthermore, after the trial court
has rendered judgment on a motion for summary judgment, it cannot grant a motion to
amend the pleadings. Automaker, Inc. v. CCRT Company, Ltd., 976 S.W.2d 744, 746
(Tex. App. — Houston [151 Dist.] 1998, no pet.); Texas General Indem. Co. v. Ellis, 888
S.W.2d 830, 831-32 (Tex. App. ~ Tyler 1994, no writ); Boarder to Boarder Trucking
Co., Inc. v. Mandi, Inc., 831 S.W.2d 495, 498-99 (Tex. App. — Corpus Christi 1992, no
writ). In the present action, the Court granted Martinez’s Motion for Summary Judgment
and its Motion to Sever Mullins’ claims against it on November 25, 2014. (2CR:24;
1CR:328-329). The summary judgment order, combined with the severance, effectively
made the summary judgment final and appealable for all purposes and accordingly, the
Court acted correctly in refusing Mullins’ efforts to amend his pleadings post~summary
judgment hearing and post-final judgment.
The Court did not err in denying Mullins’ request to supplement the summary
judgment record with a new affidavit from Mullins (2CR:393-394)7 purporting to
address, for the first time, the circumstances of the accident, as well as excerpts from the
deposition of Bonifacio Gomez taken on April 30, 2013 (more than 18 months before the
summary judgment hearing in this matter). Mullins offered no basis for seeking
permission to submit summary judgment evidence four weeks after the summary
judgment hearing and the Order granting same, merely pointing out that he had
7
The Court sustained Martinez’s objections to Mullins’ supplemental affidavit. (2CR:420).
22
previously moved for a continuance to permit him “to submit additional argument and
authorities on the issue of Ma1tinez’s indemnifications of Mullins, in order to thoroughly
present that issue to the Court.” (2CR:367). In that regard, it is important to note that in
his original motion to continue the summary judgment hearing, he cited as a basis for
same the need to “properly respond” to case law, submit evidence to the Court of
payments made by Mullins to Martinez, and to permit Mullins to prepare a “detailed
affidavit” to discuss “the facts leading to the engagement of Martinez to provide labor,
and the consideration therefore . .
.” None of the “supplemental” evidence Mullins
sought leave to submit post-hearing fits within any of the categories offered in support of
his prior motion to continue the summary judgment hearing.
Setting aside the fact Mullins offered no justification for his belated effort to
revise the pleadings, add a new party, assert new bases to circumvent the Texas Workers’
Compensation Act, and to offer summary judgment evidence that presumably was
available to him previously, neither the proposed amended pleading nor any of the
“supplemental” evidence affects the outcome here.
Mullins advanced as an “additional legal theory” (Appellant’s Brief, p. 26) the
notion that if Martinez’s conduct somehow constituted gross negligence, that would
create an exception to the statutory bar to third party actions absent a prior explicit
assumption of the third party’s liability. The argument is completely without merit, not
supported by any provision in the Texas Workers’ Compensation Act, and the only
decisions Mullins cites in support are more than 50 years old and pre~date the current
Workers’ Compensation Act by decades.
23
The Workers’ Compensation Act exclusive remedy provision, Tex. Labor Code §
408.001, recognizes only one exception to the protection afforded employers for injury to
or death of employees, that is, the “surviving spouse or heirs of the body of a deceased
employee whose death was caused by an intentional act or omission of the employer or
by the employer’s gross negligence” may bring an action against an employer. Tex.
Labor Code § 408.001(a), (b). Nothing in the Act indicates that in a non-fatal case, a
third party sued by the injured employee may seek contribution or indemnity from the
employer, if there is evidence that the latter is guilty of gross negligence. Presumably, if
such an exception existed, it would be set out in Tex. Labor Code § 4l7.004, dealing
specifically with an employer’s liability to a third party sued by the injured worker.
Mullins cites no case handed down since the effective date of the new Texas Workers’
Compensation Act that even suggests such a “gross negligence” exception to the
protection of the Act exists.
Mullins does cite a recent Texas Supreme Court decision, Fairfield Insurance
Company v. Stephens Martin Paving, L.L.C., 246 S.W.3d 653 (Tex. 2008). Fairfield in
no way supports Appellant’s argument regarding the “gross negligence exception.”
Rather, the case deals with the insurability of exemplary damages under a workers’
compensation/employer liability policy. An employee of Fairfield’s insured, Stephens
Martin Paving, suffered fatal injuries in the course and scope of his employment and his
spouse and children brought a suit for exemplary damages as permitted by Tex. Labor
Code § 408.001(b),(c). In a lengthy and well reasoned opinion, the Texas Supreme Court
concluded that the Fairfield policy’s employer liability provisions covered the employer
for gross negligence claims (Id. at 660), and that such insurance protection was not
24
against Texas public policy. Nothing in the decision suggests that there is any exception
to the exclusive remedy protection afforded employers under the Act, other than claims
brought by the surviving spouse and heirs of the body of an employee who suffers fatal
injuries in the course and scope of employment, allegedly as a result of the employer’s
gross negligence. No issue was presented to or discussed by the Court as to whether
gross negligence by the employer in a non-fatal injury context creates an additional
exception to the protection from third party claims.
The other two cases cited by Mullins are simply too remote to have any
precedential Value. In Westfall v. Lorenzo Gin Company, 287 S.W.2d 551 (Tex. Civ.
App. — Eastland l956, no writ), third parties that were sued by an employee of Lorenzo
Gin Company arising from a collison between two trucks sought contribution from the
gin company, a Texas Workers’ Compensation Act subscriber, alleging, among other
things, that the gin company was guilty of gross negligence, contributing to the accident.
The Court ultimately determined that the evidence the third parties had produced in
response to the gin company’s motion for summary judgment was insufficient to raise
any fact question on the issue of gross negligence, but language in the decision implied
that had there been such proof of gross negligence, a contribution or indemnity action
might have been sustainable. Id. at 554. In support of that proposition, the Court in
Westfall cited West Texas Utilities Co. v. Renner, 32 S.W.2d 264 (Tex. Civ. App. —
Eastland 1930), aft’ cl, 53 S.W.2d 451 (Tex. Comm’n App. 1932). In Rermer, the third
party utility company sought contribution and indemnity from its contractor, Mosher
Steel & Machinery Company, for a lawsuit brought against it by a Mosher employee who
sustained serious electrical injuries. Among other things, in affirming a directed verdict
25
in favor of Mosher, the Court of Appeals noted that the utility had failed to establish that
Mosher was guilty of “active negligence,” and thus, any common law right to
contribution was unsustainable, even setting aside the protections of the Workers’
Compensation Act. The Court went on to say, in what amounted to dicta, that Mosher
had “fully protected himself against his own negligence (not amounting to gross
I
negligence) by providing compensation insurance for his employees, and could not be
compelled to pay indirectly when no liability existed to pay directly.” Id. at 270.
Needless to say, distinctions between active and passive negligence as a basis for
common law contribution have no relevance here, given the fact that actions for
contribution are controlled by Chapter 33 of the Tex. Civ. Prac. & Rem. Code, which
makes no such distinctions.
The other case cited by Mullins, Koninklyke Nederlandsche Stoomboot
Maalschappy, N.V. v. Royal Netherlands Steamship Company, 301 F.2d 741 (5“‘ Cir.
1962), effectively recognizes that a written stevedoring contract in a maritime context
enforceable under federally developed maritime law provided a basis for a third party
ship owner to sue a stevedoring company covered by Texas workers’ compensation for
indemnity, in an action brought by a longshoreman employee. The Court concluded that
if a longshoreman’s action against the shipping company was permitted, “a state
compensation act cannot prevent an action against the employer by the third party based
on a federally judicially established maritime contractual warranty.” Id. at 746.
In discussing Westfall and Rermer, the Court interprets the state of Texas law in
1962, suggesting “that Texas is a_sygt unwilling to to rule out an indemnity where there is
a showing of gross negligence on the part of the injured man’s employer, and it might
26
even be read to my that such an indemnity is not barred by Art. 8306.” Id. at 646
(emphasis added).
The Fifth Circuit decision from more than 50 years ago indicating Texas law (as
reflected in two appellate decisions from 1932 and 1956, respectively) was still unsettled
as to whether allegations of gross negligence on the part of the employer created an
exception to the Act’s protections from third party liability, has been echoed by no Texas
appellate court at any time in the ensuing five decades, and no case citing § 417.004 of
the new Act, which has been in effect since 1993, or any decision construing its
predecessor, Art. 8306, § 3(d), of the prior Texas Workers’ Compensation Act, dating all
the way back to the 1970s, suggests that any “gross negligence” exception actually exists.
In short, there is nothing in the current statutory provision relied on by Appellee,
any other provision in the current Texas Workers’ Compensation Act, or any case law
since the new Act became effective to support Mullins’ belated assertion of a “gross
negligence” exception to the statutory protection from third party actions for
reimbursement. Accordingly, even if the trial court had permitted a post-summary
judgment pleading raising this outdated theory, and permitted the supplemental summary
judgment evidence that Mullins argues raises a fact question regarding gross negligence,
the outcome would not have changed.
Finally, Mullins argued in his Motion to Vacate that because Martinez had been
designated as a responsible third party at some prior point, it is therefore “subject to the
rules that apply to proportionate responsibility unless an exception thereto is applicable.”
(Appellant’s Brief, p. 29). The argument is specious, as a simple reading of Chapter 33
of the Tex. Civ. Prac. & Rem. Code demonstrates. The definition of the term
27
“responsible third party” in pertinent part means “any person who is alleged to have
caused or contributed to causing in any way the harm for which recovery of damages is
sought . .
.”
§ 33.0l1(6), Tex. Civ. Prac. & Rem. Code. That same section defines a
“liable defendant” as “a defendant against whom a judgment can be entered for at least a
portion of the damages awarded to the claimant.” § 33.015, titled “Contribution,” states,
under subpart (a):
If a defendant who is jointly and severally liable under § 33.013 pays a
percentage of the damages for which the defendant is jointly and severally
liable greater than his percentage of responsibility, that defendant has the
right of contribution for the overpayment against each other liable
defendant .” . .
Emphasis added.
Accordingly, contribution would exist in favor of Mullins against Martinez only if
the latter could constitute a “liable defendant,” as the term is defined in Chapter 33.
Because Martinez cannot be liable to the “claiman ” (Bonifacio Gomez) for any portion
of the damages he is entitled to recover, because of the exclusive remedy provisions of
the Texas Workers’ Compensation Act, there exists no right of contribution against
Martinez under Chapter 33.
Case law also supports the notion that there can be no contribution claim against a
covered employer. In Varela v. American Petrofina C0. of Texas, Imn, 658 S.W.2d 561
(Tex. 1983), the Court construed the prior statute relating to contribution among joint
tortfeasors, Art. 22l2(a), Tex. Civ. Stat. Ann. (repealed), holding that the protections of
the prior Texas Workers’ Compensation Act were an exception to the statute permitting
contribution actions between joint tortfeasors.
28
The distinction between a liable defendant and a responsible third party is set out
plainly in the case of City of El Paso v. Collins, 440 S.W.3d 879 (Tex. App. — El Paso
2013, no pet).
The case involved the near drowning of a six year old girl while in the care of
Children’s Place Daycare. The child’s parents brought an action against the daycare,
which in turn designated the City of El Paso as a responsible third party. The plaintiffs
then amended their action to include the City as a defendant, incorporating the motion to
designate the City as a responsible third party as a basis for their affirmative claims
against the City. Id. at 882.
The El Paso Court of Appeals concluded that to the extent the plaintiffs attempted
to impose liability on the City based solely on the responsible third party designation,
without establishing a waiver of the City’s immunity, it was error to deny the City’s plea
to the jurisdiction. Id. The Court noted, citing Tex. Civ. Prac & Rem. Code §
33.004(i)(1)(2): “The filing or granting or a motion for leave to designate a person as a
responsible third party does not impose liability against that person and may not be used
in any other proceeding, on the basis of res judicata, collateral estoppel, or any other legal
theory, to impose liability on that person.”
The Court noted approving the City’s position that a responsible third party
designation could not establish liability against a party, stating: “The City is correct that
the filing or granting of a motion for leave to designate a person as a responsible third
party or a finding of fault against the person “does not by itself impose liability on the
person.” 141., citing Tex. Civ. Prac & Rem. Code §33.004(i)(l).
29
In short, the language of Chapter 33 itself, and in particular the definitions of
responsible third party and liable defendant, make it clear that a responsible third party
designation does not establish liability of the party so designated, and that a claim for
contribution under Chapter 33 can arise only against a liable defendant. Accordingly,
Mullins’ argument that the mere designation of Martinez, a covered employer, subjects it
to a contribution claim under Chapter 33 is entirely without merit.
CONCLUSION AND PRAYER
The trial court was correct in granting Martinez’s Motion for Summary Judgment
based on the protections afforded it as an employer under the Workers’ Compensation
Act. Once Martinez demonstrated that it was a covered employer and that there was no
written agreement executed by Martinez before the Gomez accident under which it
expressly assumed the liability of Mullins and/or Blue Sky, it estabished a complete bar
to Mullins’ claims for indemnity or contribution. Mullins’ efforts to circumvent the
literal requirements of the statutory exception by producing a certificate of insurance
identifying policies covering Martinez, as well as a copy of Martinez’s commercial
insurance policy, establish merely that Martinez had liability coverage in place at the time
of the incident. Neither document constitutes proof of an explicit written agreement
executed by Martinez pre—accident under which it assumed the liability of Mullins and/or
Blue Sky.
Mullins’ belated effort to replead to include gross negligence allegations, or to
supplement the summary judgment evidence with information purporting to create a fact
question on the issue of gross negligence is of no use to him here because there is no
30
recognized exception to § 417.004 for an employer’s alleged gross negligence. Gross
negligence by the employer can provide a basis for recovery only to the spouse and heirs
of the body of an employee who suffers fatal injuries in the course and scope of
employment, not the case here.
Finally, Mullins’ argument that the designation of Martinez as a responsible third
party creates a right of contribution under Chapter 33 is contradicted by the plain
language of the statute itself.
WHEREFORE, PREMISES CONSIDERED, Appellee Martinez R.O.W., L.L.C.
f/k/a Martinez Investments, L.L.C. prays that this Court affirm the trial court’s judgment
and further grant Appellee all other relief to which it may show itself justly entitled.
Respectfully submitted,
WRIGHT & GREENHILL, P.C.
221 W. 6th Street, Suite 1800
Austin, Texas 78701
512/476-4600
512/476-5382 (Fax)
By:/s/ David P. Boyce
David P. Boyce
State Bar No. 02759770
dbo ceFzD\_v_-g.com
ATTORNEYS FOR APPELLEE
31
CERTIFICATE OF COMPLIANCE
Ihereby certify that the above and foregoing Brief of Appellee contains 6,740
words and therefore complies with the maximum length required under Tex. R. App. P.
9.4.
David P. Bovce
/s/
David P. Boyce
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the above and foregoing has been
served on the following counsel of record in accordance with the Texas Rules of Civil
Procedure, on this 26"‘ day of August, 2015:
Via ECF and Facsimile
Patrick F. Timmons, Jr.
8556 Katy Freeway, Suite 120
Houston, Texas 77024-1806
pftfcbtiininonslawfirm.coin
David P. Boyce
/s/
David P. Boyce
32
APPENDIX TAB 1
=ici.. 436 ssrn "LEGISLATURE-1-I'tEGULAR SESSION
suspended; and that this Act shall take e&‘ect and be in force from and
after its passage, and it is so enacted.‘
Passed the Senate, March 12, 1963: Yess 25, Nays 6; May 23. 1968,
Senate concurred in House amendment by :1 Viva voee vote; passed
the House, May 23, 1963, with amendment, by s non-record vote.
Approved June 10, 1968.
Efiective 90 days after May 24, 1963, date of adjournment.
WORKMEN’S COMPENSATION~—-LIABILITY OF
ASSOCIATION
CHAPTER 437
-
S. B. No. 223
A" AC‘ flmendlfli! ‘ha TEX“ Workman’; Compensation lnuursneo Lows 12! thlc
mm:by amending Sectlon 3 of Article 3305, Revised Clvll statutes of
1025, so amended; providing n unvlnnu clause; and declaring an emer-
Honey.
Be it enacted by
the Legislature of the State of Texas:
Section 1. Section 3 of Article 8306, Revised Civil Statutes of Texas,
1925, as amended,“ is amended to read hercnfter as follows:
"Sec. 3. The employees of a subscriber and the parents of minor em-
ployees shall have no right of action against their employer or ssuinst any
agent, servsnt or employee of said employer for damages for personal in-
juries, and the representatives and beneficiaries of deceased employees
shall have no right of action against such subscribing employer or his
agent, servant or employee for damages for injuries resulting in death,
but such employees and their representatives and beneficiaries shall look
for compensation solely to the association, as the same is hereinafter pro-
vided Ior. All compensation mllowed under the succeeding sections herein
shall be exempt from garnishment, attachment, judgment and all other
suits or claims, and no such right of action end no such compensation and
no part thereof or of either shall be assignable, except as otherwise herein
provided, and any attempt to assign the same shall be void. If an action
for damages on account of injury to or death of an employee of s subscrib-
er is brought by such employee, or by the representatives or beneficiaries
of such deceased employee, or by the association for the joint use and
benefit of itself and such employee or such representatives or beneficiuries,
against a person other than the subscriber, as provided in Section (is, Arti-
cle'8307, Revised Civil Statutes of Texas, 1925, and if such action results
in a judgment against such other person, or results in a settlement by
such other person, the subscriber, his agent, servant or employee, shall
have no liability to reimburse or hold such other person harmless on such
judgment or settlement, nor shall the subscriber, his agent, servant or em-
ployee, have any tort or contract liability for damages to such other person
because of such judgment or settlement. in the sbsence of a written sgree—
ment expressly assuming such liability, executed by the subscriber prior
to such injury or death. No part of this Section is intended to lessen or
alter the employees existing rights or cause of action either against his
employer, its subscriber, or any third party.
65. Vex-non‘n Ann.Clv.St. art. 8305, g 3.
1132
LIBRARIES Ch. 438
“The Association. its agent, servant or employee, shall have no lia-
bilitywith respect to any accident based on the allegation that such acci-
dent was caused or could have been prevented by a program, inspection,
or other activity or service undertaken by the association for the preven-
tion of accidents in connection with operations of its subscriber; provid-
ed, however. this immunity shall not aifect the liability of the association
for compensation or as otherwise provided in this law, No ‘part of this
Section is intended to lessen or alter the employees existing rights or cause
of action either against his employer, its subscriber, or any third party.”
Sec. 2. any Section, paragraph or provision of this Act he declared
If
unconstitutional or invalid for any reason, such holding shall not in any
manner affect the remaining Sections, paragraphs or provisions of this
Act, but the same shall remain in full force and effect.
Sec. 8. The importance of this legislation and the crowded condition
of the calendar in both Houses create an emergency and an imperative
public necessity that the Constitutional Rule requiring bills to be read
on three several days in each House be suspended, and said Rule is hereby
suspended; and that this Act shall take atfect and be in force from and
after its passage. and it is so enacted.
Passed the Senate. March 21, 1963: Yeas 30, Nays 0; May 20, 1963, by
authority of H.C.R. No. 100 bill was returned from Governor's ofiice
and correction made; passed the House, May 8, 1963, by a non-record
vote; May
20, 1963, I-I.G.R~ No. 100 was‘ adopted.
Approved June 10, 1963.
Effective 90 days after May 24, 1963, date of adjournment.
LIBRARIES—DIS'I"RIBU'I‘ION OF STATE DOCUMENTS
CHAPTER 438 5‘
S. B. No. 266
An Act to establish depository libraries with nuihority in the Director and Librar-
ian of the Texas state Library; requiring certain act: to be performed to
facilitate distribution of state documents; and declaring an emergency.
Be it enacted bythe Lrgisloiicrc of ilic State of Texas:
Section 1. The term "state document” as used in this Act means all
publications of state agencies which the Texas State Library is authorized
'
by Revised Civil Statutes, 1925, Article 5442, to acquire and distribute.
Sec. 2. The term “depository libraries” as used in this Act means the
Texas State Library, libraries of state institutions oi‘ higher education, and
other libraries so designated by the Texas Library and Historical Com-
mission upon determination that such designations are necessary to pro-
vide adequaie access to state documents.
Sec. 3. Each state agency shall furnish the Texas State Library with
state documents in the quantity specified in the Revised Civil Statutes,
1925, Article 5442.
See. 4. State documents shall be made available to depository li-
braries under the direction of the Texas State Library.
Sec. 6. To facilitate distribution of state documents, each state agen-
cy shall furnish the Texas State Library with a list of state documents
65. Vernon's Ann.Ci\'.St. nrt. uuzn.
H33
APPENDIX TAB 2
Bath LEGIl3LATURE—REGULAR smssxorq Ch. 131
and that this Act taxi: affect and be in fO!‘CI from Ind utter its
ptluul, and it 1: no Inactld.
1983‘l’g;,sx;dnE)l:‘e.r§;2;11§:juV‘;:tx;April
21, 1988: Yen 31, Nxyn 0: passed the House on Mny 6,
Approved May 17, 1983.
Effective Aug. 29, 1983, 90 days after date of adjournment.
WORKERS‘ COMPENSATION—BENEFITS—ASSIGNMEN’l 1'0
INSURANCE COMPANY
CHAPTER 131
H. B. No. 68
All AC1‘
ranting to the nniqnmont of cox-tnin vim-kart‘ compunution
bnntfltl to An innurlncu complny.
BE IT ENACTED BY THE LBOXSLATURE OE‘ ‘DEE STATE OF TEXAS:
SECTION 1. sncczlon 3, Articlo B306, Rcviud Bntutu, in
unnndudssto rand nu follmu:
Etc. 3. _(__:_l Thu umpluyuuu or I uubucribor Ind thu plrlntn
of minor employer: lhlll have nu right of action lqlinlt their
omploycr or against any Iqont. nrvnnt or umplayto at Ilid Impluyor
for dunnqn {or pcrnannl snjurhu, and thn rnpronntntivon and
bnnuticluiu of dccmnad nnploycu nhnll hnvn no right a! nation
nqninlt such subscribing ampluyor or his aunt. urvnnt or Iwloyu
tar dun: on for injurhn rnlultinq in death, but such cmplcyucl uzé
their rupx-uuntntivcn and bununcuri-I nhnu. look for canpnnntlon
Iulcly to the unocintian, nu thy Inn: 1: hu-unnttur providod Int.
All conspunution nllowod undur U1: Iuccaodinq uctionu
_0_:_)_
huruin shun be oxnnpt {ram qlrninhacnt, nttnchnont, Judgment Ind
:11 othu: suit: or clntmn. Ind no such right at action And no such
campcnntion And no part theme: or ot nun: shall 1:: uuiqmhlo,
cxcupf. an cthnrwiun h-rain prnvidnd, 111:! any attempt to usual: the
|u..¢ shall bu void.
55. Vernon's Ann.Civ.SL art. 8306. § 3.
Addition: in text lndicaud by mngnflm; dolations by [Ma-ikoouu]
613
Ch. 131 each LEGlSLAT‘URE—REGULAR SESSION
(c) In the event the unacietinn denies liability in n claim
$6 an Accident or health innunnco congenx provide: benefits tn
the Iglogee for medical aid hougitel ux-vice: nurling service:
or medicine, then the right to recover Iuch amount may he unsigned
by the emgleyee to the health or nccident inlurlnce COEEIHE.
lg) X: In nation for denuqu on account at injury to or
duth of An employee of e nubncriber is brought by such employee.
or by the repreeentntiven or beneticilriel cf such deceeeed
employee, or by the nseucietian for the joint ule end benefit of
itself end such employee or luch reprenentetivex or beneficiaries,
against | person other then the Iubscriber, II provided in Section
6:, Article 8307. Revised Civil Stetutel of Texts, 1925, end if
such lction reeultl in a judgment ngninut much debt? person. at
result: in I settlement by much other person, the subscriber, hi:
nqant, Iervent or employee, shell hnve no liability to reimburse or
hold much other person hnrmless on such judgment er settlement, nor
Ihell the Iuhlcriber, hil luent. Iervnnt or employee, hIVl lny tort
or conttlct linbility tar damage: to Iuch other person beceune or
Iuch judgment or settlement, in the nbuence c£ : written Agreement
expuuly euuminu Iuch lid:-ility, executed by the subscriber prior
to much injury or death. [Ne-pertai-ehh~Snet-.§an-Le-éntendebte
iesuen-or-alter-the-employee:-extntin[-:§¢hte-er--eeuee--e£--action
either--eye§nIt--h§I-empieyerr-its-euheeribs:r-er-eny-third-pertyw]
131 The Alnocintion, its nqent, Iervnnt at employee, shall
have no linbility with respect to my accident based on the
Illeqetion thnt such Accident wnl ceueed or could have been
prevented by e praqrem, inlpection. or other Activity or aervice
undertaken by the nslecinticn for the prevention of Accident: in
connection with uperetione oi its IUDICXLDUI; provided, hcweven
thin immunity shall not -sue: the lhbility of the eseocinticn for
compentntion or II otherwise pravided in this luv.
Lg) Na pert of this Section is intended to Xesuen or Alter
the gggiggggig [empieyeeej existing right: or clule a£ Action
either eqeinlt his employer, its subscriber. or any third pnrty.
Additions in text indicated by _u[n_§Lg,r_I‘mg: deletions by letnikoouiel
614
68th LEGISLATURE-REGULAR SESSION Ch. 132
station 2. ‘ma importanca at this lcqialation and tha
crowded condition M the calandara in both hcuan craato an
emergency and an inpcrativa public nacaaaity that th-
conatitutiunal 2-uh x-aquix-inc billa to be raad can thus aavnnl.
daya in cash noun ba auapnndod, and thin rule in ha:-oby auapandad,
and that thin Act take afloat and be in torn from and any: ita
pnnqa, and it in no enacted.
Passed by the House on March 90, 1983: Yeas 137, Nays 0, 1 present, not voting;
passed by the Senate on May 5. 1983: Yeas 31, Nays 0,
Approved May 17, 1983.
Effective May 17, 1983.
WORKERS’ COMPENSATION——-DEATH BENEFITS-
PBIOR INCAPACITY
CHAPTER 132
H. E. No. 99
AN AC1‘
ralatinq to tan reduction of workcrfl companaation death benafita
because at banafita paid for prior pariod 0! incapacity.
BE IT ENACTED BY IEIE LEGISLATURE 0!‘ '1'!!! STATE 0!‘ TEXAS:
SECTION 1. saction ab, Article 8305, Raviaod civil Statute:
ct‘ Toxaa, 1925, is amcndndssto raad aa touovax
sec. ah. 111 in can daath accu:-I as a result of tho injury
after a period of total or partial incapacity. for which
compansation haa been paid, thn period of incapacity shall be
deducted from (‘Jun total pariod of compensation and tho bonufita
paid thnraunder tron the maximum alloucd for the death.
(13) Suction 8b deal net agglg to lifatima daath bonalita aa
grovidad by section B or this article but aggllu only to than
blnaficiariaa racaivin 360 vaoka of banelita. ~
SECTION 2. It in uncartain and has not bun judicially
datormincd uhuthat tha oifant px-ovidcd by Saction Bb, Article 8306.
Raviud civil statucaa oz’ Taxaa, X925, appliaa to thu utctima
banatita proviaiana oz sanction 8 or that articla. Tha tact that nu
db. Vernon‘: Ann.Civ.St. art. 8306, § Sb.
Addition: in text indicated by ,un_d_g_r_l1n_g; deletions by [ateikoeutsl
615
APPENDIX TAB 3
TITLE 5. WORKERS’ COMPENSATION
SUBTITLE A. TEXAS WORKERS’ COMPENSATION ACT
~
CHAPTER 401. GENERAL PROVISIONS
SUBCHAPTER A. SHORT TITLE; APPLICATION OF SUNSET ACT
Sec. 401.001. SHORT TITLE.
This subtitle may be cited as the Texas Workers’ Compensation Act.
Sec. 401.002. APPLICATION OF SUNSET ACT.
~
Ed: Repealed by Acts 2005, 79th Leg., H.B. 7, eff. Sept. 1,2005. As a division wit1n'u the Texas Department of Insurance
(TDI), the Divsion of Workers’ Compensation is governed by the sunset provisons regarding TDI.
Sec. 401.003. ACTIVITIES OF THE STATE AUDITOR.
(a) The division is subject to audit by the state auditor in accordance with Chapter 321, Government Code. The ~
state auditor may audit:
(1) the structure and internal controls of the division;
(2) the level and quality of service provided by the division to employers, injured employees, insurance
carriers, sell‘-insured governmental entities, and other participants;
(3) the implementation of statutory mandates by the division;
~
(4) employee turnover;
(5) information management systems, including public access to nonconfidential information;
(6) the adoption and implementation of administrative rules by the commissioner; and
(7) assessment of administrative violations and the penalties for those violations.
(b) Nothing in this section limits the authority of the state auditor under Chapter 321, Government Code.
Ed: This section was added by the 2001 Legislature.
SUBCHAPTER B. DEFINITIONS
Sec. 401.011. GENERAL DEFINITIONS.
In this subtitle:
(1) “Adjuster” means a person licensed under Chapter 4101, Insurance Code.
Ed: Section 4101.001 of the Insurance Code defines “adjuster” as an individual who investigates or adjusts losses on behalf
of an insurer as an independent contractor or as an employee of an adjustment bureau, an association, a general property and
casualty agent, an independent contractor, aninsurer, or a managing general agent, or who supervises thehandling of claims.
However, Section 4101.002 provides that this definition does not apply to, among others, clerical or salaried personnel not
engaged regularly in the negotiation of contested claims, attorneys, photographers, private detectives, estimators, and other
exp erts.
(2) “Administrative violation” means a violation of this subtitle, a rule adopted under this subtitle, or an order
or decision of the commissioner that is subject to penalties and sanctions as provided by this subtitle.
(3) “Agreement” means the resolution by the parties to a dispute under this subtitle of one or more issues
regarding an injury, death, coverage, compensability, or compensation. The term does not include a
settlement.
(4) “Alien” means a person who is not a citizen of the United States.
16
Labor Code
~ Ed; This term does
not include “psychologist.”
lag) “Employer” means, unless otherwise specified, a person who makes a contract of hire, employs one or more
employees, and has workers’ compensation insurance coverage. The term includes a governmental entity
EW
O
that scIf—insurcs, either individually or collectively. O.
0.
/Ed: This definition is not strictly applied throughout the Act. For example, Subchapter A
of Chapter 406, dealing with 0.
~ coverage, does not exclusively apply to subscribers. To that end, Section 406.001 provides:
“In this subchapter, ‘employer’ I11
means aperson who employs one orinore employees.” Other sections, too, usethe term loosely due to subsequent legislative
amendments. For example, in Section 408.042(c), dealing with the average weekly wage of employees with multiple
V
employment, the use of the word “employer” is likewise not limited to subscribers.
(18-a)“Evidence-based medicine” means the use of current best quality scientific and medical evidence formulated
from credible scientific studies, including peer-reviewed medical literature and other current scientifically
based texts, and treatment and practice guidelines in making decisions about the care ofindividual patients.
Ed: Thistenn was added bythe200S Legislature and is usedin the definition of “health care reasonably required.” It arguably
incorporates the concepts required for the admission of expert evidence under E.1. Dupont de Nemours and Co., Inc. v.
Robinson, 923 S.W.2d 594 (Tex. 1995) or for areview of the sufficiency of the evidence underMerreIl Dow Pharmacezzticals
v. Havner, 953 S.W.2d 706 (Tex. 1997).
(19) “Health care” includes all reasonable and necessary medical aid, medical examinations, medical treatments,
medical diagnoses, medical evaluations, and medical services. The term does not include vocational
rehabilitation. The term includes:
(A) medical, surgical, chiropractic, podiatric, optornetric, dental, nursing, and physical therapy services
provided by or at the direction of a doctor;
(B) physical rehabilitation services performed by a licensed occupational therapist provided by or at the
direction ofa doctor;
(C) psychological services prescribed by a doctor;
(D) the services of a hospital or other health care facility;
(E) a prescription drug, medicine, or other remedy; and
(F) a medical or surgical supply, appliance, brace, artificial member, or prosthetic or orthotic device,
including the fitting of, change or repair to, or training in the use of the appliance, brace, member, or
device.
Ed: All health care must be provided by or at the direction of a doctor. Vocational rehabilitation is not included in this Act,
but may be provided by the Texas Department of Assistive and Rehabilitative Services (DARS) (See Section 409.012).
Subsection (l9)(F) was amended in 2007 by SB. 458. The Senate Bill Analysis stated: “Currently, artificial limbs are
not treated by all workers’ compensation carriers as a physical structure of the body. Therefore, an accident resulting in a
broken leg would be treatable under workers’ compensation, but the same accident causing injury to an artificial leg would
not cover repair or replacement of the artificial leg. ‘The goal of the workers’ compensation system is to get workers healthy
and back to work. SenateBill 45 8 ensures workers’ compensation carriers treat artificial limbs as natural limbs.” To that end,
definitions of “Oithotic device” and “Prosthetic device” were added, as well asredefining “health care” to include the fitting
of, change to, or repair to, the device. However, the amendments do not achieve the desired effect, or for that matter, any
change to the law at all. The Bill did not provide a change to the definition of “injury,” which still requires damage or harm
to the “physical structure of thebody” as opposed to an artificial limb. Further, by only amending the definition of “health
care,” the Bill still links the entitlement to such devices only to situations where the carrier would otherwise be liable for
“health care.” Pursuant to Section 408.021, a claimant is only entitled to “health care” ifhe sustains “a compensable injury.”
Thus, this amendment in no way “ensures workers’ compensation carriers treat artificial limbs as natural limbs.” Rather,
it simply further defines certain terms and ensures that the carrier is liable for the replacement or repair of the device. As
such theAppeals Panel’s analysis in Texas Workers’ Compensation ComniissionAppeal No. 91001, decided July 31, 1991,
is still applicable.
Labor Code 19
APPENDIX TAB 4
Notwithstanding Subsection (a), the guaranty fund is not liable for the payment of any penalties assessed
for any act or omission on the part of any person other than the guaranty fund. |—..
;>
W,
~~
407A.461. POSSESSION OF SECURITY BY GUARANTY FUND. O
the assumption of obligations on behalf of an insolvent
group by the guaranty fund under the commissioner’s W
O,
rmination, the guaranty fund is entitled to immediate possession of any assets ofthe insolvent group and any O
_l1
my deposited or the proceeds of any surety bond deposited by the insolvent group, along with all interest on U
security. All assessments from members of the insolvent group shall be paid to the guaranty fund.
l'|'l
~~~
~
407A.462. RELEASE OF CLAIMINFORMATION T O GUARANTY
FUND. If the guaranty fund has assumed
pensation obligations on behalf of an insolvent group, information on a workers’ compensation claim may be
~~~ ased to the guaranty fund as provided by Section 402.084(a).
.
407A.463. GUARANTY FUND AS PARTY IN INTEREST.
The guaranty fund is a party in interest in a proceeding involving a workers’ compensation claim against an
insolvent group whose compensation obligations have been paid or assumed by the guaranty fund.
The guaranty fund has the same rights and defenses as the insolvent group, including the right to:
(1) appear, defend, or appeal a claim; 7
_ (2) receive notice of, investigate, adjust, compromise, settle, or pay a claim; and
(3) investigate, handle, or deny a claim.
407A.464. PREFERENCES.
~~~
.
Benefit payments made by the guaranty fund under this subchapter are entitled to the same preference over
§ other debts ofthcinsolvent group as provided bylaw to benefit payments owed by the insolvent group to the
person entitled to the benefits.
The guaranty fund has the priority status provided by Section 8, Article 21.28, Insurance Code.
~~~ _407A.465. SPECIAL FUND.
onies advanced by the association under this chapter do not become assets of the insolvent group but constitute
special fund advanced to the commissioner, receiver, or other statutory successor only for the payment of
~~
mpensation liabilities, including the costs of claim administration and legal costs.
CHAPTER 408. WORKERS’ COMPENSATION BENEFITS
UBCIIAPTER A. GENERAL PROVISIONS
~~~Sec. 408.001. EXCLUSIVE REMEDY; EXEMPLARY DAMAGES.
, Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’
compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the
employer for the death of or a work-related injury sustained by the employee.
This section does not prohibit the recovery of exemplary damages by the surviving spouse or heirs of the body
ofa deceased employee whose death was caused by an intentional act or omission of the employer or by the
‘
employer’s gross negligence.
meaning assigned by Section 41.001, Civil Practice and Remedies
In this section, “gross negligence” has the
Code.
A determination under Section 406.032, 409.002, or 409.004 that a worli—related injury is noneompensable
‘
/\ does not adversely affect the exclusive remedy provisions under Subsection (a).
. The right of recovery for a covered employee orlegal beneficiary against the employer or agent or employee of employer
restricted solely to compensation benefits unless the employee dies as a result of an intentional act or the gross negligence
~~ bor Code 101
of the employer. In that situation, the spouse and children of the deceased can recover exemplary (punitive) damage from
the employer. This exception to the general rule is required by Article 16, Section 26 of the Texas Constitution.
“Gross negligence” is defined in the Civil Practice and Remedies Code as “more than momentary thoughtlessnessl
CODE
inadvertence, or error ofj udgment. It means such an entire want of care as to establish that the act or omission was the resu[(
of actual conscious indifference to the rights, safety, or welfare of the person affected.”
Additionally, despite the exclusivity language, Article 1, Section 13 of the Texas Constitution preserves the right to
LABOR
sue the employer for intentional injury. Unless the employee elects to take the compensation remedy, the right to sue for
intentional injury is not destroyed by a mere statute. Further, the Constitution further protects the spouse’s right to sue
the employer for loss of consortium due to intentional injury.
Except for the election against benefits allowed by an employee by Section 406.034, an agreement to waive benefits
is void. Section 406.035. See Section 504.002 regarding these issues as related to political subdivisions.
Subsection (d) was added by the 2005 Legislature to addresspotential prohlemsraisedinthe Supreme Court cases, Walls
Regional Hospital v. Bomar, 9 S.W.3d 805 (Tex. 1999) and Payne v. Glaen Hospital Hospital Corp., 28 S.W.3d 15 (Tex,
2000).
Sec. 408.002. SURVIVAL OF CAUSE OF ACTION.
A right of action survives in a case based on a compensable injury that results in the employec’s death.
Ed: The purpose of this section is not immediately clear in light of other sections in the 1989 Act. It is derived from Article
8306, §16 of the “old law.” It has been held that the former section didnotrefer to suits against a covered employer and gives
no right of recovery against the employer; rather it was “intended to preserve causes of actions arising from those accidents
to which the [workers’ compensation] insurance is applicable— i.e., injuries snstainedinthe course of employment, for which
third parties are liable — and to prevent such causes of action against third persons not insured, from abatement by death.”
Orange Ice, Light & Wafer v. Texas Compensation Ins. C o. , 278 F. 8 (5"' Cir 1922). In other words, if the employee is injured
in the course and scope of his employment due to the negligence of a third party, and that injury subsequently results in
death, the cause of action against the third party survives the employee’s death. This ensures, among other things, that the
carrier’s subrogation interest is not eliminated.
Although the language of this section is differentthan that contained in Article 8306, § 16, according to one of the authors
of the 1989 Act, this section does not create a “substantive change from the prior law on survival of a cause of action.” 1
& A
MONTFORD. Bzuznnn DUNCAN, GUIDE To TEXAS WORKERS’ Com. REFORM, § 4.03, at 4-39 (1991).
Section 408.181(a) provides a derivative, but separate, cause of action to the beneficiaries for deaths that result from
a compensable injury.
When an employee dies of causes unrelated to the compensable injury (except in the case of a specific injury), “the only
claim that survive[s] his death [is] one for benefits accrued and unpaid from the date of his injury until the date of his death.“
/lntwine v. Dallas1ndependentSchooI District,698 S.W.2d 226,228 (Tex.App.—Dallas 1985,writref’dn.r.e.). See aIsoBaz'Iey
v. Travelers Insurance Co. , 383 S.W.2d 562 (Tex. 1964); Burris 'Estate v. Ass ocialedEmplayers Insurance C o. , 374 S.W.2d
223 (Tex. 1963): Fitzhugh v. Associated Indemnity Corp., 746 S.W.Zd36l (Tex.App.—Eastland l988,no writ). TheAppeals
Panel has held that an estate’s right to accrued and unpaid benefits survives a non-compensable death. Texas Workers’
Compensation Commission Appeal No. 950310, decided April ll, 1995.
However, regardless of the compensability of the death, Section 408.081(d)providesthat“[a]n interest infunu-2 income
benefits does not survive after the employee’ s death.” Although it might be argued that impairment income benefits accrue
on the date of maximum medical improvement if the impairment rating is known, pursuant to Section 408.l2l(a)(2), the
decedent’s entitlement to these benefits ends on “the date of the en1ployee’s death.”
Sec. 408.003. REIMBURSABLE EMPLOYER PAYMENTS; SALARY CONTINUATION; OFFSET AGAINST
INCOME BENEFITS; LIMITS.
(a) After an injury, an employer may:
(1) initiate benefit payments, including medical benefits; or
(2) on the written request or agreement ofthe employee, supplement income benefits paid by the insurance
carrier by an amount that does not exceed the am ount computed by subtracting the amount ofthcincome
benefit payments from the employce’s net preinjury wages.
(in) Ifan injuryis found to be compensable and an insurance carrier initiates compensation, the insurance carrier
102 Labor Code
APPENDIX TAB 5
the court shall award to the attorney payable out of the
rance carrier. In the absence of an agreement,
mace carrier’s recovery:
3 reasonable fee for recovery of the insurance
earrier’s interest that may not exceed one-third of the 5W
insurance carrier’s recovery; and C
proportionate share of expenses. PD
,.
carrier shall make 0
no;-ney who represents the claimant and is also to represent the subrogated insurance O
.U
“written disclosure to the claimant before employment as an attorney by the insurance carrier. The
mant must acknowledge the disclosure and consent to the representation. A signed copy of the disclosure
I'll
be furnished to all concerned parties and made a part of the division file. A copy ofthe disclosure with
]aimant’s consent shall be filed with the claimant’s pleading before a judgment is entered and approved
to which the attorney is otherwise
he court. The claimant’s attorney may not receive a fee under this section
fled under an agreement with the insurance carrier unless the attorney complies with the requirements
his subsection.
participates in obtaining a
n attorney actively representing the insurance carrier’s interest actively
very, the court shall award and apportion between the claimant’s and the insurance carrier’s attorneys
payable out of the insurance carrier’s suhrogation recovery. In apportioning the award, the court shall
the benefit accruing to the insurance carrier as a result of each attorney’s service. The total
ider
rney’s fees may not exceed one—third of the insurance carrier’s recovery.
purposes of determining the amount of an attorney’s fee under this section, only the amount recovered
benefits, including medical benefits, that have been paid by the insurance carrier may be considered.
ilethe carrier is still required to pay an attorney’s fee not to exceed one-third of its subrogation recovery to either
the carrier’s lawyer, or both, the fee only applies to the past subrogation lien amount, rather than any
t’s lawyer,
ture amounts. On the other hand, carrier is now responsible for its proportionate share of expenses in
recovering
monies, said expenses to be paid out of the carrier’s part of the recovery.
~
e*ernployee’s attorney represents carrier for subrogation recovery, full disclosure of dual representation must be
~~
rnployec, furnished to all parties, ineludingthe commission, and filedwith the court prior to approval ofjudgment.
observethat a claimant’s attorney representingboth the claimant and insurance company has an inherent conflict
particularly when third party proceeds are inadequate to fund fully the subrogation interest and the desires of
~
giniant. Carrier’s own counsel should be employed independently to avoid conflict or violation of Texas Disciplinary
/W
rofessional Conduct of the State Bar of Texas.
04. EMPLOYER LIABILITY TO THIRD PARTY.
tion for damages brought by an injured employee, a legal beneficiary, or an insurance carrier against a
rty liable to pay damages for the injury or death under this chapter that results in a judgment against the
ity or a settlement by the third party, the employer is not liable to the third party for reimbursement or
shased on thcjudgnient or settlement unless the employer executed, before the injury or death occurred,
In agreement with the third party to assume the liability.
mployee, beneficiary or carrier sues a third party and recovers either by judgment or settlement, the employer
have liability to the thirdparty in the absence of an express written indemnity agreement creating liability executed
he accident. Indemnity agreements are widespread in industry, and if drafted properly, valid and enforceable.
CHAPTER 418. CRIMINAL PENALTIES
01. PENALTY FOR FRAUDULENTLY OBTAINING OR DENYING BENEFITS.
person commits an offense if the person, with the intent to obtain or deny payment ofbenelits, including
cdical benefits, under this subtitle or Subtitle C, for himself or another, knowingly or intentionally:
makes a false or misleading statement;
'
misrepresents or conceals a material fact; or
-
N16 243
Donald B. Mullins and Blue Sky Right of Way, L.L.C. v. Martinez R.O.W., LLC F/K/A Martinez Investments
Combined Opinion