Matthew Eric Kershner v. Samsung Austin Semiconductor, LLC

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ACCEPTED 03-15-00529-CV 8127888 THIRD COURT OF APPEALS AUSTIN, TEXAS 12/8/2015 8:29:43 AM JEFFREY D. KYLE CLERK Case No. 03-15-00529-CV COURT OF APPEALS FILED IN 3rd COURT OF APPEALS THIRD DISTRICT OF TEXAS AUSTIN, TEXAS AT AUSTIN, TEXAS 12/8/2015 8:29:43 AM JEFFREY D. KYLE Clerk MATTHEW ERIC KERSHNER, Appellant v. SAMSUNG AUSTIN SEMICONDUCTOR, LLC, Appellee. On Appeal from Cause No. D-1-GN-12-003687 53rd Judicial District Court of Travis County, Texas Hon. Gisela D. Triana, Presiding APPELLEE'S BRIEF BRET A. SANDERS State Bar No. 24033152 JEFFREY D. BOYD State Bar No. 24069404 FEE, SMITH, SHARP & VITULLO, L.L.P. 1801 South MoPac Expressway Suite 320 Austin, TX 78746 (512) 479-8400 (512) 479-8402 (Fax) bsanders@feesmith.com j boyd @feesmith. com COUNSEL FOR APPELLEE IDENTITY OF PARTIES AND COUNSEL Parties Counsel Matthew Eric Kershner Matthew J. Kita Appellant P.O. Box 5119 Dallas, Texas 75208 Appellate and Trial Counsel Robert W. Lee Lee Gober & Reyna 11940 J ollyville Road, Suite 220-S Austin, Texas 78759 Trial Counsel Samsung Austin Semiconductor, LLC Bret A. Sanders Appellee Jeffrey D. Boyd Fee, Smith, Sharp & Vitullo, LLP 1801 South MoPac Expressway, Suite 320 Austin, Texas 78746 Appellate and Trial Counsel APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page ii TABLE OF CONTENTS Identity of Parties and Counsel .................................. ......... ... ....... ..... ... .................... ii Index of Authorities .................... .. ................................................................... .... .. .... v Statement of the Case ..................................................................... ......................... vii Statement Regarding Oral Argument ..................................................................... viii Issues Presented ... .. ................. ...... .............. .... .... .. ....... .. ......... ..... .... .. ..... ................. ix Statement of Facts .... ......... ...................................................................... .............. .... . 1 Summary of the Argument .. .. .. ................ ... ........... .................................... ........ ......... 4 Argument ......................................................................... ........................................... 5 I. Appellant Concedes that Appellee Has Shown the Applicability of Texas Labor Code Section 406.123 as a Matter of Law, Confirming that Appellee is Entitled to Summary Judgment.. .................................................. ........ ........ 5 II. Section 406.122 Does Not Apply to This Case and Therefore Cannot Defeat Summary Judgment .......................................... .... ............................................ 6 A. Section 406.122's Requirements are Not Met ...................................... 6 B. Spur Agreed to Section 406.123 Being the Applicable Authority ........ 7 C. TIC Energy is Not Binding Authority and Conflicts with Precedent ... 8 D. TIC Energy is Not Applicable Under Its Own Terms ............. ............... 8 E. This Court Has Previously Considered and Rejected Appellant's Argument ........................................ ... ......... .... ....... .. ........ .................... 10 F. Appellant Continues to Fail to Respond to Appellee's Arguments .... 13 III. Appellant's Argument Puts OCIP Policies in Texas at Risk. .. ...................... 13 APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page iii Conclusion and Prayer .......................... ... ... ............ ..... .. ................... ......... ........... ... 17 Certificate of Compliance ......................................................... ............................... 18 Certificate of Service ........................... ..................................................................... 18 Appendix .............. .. .............. ....................................... ... ..... ..................................... 19 APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Pageiv INDEX OF AUTHORITIES Cases Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (Tex. 2009) ................... 5, 15 HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (Tex. 2009) ............ .. ..................... ...... 14-16 Walker v. Harris, 924 S.W.2d 375 (Tex. 1996) ....................................................... 10 Wingfoot Enterprises v. Alvarado, Ill S.W.3d 134 (Tex. 2003) ..................... 14-15 Bedrock General Contractors, Inc. v. Texas Workers' Compensation Insurance Fund, No. 03-00-00426-CV, 2001 WL 253594 (Tex. App.-Austin Mar. 8, 2001, pet. denied) (not designated for publication) .................................................... 11-13 Brooks v. Goodyear Tire & Rubber Co., No. 14-12-01048-CV, 2013 WL 3477288 (Tex. App.-Houston [14th Dist.] Jul. 9, 2013, no pet.) ................ ................... 15-16 Cook v. White Construction Co., No. 03-10-00114-CV, 2011 WL 3371542 (Tex. App.-Austin Aug. 4, 2011, no pet.) ....................................................................... l5 Funes v. Eldridge Electric Co., 270 S.W.3d 666 (Tex. App.-San Antonio 2008, no pet.) ................... .. ................................................................................................. l5 Garza v. Zachry Construction Corp., 373 S.W.3d 715 (Tex. App.-San Antonio 2012, pet. denied) .............................................................................................. 15-16 Hunt Construction Group, Inc. v. Konecny, 290 S.W.2d 238 (Tex. App.-Houston [1st Dist.] 2008, pet. denied) ................................................... .... ................... ..... ..... 15 Lazo v. Exxon Mobil Corp., No. 14-06-00644-CV, 2009 WL 1311801 (Tex. App.-Houston [14th Dist.] May 7, 2009, no pet.) (mem. op.) ............................... 15 Salinas v. Pankratz, No. 13-10-00241-CV, 2012 WL 112812 (Tex. App.-Corpus Christi Jan. 12, 2012, no pet.) .......................... ............ ...................... ...................... 15 TIC Energy and Chemical, Inc. v. Martin, No. 13-14-00278-CV, 2015 WL 127777 (Tex. App.-Corpus Christi Jan. 8, 2015, pet. filed) (mem. op.) ................. 8-10, 13 APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Pagev Statutes and Rules Texas Labor Code§ 406.122 ........................................................................ 4-14, 17 Texas Labor Code § 406.123 .................................................................... 4-9, 13, 17 Texas Labor Code§ 408.001 ...... ..... ............................ ..................... ............. ...... 5, 14 Texas Rule of Appellate Procedure 38.1 ................................................... .... ............ 5 Texas Rule of Appellate Procedure 47. 7 ....... .... ...................................................... 11 APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page vi STATEMENT OF THE CASE Nature of the Case: Appellant sued Appellee for monetary damages in premises liability, claiming personal injuries from an alleged on-the-job injury. C.R. 3-12. Appellee denied Appellant's allegations. C.R. 13-17. Course of Proceedings: Appellee moved for summary judgment based on the workers compensation bar. E.g., C.R. 18-32. Trial Court's Disposition: The trial court granted Appellee's motion for summary judgment. C.R. 221. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page vii STATEMENT REGARDING ORAL ARGUMENT This case presents a clear application of the workers compensation bar in a fact scenario where Texas courts have applied it many times before. Appellant's incorrect argument for the application of a statute whose requirements are not triggered has previously been considered and rejected by this Court. Appellee therefore respectfully submits that oral argument is not needed in this matter, though Appellee will be pleased to present argument if the Court believes it will be of assistance. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page viii ISSUES PRESENTED 1. Can Appellee successfully argue for reversal of summary judgment despite it being undisputed that the requirements for summary judgment under the applicable statute have been met as a matter of law? 2. Can Appellee successfully argue for reversal of summary judgment by asking the Court to apply a statute and case law whose requirements are not met as a matter of law? APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page ix STATEMENT OF FACTS Appellant was the direct employee of Spur Electric, Inc. ("Spur") while working on the Saturn Project for Appellee Samsung Austin Semiconductor, LLC ("SAS"). See, e.g., C.R. at 37-38, 45-46. Appellant claims he injured himself in a fall while performing work on that project. C.R. 4-5. SAS implemented an Owner Controlled Insurance Program ("OCIP") to provide workers' compensation coverage for contractors of every tier providing labor to the Saturn Project. C.R. 63, 85-87, 89-90, 154-55. Participation in the OCIP was mandatory, and all contractors and subcontractors were required to follow enrollment procedures. C.R. 63, 85-87, 89-90. Subcontractors contracting their own subcontractors were required to include the OCIP instructions with bid documentation and require that any of their own subcontractors participate in the OCIP. C.R. 70, 85-87, 89-90. Any independent workers compensation policy held by the subcontractor was explicitly stated to "only be Excess . . . of the OCIP coverages." C.R. 68, 85-87, 89-90. SAS was responsible for the payment of all OCIP premiums. C.R. 70, 85-87, 89-90. Subcontractors enrolled in the OCIP were to be provided a Certificate of Insurance. C.R. 63, 85-87, 89-90. Spur subcontracted with Durr Systems, Inc. ("Durr"), a contractor on the Saturn Project, for electrical install. See C.R. 89-90, 154-55. In its proposal to Durr, Spur acknowledged it would be participating in the OCIP and stated it had APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 1 included all requirements for participation in the OCIP. C.R. 73-74, 85-87, 89-90. Durr informed SAS of Spur's subcontract on a form entitled "Samsung Austin Semiconductor Saturn Project Notice of Subcontract Award and Request for Insurance". C.R. 76 (emphasis added), 85-87; see C.R. 89-90. The form was copied to the attention of the "OCIP Administrator". C.R. 76, 85-87, 89-90. Further, Spur completed a "Samsung Austin Semiconductor Saturn Project Enrollment Worksheet", expressly stating that it "hereby acknowledges and agrees that worker's compensation insurance coverage is being provided to [Spur] and its employees pursuant to an Owner/Contractor Controlled Insurance Program ('CCIP' I 'OCIP')". C.R. 78, 85-87, 89-90. Spur expressly agreed that the document "serves to memorialize the parties' agreement for purposes of Texas Labor Code sec. 406.123." C.R. 78, 85-87. The form was signed by a representative of Spur on October 15, 2010. C.R. 78, 85-87; see C.R. 89-90. This form was also sent to the OCIP Administrator. C.R. 78, 85-87, 89-90. Spur was issued a Certificate of Insurance showing it had enrolled in the OCIP. C.R. 80, 83, 85-87, 89-90, 92-126; see C.R. 154-55; C.R. 66 ("Each Enrolled Contractor will receive a separate Workers' Compensation policy."). The policy limits shown on the Certificate are identical to those workers compensation limits scheduled to be provided under the OCIP. Compare C.R. 80, 83 with C.R. 65; see C.R. 85-87, 89-90, 92-126. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page2 Appellant alleges he was injured on the job on December 7, 2010. See C.R. 4-5. At that date, Spur was already enrolled in the OCIP, including being issued a policy number of 10 WN QV6244 under the OCIP. C.R. 80, 83, 85-87, 92-126; see C.R. 154-55. The coverage period includes the alleged date of injury. See C.R. 80, 83, 85-87, 92-126. Therefore, any claim for on-the-job injury was covered by SAS's OCIP policy worker's compensation coverage. In summary, Appellant's direct employer Spur was required to and did enroll in the OCIP provided by SAS. The same OCIP provided coverage for Appellant's alleged on-the-job injury that is the basis of Appellant's suit. SAS moved for summary judgment on the basis that Appellant's suit against SAS was therefore barred by longstanding Texas law on workers compensation coverage. E.g., C.R. 18, 24-28, 178, 183-93. The trial court granted SAS's motion for summary judgment. C.R. 221. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page3 SUMMARY OF THE ARGUMENT The trial court properly granted summary judgment because SAS met all requirements for application of the workers compensation bar under Texas Labor Code section 406.123. Appellant argues for the application of section 406.122 to defeat summary judgment, citing to a case from another court of appeals. However, an absolute requirement of section 406.122 is not met, and Appellant's argument is therefore incorrect, according to Appellant's own favored statute and opinion as well as a prior opinion of this Court. The Court should affirm the decision of the trial court. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 4 ARGUMENT I. Appellant Concedes that Appellee Has Shown the Applicability of Texas Labor Code Section 406.123 as a Matter of Law, Confirming that Appellee is Entitled to Summary Judgment. Appellant's Brief argues only the applicability of Section 406.122 of the Texas Labor Code. Appellant does not dispute-and therefore concedes-that SAS has satisfied all requirements of Section 406.123 of the Texas Labor Code. 1 E.g., Tex. R. App. P. 38.1(h), (i) (noting the brief must contain the arguments being made). Appellant also does not dispute the established law that SAS' s satisfaction of section 406.123 makes it a deemed employer immune from suit by deemed employees. E.g., Tex. Lab. Code §§ 408.001 and 406.123; Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 435-36, 438 (Tex. 2009). Texas courts have repeatedly and consistently granted summary judgment under section 406.123 in this specific situation. The trial court merely agreed with and applied the existing legal authorities in granting summary judgment for SAS. Appellant's sole argument is that the Court should instead look to a separate statute. 1 Due to this concession, SAS will not add to the length of this Brief by detailing all the ways in which it has complied with section 406.123 as a matter of law. SAS did make this showing in its summary judgment briefing, which the trial court granted. E.g., C.R. 21-23, 24-28, 188, and 189-192. If Appellant claims that SAS must make this showing despite Appellant's failure to dispute the same as an appellate issue, SAS would request the opportunity to file supplemental briefing. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 5 II. Section 406.122 Does Not Apply to This Case and Therefore Cannot Defeat Summary Judgment. Appellant argues that SAS must both prove the applicability of section 406.123 and disprove the applicability of section 406.122 as a matter of law. Appellant does not address in any way the bevy of authority cited by SAS showing summary judgment is proper. In support of its claim, Appellant instead cites to one unpublished opinion currently pending before the Texas Supreme Court and having no binding authority on this Court. However, there are multiple reasons that Appellant's argument cannot prevail. The language of section 406.122 makes clear it is not applicable. Appellant's direct employer agreed that section 406.123 would apply. There is no evidence of a written agreement required to make section 406.122 applicable. This Court has previously dealt with the absence of the required written agreement and agreed with SAS that Appellant's favored statute is not applicable. Finally, these issues were raised before the trial court. Appellant had actual awareness of the reasons its argument is incorrect, and it has effectively conceded those reasons by failing to address them on appeal. A. Section 406.122's Requirements are Not Met. Texas Labor Code section 406.122 states that a subcontractor and its employees are not deemed employees of general contractor only if the subcontractor both: APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 6 ( 1) is operating as an independent contractor; and (2) has entered into a written agreement with the general contractor that evidences a relationship in which the subcontractor assumes the responsibilities of an employer for the performance of work. Tex. Lab. Code § 406.122(b ). Appellant argues that its self-serving declaration fulfills the evidentiary requirement for operating as an independent contractor. Appellant's Brief at 7-8. However, Appellant does not present evidence of, let alone even attempt to argue the existence of, the required written agreement. In the absence of the required written agreement, it is clear that section 406.122 has no applicability to this case. B. Spur Agreed to Section 406.123 Being the Applicable Authority. In contrast to the complete absence of the written agreement required to trigger section 406.122, Appellant's direct employer Spur explicitly agreed in writing to be bound by section 406.123. Spur enrolled in the OCIP provided by SAS, and its Enrollment Worksheet expressly states that it memorializes the parties' agreement for workers compensation coverage for the purposes of Texas Labor Code section 406.123. C.R. 78; see also C.R. 21-22, 27, and 188. In short, it was agreed that section 406.123 would govern, that SAS would be Appellant's deemed employer for purposes of the workers compensation bar, and that SAS would have immunity against Appellant through that statute. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 7 C. TIC Energy is Not Binding Authority and Conflicts with Precedent. Appellant relies on TIC Energy and Chemical, Inc. v. Martin, an opinion out ofthe Thirteenth Court of Appeals. No. 13-14-00278-CV, 2015 WL 127777 (Tex. App.-Corpus Christi Jan. 8, 2015, pet. filed) (mem. op.). It therefore can serve only as persuasive authority, though it is noted below why the opinion has no applicability to this case in even that capacity. Further, the status of TIC Energy cannot be determined. A petition for review on the opinion is currently pending before the Supreme Court. As the TIC Energy court acknowledges, it is the first court to reach the opinion it did. See id. at *4. SAS presented the trial court with a wealth of authority, all agreeing that the workers compensation bar applies when a general contractor satisfies Texas Labor Code section 406.123. C.R. 24-27. Appellant disputes none of this authority on appeal, and instead relies on a non- binding outlier opinion that may soon by overturned. D. TIC Energy is Not Applicable Under Its Own Terms. As noted above, Appellant's sole argument for error is that SAS must prove as a matter of law both that section 406.123 applies and section 406.122 does not apply, and that SAS has failed to do the latter. Appellant incorrectly interprets TIC Energy to make this argument. The court's opinion in that matter is much narrower. SAS pointed out Appellant's incorrectly broad interpretation before the trial court. C.R. 185-186. Appellant tellingly has not responded in any way on APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 8 appeal, indicating it cannot dispute the proper interpretation of the opinion. The court in TIC Energy actually says that a general contractor must disprove section 406.122 only in a specific factual scenario that causes section 406.122 to "irreconcilably conflict" with section 406.123. TIC Energy, 2015 WL 127777 at *4. The court makes its narrow opinion explicitly clear, stating it is: [A]ddressing a scenario, such as the one presented here, where a subcontractor enters into both: (1) an agreement with a general contractor under which the general contractor agrees to provide workers' compensation coverage to the subcontractor's employees, see TEX. LAB. CODE ANN. § 406.123(a); and (2) a written agreement with the general contractor under which the subcontractor assumes the responsibilities of an employer for the performance of work. See id. § 406.122(a). In such a scenario, section 406.123(e) unambiguously states that the general contractor is deemed the "employer" of the subcontractor for TWCA purposes, but section 406.122(b) unambiguously states that the subcontractor is not deemed an "employee" of the general contractor for TWCA purposes. See id. §§ 406.122(b), 406.123(e). We therefore conclude that, as applied to these facts, the two statutes irreconcilably conflict. !d. at *4 (italicized emphasis in original; underlined emphasis added). In other words, TIC Energy can on its face only possibly apply when both sections 406.122 and 406.123 are triggered. Under its own case law, Appellant can therefore only properly argue the application of section 406.122 when it is also triggered. As noted above-and as echoed in the TIC Energy opinion, id. at *2 (quoting Tex. Lab. Code§ 406.122)- section 406.122 requires a written agreement that does not exist in this matter. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 9 Again this issue was brought to the trial court's attention by SAS. C.R. 185- 186. Despite knowing of the issue, again Appellant has failed to address it on appeal, indicating it has no response. Appellant has not pointed to the required written agreement and has not argued that such an agreement exists? Appellant instead cites only to and attaches only Appellant's self-serving and conclusory declaration. C.R. 167-168. Even if this was proper evidence, the declaration does not mention any agreement with SAS, 3 let alone a written agreement that includes the terms required for section 406.122 and TIC Energy to be applicable. In summary, TIC Energy follows the plain language of section 406.122 in making clear that neither its opinion nor that statute is applicable in the absence of the required written agreement. As there is no evidence of such an agreement here, these authorities have no applicability to this matter. E. This Court Has Previously Considered and Rejected Appellant's Argument. This Court has considered this very issue and agreed with SAS that section 2 Appellant incorrectly claimed before the trial court that SAS was arguing for reversing the burden on summary judgment. SAS is instead merely noting that there is no evidence of the written agreement required to trigger Appellant's favored statute, section 406.122. Appellant's argument that this reverses the burden is effectively an argument that a summary judgment movant must not only present evidence for summary judgment but must also prove the nonexistence of all evidence against summary judgment. There is of course no requirement for SAS to affirmatively disprove the existence of all evidence that could in any way deny it summary judgment. SAS met its burden as the movant for summary judgment, Appellant failed to respond with evidence of a fact issue, and summary judgment was properly granted. E.g., Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996). 3 The only agreement of any kind mentioned in the declaration is with Durr. See C.R. 167. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 10 406.122 is not applicable when there 1s no evidence of the written agreement required by the statute. In Bedrock General Contractors, Inc. v. Texas Workers' Compensation Insurance Fund, appellant Bedrock General argued that its workers compensation premiums should not be calculated to include the employees of Bedrock Materials because Bedrock Materials was an independent contractor under section 406.122. No. 03-00-00426-CV, 2001 WL 253594, at *1-*2 (Tex. App.-Austin Mar. 8, 2001, pet. denied) (not designated for publication). 4 The Court noted that section 406.122 presumes that a subcontractor like Spur is an employee for workers compensation purposes, and therefore Appellant must overcome this presumption. !d. at *2. To overcome this presumption on summary judgment, Appellant must raise a fact question meeting two conditions: "(1) [Spur] operate[ d] as an independent contractor and (2) [Spur] enter[ed] into a written agreement with [SAS] 'evidenc[ing] a relationship in which [Spur] assumes the responsibilities of an employer for the performance of work."' !d. (quoting Tex. Lab. Code § 406.122(b)) (emphasis in original). The Court concludes that section 406.122 does not apply because there was no evidence of a "written agreement between [Bedrock General] and Bedrock Materials that evidenced an independent 4 Due to being not designated for publication, this case does not have precedential value. Tex. R. App. P. 47.7(b). However, it has strong value as persuasive authority, as it demonstrates that the Court has considered and previously rejected Appellant's argument on one ofthe same grounds that it should be rejected here. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 11 relationship." Id. at *8. In short, this Court previously made clear that a written agreement showing an independent relationship is an absolute requirement for section 406.122 to apply. This is the same argument SAS makes above, the same argument SAS made to the trial court, and the same argument Appellant continues to fail to address on appeal. Because there is no evidence of a qualifying written agreement-and Appellant does not even argue such a written agreement exists-it is clear under the Court's prior opinion that section 406.122 does not apply. Appellant claims its evidence shows Spur was operating as an independent contractor. However, the Court also dealt with that issue in Bedrock General and determined that such a claim is entirely irrelevant standing alone. That is only one of multiple necessary conditions, and the manner in which Spur operates is not sufficient to satisfy section 406.122 in the absence of a written agreement. I d. at *8 n.1 0 ("[Bedrock General] also claims that a fact issue exists with respect to whether Bedrock Materials operated as an independent contractor. 5 Because we conclude that a written agreement did not exist, we need not reach this argument."). Bedrock General makes clear that the Court has considered and agrees with 5 Note that this is the exact argument Appellant makes. E.g., Appellant's Brief at 5 ("[T]he evidence before the trial court demonstrated that Spur was operating as an independent contractor."). The Court property determined the argument was wrong when Bedrock General made it, and it remains wrong now that Appellant is making it. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 12 SAS's position that section 406.122 and TIC Energy have no application to this suit because there is no evidence of a written agreement satisfying section 406.122. F. Appellant Continues to Fail to Respond to Appellee's Arguments. Appellant is well aware of the issues with its argument for the applicability of section 406.122 and TIC Energy. In briefing to the trial court, SAS pointed out that Spur agreed to be bound by section 406.123, that TIC Energy is an outlier opinion with no binding authority, that section 406.122 and TIC Energy explicitly state they are not applicable without the written agreement that does not exist here, and that this Court has considered and rejected Appellant's argument. E.g., C.R. 21-22, 27, 78, 183-188. By failing to respond to any of these issues, Appellant concedes it has no response. 6 III. Appellant's Argument Puts OCIP Policies in Texas at Risk. Appellant argues that a deemed employer providing workers compensation coverage to deemed employees must also prove a negative: that section 406.122 does not apply. Appellant further argues that it is insufficient for SAS to demonstrate the complete absence of evidence of the qualifying written agreement 6 Bizarrely, Appellant instead incorrectly claims that "Samsung's motion for summary judgment never addressed section 406.122." Appellant's Brief at 7. Appellant presumably is aware this claim is incorrect, as SAS already addressed it before the trial court. C.R. 188; see also C.R. 27 & n.4. SAS did not address section 406.122 in more depth in its initial summary judgment motion because it was clearly inapplicable. Once Appellant incorrectly argued for its application, SAS briefed the issue in detail. C.R. 183-189. As noted above, it is Appellant that has failed to argue against any of the reasons given for why section 406.122 and TIC Energy do not apply here. APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 13 explicitly required by section 406.122 for that statute to be applicable. Appellant's argument puts a tremendous burden on general contractors like SAS who wish to ensure those working their projects have workers compensation coverage. In addition to the reasons given above for why Appellant's argument is incorrect, it is worth weighing the burden Appellant wishes to create against the public policy that strongly favors finding coverage. It is well-established law that the remedy for an employee alleging an on- the-job injury is limited to the recovery of workers' compensation benefits. Tex. Lab. Code § 408 .001(a). Texas courts have repeatedly noted the sound public policy behind the Legislature's decision to make workers' compensation benefit the employee's exclusive remedy. Under the Texas Workers' Compensation Act, employees are provided with certainty that their medical bills and lost wages will be covered if they are injured, without the time, expense, and uncertainty of litigation and without having to prove liability. HCBeck, Ltd. v. Rice, 284 S.W.3d 349, 350 (Tex. 2009); id. at 358 (quoting Wingfoot Enters. v. Alvarado, 111 S.W.3d 134, 142 (Tex. 2003)). In short, the Act guarantees that employees injured on the job are promptly covered for medical expenses regardless of fault. In return, the subscribing employer receives immunity from the tort claims of that employee. ld. at 350; id. at 358 (quoting Wingfoot, 111 S.W.3d at 142). Unsurprisingly, the Legislature and Texas courts have consistently favored APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 14 finding workers compensation coverage-and the immunity that comes with it-in scenarios like the one presented here. Doing so is in keeping with the Texas Supreme Court's recognition of the Legislature's '"decided bias' for coverage" in determining whether the exclusive-remedy defense applies. Id. at 358 (quoting Wingfoot Enters., 111 S.W.3d at 142) (emphasis in original). The Court has further recognized that multi-tiered contractor relationships are prevalent throughout Texas, and the bias for coverage requires favoring broad, blanket coverage and extending immunity throughout multiple tiers when workers compensation coverage is provided to employees. !d. at 358-59. Courts throughout Texas have responded by routinely finding broad, multi- tiered immunity resulting from OCIP policies like the one in this case. 7 OCIP 7 Specific to this case, the Texas Supreme Court has explicitly held that premises owners (like SAS) have immunity from claims for personal injuries made by employees of subcontractors (like Appellant). Summers, 282 S.W.3d at 435-36, 438; see also Garza v. Zachry Constr. Corp., 373 S.W.3d 715, 721 (Tex. App.-San Antonio 2012, pet. denied); Salinas v. Pankratz, No. 13- 10-00241-CV, 2012 WL 112812, at *3 (Tex. App.-Corpus Christi Jan. 12, 2012, no pet.); Lazo v. Exxon Mobil Corp., No.14-06-00644-CV, 2009 WL 1311801, at *2-3 (Tex. App.-Houston [14th Dist.] May 7, 2009, no pet.) (mem. op.). As additional examples of the broad findings of coverage with OCIPs: The general contractor has immunity from an employee of a subcontractor due to an OCIP purchased by the premises owner. HCBeck, 284 S.W.3d at 360; Cook v. White Constr. Co., No. 03-10-00114-CV, 2011 WL 3371542, at *5 (Tex. App.-Austin Aug. 4, 2011, no pet.); Hunt Constr. Grp., Inc. v. Konecny, 290 S.W.3d 238, 246 (Tex. App.-Houston [1st Dist.] 2008, pet. denied). A subcontractor has immunity from an employee of the premises owner due to an OCIP purchased by the premises owner. Garza, 373 S.W.3d at 721. A subcontractor has immunity from an employee of another subcontractor due to an OCIP purchased by the premises owner. Hunt Constr., 290 S.W.3d at 247; Funes v. Eldridge Elec. Co., 270 S.W.3d 666, 672 (Tex. App.-San Antonio 2008, no pet.). A premises owner has immunity from an employee of a subcontractor, even in the absence of an OCIP, because the premises owner agreed to reimburse the subcontractor for premiums the subcontractor paid to provide workers compensation coverage to its employees. Brooks v. Goodyear Tire & Rubber Co., No. 14-12-01048-CV, 2013 WL APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 15 policies "allow the highest-tiered entity to ensure quality and uninterrupted coverage to the lowest-tiered employees", thereby ensuring that all employees on a project receive the benefits contemplated by the Workers' Compensation Act. !d. at 359. The Texas Supreme Court has expressed concern that failing to find immunity in the case of an OCIP "would likely do away with'' that insurance option in Texas. !d. at 360 n.7; see Garza v. Zachry Constr. Corp., 373 S.W.3d 715, 723 (Tex. App.-San Antonio 2012, pet. denied). It is undisputed that Appellant received workers compensation benefits and that those have been covered by SAS's OCIP policy. The sound public policy behind the workers compensation bar has therefore been satisfied in this case. Affirming summary judgment is also in keeping with the Legislature's decided bias for finding coverage and applying the workers compensation bar. Affirming summary judgment also avoids conflicting with the Supreme Court's concern that failing to find immunity in cases where the purposes of OCIP policy have clearly been satisfied will lead to the elimination of this insurance option in Texas. Appellant's self-serving and conclusory declaration and citations to inapplicable statutory and case law does not change the result: the bevy of evidence and authority presented makes clear that SAS was and remains entitled to summary judgment. 3477288, at *3-4 (Tex. App.-Houston [14th Dist.] Jul. 9, 2013, no pet.). APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 16 CONCLUSION AND PRAYER Appellee Samsung Austin Semiconductor, LLC is indisputably entitled to summary judgment under Texas Labor Code section 406.123 and case law interpreting that statute. Appellee incorrectly argues for the application of section 406.122, as one of its absolute requirements is clearly not met. Appellee therefore asks that the Court affirm the summary judgment entered by the trial court, and for all other relief to which Appellee has shown itself justly entitled. Respectfully submitted, FEE, SMITH, SHARP & VITULLO, L.L.P. /s/ Jeffrey D. Boyd BRET A. SANDERS State Bar No. 24033152 JEFFREY D. BOYD State Bar No. 24069404 1801 South MoPac Expressway, Suite 320 Austin, Texas 78746 (512) 479-8400 (512) 479-8402 (Fax) bsanders@feesmith. com jboyd@feesmith. com ATTORNEYS FOR APPELLEE APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 17 CERTIFICATE OF COMPLIANCE This brief complies with Texas Rule of Appellate Procedure 9.4(i) because it contains 4,056 words, excluding the parts of the brief exempted by Tex. R. App. P. 9.4(i)(l ). In making this certificate of compliance, I am relying on the word count provided by the software used to prepare this document. Is/ Jeffrey D. Boyd BRET A. SANDERS JEFFREY D. BOYD CERTIFICATE OF SERVICE THIS WILL CERTIFY that a true and correct copy of the foregoing instrument has been mailed, telecopied, emailed, or hand-delivered to all attorneys of record in this cause of action on the 8th day ofDecember, 2015. Via Certified Mail/RRR Via Certified Mail/RRR Matthew J. Kita Kenneth "Tray" Gober, III P.O. Box 5119 Robert W. Lee Dallas, TX 75208 Lee, Gober & Reyna (214) 347-7221 (Fax) 11940 Jollyville Road, Suite 220-S matt@mattk:ita.com Austin, TX 78759 Appellate and Trial Counsel for Trial Counsel for Appellant Appellant Is/ Jeffrev D. Boyd BRET A. SANDERS JEFFREY D. BOYD APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 18 APPENDIX Bedrock General Contractors, Inc. v. Texas Workers' Compensation Insurance Fund, No. 03-00-00426-CV, 2001 WL 253594 (Tex. App.-Austin Mar. 8, 2001, pet. denied) (not designated for publication) TIC Energy and Chemical, Inc. v. Martin, No. 13-14-00278-CV, 2015 WL 127777 (Tex. App.-Corpus Christi Jan. 8, 2015, pet. filed) (mem. op.) APPELLEE SAMSUNG AUSTIN SEMICONDUCTOR'S BRIEF Page 19 Bedrock General Contractors, Inc. v. Texas Workers' ... , Not Reported in .. . 2001 WL 253594 summary judgment that the Fund obtained against Bedrock General. 2001 WL 253594 Only the Westlaw citation is currently available. We have jurisdiction over this interlocutory order, which the district court severed for NOTICE: NOT DESIGNATED FOR purposes of appeal. See M.yffbe ~·. NO.I:i. SCifi PUBLICATION. UNDER TX R RAP ' .W.2tl590. 59 ! (Tex. l 993l: Po11 Am. l'dmfetun RULE 47-7, UNPUBLISHED OPINIONS Cmp, y, Te.-r:@. Ew;~ Cil~!/ is. inc., 875 S.W.2d 695, 699 ITex. l994). In its response, appellant offered copies of two TWCC-85 forms as summary judgment proof that ~/!Net:J © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Bedrock General Contractors, Inc. v. Texas Workers' ... , Not Reported in ... 2001 WL 253594 Once the movant establishes a right to summary judgment, the non-movant must expressly present any DISCUSSION reasons avoiding the movant's entillement and must support the response with proof to establish a fact In its second issue on appeal, B. appellant contends that issue. McC9.!11J.?lll'. Sm!thffidc. !ndep, S_c;h._O.i!i.L. _8~_8 the district court erred by granting partial summary S. W.2d 337, 34 J ITcx .1993); C ill' 11 f Hou:vwn v. judgment because the evidence below raises issues of .'/ear Creek BasirJ ;hllh .. 589 S. W.2d 67 1 678-79 material fact. Specifically, appellant complains that fTcx. l979) . fi Evidence is viewed in the light most fact issues exist as to whether a written agreement favorable to the non-movant with all reasonable existed evidencing Bedrock Materials' independence inferences indulged. @ 9.11, 690 S.W.2d al 54 8-49. from appellant. The district court expressly found that Similarly, any doubts are resolved in favor of the non- appellant subcontracted work to Bedrock Materials movant. !d. and carried its employees on its payroll without the required written agreement. The issue, then, The burden of proof, however, does not shift to is whether appellant has raised a fact issue that the non-movant.CQSSQ v. Bm!J.d..J_7.9.S.W2r:J_~~.L Adcox for appellant and Speer for Bedrock Materials 556 ITcx. J98\)); Cirv o(! ! o U.I'fiJ /1 v. Clear Creek either signed such a written agreement or authorized 61l.,_£?.L ITcx 1279) !lJ1.1'.hu 1.JJJlJ...._589 S_,_W,2d someone to sign on their behalf. ("Summary judgments must stand on their own merits"). Appellant contends in its first issue that the When the district court expressly states the grounds Fund is not entitled to summary judgment on which summary judgment was granted, we must because it failed to present any evidence of consider the grounds on which the district court damages, an essential element of a breach of ruled.G7lr;in'?CJ.!LLif..? ln!i.. _Cdd. y.J:.C!.l?.!i, 9.27_ S,W.2d contract claim. Sn vder v. Eanes !ndep. Sell. Dist., SJiLS~W.,2~.L 69L9.2~- (I~l>,APP~:All~!in 6Lt 62~ (I~z<,.J996). 7 In its summary judgment 129__3, ' ·!I de :tlliU. We find that the Fund did order, the district court concluded that appellant include evidence to show appellant's premiums subcontracted work to Bedrock Materials but that if calculated to include Bedrock Materials's no written agreement evidencing an independent employees who worked for appellant under relationship existed between the general contractor and contracts. Specifically, the Fund included in subcontractor. The district court order then entered its summary judgment proof the affidavit of judgment in favor of the Fund for liability on its Ann Pollack, Manager of the Fund's Premium breach of contract claim "calculated on the additional Investigation Unit, with attached exhibits, payroll of employees of Bedrock Materials, Inc. who including the demand letter sent to appellant, that perfonned subcontracted work for Defendant Bedrock identified the amount of unpaid premiums owed General Contractors, Inc. during the time period to the Fund. While partial summary judgment January 21, 1994 to January 21, 1997." may be granted strictly on the issue of liability even if a genuine issue exists as to the amount of damages, I~&'R. iv. P. 166!l(tl), here, the parties But a reviewing court is not limited by a recitation have stipulated that if the summary judgment of grounds in a judgment. Cim:!mw li U(e Ins. Co. were upheld on appeal, the additional unpaid v. CqtesL9_ll__S,W...2d_92_3,_625 _(T~J9_9_Q). In the premiums would be $165,000. We overrule interest of justice, our review may consider other appellant's first issue. possible grounds for a judgment if the movant has presented these issues to the district court and has We must initially determine whether the Fund has preserved them. !d. In this case, a review beyond met its summary judgment burden. When moving for the district court's judgment is not warranted summary judgment, a plaintiff must present summary because the parties have confined their briefing judgment proof that supports each element of its to the ground set forth in the court's judgment. claim to demonstrate an entitlement to judgment. See Acker v. Texas Water Comm'n. 790 S.W~2d __2.2.9, JjtJ -Q2_(Tex , L99Q). Therefore, to obtain summary judgment on the issue of liability with respect to its Y,',,NeiiX © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Bedrock General Contractors, Inc. v. Texas Workers' ... , Not Reported in ... 2001 WL 253594 breach of contract claim, the Fund must prove the TWCC-85 form, marked as deposition exhibit 54, were following essential elements in a suit for breach of not genuine and that Speer had not authorized anyone contract: (I) that a valid contract existed, (2) the to sign the form on his behalf. Because the TWCC-85 plaintiff performed or tendered performance, (3) that form states that the agreement takes effect "no sooner the defendant breached the contract, and (4) that the than the date it is signed," the Fund maintains that the plaintiff was damaged as a result of the breach. Snvder form requires valid signatures of a general contractor 1. /S(llle.l" lndep , Sch. Dj.1·t., 860 S.W .2d 692, 695 and a subcontractor to be effective. In this case, the {I~Xd-\_J2 p .-Au~1inJ.22l,_ wri I d~ni~d_l. Here, the parties valid signatures needed to include those of Adcox and do not dispute the existence of the contracts at issue, Speer or of any person authorized to sign the fom1. the workers' compensation insurance policies, or that the Fund provided coverage under the contracts. During his deposition, Adcox specifically denied signing the TWCC-85 form at issue. Likewise, in his *5 At the outset, we must determine what summary deposition, Speer testified unequivocally that he did judgment evidence was properly before the district not sign the TWCC-85 fonn at issue. In addition, Speer court. Because neither party obtained an express or stated that he had not authorized anyone to sign this implied ruling on its objections to the evidence and the form on his behalf. district court did not refuse to rule, we will consider all of the evidence that was before the district court. Challenging Speer's deposition testimony, appellant SeeTcx. R.A _ .P. 33 . .l a 2 . The summary judgment cites us to portions of Speer's deposition testimony evidence consisted of various responses to discovery, that contain inconsistencies regarding whether he deposition testimony, and affidavits of employees of authorized other individuals to sign his name. This the parties as well as the affidavit of appellant's testimony, however, is limited to Speer recalling one risk manager, Donald D. Cook. The exhibits to the instance when he gave an individual power of attorney depositions were not included in the record. to purchase a dump truck on his behalf and another when he authorized an employee to sign company To demonstrate that summary judgment should be payroll checks while he was on vacation. Speer also granted, a movant must offer admissible evidence. admitted to authorizing Adcox to sign payroll checks JJ.wJ.gd__ fl.loo_tl_S..?.l.:Y§, _Y~ _LQIJ,gQ_r/q, 93 8 S. W.2d 29,_;3_Q on several occasions. This evidence, however, does (Tex.l997). Any fact that the movant seeks to establish not controvert Speer's testimony that he did not sign conclusively must be subjected to verification or the TWCC-85 form at issue and that he did not denial. !J.quer __Y~ .ktsm __2_4('i___S~.W.2d j)2,_ 55('i authorize anyone else to sign this form on his behalf. O"ex.App.- oqJu~ Chd;;ti__l2_21. __n_g__ _w:tit). A matter We conclude that this evidence is sufficient to support may be conclusively established by uncontroverted summary judgment because it is "clear, positive and testimony from an interested witness "if the evidence direct, otherwise credible and free from contradictions is clear, positive and direct, otherwise credible and and inconsistencies, and could have been readily free from contradictions and inconsistencies, and could controverted."Tcx.R. iv.P. 166a(c). have been readily controverted."Tex. .Ci .P. 6a c . *6 Contending that it has raised a genuine issue of The Fund presented summary judgment proof material fact, appellant refers us to an exhibit attached establishing that (i) appellant executed three contracts to its response to the Fund's motion for summary for workers' compensation insurance with the Fund judgment, the affidavit of Donald D. Cook. Summary in 1994, 1995, and 1996; (ii) the Fund perfonned judgment proof must be admissible under the rules its duties under the contract; and (iii) appellant was of evidence. Longqria, 938 S. W.2d al 30. Affidavits a general contractor that subcontracted its work to, in support or in opposition to a motion for summary among others, Bedrock Materials. In support of its judgment must be made on personal knowledge, must position that no written agreement existed between set forth such facts that would be admissible in appellant and Bedrock Materials, the Fund offered evidence, and must show affirmatively that the affiant summary judgment evidence, the deposition testimony is competent to testify to the matters stated therein. of Adcox and Speer, to show that the signatures on the Tex.R . iv.P. 166aCQ; see also Rvland Groua inc. y, Ne;,,t © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Bedrock General Contractors, Inc. v. Texas Workers' ... , Not Reported in ... 2001 WL 253594 1Lqqq, 924 S.W)d 120, 122 CI~.lcl999). A conclusory witness affidavit will not support a summary judgment. Appellant also asserts thal the 1994 TWCC-85 form EaJi£ULBttJli[f. 99H S.W .2d 882. 890 (I_cx_._l999). and exhibit 54 attached to Cook's affidavit are evidence The prohibition of conclusory evidence does not mean alone that a written agreement existed between that logical conclusions based on stated underlying appellant and Bedrock Materials. The record, however, is devoid of any specific reference to the 1994 TWCC-85 fonn much less evidence that, as required But conclusory evidence is improper if it fails to by its terms, the 1994 TWCC-85 form was signed by explain the basis of the witness's statements to link the the representatives of appellant and Bedrock Materials conclusions to facts. ld. or by someone authorized by these representatives. We believe the only possible written agreement in Attached to Cook's affidavit are six pages of the record about which a fact issue could be raised is records consisting of copies of transmittal letters, exhibit 54. two TWCC-83 fonns, and two TWCC-85 fonns. A transmittal letter dated February 14, 1996, is identified *7 Appellant further argues that an issue of material as deposition exhibit 54 and appears to include fact exists regarding whether Speer authorized TWCC-83 and -85 forms dated February 2, 1996.2 The someone to sign exhibit 54 on his behalf. Appellant forms purport to bear the signature of Adcox on behalf first points to Adcox's deposition testimony, asserting of appellant and Speer on behalf of Bedrock Materials. that Speer authorized him to sign checks, insurance forms, and other documents on behalf of both appellant and Bedrock Materials. Adcox testified that At one point in Speer's deposition, the parties while he did not sign exhibit 54, he authorized indicate that Exhibit 54 is a duplicate or the other employees to sign various documents, including "same as" Exhibit 23. Although the record is not clear, we will assume that Exhibit 54 is an TWCC documents, on his behalf. In contrast, Speer exhibit containing three pages and consisting of testified that he did not sign exhibit 54 or authorize a transmittal letter, a TWCC-83 form, and a anyone to sign the form on his behalf. Appellant TWCC-85 form. contends that because Adcox testified that he and Speer both authorized others to sign their names on Although Cook testified extensively by deposition, unspecified documents that a fact issue exists as to in his affidavit he acknowledged only that he had whether they signed the TWCC-85 form at issue. We been responsible for preparing and filing "appropriate disagree. forms" with the Fund. In addition to exhibit 54, an unmarked TWCC-85 form dated February 14, 1994 is Adcox did not testify that he or Speer authorized attached to Cook's affidavit. The affidavit makes no anyone to sign exhibit 54. Adcox does not assert that he mention of the signatures in question, averring only had personal knowledge that Speer authorized anyone that the documents were "prepared by or under his to sign this exhibit nor does he claim to recognize direction." the handwriting on the form. Rather, Adcox asserts in a conclusory manner that Speer authorized others to This testimony, then, does not establish who signed sign his name. Conclusory statements devoid of the the TWCC-85 forms, nor does it establish that requisite facts are insufficient to raise fact issues on any unknown person who might have signed the summary judgment. Rvland Crou~224 S.W.2d forms was authorized by Adcox, Speer, or any other authorized person. We reject any legal or factual !!L12.2. Because Adcox's testimony does not address the specific document at issue here, we must conclude conclusions that either of these attached TWCC-85 that his testimony lacks a sufficient factual basis to forms constitutes valid written agreements because raise a genuine issue of material fact. there is no supporting basis in fact. Earle, 998 S. W .2d ill_..a2_Q. Also, no facts are presented in this affidavit Appellant also offers the testimony of Kathy Holmes, to permit us to reasonably infer the validity of either one of appellant's employees who had previously TWCC-85 form or to raise a doubt about the asserted worked for Bedrock Materials. During her deposition, invalidity of exhibit 54. · Ne;.:t © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Bedrock General Contractors, Inc. v. Texas Workers' ... , Not Reported in ... 2001 WL 253594 Holmes was shown a TWCC-85 form designated documents for which Speer had previously authorized as exhibit 23, which is not identified or otherwise the use of his signature. Moreover, Cook's deposition included in the record, as well as exhibit 54. Holmes testimony, even if taken as true, is contradictory. was unable to identify the signature on the exhibit as SeeT(,.R.C:iY.P~ Lt?fl~APP - -Te.l\ n rls.,) 66a(g); denying its motion for summary judgment in a Joe v. Two Thirtv Nine .Joint VentiJre. 145 S. W.Jd l5Q, lawsuit brought by appellee, Kevin Bradford Martin. 157_LThXc.2QQ_4). We review the trial court's summary The issue presented is whether the Texas Workers' judgment ruling de novo. ,Log,_J45._ S.W. ~!:L..i!LU..Q; Compensation Act ("TWCA") bars suit against Nalfe Pfostics Familv LP. v. Pol'/er. Roger ·, Dc!hJJJJcm an independent subcontractor whose employees & Gordon, P.C., 406 S.W.3d 186. 199 (Tex. App.- were covered by the general contractor's workers' Com as _Cbrisli 20J.J..,J]e . den i ~. We take as true all compensation insurance policy. We affirm. evidence favorable to the non-movant, and we indulge every reasonable inference and resolve any doubts in the non-movant's favor. J'.g_{gJJg_(}_QperatiTJg ___Q,__ y._ Dorse!L !64 S.W.3d 656. 66 l_(I<:'---'-"'-"'"-'--"'-"-'"-"-' provides that: (holding that an OCIP may qualify as "providing" workers' compensation insurance to subcontractors (b) A subcontractor and the subcontractor's under section 406.123(a)). TIC also alleged that, employees are not employees of the general "[a]cting under Dow's authority and in order to contractor for purposes of this subtitle if the implement the OCIP, [UCC] deducted the cost of the subcontractor: actual OCIP premiums, based on payroll, for TIC's (1) is operating as an independent contractor; and coverage from TIC's earnings under the Agreement." SeeTEX. LAB. CODE AN N. § 406.123(d). (2) has entered into a written agreement with the general contractor that evidences In support of its motion, TIC attached a March 13, a relationship in which the subcontractor 2008 "Agreement for Services" between UCC and assumes the responsibilities of an employer for Gulf States, Inc. ("Gulf States"), TIC's predecessor, the performance of work. under which Gulf States agreed to provide certain \'i'>: ',,\,j'tiNe:.;t © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 TIC Energy and Chemical, Inc. v. Martin, Not Reported in S.W.3d (2015) 2015 WL 127777 mechanical maintenance services at the Seadrift However, he argues that sec:tion 4Q6.1 :2,3 is trumped by facility. The agreement contained the following the language of the preceding statute, section 406.122, provision regarding insurance coverage: which states that a subcontractor who enters into an agreement with a general contractor and "assumes the *3 18.3 Insurance Provided under "Owner responsibilities of an employer for the performance Controlled Insurance Program"-UCC agrees of work" is not a deemed employee. !d. § 406.122. upon the terms and conditions contained Martin further notes that, under the agreement at herein, as part of [Dow's OClP], to procure, issue, TIC-not UCC-is responsible for adequately maintain during the life of this Contract, supervising TIC's employees; for ensuring that TIC's and pay for, in the name of [Gulf States], employees follow work site rules and regulations; for Workers' Compensation and Employer's Liability "maintaining acceptable safety performance"; and for insurance and Commercial General Liability investigating incidents that occur on the work site. insurance in amounts equal to or, at UCC's Finally, Martin points out that the agreement contains sole discretion, greater than the minimum limits, specific provisions designating UCC as the "statutory required in Subsections 18.1.1 and 18.1.2 of the employer" for "Contractors providing Services in Contract. Louisiana" and "Contractors providing Services in Michigan" but that there is no similar clause for Texas workers. Martin argues that there is at least a disputed 18.3.1 The insurance m Section 18.3 IS issue of material fact as to whether the agreement for the protection of [Gulf States] and "evidences a relationship in which [TIC] assumes the any Subcontractors who will be performing responsibilities of an employer for the performance of services on UCC property as part of the work." I d. § 406.122(b )(2). Contract.... TIC does not appear to dispute the notion that UCC also attached an affidavit by a Dow it operated as an independent contractor; instead, representative which stated that "Dow's OCIP it argues that it must be a "deemed employee" provided workers' compensation insurance coverage under sec tion 406. 123 regardless of its independent for [UCC]'s contractors and/or subcontractors enrolled status. In support of its position, TIC cites Garza in the program for on-site activities at the Seadrift v. Zachry Construction Corp., in which the San facility." The Dow representative further averred that Antonio court of appeals held that a subcontractor Gulf States's name change to TIC was properly was properly considered a "deemed employee" under reported to the OCIP administrator and that, "[a]t all section 406.123 and was therefore entitled to assert material times, including at the time made the basis of the exclusive remedy bar. 373 S.W.Jd 715. 72 1 this suit, TIC was an enrolled and active participant in LTe~£\pp .-~fl_IJ, Antoni9__1 _ QJ),, pet _d_~Jikd). This Dow's OCIP program." was the case even though the contract at issue contained language specifying that the subcontractor In response to TIC's summary judgment motion, was an "independent contractor." Id. The First Martin argued that the exclusive remedy provision Court of Appeals reached a similar conclusion in did not apply because: (I) TIC is an independent Etie v. .lf.t.il.~b_ &UA.l]J_erl _Co.. 135 S. W.3 d 764 contractor of UCC; and (2) TIC entered into a contract with UCC under which TIC "assume [d] the In Etie, the injured plaintiff asserted that the responsibilities of an employer for the performance appellee, a lower-tier subcontractor, could not be a of work." Id. § 406.122(b). Martin notes that "deemed employee" because the TWCA's definition independent contractors are explicitly excluded from of "employee" excludes independent contractors, and the TWCA's definition of "employee." See id. § the subcontractor had conceded at oral argument that 40l.012(b) (West, Westlaw through 2013 3d C.S.). it was an independent contractor. l_d, at 767 (citing Martin concedes on appeal that TIC's agreement ODE ANN. § 401.0 12(b}(l)). :2 The with UCC is "similar" to the type of agreement court disagreed, noting that the TWCA "[ c]!early ... contemplated by §~ ti on_1QJj_)2~_- Seeid. § 406.123. contemplates that independent contractors may, in > Net!.t © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 TIC Energy and Chemical, Inc. v. Martin, Not Reported in S.W.3d (2015) 2015 WL 127777 certain circumstances, be considered 'employees' would not be considered [the general contractor]'s despite not meeting the definition of an 'employee' employees for workers' compensation purposes"); in section 40:1 .0 12(b)(2) .' " Jd. The court held that 135 S.W.Jd ul 766-67 (plaintiff argued that l:."JJ e "the provision of workers' compensation insurance subcontractor could not be "deemed employee" transforms an independent contractor into a 'deemed because TWCA's definition of "employee" excludes employee' " for TWCA purposes. ld. And the independent contractors and that the exclusive remedy court saw "no reason why this shift in status from bar may not be asserted by lower-tier contractors). 'independent contractor' to 'deemed employee,' with Garza and Etie are therefore not controlling. its concomitant protections, should be denied to lower tier subcontractors." !d. The court held that In 2001, the Austin court of appeals had the "the purposes of the [TWCA J are best served by opportunity to apply section 406.122 when it deeming immune from suit all subcontractors and considered whether a general contractor was lower tier subcontractors who are collectively covered required to pay workers' compensation insurance by workers' compensation insurance"; but it hastened premiums for a subcontractor's employees. to add that "we do not abrogate the right of an injured /Jedmr:k Gi!n. Crmlractors . .Inc. v. Tex. Workers' worker to sue a subcontractor or its employees when Comp. ins. FullCI, _Nq,_QJ- OO- OQ426-::.CY,_2.QQJ that subcontractor retains its status as an independent WL. 251~94,