Summary
holding consideration of one type of waiver in administrative proceeding did not equate to a different type of waiver argument
Summary of this case from NORTHSIDE ISD v. DUBOSEOpinion
No. 14-03-00629-CV.
Memorandum Opinion filed April 8, 2004.
On Appeal from the 11th District Court, Harris County, Texas, Trial Court Cause No. 00-65452.
Reversed and Remanded.
Panel consists of Justices FOWLER, EDELMAN and SEYMORE.
MEMORANDUM OPINION
Appellant, Trinity Universal Insurance Company ("Trinity"), appeals from a judgment in favor of appellee, Yolanda Berryhill, in Trinity's action for judicial review of a workers' compensation commission decision awarding benefits to Berryhill. In one issue, Trinity contends the trial court erred in granting Berryhill's motion for partial summary judgment on the ground that Trinity waived its right to contest compensability of her injury. We reverse and remand
Background
Berryhill made a claim under the Texas Workers' Compensation Act ("the Act") alleging she was injured on November 5, 1999 in the course and scope of her employment with AIM Administrators, Ltd. She filed her written notice of injury on March 28, 2000. Eight days later, Trinity, AIM's workers' compensation carrier, filed its "Notice of Refused/Disputed Claim" contesting that Berryhill sustained a compensable injury in the course and scope of her employment.
Trinity asserted that Berryhill was on a lunch break, not furthering her employer's business, and not within her employer's premises when she was injured.
A benefit review conference was held, but the parties did not reach an agreement. The parties proceeded to a contested case hearing. The hearing officer rendered a written decision on October 2, 2000 concluding (1) Berryhill sustained a compensable injury in the course and scope of her employment, (2) she has a continuing disability as a result of the injury, (3) she timely reported her injury, (4) she was not barred from pursuing workers' compensation benefits by electing to receive benefits under a group health insurance policy, and (5) Trinity waived its right to contest compensability based on Berryhill's untimely reporting of injury or election of remedies. Trinity was ordered to pay benefits in accordance with the decision. Trinity filed an appeal with the commission appeals panel. The appeals panel did not timely issue a written decision. Therefore, the hearing officer's decision became the final decision of the appeals panel.
See generally TEX. LAB. CODE ANN. §§ 410.021-034 (Vernon 1996 Supp. 2004).
See generally TEX. LAB. CODE ANN. §§ 410.151-169 (Vernon 1996 Supp. 2004).
See generally TEX. LAB. CODE ANN. §§ 410.201-208 (Vernon 1996 Supp. 2004).
See TEX. LAB. CODE ANN. § 410.204(a), (c) (Vernon 1996).
Trinity filed the underlying action in state district court on December 22, 2000 seeking judicial review of all issues decided by the hearing officer and adopted by the appeals panel. While the case was still pending in the district court, the Texas Supreme Court decided Continental Casualty Co. v. Downs holding that a carrier which does not initiate benefits or file a notice of refusal within seven days after receiving notice of injury may not contest compensability. 81 S.W.3d 803, 807 (Tex. 2002). Several weeks after that decision, Berryhill filed an amended answer citing Downs and pleading that Trinity waived its right to contest compensability by failing to file its notice of refusal within seven days after receiving Berryhill's notice of injury.
See generally Tex. Lab. Code Ann. §§ 410.251-308 (Vernon 1996 Supp. 2004).
The court affirmed a decision of the San Antonio Court of Appeals issued while Berryhill's contested case hearing was pending. See Downs v. Cont'l Cas. Co., 32 S.W.3d 260 (Tex. App.-San Antonio 2000), aff'd 81 S.W.3d 803 (Tex. 2002). All subsequent references to Downs are to the Texas Supreme Court's decision unless otherwise noted.
Berryhill subsequently moved for partial summary judgment on the same ground. The trial court granted the motion for partial summary judgment. After a bench trial on the remaining disability issue, the trial court entered a final judgment affirming the appeals panel decision. The trial court denied Trinity's motion for new trial and motion to set aside and modify the partial summary judgment. This appeal followed.
Analysis
In one issue, Trinity contends the trial court erred in granting Berryhill's motion for partial summary judgment on the ground that Trinity waived its right to contest compensability of her injury. A defendant, as movant, is entitled to summary judgment if it (1) disproves at least one element of each of the plaintiff's theories of recovery, or (2) pleads and conclusively establishes each essential element of an affirmative defense thereby rebutting the plaintiff's cause of action. Burroughs v. APS Int'l, Ltd., 93 S.W.3d 155,159 (Tex. App.-Houston [14th Dist.] 2002, pet. denied) (citing City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 679 (Tex. 1979)). Our standard for reviewing summary judgments is well-established. Id. (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985)). The summary judgment movant has the burden of showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Id. In deciding whether there is a material disputed fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true. Id. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor. Id.
Section 409.021 of the Act sets forth a carrier's obligations after receiving a notice of injury. The version of section 409.021 governing Berryhill's claim provided:
(a) An insurance carrier shall initiate compensation under this subtitle promptly. Not later than the seventh day after the date on which an insurance carrier receives written notice of an injury, the insurance carrier shall:
(1) begin the payment of benefits as required by this subtitle; or
(2) notify the commission and the employee in writing of its refusal to pay and advise the employee of:
(A) the right to request a benefit review conference; and
(B) the means to obtain additional information from the commission.
. . .
(c) If an insurance carrier does not contest the compensability of an injury on or before the 60th day after the date on which the insurance carrier is notified of the injury, the insurance carrier waives its right to contest compensability. The initiation of payments by an insurance carrier does not affect the right of the insurance carrier to continue to investigate or deny the compensability of an injury during the 60-day period.
See Acts 1993, 73rd Leg., ch. 269, § 1 (amended 2003) (current version at TEX. LAB. CODE ANN. § 409.021 (Vernon Supp. 2004)).
Section 409.021 has been amended, and a carrier is now allowed fifteen days to initiate benefits or notify the commission and the claimant of its refusal to pay benefits. See TEX. LAB. CODE ANN. § 409.021. However, the amendments apply to injuries occurring on or after September 1, 2003. See id. The version of section 409.021 in effect at the time of Berryhill's injury governs her claim. See id.
In Downs, the Texas Supreme Court interpreted a carrier's obligations under the former version of section 409.021. 81 S.W.3d at 806-07. A carrier must initiate benefits or file a notice of refusal within seven days of receiving notice of injury. See id. at 806. Taking some action within seven days after receiving notice of injury entitles the carrier to a sixty-day period to investigate or deny compensability. See id. at 807. However, a carrier that does not initiate benefits or file a notice of refusal within seven days after receiving notice of injury may not contest compensability. See id. Relying on Downs, Berryhill asserted in her motion for summary judgment that Trinity waived its right to contest compensability because it did not file its notice of refusal within seven days after receiving her notice of injury.
Section 409.021 was amended after Downs and now specifically provides that a carrier which fails to comply with section 409.021(a) does not waive the right to contest the compensability, but commits an administrative violation. See TEX. LAB. CODE ANN. § 409.021(a-1).
Trinity contends that Berryhill may not raise this waiver issue during judicial review because it was not decided by the commission appeals panel. Section 410.302 of the Act provides that judicial review on issues regarding compensability and benefits "is limited to issues decided by the commission appeals panel and on which judicial review is sought." TEX. LAB. CODE ANN. § 410.302 (Vernon 1996); see St. Paul Ins. Co. v. Mefford, 994 S.W.2d 715, 719-20 (Tex. App.-Dallas 1999, pet. denied) (holding carrier's failure to raise its right to reopen issue of compensability before appeals panel precluded trial court from considering the right to reopen issue); ESIS, Inc., Servicing Contractor v. Johnson, 908 S.W.2d 554, 561-63 (Tex. App.-Fort Worth 1995, writ denied) (citing section 410.302 and holding carrier was barred from presenting intoxication defense to compensability during judicial review by failing to raise it during the administrative process).
Berryhill responds that she may raise " Downs waiver" during judicial review because a waiver issue was considered during the administrative proceeding. We disagree. Although a waiver issue was considered, the " Downs waiver" issue was not in the administrative proceeding. During the administrative proceeding, Trinity claimed Berryhill's injury was not compensable because it did not occur in the course and scope of her employment, she did not timely report it, and she elected to receive benefits under her group health insurance policy. Relying on section 410.022 of the Act, the hearing officer determined that Trinity waived its right to contest compensability based on untimely reporting of injury and election of remedies by failing to raise these grounds in its notice of refusal. However, this issue is distinct from the issue of whether Trinity waived its right to contest compensability altogether under section 409.021 by failing to timely file its notice of refusal. The hearing officer made no conclusion on whether Trinity waived its right to contest compensability altogether by failing to timely file its notice of refusal. There is no indication that this issue was even raised during the contested case hearing.
Section 410.022 provides that a carrier's notice of refusal under Section 409.021 must specify the grounds for refusal. TEX. LAB. CODE ANN. § 409.022(a) (Vernon 1996). The grounds for refusal specified in the notice constitute the only basis for the carrier's defense on the issue of compensability in a subsequent proceeding, unless the defense is based on newly discovered evidence that could not reasonably have been discovered at an earlier date. TEX. LAB. CODE ANN. § 409.022(b) (Vernon 1996).
The hearing officer also determined that Trinity's subsequent defense on these grounds was not based on newly discovered evidence which could not have been reasonably discovered at an earlier date. See TEX. LAB. CODE ANN. § 409.022(b).
Instead, the hearing officer considered the merits of Trinity's remaining challenge to compensability — whether the injury occurred in the course and scope of Berryhill's employment.
Nevertheless, Berryhill asserts she may raise " Downs waiver" for the first time during judicial review because she had "good cause" for failing to raise it during the administrative proceeding. She notes Downs was not decided by the Texas Supreme Court until after the judicial review was filed. She further notes the commission had previously advised that the San Antonio court's Downs decision should not be considered precedent until finally disposed of by the Texas Supreme Court. See Tex. Workers' Comp. Comm'n Advisory 2000-07 (2000); Advisory 2001-02 (2001); Advisory 2002-08 (2002).
While Berryhill's contested case hearing was pending, the commission issued Advisory 2000-07 stating it had consulted with the Attorney General and understood the San Antonio court's Downs decision "should not be considered as precedent at least until it becomes final upon completion of the judicial process." See Advisory 2000-07. After Trinity filed for judicial review, the commission reiterated this advice. See Advisory 2001-02. After the Texas Supreme Court affirmed Downs, the commission advised that the decision was not final until all opportunities for rehearing were exhausted, but stated parties may present the Downs issue to the commission. See Advisory 2002-08. Ten days after Advisory 2002-08, Berryhill raised the " Downs waiver" issue in her amended answer.
However, the Act contains no "good cause" exception to section 410.302. See generally TEX. LAB. CODE ANN. §§ 410.301-308. "There is no provision in the Act authorizing the trial court to enlarge this scope of review by considering issues, or evidence probative of issues, that were not determined by the commission appeals panel." ESIS, Inc., 908 S.W.2d at 562 (rejecting employer's argument it should have been allowed to introduce intoxication evidence for the first time on judicial review because it was "newly discovered" after the appeals panel decision). We recognize Berryhill may have merely relied on the commission's advisories in failing to raise the waiver issue before Downs was finally decided by the Texas Supreme court. Nevertheless, we must apply section 410.302 as written. See Drilex Sys., Inc. v. Flores, 1 S.W.3d 112, 123 (Tex. 1999) (recognizing the Legislature is presumed to intend the plain language of its enactments, and courts must give effect to that intent although the result may seem harsh); Moran v. City of Houston, 58 S.W.3d 159, 162 (Tex. App.-Houston [14th Dist.] 2001, pet. denied) (recognizing courts must take statutes as they find them although the result may seem harsh or unfair).
The only statutory exception to section 410.302 is that evidence of the extent of impairment is not limited to that presented to the commission if the court, after a hearing, finds that there is a substantial change of condition. See Tex. Lab. Code Ann. § 410.307.
In contrast, the Act allows an issue not raised at a benefit review conference to be raised at a contested case hearing upon a finding of "good cause." See Tex. Lab. Code Ann. § 410.151; see also Tex. Workers' Comp. Comm'n, Appeal No. 022274, 2002 WL 31474068, at *3 (Oct. 17, 2002) (holding contested case hearing officer did not abuse his discretion in finding "good cause" to allow claimant to raise " Downs waiver" at hearing although not raised at benefit review conference). However, there is no similar provision allowing a new issue to be raised in judicial review upon a finding of "good cause." When the Legislature has employed a term or phrase in one section of a statute and excluded it in another, we presume the Legislature had a reason for excluding it and that term should not be implied where it has been excluded. Moran v. City of Houston, 58 S.W.3d 159, 162-63 (Tex. App.-Houston [14th Dist.] 2001, pet. denied) (citing Fireman's Fund County Mut. Ins. Co. v. Hidi, 13 S.W.3d 767, 769 (Tex. 2000); Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer, 904 S.W.2d 656, 659 (Tex. 1995)).
We note, however, that commission appeals panels have barred carriers from contesting compensability based on Downs despite the carriers' arguments that they did not timely contest compensability because they relied on the commission's previous advisories. See, e.g., Tex. Workers' Comp. Comm'n, Appeal No. 030141, 2003 WL 1733948, at *1 (March 4, 2003); Tex. Workers' Comp. Comm'n, Appeal No. 022274, 2002 WL 31474068, at *1-2.
We recognize the Act must be liberally construed to carry out its purpose of compensating injured workers. Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 961 (Tex. 1999). However, even applying a liberal construction, section 410.302 clearly precludes judicial review of an issue that was not raised during the administrative process, and we may not read an exception into section 410.302 that is not there. See St. Paul Fire Marine Ins. Co. v. Bjornson, 831 S.W.2d 366, 371 (Tex. App.-Tyler 1992, no writ) (stating while workers' compensation laws should be liberally construed in favor of the injured claimant, courts are not at liberty to adopt a construction which is contrary to the plain and unambiguous language of the statute); see also Moran, 58 S.W.3d at 162 (recognizing courts, in enforcing statutes, are not responsible for omissions in legislation).
Berryhill also urges she may now raise Downs because it applies retroactively. Downs has indeed been applied retroactively by the commission appeals panels in that it governs claims that accrued before Downs. See Tex. Workers' Comp. Comm'n, Appeal No. 030141, 2003 WL 1733948, at *1 (March 4, 2003) (finding carrier waived right to contest compensability despite carrier's argument that injury arose before Downs); Tex. Workers' Comp. Comm'n, Appeal No. 022274, 2002 WL 31474068, at *1-2 (Oct. 17, 2002) (rejecting carrier's argument that Downs should not apply retroactively); see also Baker Hughes, Inc. v. Keco R. D., Inc., 12 S.W.3d 1, 4 (Tex. 2000) (stating that, as a rule, court decisions apply retroactively). However, the Act still requires that the particular waiver issue, to which Downs would apply retroactively, be raised during the administrative proceeding before it is subject to judicial review.
Berryhill's argument is somewhat inconsistent. She urges Downs applies retroactively. Thus, Trinity is barred from contesting compensability irrespective of the date of her injury. Conversely, she suggests Downs was not the law until decided by the Texas Supreme Court. She contends that she should be excused from raising " Downs waiver" during the administrative proceeding. Nevertheless, the Downs court interpreted a statute in effect at the time of Berryhill's injury. See 81 S.W.3d at 806-07. As such, the court did not create new law, but rather recognized law effective and applicable on the date in question. See Baker Hughes, Inc., 12 S.W.3d at 4.
Here, because the " Downs waiver" issue was not decided by the appeals panel, the trial court is precluded from considering it during the judicial review. Therefore, the trial court erred in granting partial summary judgment on the ground that Trinity waived its right to contest compensability by failing to file its notice of refusal within seven days after receiving Berryhill's notice of injury. We sustain Trinity's sole issue.
In Hefley v. Sentry Insurance Co., No. 04-02-00881-CV, 2003 WL 22794295 (Tex. App.-San Antonio Nov. 26, 2003, no pet. h.), the court rejected a claimant's attempt to raise " Downs waiver" for the first time during judicial review. However, Hefley has not been released for publication and is, thus, subject to revision. Id. at *1. The claimant sought judicial review of an appeals panel decision that he did not sustain a compensable injury. Id. Downs was subsequently decided by the Texas Supreme Court, so the claimant amended his petition to assert waiver. Id. The trial court struck the waiver allegation. Id. The court of appeals affirmed and held that pursuant to section 410.302, waiver was beyond the permissible scope of judicial review because it was not an issue before the appeals panel. Id. at *2-3. Further, the court rejected the claimant's argument that he should be excused from the application of section 410.302 because the commission refused to follow the San Antonio court's Downs decision by issuing Advisory 2000-07. Id. The court concluded it was not the commission's departure from the law, but rather the claimant's failure to exercise a right, which deprived him of an administrative remedy or made his administrative remedy inadequate. Id.
Finally, Trinity requests that we sanction Berryhill's counsel because he has argued the trial court could consider the waiver issue when he knew the issue could not be raised for the first time during judicial review. However, because Downs was decided after the judicial review was filed and there are no reported cases on its application when the waiver issue is raised for the first time during judicial review, we find no sanctionable conduct in counsel's arguments.
Accordingly, we reverse the final judgment and remand for further proceedings consistent with this opinion.