DONALD B. MULLINS and BLUE SKY RIGHT OF WAY, LLC Cross-Plaintiff(s) — Appellants 

VS. 

MARTINEZ R.O.W., L.L.C. f/k/a MARTINEZ INVESTMENTS, L.L.C. Cross—Defendant — Appellee 

On Appeal from the 149"‘ District Court of Brazoria County, Texas; Trial Court Cause No. 79750—CV 

BRIEF OF APPELLEE MARTINEZ R.O.W., LLC F/K/A MARTINEZ INVESTMENTS, L.L.C. 

WRIGHT & GREENHILL, P.C. David P. Boyce State Bar No. 02759770 dboyce@w—g.com 221 W. 6"‘ Street, Suite 1800 Austin, Texas 78701 512-476-4600 512-476-5382 (Fax) 

ATTORNEYS FOR APPELLEE
Appellants 

Counsel for Patrick F. Timmons Cross- Timmons Law Firm Plaintiffs 8556 Katy Freeway, Suite 120 and Houston, Texas 77024-1806 Appellant 713/465-7638 — Telephone 713/465-9527 - Facsimile 

Cross- Martinez R.O.W., L.L.C. f/k/a Martinez Investments, L.L.C. Defendant and Appellee 

Counsel for David P. Boyce Cross- Wright & Greenhill, P.C. Defendant 221 West 6"‘ Street, Suite 1800 and Austin, Texas 78701 Appellee 512/476-4600 — Telephone 512/476-5382 - Facsimile 

' Blue Sky Right of Way, L.L.C. (“Blue Sky”) is listed as Appellant on Appellant’s Briefbut was not a party before the trial court and was not granted leave to appear as a cross-plaintiff in the Court below.

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Index of Authorities ................................................................................................. .. Statement of the Case ............................................................................................... .. 

Issues Presented for Review .................................................................................... .. 

Statement Regarding Oral Argument ....................................................................... .. 

Citations to the Record ............................................................................................. .. Statement of Facts .................................................................................................... .. Scope and Standard of Review ................................................................................ .. 

Summary of Argument ............................................................................................ .. 

Argument ................................................................................................................. .. 

I. The Court was correct in granting Appellee’s Motion for Summary Judgment under Tex. Labor Code § 417.004 because it negated the statutory exception and Appellant failed to produce any evidence to satisfy the exception .................................... .. II. The trial court correctly denied Appellant’s Motion to Vacate Judgment and for New Trial and for Leave to File Amended Pleading and Supplemental Material in Response to Cross-Defendant Martinez R.O.W., L.L.C.’s Motion for Summary Judgment ......................................................................... .. 

Conclusion and Prayer ............................................................................................. .. Certificate of Compliance ........................................................................................ .. 

Certificate of Service ............................................................................................... .. 

iii 

ll 11 

21 30 3232
Tab 4 — Tex. Labor Code § 408.001 Tab 5 — Tex. Labor Code § 417.004

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Boarder to Boarder Trucking C0,, Inc. v. Mondi, Inc., 831 S.W.2d 495, 498-99 (Tex. App. — Corpus Christi 1992, no writ) ......................................... .. 22 

City ofBeaumont v. Graham, 441 S.W.2d 829 (Tex. 1969) .................................... .. 12 City 0fEl Paso v. Collins, 440 S.W.3d 879 (Tex. App. — E1Paso 2013, no pet.) 29 

Ensearch Corp. v. Parker, 794 S.W.2d 2 (Tex. 1990) ............................................ .. 13 Fairfield Insurance Company v. Stephens Martin Paving, LL. C ., 246 S.W.3d 653 (Tex. 2008) .................................................................................... .. 24 

Gilbane Building Co. v. Keystone Structural Concrete, 263 S.W.3d 291 (Tex. App. — Houston [151 Dist.] 2007, no pet.) ....................................................... .. 14 

Granite Construction Co. v. Bituminous Insurance Cos., 832 S.W.2d 427, 430 (Tex. App. — Amarillo 1992, no writ) Argument ..................................................... .. 16 

Henkel v. Norman, 441 S.W.2d 925, 927 (Tex. 1996) ............................................ .. 8 Hill v. Milani, 678 S.W.2d 203, 205 (Tex. App. — Austin 1984) affd 686 S.W.2d 610 (Tex. 1985) ........................................................................... .. 22 Houston Lighting & Power Co. v. Eller Outdoor Advertising Company, 635 S.W.2d 133 (Tex. App. ~— Houston [1S' Dist.] 1982, writ ref’d n.r.e.) ............... .. 19 

Johnson & Johnson Med, Inc. v. Sanchez, 924 S.W.2d 925, 927 (Tex. 1996) ....... .. 8 

Koninklyke Nederlandsche Stoomboot Maalschappy, N. V v. Royal Netherlands Steamship Company, 301 F.2d 741 (5‘“ Cir. 1962) .................................................. .. 26 

Leinen v. Buflington 's Bayou City Service Co., 824 S.W.2d 682, 685 (Tex. App. ~ Houston [14"' Dist] 1992, no writ) Argument ................................... .. 22 Monsanto Co. v. Owens-Corning F iberglas Corp., 764 S.W.2d 293, 294 (Tex. App. ~ Houston [1s' Dist.] 1988) Argument ................................................... .. 18, 19
~

~ 

Scottsdale Insurance Co. v. Shahinpour, 2006 WL 870642 (S.W.2d Tex) ............. .. 16 

Texas General Indem. Co. v. Ellis, 888 S.W.2d 830, 831-32 (Tex. App. — Tyler 1994, no writ) ............................................................................ .. 22 

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005) .................... .. 8 

Varela v. American Petrofina Co. o_/‘Texas, Inc., 658 S.W.2d 561 (Tex. 1983) ..... .. 28 

West Texas Utilities Co. v. Renner, 32 S.W.2d 264 (Tex. Civ. App. — Eastland 1930, affd, 53 S.W.2d 451 (Tex. Comm’n App. 1932) .......................................... .. 25, 26 Westfall v. Lorenzo Gin Company, 287 S.W.2d 551 (Tex. Civ. App. ~ Eastland 1956, no writ) ........................................................................................................... .. 25, 26 

Statutes and Rules 

Tex. Labor Code 

§401.011(18) ............................................................................................... .. 14 §408.001 ...................................................................................................... .. 14,30 §408.001(a), (b) .......................................................................................... .. 30 §408.001(b), (c) 30 §4l7.004 ...................................................................................................... .. 33,37 

Tex. Civ. Stat. Ann. 

Art. 8306 § 3 ................................................................................................ ..I7, 18, 19 Art. 8306 § 3(d) ....... .. 17, 33 Art. 2212(a) (repealed) ................................................................................. .. 34

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§ 33.oo4(1)(1). 35 §33.o11(3).... 16 § 33.011(6). 34 § 33.015 ........................................................................................................ .. 34 

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(lCR:l92—195). Blue Sky in turn subcontracted a portion of the work to Martinez Right of Way, L.L.C. f/k/a Martinez Investments, L.L.C. (“Martinez”). (lCR:25). In the 

course of performing that work, one of Martinez’s employees, Bonifacio Gomez, suffered an injury in the course and scope of his employment and he later initiated an action for damages against Mullins, among others. (lCR:5—12). Mullins asserted defenses to Mr. Gomez’s allegations and filed a cross-claimz against Martinez, arguing that Martinez had 

agreed to indemnify and hold harmless Blue Sky, as well as Mullins individually, for any liability arising from Martinez’s work pursuant to its agreement with Blue Sky, including supervision of its own employees at the job site. (lCR:5—12). Mullins sought indemnity 

based on that alleged agreement, as well as contribution under Chapter 33 of the Tex. Civ. Prac. & Rem. Code. (lCR:5—12). 

Martinez’s answer included a general denial, as well as the affirmative defense 

that it was afforded protection under the Texas Workers’ Compensation Act because it was covered for workers’ compensation insurance at the time of the on the job injury suffered by its employee, Bonifacio Gomez. (2CR:7—9). 

Martinez then moved for a no evidence and traditional summary judgment with 

respect to Mullins’ claims for indemnity and contribution, under § 417.004 of the Tex. Labor Code. That provision insulates an employer protected by workers’ compensation from any claim for reimbursement asserted by a third party in an action for damages 

2 While incorrectly styled as a cross—claim, Mullins was actually asserting a third party action.

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of workers’ compensation at the time of Mr. Gomez’s accident and that there was no 

written agreement under which Martinez assumed Mullins’ liability. (lCR:41-95). 

Mullins filed a motion to continue the summary judgment hearing (lCR:98-101) 

and a response in which he asserted that a certificate of insurance “authorized” by 

Martinez and the existence of a liability policy covering Martinez demonstrated an intent 

to indemnify Mullins and thus satisfied the statutory exception under Tex. Labor Code § 417.004. (lCR:l08-176). 

The trial court denied Mullins’ motion for continuance (lCR:330) and granted the 

Motion for Summary Judgment (2CR:24) and Martinez’s motion to sever the claims 

Mullins had asserted against it from the main action (lCR:328—329). Mullins filed a motion to vacate the judgment and for new trial, for leave to file an amended pleading, and for leave to file supplemental materials in response to Martinez’s Motion for 

Summary Judgment (2CR:366-372), relief that was overruled by operation of law on 

February 9, 215 as to the Motion to Vacate and for New Trial, and denied by the Court on February 10, 2015 (2CR:420) at the same time the Court sustained Appellee’s objections 

to Mullins’ affidavit. This appeal followed.
covering Martinez sufficed to satisfy the statutory exception. 

Did the district court properly grunt Martinez ’s Motion for Summary Judgment 

under Tex. Labor Code § 417.004 absent evidence that any pre-accident written 

agreement had been executed by Martinez under which it assumed Mullins’ 

liability?
CITATIONS TO THE RECORD 

“CR” refers to the two volume C1erk’s Record, with volume number listed before 

“CR,” followed by a colon and then page number.
alleged gross negligence on the part of Martinez. The Court disallowed Mullins’ motion for leave to supplement the summary judgment record. In any event, testimony allegedly indicating gross negligence on the part of Martinez is irrelevant to the issue before the 

Court. 

Appellant Mullins owns Blue Sky Right of Way, L.L.C. (“Blue Sky”), whose 

business includes the clearing of land, tree trimming and related work (1CR:1 16). Blue 

Sky contracted with Southern Brush S.W., Inc. to perform certain clearance and tree 

trimming work along a right—of—way (lCR:l92—195) and in turn entered into an 

agreement with Martinez to provide labor at a location in Brazoria County, Texas. (1CR:1 16). Bonifacio Gomez was an employee of Martinez, an employer covered by 

workers’ compensation insurance. (lCR:4l—92; lCR:l09). Mr. Gomez was injured at 

the job site while working for Martinez and performing the work Martinez had agreed to 

undertake for Blue Sky. (1CR:116). 

There was no written agreement between Martinez and Blue Sky or Mullins 

pertaining to Martinez’s work on the “Southern Brush” job site in Brazoria County, 

something Mullins acknowledged under oath in his deposition that was taken on June 5, 2013, well before Martinez’s entiy into the lawsuit. (lCR:94). It appears that either prior 

to or contemporaneous with Martinez’s commencement of the work Mullins received a certificate of insurance dated June 7, 2010, that shows as the insured Martinez
an additional insured under any of the three policies. (lCR:l20). 

Mullins contends that Martinez agreed to assume Blue Sky’s or his liability for 

injuries to Martinez’s employees on the job, and to provide insurance for Blue Sky, but 

there is no written proof to support either assertion. Martinez was protected by an insurance policy issued by the Travelers’ Indemnity Company of Connecticut that contained commercial general liability coverage, a (possibly incomplete) copy of which 

was attached to Mullins’ summary judgment response, but the policy nowhere mentions Blue Sky or Mullins, nor is there any evidence that it provided additional insurance coverage for either at the time of the accident. 

Mr. Gomez initiated a personal injury action against Mullins and others, in 

response to which Mullins asserted certain affirmative defenses (lCR:5—l3). On March 27, 2014, Mullins included with his second amended answer what he titled as a “crossclairn,” although it initiated actions against persons and entities who were not prior 

parties to the case (Martinez and Hallmark Specialty Insurance Company), and should have been identified as an original third party action. (lCR:5—l3). 

As to Martinez, Mullins sought contractual indemnity as well as contribution 

pursuant to Chapter 33 of the Tex. Civ. Prac. & Rem. Code, noting he joined in a motion to designate Martinez as a responsible third party.
On October 17, 2014, Martinez filed its no evidence and traditional motion for 

partial summary judgment.3 As a basis for its motion, Martinez relied on Tex. Labor 

Code § 417.004, insulating a covered employer under the Act from a reimbursement claim by a third party who is potentially liable to an injured employee, unless the 

employer executed before the on the job injury a written agreement with that third party 

to assume its liability. (1CR:l4—20). 

Mullins filed a motion to continue the summary judgment hearing (lCR:98-101) 

and a response to Martinez’s summary judgment motion (lCR:l08-176), with exhibits. 

The trial court denied Mullins’ motion for continuance and granted Martinez’s summary 

judgment motion (2CR:24) and its Motion for Severance (1CR:328—329). Thereafter, 

Mullins filed a motion to vacate the judgment and for new trial, and for leave to file an amended pleading and to supplement the summary judgment evidence. (2CR:366-372). 

That motion was overruled by operation of law on February 9, 2015 and denied by the Court on February 10, 2015, which further sustained Martinez’s objections to Mullins’ supplemental affidavit. (2CR:420). This appeal followed. 

3 The motions were designated as “partial" because Mullins had cross-claims pending against Hallmark and, of course, Plaintiff Bonifacio Gomez had asserted causes of action against a number of parties, including Mullins and Southern Brush, S.W., Inc.
judgment on an affirmative defense that has been pled or raised in the motion itself. 

Randall’s Food Markets, Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). When it does so, it must prove each element of its defense as a matter of law. Johnson & Johnson 

Med, Inc. v. Sanchez, 924 S.W.2d 925, 927 (Tex. 1996). A defendant may move for 

summary judgment by disproving as a matter of law an essential element of the plaintiff’ s 

cause of action. Henkel v. Norman, 441 S.W.3d 249, 251 (Tex. 2014); Nall v. Plunkett, 

404 S.W.3d 552, 555 (Tex. 2013). 

SUMMARY OF THE ARGUMENT 

This case is controlled by statute, specifically § 417.004 of the Tex. Labor Code, 

which effectively insulates a covered employer4 from an action seeking contribution and indemnity brought by parties who have been sued by the subscribing employer’s employee for injuries in the course and scope of employment. The exclusive remedy 

provision of the Workers’ Compensation Act, Tex. Labor Code § 408.001, protects the covered employer from a common law cause of action asserted by an employee or the legal beneficiaries of an employee injured or killed in the course and scope of 

employment, with the sole exception a suit for exemplary damages brought by the spouse 

4 The Act defines “Employer” as “a person who makes a contract of hire, employs one or more employees, and has workers‘ compensation coverage.” Tex. Labor Code § 401.011(18). By definition, an employer carries workers’ compensation coverage.
liable third party’s claims for contribution and indemnity unless the employer has 

executed, before the on the job injury or death, a written agreement with the third party to assume its liability. 

Mullins’ “cross—claim” against Martinez was clearly an attempt by a third party 

sued by the covered employee, Bonifacio Gomez, to obtain reimbursement from 

Martinez in the form of contractual indemnity, or contribution under Chapter 33 of the Tex. Civ. Prac & Rem Code. 

Martinez promptly asserted the protections of the Texas Workers’ Compensation 

Act in its initial pleading. Its summary judgment motion established its status as an employer covered by a policy of workers’ compensation issued by Texas Mutual Insurance Company. It further established the lack of any pre—injury written agreement executed by Martinez to assume Mullins’ potential liability to Mar’tinez’s employees injured on the job. Martinez negated as a matter of law the one exception to the statutory 

protection afforded it against third party claims for contribution or indemnity, and indeed, produced sworn testimony from Mullins acknowledging the absence of any written 

agreement between Mullins (or Blue Sky) and Martinez relevant to the work underway at 

the time of Mr. Gomez’s injuries. 

At that point, the burden shifted to Mullins to present evidence of Martinez’s 

execution of a written agreement under which it expressly assumed Mullins’ liability to
well as a copy of Martinez’s general liability policy. (lCR:l08-l76). However, a certificate of insurance is not the equivalent of a written agreement to indemnify a party, and the policy simply shows that Martinez had insurance coverage in place at the time of 

the accident. Neither document is evidence that Martinez undertook, in writing, on or before June 7, 2010, to assume Mullins’ liability. 

In Mullins’ belated motion to vacate, amend his pleading and supplement the 

summary judgment record, he advanced for the first time the argument that there was another exception to the statutory protection afforded covered employers from third party claims, that being when the employee’s non-fatal injuries allegedly result from employer 

gross negligence. Tex. Labor Code § 417.004 does not mention such an exception, nor does any other Labor Code provision or case handed down in the last 50 years even hint 

at such an exception. 

Finally, Mullins’ post—hearing motion argued that because Martinez had been 

designated as a responsible third party under Chapter 33 of the Tex. Civ. Prac. & Rem. Code, it was subject to a claim for contribution under Chapter 33. That argument is 

specious. Chapter 33 permits a defendant who is jointly and severally liable for damages 

to the plaintiff to seek contribution against any other “liable defendant,” a term that is 

defined in § 33.0ll(3) of the Tex. Civ. Prac. & Rem. Code in a way that clearly 

distinguishes it from “responsible third party.” The fact that a party is designated as a

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contribution claim against it under Chapter 33 of the Tex. Civ. Prac & Rem. Code. 

ARGUMENT 

I. The Court was correct in granting Appellee’s Motion for Summary Judgment under Tex. Labor Code § 417.004 because it negated the statutory exception and Appellant failed to produce any evidence to satisfy the exception. 

Mullins readily admits that there is no “separate contract of indemnity” that was 

executed by Martinez prior to Mr. Gornez’s on the job injury on June 7, 2010. 

(Appellant’s Brief, p. 8). He argues instead that Martinez “caused the delivery” of a 

certificate of insurance referencing a liability policy (Id.), that it performed work pursuant 

to an agreement (presumably oral) with Blue Sky, that it was later paid for that work, and that Martinez’s liability policy “covers the activities undertaken by Blue Sky and Mullins 

. . .” (Appellant Brief, p. 15). Appellant nowhere explains how a certificate of insurance 

or a liability insurance policy is the equivalent of a written agreement executed by the employer to assume the liability of a third party. Those two documents, taken singly or 

together, do not constitute an explicit written agreement to indemnify Mullins, as even a cursory review of the applicable case law makes clear. 

Cases construing Tex. Labor Code. § 417.004, and its predecessor under the prior 

Workers’ Compensation Act, Tex. Civ. Stat. Ann. Art. 8306 § 3 (later Article 8306, § 3(d), have held that to satisfy the statutory exception to a covered employer’s protection

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language would satisfy the exception in the prior Workers’ Compensation Act, Art. 8306, 

§ 3, in City 0fBeaumont v. Graham, 441 S.W.2d 829 (Tex. 1969). An employee of a 

workers’ compensation subscriber, Texas Tower & Construction Company (Texas Tower) was fatally injured while working in an elevated storage tank belonging to the 

City of Beaumont. Id. at 832. His beneficiaries sued the City, which in turn filed a thirdparty action against Texas Tower seeking indemnity or contribution. Id. The Texas Supreme Court noted that Texas Tower, as a workers’ compensation subscriber, was 

protected against claims for indemnity and contribution by Art. 8306, § 3. Id. at 837. The City contended that its contract with Texas Tower contained indemnity language 

sufficient to satisfy the statutory exception. 

The Texas Supreme Court disagreed, concluding that the indemnity provisions 

showed an intent to indemnify the City only for damages or claims resulting solely from 

the acts or conduct of Texas Tower. Id. at 838. The Texas Supreme Court agreed with the Court below that the language in the City of BeaumonUTexas Tower contract did not “evidence an intention of the parties that Texas Tower should indemnify the City for the consequences of its own negligent conduct, or for the consequences of the joint 

negligence of the parties, or for the consequences of the negligent conduct of the City and the non—negligent conduct of Texas Tower.” Id. at 838-839. The Court concluded that the City’s contribution and indemnity claims were not sustainable.

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Co., satisfied the statutory exception to the workers’ compensation bar to Port Royal’s 

reimbursement claim. The Court reviewed the indemnity language, noting that it specifically excluded indemnity for injury arising out of the act or neglect of Port Royal. 

The Court concluded that in View of the fact the indemnity agreement did not indemnify Port Royal for its own negligence, it did not satisfy the statutory exception set forth in the 

prior Workers’ Compensation Act, Art. 8306 § 3, Tex. Civ. Stat. Ann. 

The Texas Supreme Court again considered what language was sufficient to 

satisfy the statutory exception to the workers’ compensation bar against third party 

reimbursement actions in Ensearch Corp. v. Parker, 794 S.W.2d 2 (Tex. 1990). In that case, the Court held that the Act did not bar a pipeline owner’s claim for indemnity from an independent contractor whose employees were asphyxiated during their work. Under 

the indemnity agreement in that case, the independent contractor assumed “entire responsibility and liability for any claims or actions based on or arising out of injuries, including death, to persons . . . sustained or alleged to have been sustained in connection with or to have arisen out of or incidental to the performance of this contract by 

[independent contractor] . . . regardless of whether such claims or actions are founded in 

whole or in part upon alleged negligence of [pipeline owner] . . . Id. at 6-7.

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§ 417.004, is Gilbane Building Co. v. Keystone Structural Concrete, 263 S.W.3d 291 

(Tex. App. — Houston [151 Dist.] 2007, no pet.). In that case, Gilbane Building Co. (“Gilbane”) and Keystone Stuctural Concrete, Ltd. (“Keystone”) contracted for Keystone 

to act as subcontractor on a construction project, during which a Keystone employee 

suffered injuries and sued Gilbane, resulting in a settlement. Id. at 294. Gilbane and its liability insurer, Zurich, sued Keystone for, among other things, contractual indemnity. 

Id. The Court first determined that the indemnity language in the Gilbane/Keystone 

contract did not satisfy the express negligence test and was thus unenforceable, affirming 

the trial court’s grant of summary judgment as to Gilbane’s contractual indemnity claim. However, Gilbane also argued that Keystone had breached contractual obligations relating to use of equipment that was in a safe condition and in compliance with applicable regulations, codes, ordinances, etc. Id. at 302. In response, Keystone asserted 

that Gilbane’s claim for breach of contract was merely a reformulation of its indemnity 

claim and that regardless of how Gilbane characterized that reimbursement action, it was 

barred by Tex. Labor Code § 417.004. The Court of Appeals agreed, noting that the 

statute prohibited indemnity absent an express agreement by the employer to indemnify 

the third party in writing. Id. at 303. The Court concluded: 

The indemnity agreement here is unenforceable because it fails to comply with the express negligence rule [citation omitted]. Accordingly, we hold that § 417.004 bars Gilbane’s breach of contract claims against Keystone.

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assume the liability of the third party in the form of enforceable indemnity language that satisfies the express negligence test. In this case, by Mullins’ own admission, there is Q 

written agreement relating to Martinez’s work for Mullins or Blue Sky, much less a conspicuous indemnity provision that meets the express negligence test. 

Mullins does not cite any case holding that the statutory exception can be satisfied 

by something other than a written contract of indemnity under which the employer expressly assumes the third pa1'ty’s liability. Indeed, in the “contractual indemnity” section of his brief (Appellant Brief, pp. 15-16), he cites no case at all. Rather, he argues 

that there was in fact a written agreement to indemnify him evidenced by the certificate of insurance he received and by Ma1tinez’s liability policy, which he attached to his summary judgment response. (lCR:l23-176).5 The argument is unsuppoitable, for a 

number of reasons. 

First, the certificate of insurance that is dated June 7, 2010 specifically notes, at 

the outset: 

[THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSUR_ER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER] 

5 The copy of the Travelers policy in the record is incomplete (lCR:l23-176); what appears to be a more complete copy is attached in the appendix to Appellant’s Brief.

15
issuing the certificate and the certificate holder. See, e.g., Scottsdale Insurance Co. v. 

Shahinpour, 2006 WL 870642 (S.W.2d Tex) (certificate of insurance that states it does 

not amend, extend or alter coverage afforded by the policies below, does not alter the 

terms of any insurance policy, and creates no contract for insurance coverage); Granite 

Construction Co. v. Bituminous Insurance Cos., 832 S.W.2d 427, 430 (Tex. App. - 

Amarillo 1992, no writ) (any insurance afforded to Granite Construction Co., despite being shown as an additional insured in a certificate of insurance, is afforded by the policies and not the certificate itself). Accordingly, the certificate itself is not a written “agreement” of any kind between Mullins or Blue Sky and the certificate issuer (an insurance agency is identified as the producer), or any insurer of Martinez. It was not 

executed by Martinez, and it certainly cannot constitute an express agreement by Martinez to assume Blue Sky’s or Mullins’ liability for injury to one of Martinez’s employees. 

Second, setting aside the fact that the Martinez liability policy Mullins also relies 

on is not certified or proven up through a business records affidavit of any kind, it has no 

relevance here. The affidavit Mullins attached to his summary judgment response, in paragraph 6 (lCR:ll6—ll7), offers his opinion that the policy in question “provides liability insurance coverage for the officers and agents of covered organizations.” 

Needless to say, the interpretation of an insurance policy presents an issue of law for the 

Court, not susceptible to construction by interested parties.

l6
Paragraph l.a of the Commercial General Liability Coverage Form (lCR:134) 

simply states that the insurer “will pay those sums that the insured becomes legally 

obligated to pay as damages because of “bodily injury” or “property damage” to which 

this insurance applies . . .” That provision does not define the term “insured,” but 

language preceding that provision on the same page of the policy indicates that the word insured “means any person or organization qualifying as such under Section II — Who Is 

An Insured.” (ICR: 134). 

The Section II — Who Is An Insured provision of the Commercial General 

Liability Coverage Form in the policy included in the appendix to Appellant’s Brief, subpart (c), states that if the named insured is a limited liability company (the case here), 

the entity itself is an insured, its members, “but only with respect to the conduct of your business,” and the named insured’s managers. That definition does not include either Mullins or Blue Sky. 

Mullins also appears to cite Exclusion 2(b)(2) on page 2 of the Commercial 

General Liability Coverage Form in the Travelers policy (in the appendix to Appellant’s 

Brief), but that provision merely excludes coverage for bodily injury for which the 

insured “is obligated to pay damages by reason of the assumption of liability in a contract 

or agreement.” There is an exception to the contractual liability exclusion for, among other things, an “insured contract,” but Appellant makes no argument that the exception

17
policy itself, somehow equates to an explicit assumption of Mullins’ or Blue Sky’s 

liability. Proof of insurance that might cover an obligation is not the same as an explicit 

assumption of that obligation. 

In short, after acknowledging in sworn testimony that there was no written 

agreement between himself or Blue Sky and Martinez, Mullins’ only response to the 

Appellee’s summary judgment motion was to produce documents that at most evidence 

insurance coverage for Martinez. Mullins cites no case that has held that a party seeking 

indemnity from a covered employer need not produce any writing actually executed by 

the employer expressly assuming such liability. Having failed to present any evidence that meets the statutory exception to the employer’s protection from third party suits, Mullins has no basis to challenge the correctness of the summary judgment granted against him. 

Mullins argues that a contract of indemnity (and presumably one sufficient to 

satisfy the requirements of Tex. Labor Code § 417.004) may be either express or implied, citing Monsanto Co. v. 0wens—Coming Fiberglas Corp., 764 S.W.2d 293, 294 (Tex. 

App. — Houston [lS‘ Dist.] 1988), which in turn cites Houston Lighting & Power Co. v. ° The policy in question defines “insured contract” to include (subpart t): “That part of any other contract or agreement pertaining to your business . . . under which you assume the tort liability of another party to pay for ‘bodily injury’ or ‘property damage’ to a third person or organization. Tort liability means the liability that would be imposed by law in the absence of any contract or agreement.” In effect, the “insured contract” exception restores coverage for explicit indemnity obligations by which the insured assumes the tort liability of another party.

18
employee of a subcontractor, Owens~Corning Fiberglas Corp. (“Owens-Corning”), who 

brought a personal injury action against the Monsanto Company (“Monsanto”). Id. at 294. Monsanto asserted a third party action against Owens-Corning based on the 

indemnification language contained in a written contract between the two companies. 

Citing the indemnity provision at length, the Court noted that the provision nowhere included the word “negligence” or adequately defined the scope of the protection that 

was provided and: “Because the intent of the parties is not specifically stated within the 

four corners of the contract, we find that this indemnity provision does not satisfy the 

express negligence test.” Id. at 295. 

The Court concluded, in effect, that the failure of the written indemnity provision 

to satisfy the express negligence test did not bring it within the exception of the statutory protection provided the employer under the Texas Workers’ Compensation Act (albeit an earlier version of the Act). 

The Houston Lighting & Power decision did not involve a written contract of 

indemnity. Rather, an employee of Eller Outdoor Advertising Company of Texas (“Eller”) was electrocuted after contacting an HL&P line. His widow and children sued 

HL&P, which settled that action and then sought indemnification from Eller pursuant to a section of the Public Utilities Act setting forth the duties of any party working within six feet of a high voltage line, a violation of which entitles the utility to indemnification

19
applicable provision of the Public Utilities Act. Id. at 135. 

The Court accepted HL&P’s reasoning, concluding that the “later, more specific 

Public Utilities Act should be given controlling effect over the older, more general terms of the Workers’ Compensation Act.” Id. The Houston Lighting & Power decision simply recognizes that the specific indemnity granted to public utilities against entities 

who violate the “six foot rule” trumps the statutory protection afforded employers under the Texas Workers’ Compensation Act. It does not stand for the proposition that a third 

party not entitled to statutory indemnity can dispense with the requirements of Tex. Labor 

Code § 417.004 of a written agreement. 

Finally, Mullins disputes the applicability of the express negligence rule. While 

as noted above, numerous cases have held that written indemnity language that does not satisfy the express negligence test does not meet the requirements of the statutory 

exception in Tex. Labor Code § 417.004, that is not the dispositive issue here. While in 

theory there may be language in a written agreement executed by the employer by which 

it expressly assumes the liability of the third party that falls short of the express negligence standard, that is not the case here. In the instant matter, there simply is Q indemnity agreement of any kind executed by Martinez and accordingly, the question of 

whether or not the indemnity language must satisfy the express negligence test to meet the statutory exception is moot.

20
motion to vacate, etc. is the refusal to permit him to amend his pleading to add a new party and to assert an entirely new basis to circumvent the workers’ compensation bar to his third party action, and to present additional summary judgment evidence to support same. 

The trial court was correct in denying the motion, for a number of reasons. First, 

the proposed first amended cross—claim attempted to add an entirely new party, Blue Sky, for reasons nowhere addressed in the motion for leave itself. Blue Sky was not a defendant in the action initiated by Bonifacio Gomez and accordingly, there would be no 

legal basis under any theory alleged by Mullins, or later by Blue Sky, for it to seek 

indemnity for liability it could not have had to Mr. Gomez, who had never asserted 

claims against Blue Sky. Blue Sky could not seek indemnity or contribution for liability 

it could not have to Plaintiff Bonifacio Gomez, who had never sued it. 

Second, the proposed amended pleading attempted to add an entirely new basis 

for contribution or indemnity, namely that Martinez was guilty of gross negligence with 

respect to Mr. Gomez’s injuries, and that somehow supported Mullins’ claim for 

contribution or indemnity. The assertions of gross negligence had never been pleaded 

previously, and Mullins did not make such contentions in any amended pleading that he could have filed, without leave of court, after Martinez’s Motion for Summary Judgment was filed on October 17, 2014, and before it was heard on November 25, 2014.

21
App. — Austin 1984) affld 686 S.W.2d 610 (Tex. 1985). Furthermore, after the trial court has rendered judgment on a motion for summary judgment, it cannot grant a motion to 

amend the pleadings. Automaker, Inc. v. CCRT Company, Ltd., 976 S.W.2d 744, 746 (Tex. App. — Houston [151 Dist.] 1998, no pet.); Texas General Indem. Co. v. Ellis, 888 S.W.2d 830, 831-32 (Tex. App. ~ Tyler 1994, no writ); Boarder to Boarder Trucking Co., Inc. v. Mandi, Inc., 831 S.W.2d 495, 498-99 (Tex. App. — Corpus Christi 1992, no 

writ). In the present action, the Court granted Martinez’s Motion for Summary Judgment and its Motion to Sever Mullins’ claims against it on November 25, 2014. (2CR:24; 

1CR:328-329). The summary judgment order, combined with the severance, effectively 

made the summary judgment final and appealable for all purposes and accordingly, the 

Court acted correctly in refusing Mullins’ efforts to amend his pleadings post~summary 

judgment hearing and post-final judgment. 

The Court did not err in denying Mullins’ request to supplement the summary 

judgment record with a new affidavit from Mullins (2CR:393-394)7 purporting to 

address, for the first time, the circumstances of the accident, as well as excerpts from the deposition of Bonifacio Gomez taken on April 30, 2013 (more than 18 months before the 

summary judgment hearing in this matter). Mullins offered no basis for seeking 

permission to submit summary judgment evidence four weeks after the summary 

judgment hearing and the Order granting same, merely pointing out that he had 

7 The Court sustained Martinez’s objections to Mullins’ supplemental affidavit. (2CR:420).

22
same the need to “properly respond” to case law, submit evidence to the Court of 

payments made by Mullins to Martinez, and to permit Mullins to prepare a “detailed affidavit” to discuss “the facts leading to the engagement of Martinez to provide labor, and the consideration therefore . . .” None of the “supplemental” evidence Mullins sought leave to submit post-hearing fits within any of the categories offered in support of 

his prior motion to continue the summary judgment hearing. 

Setting aside the fact Mullins offered no justification for his belated effort to 

revise the pleadings, add a new party, assert new bases to circumvent the Texas Workers’ Compensation Act, and to offer summary judgment evidence that presumably was available to him previously, neither the proposed amended pleading nor any of the 

“supplemental” evidence affects the outcome here. 

Mullins advanced as an “additional legal theory” (Appellant’s Brief, p. 26) the 

notion that if Martinez’s conduct somehow constituted gross negligence, that would create an exception to the statutory bar to third party actions absent a prior explicit assumption of the third party’s liability. The argument is completely without merit, not supported by any provision in the Texas Workers’ Compensation Act, and the only 

decisions Mullins cites in support are more than 50 years old and pre~date the current Workers’ Compensation Act by decades.

23
by the employer’s gross negligence” may bring an action against an employer. Tex. Labor Code § 408.001(a), (b). Nothing in the Act indicates that in a non-fatal case, a third party sued by the injured employee may seek contribution or indemnity from the employer, if there is evidence that the latter is guilty of gross negligence. Presumably, if such an exception existed, it would be set out in Tex. Labor Code § 4l7.004, dealing specifically with an employer’s liability to a third party sued by the injured worker. 

Mullins cites no case handed down since the effective date of the new Texas Workers’ Compensation Act that even suggests such a “gross negligence” exception to the 

protection of the Act exists. 

Mullins does cite a recent Texas Supreme Court decision, Fairfield Insurance 

Company v. Stephens Martin Paving, L.L.C., 246 S.W.3d 653 (Tex. 2008). Fairfield in 

no way supports Appellant’s argument regarding the “gross negligence exception.” Rather, the case deals with the insurability of exemplary damages under a workers’ compensation/employer liability policy. An employee of Fairfield’s insured, Stephens 

Martin Paving, suffered fatal injuries in the course and scope of his employment and his 

spouse and children brought a suit for exemplary damages as permitted by Tex. Labor 

Code § 408.001(b),(c). In a lengthy and well reasoned opinion, the Texas Supreme Court concluded that the Fairfield policy’s employer liability provisions covered the employer for gross negligence claims (Id. at 660), and that such insurance protection was not

24
gross negligence. No issue was presented to or discussed by the Court as to whether gross negligence by the employer in a non-fatal injury context creates an additional exception to the protection from third party claims. 

The other two cases cited by Mullins are simply too remote to have any 

precedential Value. In Westfall v. Lorenzo Gin Company, 287 S.W.2d 551 (Tex. Civ. 

App. — Eastland l956, no writ), third parties that were sued by an employee of Lorenzo Gin Company arising from a collison between two trucks sought contribution from the gin company, a Texas Workers’ Compensation Act subscriber, alleging, among other 

things, that the gin company was guilty of gross negligence, contributing to the accident. The Court ultimately determined that the evidence the third parties had produced in response to the gin company’s motion for summary judgment was insufficient to raise any fact question on the issue of gross negligence, but language in the decision implied 

that had there been such proof of gross negligence, a contribution or indemnity action might have been sustainable. Id. at 554. In support of that proposition, the Court in 

Westfall cited West Texas Utilities Co. v. Renner, 32 S.W.2d 264 (Tex. Civ. App. — 

Eastland 1930), aft’ cl, 53 S.W.2d 451 (Tex. Comm’n App. 1932). In Rermer, the third 

party utility company sought contribution and indemnity from its contractor, Mosher 

Steel & Machinery Company, for a lawsuit brought against it by a Mosher employee who 

sustained serious electrical injuries. Among other things, in affirming a directed verdict

25
had “fully protected himself against his own negligence (not amounting to gross 

I 

negligence) by providing compensation insurance for his employees, and could not be compelled to pay indirectly when no liability existed to pay directly.” Id. at 270. 

Needless to say, distinctions between active and passive negligence as a basis for 

common law contribution have no relevance here, given the fact that actions for contribution are controlled by Chapter 33 of the Tex. Civ. Prac. & Rem. Code, which 

makes no such distinctions. 

The other case cited by Mullins, Koninklyke Nederlandsche Stoomboot 

Maalschappy, N.V. v. Royal Netherlands Steamship Company, 301 F.2d 741 (5“‘ Cir. 

1962), effectively recognizes that a written stevedoring contract in a maritime context 

enforceable under federally developed maritime law provided a basis for a third party ship owner to sue a stevedoring company covered by Texas workers’ compensation for indemnity, in an action brought by a longshoreman employee. The Court concluded that if a longshoreman’s action against the shipping company was permitted, “a state 

compensation act cannot prevent an action against the employer by the third party based on a federally judicially established maritime contractual warranty.” Id. at 746. 

In discussing Westfall and Rermer, the Court interprets the state of Texas law in 

1962, suggesting “that Texas is a_sygt unwilling to to rule out an indemnity where there is 

a showing of gross negligence on the part of the injured man’s employer, and it might

26
as to whether allegations of gross negligence on the part of the employer created an exception to the Act’s protections from third party liability, has been echoed by no Texas appellate court at any time in the ensuing five decades, and no case citing § 417.004 of 

the new Act, which has been in effect since 1993, or any decision construing its 

predecessor, Art. 8306, § 3(d), of the prior Texas Workers’ Compensation Act, dating all the way back to the 1970s, suggests that any “gross negligence” exception actually exists. 

In short, there is nothing in the current statutory provision relied on by Appellee, 

any other provision in the current Texas Workers’ Compensation Act, or any case law since the new Act became effective to support Mullins’ belated assertion of a “gross 

negligence” exception to the statutory protection from third party actions for reimbursement. Accordingly, even if the trial court had permitted a post-summary 

judgment pleading raising this outdated theory, and permitted the supplemental summary judgment evidence that Mullins argues raises a fact question regarding gross negligence, 

the outcome would not have changed. 

Finally, Mullins argued in his Motion to Vacate that because Martinez had been 

designated as a responsible third party at some prior point, it is therefore “subject to the rules that apply to proportionate responsibility unless an exception thereto is applicable.” (Appellant’s Brief, p. 29). The argument is specious, as a simple reading of Chapter 33 of the Tex. Civ. Prac. & Rem. Code demonstrates. The definition of the term

27
portion of the damages awarded to the claimant.” § 33.015, titled “Contribution,” states, 

under subpart (a): 

If a defendant who is jointly and severally liable under § 33.013 pays a percentage of the damages for which the defendant is jointly and severally liable greater than his percentage of responsibility, that defendant has the right of contribution for the overpayment against each other liable defendant . . .” 

Emphasis added. 

Accordingly, contribution would exist in favor of Mullins against Martinez only if 

the latter could constitute a “liable defendant,” as the term is defined in Chapter 33. Because Martinez cannot be liable to the “claiman ” (Bonifacio Gomez) for any portion of the damages he is entitled to recover, because of the exclusive remedy provisions of the Texas Workers’ Compensation Act, there exists no right of contribution against Martinez under Chapter 33. 

Case law also supports the notion that there can be no contribution claim against a 

covered employer. In Varela v. American Petrofina C0. of Texas, Imn, 658 S.W.2d 561 (Tex. 1983), the Court construed the prior statute relating to contribution among joint 

tortfeasors, Art. 22l2(a), Tex. Civ. Stat. Ann. (repealed), holding that the protections of 

the prior Texas Workers’ Compensation Act were an exception to the statute permitting 

contribution actions between joint tortfeasors.

28
Children’s Place Daycare. The child’s parents brought an action against the daycare, 

which in turn designated the City of El Paso as a responsible third party. The plaintiffs 

then amended their action to include the City as a defendant, incorporating the motion to 

designate the City as a responsible third party as a basis for their affirmative claims against the City. Id. at 882. 

The El Paso Court of Appeals concluded that to the extent the plaintiffs attempted 

to impose liability on the City based solely on the responsible third party designation, without establishing a waiver of the City’s immunity, it was error to deny the City’s plea 

to the jurisdiction. Id. The Court noted, citing Tex. Civ. Prac & Rem. Code § 

33.004(i)(1)(2): “The filing or granting or a motion for leave to designate a person as a 

responsible third party does not impose liability against that person and may not be used 

in any other proceeding, on the basis of res judicata, collateral estoppel, or any other legal 

theory, to impose liability on that person.” 

The Court noted approving the City’s position that a responsible third party 

designation could not establish liability against a party, stating: “The City is correct that 

the filing or granting of a motion for leave to designate a person as a responsible third 

party or a finding of fault against the person “does not by itself impose liability on the person.” 141., citing Tex. Civ. Prac & Rem. Code §33.004(i)(l).

29
Mullins’ argument that the mere designation of Martinez, a covered employer, subjects it 

to a contribution claim under Chapter 33 is entirely without merit. 

CONCLUSION AND PRAYER 

The trial court was correct in granting Martinez’s Motion for Summary Judgment 

based on the protections afforded it as an employer under the Workers’ Compensation Act. Once Martinez demonstrated that it was a covered employer and that there was no 

written agreement executed by Martinez before the Gomez accident under which it 

expressly assumed the liability of Mullins and/or Blue Sky, it estabished a complete bar 

to Mullins’ claims for indemnity or contribution. Mullins’ efforts to circumvent the 

literal requirements of the statutory exception by producing a certificate of insurance 

identifying policies covering Martinez, as well as a copy of Martinez’s commercial insurance policy, establish merely that Martinez had liability coverage in place at the time of the incident. Neither document constitutes proof of an explicit written agreement 

executed by Martinez pre—accident under which it assumed the liability of Mullins and/or Blue Sky. 

Mullins’ belated effort to replead to include gross negligence allegations, or to 

supplement the summary judgment evidence with information purporting to create a fact question on the issue of gross negligence is of no use to him here because there is no

30
Finally, Mullins’ argument that the designation of Martinez as a responsible third 

party creates a right of contribution under Chapter 33 is contradicted by the plain language of the statute itself. 

WHEREFORE, PREMISES CONSIDERED, Appellee Martinez R.O.W., L.L.C. 

f/k/a Martinez Investments, L.L.C. prays that this Court affirm the trial court’s judgment and further grant Appellee all other relief to which it may show itself justly entitled. 

31 

Respectfully submitted, WRIGHT & GREENHILL, P.C. 221 W. 6th Street, Suite 1800 Austin, Texas 78701 512/476-4600 512/476-5382 (Fax) By:/s/ David P. Boyce David P. Boyce State Bar No. 02759770 dbo ceFzD\_v_-g.com 

ATTORNEYS FOR APPELLEE
/s/ David P. Bovce David P. Boyce 

CERTIFICATE OF SERVICE 

I hereby certify that a true and correct copy of the above and foregoing has been served on the following counsel of record in accordance with the Texas Rules of Civil Procedure, on this 26"‘ day of August, 2015: 

Via ECF and Facsimile Patrick F. Timmons, Jr. 8556 Katy Freeway, Suite 120 Houston, Texas 77024-1806 pftfcbtiininonslawfirm.coin 

/s/ David P. Boyce David P. Boyce

32
APPENDIX TAB

1
WORKMEN’S COMPENSATION~—-LIABILITY OF ASSOCIATION 

CHAPTER 437 

- S. B. No. 223 

A" AC‘ flmendlfli! ‘ha TEX“ Workman’; Compensation lnuursneo Lows 12! thlc mm: by amending Sectlon 3 of Article 3305, Revised Clvll statutes of 1025, so amended; providing n unvlnnu clause; and declaring an emer- Honey. 

Be it enacted by the Legislature of the State of Texas: Section 1. Section 3 of Article 8306, Revised Civil Statutes of Texas, 1925, as amended,“ is amended to read hercnfter as follows: "Sec. 3. The employees of a subscriber and the parents of minor em- ployees shall have no right of action against their employer or ssuinst any agent, servsnt or employee of said employer for damages for personal in- juries, and the representatives and beneficiaries of deceased employees shall have no right of action against such subscribing employer or his agent, servant or employee for damages for injuries resulting in death, but such employees and their representatives and beneficiaries shall look for compensation solely to the association, as the same is hereinafter pro- vided Ior. All compensation mllowed under the succeeding sections herein shall be exempt from garnishment, attachment, judgment and all other suits or claims, and no such right of action end no such compensation and no part thereof or of either shall be assignable, except as otherwise herein provided, and any attempt to assign the same shall be void. If an action for damages on account of injury to or death of an employee of s subscrib- er is brought by such employee, or by the representatives or beneficiaries of such deceased employee, or by the association for the joint use and benefit of itself and such employee or such representatives or beneficiuries, against a person other than the subscriber, as provided in Section (is, Arti- cle'8307, Revised Civil Statutes of Texas, 1925, and if such action results in a judgment against such other person, or results in a settlement by such other person, the subscriber, his agent, servant or employee, shall have no liability to reimburse or hold such other person harmless on such judgment or settlement, nor shall the subscriber, his agent, servant or em- ployee, have any tort or contract liability for damages to such other person because of such judgment or settlement. in the sbsence of a written sgree— ment expressly assuming such liability, executed by the subscriber prior to such injury or death. No part of this Section is intended to lessen or alter the employees existing rights or cause of action either against his employer, its subscriber, or any third party. 

65. Vex-non‘n Ann.Clv.St. art. 8305, g 3. 

1132
manner affect the remaining Sections, paragraphs or provisions of this Act, but the same shall remain in full force and effect. Sec. 8. The importance of this legislation and the crowded condition of the calendar in both Houses create an emergency and an imperative public necessity that the Constitutional Rule requiring bills to be read on three several days in each House be suspended, and said Rule is hereby suspended; and that this Act shall take atfect and be in force from and after its passage. and it is so enacted. Passed the Senate. March 21, 1963: Yeas 30, Nays 0; May 20, 1963, by authority of H.C.R. No. 100 bill was returned from Governor's ofiice and correction made; passed the House, May 8, 1963, by a non-record vote; May 20, 1963, I-I.G.R~ No. 100 was‘ adopted. Approved June 10, 1963. Effective 90 days after May 24, 1963, date of adjournment. 

LIBRARIES—DIS'I"RIBU'I‘ION OF STATE DOCUMENTS 

CHAPTER 438 5‘ 

S. B. No. 266 

An Act to establish depository libraries with nuihority in the Director and Librar- ian of the Texas state Library; requiring certain act: to be performed to facilitate distribution of state documents; and declaring an emergency. 

Be it enacted by the Lrgisloiicrc of ilic State of Texas: Section 1. The term "state document” as used in this Act means all publications of state agencies which the Texas State Library is authorized ' by Revised Civil Statutes, 1925, Article 5442, to acquire and distribute. Sec. 2. The term “depository libraries” as used in this Act means the Texas State Library, libraries of state institutions oi‘ higher education, and other libraries so designated by the Texas Library and Historical Com- mission upon determination that such designations are necessary to pro- vide adequaie access to state documents. Sec. 3. Each state agency shall furnish the Texas State Library with state documents in the quantity specified in the Revised Civil Statutes, 1925, Article 5442. See. 4. State documents shall be made available to depository li- braries under the direction of the Texas State Library. Sec. 6. To facilitate distribution of state documents, each state agen- cy shall furnish the Texas State Library with a list of state documents 

65. Vernon's Ann.Ci\'.St. nrt. uuzn. H33
APPENDIX TAB

2
WORKERS‘ COMPENSATION—BENEFITS—ASSIGNMEN’l 1'0 INSURANCE COMPANY 

CHAPTER 131 

H. B. No. 68 

All AC1‘ 

ranting to the nniqnmont of cox-tnin vim-kart‘ compunution 

bnntfltl to An innurlncu complny. 

BE IT ENACTED BY THE LBOXSLATURE OE‘ ‘DEE STATE OF TEXAS: 

SECTION 1. sncczlon 3, Articlo B306, Rcviud Bntutu, in 

unnndudssto rand nu follmu: 

Etc. 3. _(__:_l Thu umpluyuuu or I uubucribor Ind thu plrlntn 

of minor employer: lhlll have nu right of action lqlinlt their omploycr or against any Iqont. nrvnnt or umplayto at Ilid Impluyor 

for dunnqn {or pcrnannl snjurhu, and thn rnpronntntivon and bnnuticluiu of dccmnad nnploycu nhnll hnvn no right a! nation nqninlt such subscribing ampluyor or his aunt. urvnnt or Iwloyu 

tar dun: on for injurhn rnlultinq in death, but such cmplcyucl uzé 

their rupx-uuntntivcn and bununcuri-I nhnu. look for canpnnntlon Iulcly to the unocintian, nu thy Inn: 1: hu-unnttur providod Int. 

_0_:_)_ All conspunution nllowod undur U1: Iuccaodinq uctionu 

huruin shun be oxnnpt {ram qlrninhacnt, nttnchnont, Judgment Ind 

:11 othu: suit: or clntmn. Ind no such right at action And no such 

campcnntion And no part theme: or ot nun: shall 1:: uuiqmhlo, cxcupf. an cthnrwiun h-rain prnvidnd, 111:! any attempt to usual: the 

|u..¢ shall bu void. 

55. Vernon's Ann.Civ.SL art. 8306. § 3. 

Addition: in text lndicaud by mngnflm; dolations by [Ma-ikoouu] 

613
duth 

employee 

by 

or by the repreeentntiven or beneticilriel cf such deceeeed employee, or by the nseucietian for the joint ule end benefit of 

itself end such employee or luch reprenentetivex or beneficiaries, against | person other then the Iubscriber, II provided in Section 6:, Article 8307. Revised Civil Stetutel of Texts, 1925, end if 

such lction reeultl in a judgment ngninut much debt? person. at result: in I settlement by much other person, the subscriber, hi: nqant, Iervent or employee, shell hnve no liability to reimburse or 

hold much other person hnrmless on such judgment er settlement, nor 

Ihell the Iuhlcriber, hil luent. Iervnnt or employee, hIVl lny tort 

or conttlct linbility tar damage: to Iuch other person beceune or 

Iuch judgment or settlement, in the nbuence c£ : written Agreement 

expuuly euuminu Iuch lid:-ility, executed by the subscriber prior 

to much injury or death. [Ne-pertai-ehh~Snet-.§an-Le-éntendebte iesuen-or-alter-the-employee:-extntin[-:§¢hte-er--eeuee--e£--action either--eye§nIt--h§I-empieyerr-its-euheeribs:r-er-eny-third-pertyw] 

131 The Alnocintion, its nqent, Iervnnt at employee, shall 

have no linbility with respect to my accident based on the Illeqetion thnt such Accident wnl ceueed or could have been 

prevented by e praqrem, inlpection. or other Activity or aervice undertaken by the nslecinticn for the prevention of Accident: in connection with uperetione oi its IUDICXLDUI; provided, hcweven thin immunity shall not -sue: the lhbility of the eseocinticn for 

compentntion or II otherwise pravided in this luv. 

Lg) Na pert of this Section is intended to Xesuen or Alter 

the gggiggggig [empieyeeej existing right: or clule a£ Action either eqeinlt his employer, its subscriber. or any third pnrty. 

Additions in text indicated by _u[n_§Lg,r_I‘mg: deletions by letnikoouiel 

614
pnnqa, 

Passed by the House on March 90, 1983: Yeas 137, Nays 0, 1 present, not voting; passed by the Senate on May 5. 1983: Yeas 31, Nays 0, Approved May 17, 1983. Effective May 17, 1983. 

WORKERS’ COMPENSATION——-DEATH BENEFITS- PBIOR INCAPACITY 

CHAPTER 132 

H. E. No. 99 

AN AC1‘ 

ralatinq to tan reduction of workcrfl companaation death benafita 

because at banafita paid for prior pariod 0! incapacity. 

BE IT ENACTED BY IEIE LEGISLATURE 0!‘ '1'!!! STATE 0!‘ TEXAS: SECTION 1. saction ab, Article 8305, Raviaod civil Statute: 

ct‘ Toxaa, 1925, is amcndndssto raad aa touovax 

sec. ah. 111 in can daath accu:-I as a result of tho injury 

after a period of total or partial incapacity. for which compansation haa been paid, thn period of incapacity shall be deducted from (‘Jun total pariod of compensation and tho bonufita 

paid thnraunder tron the maximum alloucd for the death. 

(13) Suction 8b deal net agglg to lifatima daath bonalita aa 

grovidad by section B or this article but aggllu only to than blnaficiariaa racaivin 360 vaoka of banelita.~ 

SECTION 2. It in uncartain and has not bun judicially 

datormincd uhuthat tha oifant px-ovidcd by Saction Bb, Article 8306. Raviud civil statucaa oz’ Taxaa, X925, appliaa to thu utctima 

banatita proviaiana oz sanction 8 or that articla. Tha tact that nu db. Vernon‘: Ann.Civ.St. art. 8306, § Sb. 

Addition: in text indicated by ,un_d_g_r_l1n_g; deletions by [ateikoeutsl 

615
APPENDIX TAB

3
Ed: Repealed by Acts 2005, 79th Leg., H.B. 7, eff. Sept. 1, 2005. As a division wit1n'u the Texas Department of Insurance (TDI), the Divsion of Workers’ Compensation is governed by the sunset provisons regarding TDI. Sec. 401.003. ACTIVITIES OF THE STATE AUDITOR. (a) The division is subject to audit by the state auditor in accordance with Chapter 321, Government Code. The state auditor may audit: (1) the structure and internal controls of the division; (2) the level and quality of service provided by the division to employers, injured employees, insurance carriers, sell‘-insured governmental entities, and other participants; (3) the implementation of statutory mandates by the division; (4) employee turnover; 

(5) information management systems, including public access to nonconfidential information; (6) the adoption and implementation of administrative rules by the commissioner; and (7) assessment of administrative violations and the penalties for those violations. (b) Nothing in this section limits the authority of the state auditor under Chapter 321, Government Code. 

Ed: This section was added by the 2001 Legislature. SUBCHAPTER B. DEFINITIONS 

Sec. 401.011. GENERAL DEFINITIONS. In this subtitle: 

(1) “Adjuster” means a person licensed under Chapter 4101, Insurance Code. 

Ed: Section 4101.001 of the Insurance Code defines “adjuster” as an individual who investigates or adjusts losses on behalf of an insurer as an independent contractor or as an employee of an adjustment bureau, an association, a general property and casualty agent, an independent contractor, aninsurer, or a managing general agent, or who supervises thehandling of claims. However, Section 4101.002 provides that this definition does not apply to, among others, clerical or salaried personnel not engaged regularly in the negotiation of contested claims, attorneys, photographers, private detectives, estimators, and other exp erts. (2) “Administrative violation” means a violation of this subtitle, a rule adopted under this subtitle, or an order or decision of the commissioner that is subject to penalties and sanctions as provided by this subtitle. (3) “Agreement” means the resolution by the parties to a dispute under this subtitle of one or more issues regarding an injury, death, coverage, compensability, or compensation. The term does not include a settlement. 

(4) “Alien” means a person who is not a citizen of the United States. 

16 Labor Code

~

~

~
(18-a)“Evidence-based medicine” means the use of current best quality scientific and medical evidence formulated from credible scientific studies, including peer-reviewed medical literature and other current scientifically based texts, and treatment and practice guidelines in making decisions about the care ofindividual patients. 

Ed: Thistenn was added bythe200S Legislature and is usedin the definition of “health care reasonably required.” It arguably incorporates the concepts required for the admission of expert evidence under E.1. Dupont de Nemours and Co., Inc. v. Robinson, 923 S.W.2d 594 (Tex. 1995) or for areview of the sufficiency of the evidence underMerreIl Dow Pharmacezzticals 

v. Havner, 953 S.W.2d 706 (Tex. 1997). (19) “Health care” includes all reasonable and necessary medical aid, medical examinations, medical treatments, medical diagnoses, medical evaluations, and medical services. The term does not include vocational rehabilitation. The term includes: (A) medical, surgical, chiropractic, podiatric, optornetric, dental, nursing, and physical therapy services provided by or at the direction of a doctor; (B) physical rehabilitation services performed by a licensed occupational therapist provided by or at the direction ofa doctor; (C) psychological services prescribed by a doctor; (D) the services of a hospital or other health care facility; 

(E) a prescription drug, medicine, or other remedy; and (F) a medical or surgical supply, appliance, brace, artificial member, or prosthetic or orthotic device, including the fitting of, change or repair to, or training in the use of the appliance, brace, member, or device. 

Ed: All health care must be provided by or at the direction of a doctor. Vocational rehabilitation is not included in this Act, but may be provided by the Texas Department of Assistive and Rehabilitative Services (DARS) (See Section 409.012). Subsection (l9)(F) was amended in 2007 by SB. 458. The Senate Bill Analysis stated: “Currently, artificial limbs are not treated by all workers’ compensation carriers as a physical structure of the body. Therefore, an accident resulting in a broken leg would be treatable under workers’ compensation, but the same accident causing injury to an artificial leg would not cover repair or replacement of the artificial leg. ‘The goal of the workers’ compensation system is to get workers healthy and back to work. SenateBill 45 8 ensures workers’ compensation carriers treat artificial limbs as natural limbs.” To that end, definitions of “Oithotic device” and “Prosthetic device” were added, as well asredefining “health care” to include the fitting 

of, change to, or repair to, the device. However, the amendments do not achieve the desired effect, or for that matter, any change to the law at all. The Bill did not provide a change to the definition of “injury,” which still requires damage or harm to the “physical structure of thebody” as opposed to an artificial limb. Further, by only amending the definition of “health care,” the Bill still links the entitlement to such devices only to situations where the carrier would otherwise be liable for “health care.” Pursuant to Section 408.021, a claimant is only entitled to “health care” if he sustains “a compensable injury.” Thus, this amendment in no way “ensures workers’ compensation carriers treat artificial limbs as natural limbs.” Rather, 

it simply further defines certain terms and ensures that the carrier is liable for the replacement or repair of the device. As such theAppeals Panel’s analysis in Texas Workers’ Compensation ComniissionAppeal No. 91001, decided July 31, 1991, is still applicable. 

Labor Code 19
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. 407A.463. GUARANTY FUND AS PARTY IN INTEREST. The guaranty fund is a party in interest in a proceeding involving a workers’ compensation claim against an insolvent group whose compensation obligations have been paid or assumed by the guaranty fund. The guaranty fund has the same rights and defenses as the insolvent group, including the right to: 

(1) appear, defend, or appeal a claim; 7 

_ (2) receive notice of, investigate, adjust, compromise, settle, or pay a claim; and 

(3) investigate, handle, or deny a claim. 

. 407A.464. PREFERENCES. Benefit payments made by the guaranty fund under this subchapter are entitled to the same preference over 

§ other debts ofthcinsolvent group as provided bylaw to benefit payments owed by the insolvent group to the person entitled to the benefits. The guaranty fund has the priority status provided by Section 8, Article 21.28, Insurance Code. 

_407A.465. SPECIAL FUND. onies advanced by the association under this chapter do not become assets of the insolvent group but constitute special fund advanced to the commissioner, receiver, or other statutory successor only for the payment of mpensation liabilities, including the costs of claim administration and legal costs. 

CHAPTER 408. WORKERS’ COMPENSATION BENEFITS 

UBCIIAPTER A. GENERAL PROVISIONS 

Sec. 408.001. EXCLUSIVE REMEDY; EXEMPLARY DAMAGES. 

, Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee. This section does not prohibit the recovery of exemplary damages by the surviving spouse or heirs of the body ofa deceased employee whose death was caused by an intentional act or omission of the employer or by the ‘ employer’s gross negligence. In this section, “gross negligence” has the meaning assigned by Section 41.001, Civil Practice and Remedies Code. A determination under Section 406.032, 409.002, or 409.004 that a worli—related injury is noneompensable ‘ 

/\ does not adversely affect the exclusive remedy provisions under Subsection (a). 

. The right of recovery for a covered employee orlegal beneficiary against the employer or agent or employee of employer restricted solely to compensation benefits unless the employee dies as a result of an intentional act or the gross negligence 

bor Code 101 
Regional Hospital 

Bomar, 9 S.W.3d 805 (Tex. 1999) and Payne 

Glaen Hospital Hospital Corp., 28 S.W.3d 15 (Tex, 2000). 

Sec. 408.002. SURVIVAL OF CAUSE OF ACTION. A right of action survives in a case based on a compensable injury that results in the employec’s death. 

Ed: The purpose of this section is not immediately clear in light of other sections in the 1989 Act. It is derived from Article 8306, §16 of the “old law.” It has been held that the former section didnotrefer to suits against a covered employer and gives no right of recovery against the employer; rather it was “intended to preserve causes of actions arising from those accidents to which the [workers’ compensation] insurance is applicable— i.e., injuries snstainedinthe course of employment, for which third parties are liable — and to prevent such causes of action against third persons not insured, from abatement by death.” Orange Ice, Light & Wafer v. Texas Compensation Ins. C o. , 278 F. 8 (5"' Cir 1922). In other words, if the employee is injured in the course and scope of his employment due to the negligence of a third party, and that injury subsequently results in death, the cause of action against the third party survives the employee’s death. This ensures, among other things, that the carrier’s subrogation interest is not eliminated. Although the language of this section is differentthan that contained in Article 8306, § 16, according to one of the authors of the 1989 Act, this section does not create a “substantive change from the prior law on survival of a cause of action.” 1 MONTFORD. Bzuznnn & DUNCAN, A GUIDE To TEXAS WORKERS’ Com. REFORM, § 4.03, at 4-39 (1991). Section 408.181(a) provides a derivative, but separate, cause of action to the beneficiaries for deaths that result from a compensable injury. When an employee dies of causes unrelated to the compensable injury (except in the case of a specific injury), “the only claim that survive[s] his death [is] one for benefits accrued and unpaid from the date of his injury until the date of his death.“ /lntwine v. Dallas1ndependentSchooI District,698 S.W.2d 226,228 (Tex.App.—Dallas 1985,writref’dn.r.e.). See aIsoBaz'Iey 

v. Travelers Insurance Co. , 383 S.W.2d 562 (Tex. 1964); Burris 'Estate v. Ass ocialedEmplayers Insurance C o. , 374 S.W.2d 223 (Tex. 1963): Fitzhugh v. Associated Indemnity Corp., 746 S.W.Zd36l (Tex.App.—Eastland l988,no writ). TheAppeals Panel has held that an estate’s right to accrued and unpaid benefits survives a non-compensable death. Texas Workers’ Compensation Commission Appeal No. 950310, decided April ll, 1995. However, regardless of the compensability of the death, Section 408.081(d)providesthat“[a]n interest in funu-2 income benefits does not survive after the employee’ s death.” Although it might be argued that impairment income benefits accrue on the date of maximum medical improvement if the impairment rating is known, pursuant to Section 408.l2l(a)(2), the decedent’s entitlement to these benefits ends on “the date of the en1ployee’s death.” 

Sec. 408.003. REIMBURSABLE EMPLOYER PAYMENTS; SALARY CONTINUATION; OFFSET AGAINST INCOME BENEFITS; LIMITS. (a) After an injury, an employer may: 

(1) initiate benefit payments, including medical benefits; or (2) on the written request or agreement ofthe employee, supplement income benefits paid by the insurance carrier by an amount that does not exceed the am ount computed by subtracting the amount ofthcincome benefit payments from the employce’s net preinjury wages. 

(in) Ifan injuryis found to be compensable and an insurance carrier initiates compensation, the insurance carrier 

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his subsection. n attorney actively representing the insurance carrier’s interest actively participates in obtaining a very, the court shall award and apportion between the claimant’s and the insurance carrier’s attorneys payable out of the insurance carrier’s suhrogation recovery. In apportioning the award, the court shall ider the benefit accruing to the insurance carrier as a result of each attorney’s service. The total rney’s fees may not exceed one—third of the insurance carrier’s recovery. purposes of determining the amount of an attorney’s fee under this section, only the amount recovered benefits, including medical benefits, that have been paid by the insurance carrier may be considered. 

ile the carrier is still required to pay an attorney’s fee not to exceed one-third of its subrogation recovery to either t’s lawyer, the carrier’s lawyer, or both, the fee only applies to the past subrogation lien amount, rather than any 

ture amounts. On the other hand, carrier is now responsible for its proportionate share of expenses in recovering monies, said expenses to be paid out of the carrier’s part of the recovery. 

e*ernployee’s attorney represents carrier for subrogation recovery, full disclosure of dual representation must be 

rnployec, furnished to all parties, ineludingthe commission, and filedwith the court prior to approval of judgment. observethat a claimant’s attorney representingboth the claimant and insurance company has an inherent conflict particularly when third party proceeds are inadequate to fund fully the subrogation interest and the desires of 

giniant. Carrier’s own counsel should be employed independently to avoid conflict or violation of Texas Disciplinary /W rofessional Conduct of the State Bar of Texas. 

04. EMPLOYER LIABILITY TO THIRD PARTY. tion for damages brought by an injured employee, a legal beneficiary, or an insurance carrier against a rty liable to pay damages for the injury or death under this chapter that results in a judgment against the ity or a settlement by the third party, the employer is not liable to the third party for reimbursement or shased on thcjudgnient or settlement unless the employer executed, before the injury or death occurred, 

In agreement with the third party to assume the liability. 

mployee, beneficiary or carrier sues a third party and recovers either by judgment or settlement, the employer have liability to the thirdparty in the absence of an express written indemnity agreement creating liability executed he accident. Indemnity agreements are widespread in industry, and if drafted properly, valid and enforceable. 

CHAPTER 418. CRIMINAL PENALTIES 

01. PENALTY FOR FRAUDULENTLY OBTAINING OR DENYING BENEFITS. person commits an offense if the person, with the intent to obtain or deny payment ofbenelits, including cdical benefits, under this subtitle or Subtitle C, for himself or another, knowingly or intentionally: makes a false or misleading statement; 

' - misrepresents or conceals a material fact; or 

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