1 NO. 03-14-00012-CV

IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS

_________________________________ ___________________________ STATE OFFICE OF RISK MANAGEMENT Appellant

v. KATINA A. EDWARDS Appellee

On Appeal from the 53 rd Judicial District Court of Travis County, Texas

APPELLANT’S REPLY BRIEF

J. Red Tripp State Bar No. 00790257 Assistant General Counsel State Office of Risk Management P.O. Box 13777 Austin, Texas 78711-3777 (512) 936-1516 Fax (512) 370-9189 Red.Tripp@sorm.state.tx.us Counsel for Appellant

ORAL ARGUMENT REQUESTED ACCEPTED 03-14-00012-CV 3703647 THIRD COURT OF APPEALS

AUSTIN, TEXAS 1/8/2015 4:20:48 PM JEFFREY D. KYLE

CLERK2 TABLE OF CONTENTS Page

Table of Contents ...........................................................................2

Index of Authorities .........................................................................3 Reply Argument.............................................................................5 I. The Texas Department of Insurance, Division of Workers’ Compensation (DWC), deprived SORM of its due process right to a fair h earing.............................................................5 II. Appellant raised a Substantia l Evidence Due Process Issue in its Original Petition. Appe llant withdrew only its challenge to the issues of compensabilit y and indemnity in its Amended Petition. Accordingly, venue is mandatory in Travis County, Texas................................................................................5

a. Substantial Evidence Iss ue was Raised in the Original Petition..........................................................................5 b. Venue Is Mandatory in Travis County..................................6 c. De Novo Review Does Not Cure the Due Process Violation............ ............................................................8 III. Appellant Is Not Required By Any Rule or Statute to File a Declaratory Judgment Action Against DWC To Resolve The Issues In This Case............................................................9

Conclusion and P rayer..................................................................11

Certificate of S ervice.....................................................................12 Certificate of Comp liance...............................................................133 INDEX OF AUTHORITIES

CASES Ross v. Kornrumpf , 46 Texas 390, 393 (1885) ....................................6 Morales v. Liberty Mutual Insurance Co. , 241 S.W.3d 514, 517 (Tex. 2007)..............................................7

STATUTES Tex. Gov’t Code Subchapter G, §2001.174(2).............................7, 8, 11 Tex. Gov’t Code Subchapter G, §2001.175.......................................10 Tex. Gov’t Code Subchapter G, §2001.176.........................................7 Tex. Labor Code §410.252(b)(1).......................................................7 Tex. Labor Code §410. 253.............................................................10 Tex. Labor Code §410.255....................... ........................5, 7, 8, 9, 10 Tex. Labor Code §410.258(b).........................................................10 Tex. Labor Code §410.301.........................................................8, 104 NO. 03-14-00012-CV

IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS

_________________________________ ___________________________ STATE OFFICE OF RISK MANAGEMENT Appellant

v. KATINA A. EDWARDS Appellee

On Appeal from the 53 rd Judicial District Court of Travis County, Texas

APPELLANT’S REPLY BRIEF

TO THE HONORABLE JUSTICES OF THE TEXAS THIRD COURT OF APPEALS: COMES NOW, Appellant, State Offi ce of Risk Management and files this its Reply Brief to Appellee, Ka tina A. Edwards’ Response brief, and

would show as follows:5 REPLY ARGUMENT

I. THE TEXAS DEPARTMENT OF INSURANCE, DIVISION OF WORKERS’ COMPENSATION (D WC), DEPRIVED APPELLANT OF ITS DUE PROCESS RIGH T TO A FAIR HEARING DWC deprived Appellant of its due process right to a fair hearing by failing to require Appellee to pro vide evidence-based expert medical evidence to prove her claim of occ upational disease, thereby failing to properly place the burden of proof on A ppellee. Appellee has not provided any argument contrary to Appellant’s position. It must, therefore, be presumed that Appellee concurs with Appe llant’s position as to this Issue. To the extent that a reply is necess ary, Appellant incorpor ates, in full, its argument as set forth in its or iginal brief on the merits.

II. APPELLANT RAISED A S UBSTANTIAL EVIDENCE DUE PROCESS ISSUE IN ITS ORIGIN AL PETITION. APPELLANT WITHDREW ONLY ITS CHALLE NGE TO THE ISSUES OF COMPENSABILITY AND INDEMITY IN ITS AMENDED PETITION. ACCORDINGLY, VENUE IS MAND ATORY IN TRAV IS COUNTY, TEXAS

a. Substantial Evidence Issue was Ra ised in the Original Petition Appellee acknowledges that Appellant timely filed its original petition, but argues that Appellant’s Amended Petition untimely sought judicial review under subchapter F and Tex. La bor Code §410.255. However, Appellant’s Amended Petition, filed on January 28, 2010, properly removed6 only the issues of compensability a nd disability from its appeal without adding any new cause of action. 1 To the extent Appe llee asserts that it was improper for Appellant to amend its ori ginal petition to more specifically describe the relief sought on its substant ial evidence cause of action, this argument has been soundly rejected by the Texas Supreme Court since

the 1800s. See Ross v. Kornrumpf , 46 Texas 390, 393 (1885) (A new cause of action is not set up by s pecifying more particularly the relief sought). b. Venue Is Mandatory In Travis County Appellee acknowledges that Appellant is not seek ing a reversal of the DWC’s decision regarding compensability and disability; 2 rather, Appellant is asking this court to remand this matter to DWC for a new hearing in order that DWC make a determination in compliance with its statutory provisions and authority that is properly supported by the substantial evidence. This dispute is not over whether or not Appe llee is entitled to benefits - this dispute is over whether or not the adm inistrative agency followed the law in

1 In its Original Petition to the Travis County District Court, A ppellant stated that “Defendant was not held to [her] burden of proof. Plaintiff is, therefore, aggrieved by the improper application of the burden of proof...” CR at 5-6, and requested “such other and further relief at law or in equity to which the Court finds it may be justly entitled.” CR at 7. 2 Appellee’s Response issue acknowl edges “...the Insurance Carrier’s legal insufficiency argument of the evidence at the administrative level does not matter as to compensability and disability issu es...” Response Brief at viii.7 coming to its decision. This Court has the authority to remand specifically for these reasons, but only under Tex. Gov’t Code §2001.174(2), after which the DWC has the authority to either issue a new decision based upon the existing record or reopen the rec ord for new evidence. Thus, a decision by this court to remand this matter to the DWC is not a de facto reversal, nor is such a reversal so ught by Appellant from the court. Appellee’s proposition that Tex. Labor Code §410.252(b)(1) statutorily mandates venue in Fort B end County, the county of Appellee’s residence, regardless of whether t he proper standard of review is de novo

or substantial evidence is without m erit. While Appellee contends that venue is mandatory in her county of residence, Tex. Labor Code §410.255 provides otherwise. If a dispute doe s not concern compensability, income or death benefits, the matter falls under Tex. Labor C ode §410.255, which instructs parties that judicial revie w is to be conducte d under Subchapter G, Chapter 2001, Government Code. Sect ion 2001.176 of the Government Code specifically places mandator y venue in Travis County. See Morales v. Liberty Mutual Insurance Co. , 241 S.W.3d 514, 517 (Tex. 2007). Appellee’s contention that “if courts allow parties to seek review in Travis County on alleged legal errors , then almost every administrative8 hearing could be alleged to have jurisd ictional grounds in Travis County,” 3 is without merit. Appellant is reque sting a remand back to DWC under Tex. Gov’t Code §2001.174(2), because DWC did not properly apply the established law and procedure in this cl aim. If an insurance carrier was to file its petition in Travis County and the court determined that no legal or procedural error occurred, then the petition would fail and the injured worker would maintain their right to a jury trial in the county of their

residence with the burden on the insu rance carrier on any remaining issues concerning compensability, income or death benefits pur suant to Tex. Labor Code §410.301. An insurance carrier’s appeal under Tex. Labor Code §410.255 would fail if the DWC did not misapply the law or procedure. Appellee’s contention that by granting Appellant’s request relief almost every case could then be filed in Travis County would be true only if “in almost every administrative hearing” the DWC misapplied the law or committed another egregious legal or proc edural error. Appellee has

offered no evidence that this is the case.

c. De Novo Review Does Not Cure the Due Process Violation Issues of due process, burden of proof, and evidence are not issues of compensability, eligibility to or the amount of inco me or death benefits,

3 Appellee’s Response Brief at 21.9 under Tex. Labor Code §410. 255. Under Appellee’s construction of the law, Appellant’s only remedy would be to try the issues of compensability and disability before a jury with t he burden of proof bei ng placed upon the Appellant, thereby allowing the a part y to continue to benefit from the DWC’s erroneous placement of the burden of proof at the administrative level. Appellant would then have to prove that something did not happen, which is antithetical to statute and logi c. The real issue of procedural error would never be addressed, nor correct ed, contrary to Appellee’s contention that “modified de novo review prote cts parties’ rights to have errors

corrected in court.” 4 Accordingly, contrary to Appellee’s contentions, de

novo review does not cure the due process violation.

III. APPELLANT IS NOT REQUIRED BY ANY RULE OR STATUTE TO FILE A DECLARATORY JUDGMENT ACTION AGAINST DWC TO RESOLVE THE ISSUES IN THIS CASE Appellant has never pled a decla ratory judgment action in this

matter. 5 While Appellee argues that Appellant could have brought a Uniform Declaratory Judgment Act claim, Appellee offers no support for the

contention that this wa s required under law.

4 Appellee’s Response Brief at 20. 5 While Appellee appears to contend that a UDJA is the only vehicle under which SORM can obtain relief, she nev er explains what justici able controversy or legal misinterpretation exists and how the Court’s ruling be tween DWC and SORM in this case would resolve such controversy

.10 Appellee does not explain how DWC is an indispensable party to this litigation. There is no statutory requirement that DWC be made a party under Tex. Labor Code §401.255 or §401.301. A copy of plaintiff’s original petition was filed with DWC simultaneously with the filing of the petition with the court, pursuant to Tex. Labor C ode §410.253 and in compliance with Tex. Gov’t Code §2001.175. The statute provides that “The division may intervene in a [judicial review proceedi ng] not later than the 30th day after the date of receipt of the proposed judgment or sett lement.” Tex. Labor Code §410.258(b) (emphasis added). DWC was also sent a copy of the Final Judgment. On August 13, 2013, SORM mailed DWC its proposed judgment by certified mail, return rece ipt requested. The DWC admits in its

Petition in Intervention that it rec eived the proposed order on August 14, 2013, and admits that it did not makes its request to intervene until more than 30 days had passed. 6 Though DWC did not timely intervene in this lawsuit and thus was not a party to the lawsuit, it has now filed an amicus

brief to this Court. Appellee’s contention that, should th is Court remand this case back to DWC for proper application of the la w, it would somehow “allow DWC to continuously misapply and misinter pret the law without being held

6 Texas Department of Insurance-Division of Workers’ Compensation’s Petition in Intervention, Page 2, Section III.11 accountable...” is without merit, or explanation, and it is precisely the consequence sought to be avoided in this matter. Appellee does not

indicate what relief would be achi eved by Appellant under a declaratory judgment action that would not be accomplished by a remand to DWC for rehearing and a correction of t he due process violation.

CONCLUSION AND PRAYER WHEREFORE, Appellant timely requested substantial evidence review, properly in Travis County an d wherefore Appellant has shown that its due process rights to a fair hear ing were violated, Appellant requests that this court grant its request to reverse the administrative order finding that the Claimant sustained a compensable injury in the form of hypersensitivity pneumonitis on June 17, 2008; and that she had disability resulting from the compensable injury sustained on June 17, 2008, from August 22, 2008, through May 12, 2009 ; specifically and only for the purpose of remanding the case to t he Texas Department of Insurance, Division of Workers’ Compensation, for a proper applicati on of the burden of proof and evidence as permitt ed under Tex. Gov’t Code §2001.174(2).12 Respectfully submitted,

//s// J. Red Tripp J. Red Tripp State Bar No. 00790257 Associate General Counsel State Office of Risk Management P.O. Box 13777 Austin, Texas 78711-3777 (512) 936-1516 (512) 370-9189 fax Red.Tripp@sorm.state.tx.us Counsel for Appellant

CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of Appellant’s Reply Brief was served on Appellee via electronic service pursuant to the TRAP on the

8 th day of January, 2015. Bradley Dean McClellan State Bar No. 13395980 Of Counsel, Law Offices of Richard Pena 1701 Director’s Blvd., Suite 110 Austin, Texas 78744 (512) 327-6884 office (512) 694-8843 cell (512) 327-8354 fax brad.mcclellan@yahoo.com //s// J. Red Tripp J. Red Tripp13 CERTIFICATE OF COMPLIANCE I hereby certify that per TRAP 9. 4(i)(3) the Appellant’s Reply Brief contains 2,051 words pursuant to th e word count on the computer program used to prepare the document. //s// J. Red Tripp J. Red Tripp