### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

ON MOTION F OR REHEARING

NO. 03-08-00483- CV

Texas P ropert y and Casu alty Insu rance G uaranty Association f or Re liance National Insu rance C om pany, an im paired com pany, Ap pellant

v. Doris J. Toberny, Appellee

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 345 TH JUDICI AL DISTRICT NO. D-1 -GN-0 6-0 0329 5, H ONO RAB LE STEP HEN Y ELENOSK Y , JUDGE P RESIDING

M E M O R A N D U M O P I N I ON

We withdraw the opinion and judgme nt issued Dec ember 9, 2009, and substitut e the following opinion in li eu of the ear lier one.

Appellant Texas Property and Casualty I nsuranc e Guar anty Association for Reliance National I ns u rance Com pany , an im paire d company (“the Company ”), filed suit ag ainst appellee 1
Doris J

. Toberny for judicial revie w of a decision of the Division of Workers’ Compensation of the
Texas Depa

rtment of I nsuranc e (“the Division”). The district court enter ed a final judgme nt in favor

For simpli city , we ref

er to both Reliance National I nsuranc e Company and its rec eiver and 1 succe ssor in interest, Texas Property and Casualty I nsuranc e Guar anty Association, as “the Company .”of Toberny on all issues on which the Company soug ht judicial revie w. I n four issues on appea l, the

Company asser

ts that (1) the Division’s calc ulati on of Toberny ’s impairment rating is incorre ct; (2) Toberny ’s compensa

ble injuries do not include her pre- exis ting scoliosis and deg ener ative disc d i sease ; (3) Toberny was not entitled to supplemental income benef its for the ni n t h an d 2
tenth quarte rs; and (4) the C ompany was not obliga ted t o pay Toberny ’s attorney ’s fees

. W e wi l l aff irm the trial cour

t’s judgme nt.

F ACTUAL AND P ROCEDURAL BACK GR OUND Toberny was employ ed as an exhibi t decor ator, setting u p an d tear ing down trade show exhibi ts. She injured her back on May 10, 2000, when a reg istration unit fell on her while she

was working

. She soug ht car e with her company doctor, who rec ommended thera py . After thera

py failed to alleviate her pain, Toberny underw ent a nine-leve l spinal-fusion surg ery , perf ormed in two parts, during which her pre- exis ting scoliosis was corr ecte d. The surg ery left her unable to work and partially phy sically impa i re d. The Com pany paid for Toberny ’s s urg ery as part of a compensa ble injury rela ted t o her on-the-job i njury

. Howeve r, in Dec ember 2001 the C ompany sent Toberny a notice of ref

used or disputed claim, asser ting that her May 10, 2000 injury was a sprain or strain to her lower back only and was not the producing cause of the diag nosis or trea tment of scoliosis. The Company did not, at that time, pursue its disputed claim at a contested- case hear ing in the Division to determine the extent of Toberny ’s compensa ble injury

.

Supplemental income benef its are paid to injured worke rs whose oth er income benef its 2 have run out, who have an impairment rating of 15 perc ent or g rea ter, and who meet other require d statutory criter ia. Tex. L ab. Code Ann. § 408.142( a) ( West 2006). 2On J une 26, 2002, Toberny visited Dr. Remon A. Fino to have him assess whether

she had rea ched maxi mum medi ca l improvement (“MMI ”) and, if so, to have him assig n a 3 whole-body impairment rating

. Dr. F ino examined Toberny , decide d that she had rea ched MMI , 4 and assigned her a 15-per cent impairment rating

. On J uly 17, 2 0 0 2 , t he C ompany timely filed an impairment-ra ting dispute with the Depa rtment to contest Dr. Fino’s finding s. The Division appointed a desig nated doctor, Dr. Soignier , to independe ntly deter mine Toberny ’s date of MMI and her impairment rating

. See Tex. L ab. Code Ann. § 408.0041 (West 2006). Dr. Soignier deter mined that Toberny rea ched MMI on J une 26, 2002 and assig ned her a 25-per cent impairment rating

. After that desig nation, the Company did not initiate any further dispute-re solution proce dures, but rathe r paid Toberny benef

its, including eig ht quarte rs of supplemental income ben ef i t s based on her 25-per cent impairment rating , until more than three y ear s later when it contested the propriety of her impairment rating and beg an the pr ocee dings tha t form the basis of this appe al.

On September 22, 2005, the Company filed a reque st with the Divis i o n t o h o l d a benef it-review confe renc e conce rning Toberny ’s injuries. The Company ’s reque st stated that it was “dis puting [t hat] the claimant’s curr ent medical condition is rela ted to the compensa ble lumba r strain,” and also stated t hat i t “asse rts the continued medical treatment i s rela ted t o t h e claimant’s

A worke r rea ches maxi mum medical improvement (1) when h er condition stabiliz es, 3 (2) even if her condition has not y et stabiliz ed, at two y ear s from the date of her injury , or (3) in the case of a worke r who has had spinal surg ery and whose condition has not stabiliz ed within two y ear s from the date of inju ry , at s o m e later date as decide d by the Division pursuant to labor code section 408.104 and the Division’s rules. Id. § 401.011(30).

A doctor assig ns an impairment rating pursuant t o g uidelines specifie d by statute. 4 See id

. § 408.124. The rating is g iven as a perc entag e of w hole-body impairment resulting from a compensa ble injury

. Id. § 401.011(24). 3pre- exis ting scoliosis and deg ener ati ve disc disease.” The Company soug ht permission to

discontinue providing “medica l trea tment and/or any indemnity benef its.” On October 4, 2005, the Division denied the Company ’s reque st for a revie w confe renc e, stating: “[I ]t is the injured worke rs’ [si c] responsibility

to pursue extent of injury issues.” Although it is unclea

r which party reque sted the next benef it-review confe renc e, the

rec ord indicates that the Division held a confe renc e in the Ty ler field office o n Marc h 3, 2006 in order “to mediate resolution of disputed issues.” The parties wer e unable to come to an ag ree ment,

so the Division held a benef it contested- case hear ing on April 25, 2006. After taking evidenc e, the hear ing office r issued a “dec ision and order ” in which he found that the medica l ev i d en ce was uniform in stating that Toberny ’s pre- exis ting scolios is and deg ener ative disc disease wer e not
ag g rava ted by her on-the-job inju ry an d t h at her surg ery was done to alleviate problems from
pre- exis ting conditions only

. I n addition, howeve r, the hear ing office r noted that despite having filed its dispute to Toberny ’s first impairment rating in De ce m b er of 2001, the Company did not file a dispute to Dr. Soignier ’s 25-per cent impairment rating until September 21, 2005, almost four y ear s l at er , an d near ly a y ear and a half afte r the first three months of Toberny ’s supplemental in co m e benef its had been paid. The hear ing office r conclude d that beca use the Company had no “pending dispute” to Toberny ’s MMI and impairment rating desig nations befor e Marc h 3, 2004—the end of the first quarte r of supplemental income b en ef i t s —it had waived its rig ht to contest her MMI or impairment rating under rule 130.102(g ). See 28 Tex. Admin. Code § 130.102(g ) (2000) (Tex. Div. Workers’ Comp., Eligibility for Supplemen t al I ncome Be nefits, Amount), recodified at 28 Tex. Admin. Code § 130.102(h) by 34 Tex. Reg

. 2138 (her einaf ter “for mer rule 130.102(g )”)

. Be cause

4the Company had waived its rig ht to contest Toberny ’s impairment rating , the hear ing office r found

that (1) Toberny rea ched MMI on J une 26, 2002, (2) her impairment ra t i n g is 25 perc ent, (3) her
compensa ble injury extends to the diag nosed conditions of scoliosis and deg ener ative disc disease, and (4) Toberny was entitled to continued s u p p l em ental income benef its for the ninth and tenth quarte rs. The D ivision acc epted the decision and order of t he hearing office r and adopted it as a f inal decision of the a g ency without issui ng a wr itten opinion. The Company filed suit for judicial revie w of the Division’s f inal order pursuant to labor code section 410.301, the statute that provides for “modified trial de novo” in the district court. Tex. L ab. Code Ann. § 4 10.301 (West 2006). After a bench trial, the court rende red judgme nt aff irming the Division’s final order

. The judgme nt stated, in pertinent part, that (1) the deadline in former rule 130.102(g ) is rea sonable and valid; (2) Toberny ’s compensa ble injury incl u des the diag noses of scoliosis and dege nera tive disc disease; (3) t he C o m p any waived the rig ht to contest
compensa bility by failing to contest the impairment ra t i n g i n the time allowed by former rule 130.102(g ); (4) Toberny ’s impairment rating is 25 perc ent beca use of the Company ’s failure to timely contest the rating ; ( 5) Toberny is e ntitled to supplemental income benef its for the ninth a

nd tenth compensa

ble quarte rs; (6) Toberny is e ntitled to $19,000 in a ttorney ’s fee s for defe nding her suit for judicial revie w in the trial court; and (7) should she be succe ssful in this Court, a rea sonable and nec essar

y amount of attorne y ’s fe es for her a ppeal would be $15,000. The Company appea ls.

STANDARD OF REVIEW
I n case s like the prese nt one that ultimately involve issues reg arding compensa bility and elig ibilit y for income benef its, judicial revie w of the Division’s decis i o n i s b y modified de

5novo trial. See id. § 410.301-.308 (West 2006); see also Morales v. Liberty Mut

. Ins. Co. ,

241 S.W .3d 514, 519 (Tex. 2007). The party appea ling the Division ’s d ec i s i o n , i n this case the Compan y , b ea rs the burden of proof by a preponde ranc e of the evidenc e. Tex. L ab. Code Ann. § 410.303. When, as here , the court sits without a jury , the court “shall consider the decision of the
appea ls panel” in its delibera tion but is not bound by it. Id

. § 4 1 0

. 3 04(b); Morales , 241 S.W .3d

at 5 1 6. I n deter

mining an impairment rating , the court must adopt one of the specific ra t i n gs previously

rende red by

a phy sician. Tex. L ab. Code Ann. § 410.306( c).
I nsofar as a party claims that an ag ency acte d bey ond its s t at u t o ry authority in adopting a rule, our revie w is de novo. Guitar Holding Co. v. Hudspeth County Underground W ater Conservation Dist. No. 1 , 263 S.W .3d 910, 917 (Tex. 2008). “A n age n cy m ay adopt only such rules as are authorize d b y and consistent with its statutory authority .” Pruett v. Harris County Bail Bond Bd. , 249 S.W .3d 447, 452 (Tex. 2008) (citing Railroad Comm’n v. Lone Star Gas Co. , 844 S.W .2d 679, 685 (Tex. 1992)). That authorit y ca n b e ex press or implied. Id. “I n deciding whether a particula

r administrative ag ency has exceede d its rule-ma king power s, the deter minative fac tor is whether the rule’s provisions are ‘in h ar m o n y wi t h t he g ener al objectives of the Act involved.’” Id. (quoting Gerst v. Oak Clif f Sav. & Loan Ass’n , 432 S.W .2d 702, 706 (Tex. 1968)).

DISCUSSIO N
I n its first issue, the Company asser ts three arg uments wh y Toberny ’s impairment rating is not 25 perc ent: (1) former rule 130.102(g ) is inva lid a nd there fore any

impairment rating b as ed o n t h at rule is also invalid; (2) even if former rule 130.102(g ) is valid, the Company di d
not waive its rig ht to challeng e To b er n y ’s M MI and impairment rating beca use there was a
6“pending dispute” as that term is used in the rule; and (3) the evidenc e conclusively establishes that

the impairment rating was made using non-compe nsable conditions. We will addre ss eac h

asser tion in turn.

V alidity of Form er Rule 130.102(g)

The Company asser

ts that former rule 130.102(g ) is i n v al i d b ecause it place s an additional burden on worke rs’ compensa tion participa nts not contemplated by statute. I t cites to this
Court’s opinion in Fulton v. Associated Indem nity Corp. , 46 S.W .3d 354 (Tex. App.—Austin 2001, pet. denied) , for support. The Company al s o as s erts that “the leg islature’s cre ation of a specific standard for impairment rating finality , which omits all other forms of finality , prec ludes the finality contained in Rule 130.102(g ).”

Rule 130.102 conce rns the elig ibilit y of worke rs for supplemental income benef its. Pay ment of su p p l em en t al income benef its is based on a worke r’s impairment rating , which is assig ned afte r a worke r has rea ched MMI

. See 28 Tex. Admin. Code § 130.102(b) (2008) (injured employ ee must have 15-perce nt or g rea ter impairment rating and meet other require ments to be elig ible for supplemental income benef its); 28 Tex. Admin. Code § 1 3 0

. 1 (b)- (c) (2008) (Div. of Workers’ Comp., Certifica tion of MMI and Eval. of Per ma n e n t I mp a ir ment) (deta iling how to cer tify
MMI and assig n impairment rating ). For mer rule 130.102(g ) finalized a worke r’s MMI date and impairment rating if there was no pending dispute prior to the end of the first quarte r of supplemental income bene fits. The rule sta tes:

I f there is no pending dispute reg arding the date of maxi mum medical improvement or the impairment ra t i n g p ri or to the expiration of the first quarte r, the date of

7maxi mum medical i m p ro vement and the impairment rating shall be final and

binding.

For mer rule 130.102(g ).

The Company arg ues that t h e ru l e i s invalid beca use it cre ates a “statute of limit ations” for challeng ing MMI and impairment rating s. I t as s er t s t h at the rule “pre clude[s] a

car rier from challeng ing the rela tionship of any condition in such an impairment rating afte r the expiration of the first quar ter of [suppl emental income benef its] ,” and there fore improperly place s an additional burde n on the Company not contemplated by

statute, akin to the rule this Court held invalid in Fulton

.

I n Fu l t on , this Court invalidated a Division rule that barr ed a worker’s rig ht to bring a challeng e to his impairment rating afte r 90 day s from t h e d at e t h e impairment rating was assig ned. Citi ng to the supreme court’s decision i n Rodriguez v. Servic e Lloyds Insurance Co. , 997 S.W .2d 248 (Tex. 1999), we discussed, as an i n itial matter, the proposition that MMI and impai rm ent rating s are inext rica bly linked, and that making a rule that limit s a worke r from contesting his impairme nt r ating has the prac tical eff ect of limit ing his r ight to contest the date his
MMI beca

me final. Fulton , 46 S.W .3 d at 371. This connec tion was important to our holding beca use t he supreme court had prev i o u sly upheld t he W orker s’ C ompensation Act’s use of MM I , wh i ch b y statute must be finally deter mined no more than two y ear s afte r a worke r’s inju ry ,

as a constitutionally adequate substitut e for worke rs’ neg lige nce reme dies. See Texas W o r ke r s’ Comp. Comm’n v. Garcia , 893 S.W .2d 504, 525 (Tex. 1995). Until he has rea ched MMI , a worke r
may b e en t i tled to temporar y income benef

its, which the supreme court in Garcia called a

8“major benef it.” Id

. The court in Ga r ci a s aid that restric ting temporar y income benef

its to a maxi mum of two y ear s, which the Act does by deeming a worke r to have rea ched MM I u pon the expiration of two y ear s reg ardle ss of his actual c ondition, was only justified by medical testimony that indicated the vast majority of worke rs’ conditions stabiliz e within two y ear s. Id. We rea soned in Fulton that if a rule cuts off temporar y income benef

its befor e the worke r’s condition has had two
y ear s to stabiliz e, that rule “mig ht be deeme d arbitra ry and might call into question the adequa cy of the entire statutory quid pro quo approve d in Garcia .” Fulton , 46 S.W .3d at 370. We held that the rule in Fulton was “ar

bitrary and invalid beca

use it impermissibly shorten[ed] the statuto ry t ime period a llotted to an injured worke r to ac hieve MMI .” Id. at 372.

Central to our h o l d i ng wer e two tenets of construction rele vant to the Workers’ Compensation Act. Firs t , we l i b er ally construe the Act to eff ectua te i ts purpose of compensa ting injured worke rs and their families. Id. at 370 (citing Albertson’s Inc. v. Sinclair , 984 S.W .2d 958,
961 (Tex. 1999)). Second, “[a]n ag ency may not suppl y b y implication restric tions on an employ ee’ s rig hts that are not found in the plai n l an gu age o f the Act.” Id. (citing Kroger Co. v. Keng , 23 S.W .3d 347, 349 (Tex. 2000)) (e mphasis added)

.

The rea soning that underpi n s F u l t o n does not avail the Company in this case . As noted above, “[i] n deciding whether a particula r administrative ag ency has exceede d its rule-making
power s, the deter

minative fac tor is whether the rule’ s provisions are ‘ in harmony with the gene ral objectives of the Act involved.’ ” Pruett , 249 S.W .3d at 452 (quoting Gerst , 432 S.W .2d at 706).
For mer rule 130.102(g ), as applied in this case to bar the Company from contesting Toberny ’s MMI and impairment rating long afte r they wer e deter mined, is in harmony with the objectives of the Act.

9I t provides finality fo r an injured worke r, helping to compensa te the worke r and her family for

on-the-job injuries. I t is also consistent with the broad rule-ma king authority g rante d to the Division by statute. See Tex. L ab. Code Ann. § 402.061 (West 2006 ). T h e question of whether the rule supplies by implication any impermissible restric tions on an employe e’s rig hts not contemplated by statute is not before us. Wi th respec t to the circumstances presente d by this case, Fulton does not compel the r

ule’s nullification. The C o m p any urg es us to hold former rule 130.102(g )—now curr ent rule 130.102(h)—invalid beca use the leg islature enac ted a statute specific ally addre ssing the finality of impairment rating s. See Act of J une 20, 2003, 78th L eg ., R.S., ch. 1190, § 1, 2003 Tex. Gen. L aws 3397, 3397-98 (codifie d at Tex. L ab. Code Ann. § 408.123(d)- (g ) (West 2006)). Since the leg islature has specific ally addre ssed finality of impairment rating s in a statute, the Company asser ts that former rule 130.102(g ), which ties finality to the rec eipt of supplemental i n co m e b enefits, is incompatible wit h the s tatute and cites Mid-Cent u r y Insurance C o. v. K

idd , 997 S.W .2d 265, 273 (Tex. 1999) (explaining doctrine that leg islature’s expression of one thing means its exclusion of all others). We express no opinion as to the applicability of that doctrine in this situation beca use labor code section 408.123 does not apply to this case . The 2003 amendment of the labor code provides that “[t] he chang e in law made by this Act by amendment” —add i n g the sections to which the Company cites—“a

pplies only to a cer

tification of maxi mum medical improvement and assig nment of an imp ai rm en t rating that is made on or afte r the eff ective date [J une 20, 2003] of this Act.”
See Act of J une 20, 2003, 78th L eg ., R.S., ch. 1190, § 2, 2003 Tex. Gen. L aws 3397, 3397-98. Both

10of Toberny ’s MMI and impairment-ra ting desig nations wer e made in 2002. Since the statute does

not apply to this case, we need not a ddress whe ther the r ule is in conflict with it.
Pending Dispu te

Having found the rule valid in th is case , we next addre ss the Company ’s asser tion that i t h ad a “pending dispute” within the meaning of former rule 130.102(g ) and there for e h as n o t waived its rig ht to contest Toberny ’s impairment rating

. As noted above, on J u l y 1 7 , 2 0 0 2 , the Company disputed Toberny ’s first impairment rating , which l ed to the Division’s desig nation of another doctor, a second exam, and a new impairment rating

. The Company asser ts that its orig inal dispute rema ins pending , howeve r, and has been pending ever since 2002 beca use “[t] he passag e of time does not neg ate the pending nature of a dispute,” despite the fac t that the Company did nothing else to dispute Toberny ’s second impa ir me n t r a ti n g until September 22, 2005—more than three y ear s afte r it filed its first objection to her impairment rating

. The Company arg ues that the orig inal dispute was not resolved by the desig nation of a doctor and that doctor’s subsequent deter mination of an MMI date and i m p ai rm en t rating, but rema ins “pending ” fore ver until formally and finally decide d by , we assume, either the Division or the courts. Th e C ompany cites to sever al Division
ap p eals panel decisions for support of its arg ument. Dec isions of the Division’s appea ls panel in other c ases, of

course , are not binding on this Court.
I n the prese nt case , the Company prese nted no aff irmative notice or evidenc e to the Division that there was still a pending dispute betwee n Toberny and the Company reg arding her
MMI or impairment rating betwee n the time of the Company ’s first impairment-ra ting disput e in
2002 and the expiration of t he first q u ar t er of Toberny ’s s upplemental income benef its more than

11two y ea rs l at er . The Company arg ues that its complete inaction during this time does not matter

beca use an impairment-ra ting dispute is finally resolved only by utiliz ing the proce dures laid out in chapte r 410 of the labor code. See Tex. L ab. Code Ann. §§ 410.002-.308 (West 2006 & West Supp.
2 0 0 9). We note that those dispute-re solution proce dures wer e available to the Comp an y fo r

more than three y ear s afte r the Company re q u est ed a desig nated- doctor revie w, y et it failed to employ them. Although the term “pending dispute” is not defined i n the rule, it was not

unrea sonable for the Division to require the Company to exercise some diligenc e with respe ct to the
prosec ution of its dispute in order for that dispute to rema in “pending ” for the purposes of former rule 130.102(g ). To decide otherwise would permit the Company to reque st a desig nated- doctor review an d t hen wait ten, fifteen, or even twenty y ear s without any further indication that it had a continued dispute about the desig nated doct o r’ s rating —the entire time pay ing benef its and 5
otherwise acting as if there wer e no pending d i s p ute—bef ore employ ing the dispute-re solution
proce dures in chapte r 410. This lack of f inality is at odds with the Workers’ Compensation Act’ s
purpose of providing compensa tion to injured worke rs and their families. I n light of the lack o f evidenc e of a pending dispute in the prese nt case , the Division did not err by deciding that there was

For example, the labor code, as it exis ted when the d es i gn ated doctor rende red his 5 impairment rating , allowed a car rier that was unsatisfied with the designate d doctor’s impairment rating to reque st that the Division order the employ ee “to attend an examination by a doctor selec ted by the insuranc e ca

rrier .” Ac t of May

25, 2001, 77th L eg ., R.S., ch. 1456, § 5.02, 2001 Te x . Gen. L aws 5167, 5182 (f

ormerly Tex. L ab. Code Ann. § 408.0041( f))

.

12no pending dispute wi t h i n t h e m ea ning of former rule 130.102(g ), nor did the trial court err in

aff irming the Division. 6

Com pensabilit

y, Extent of Inju ry, and Waiver Under Rule 130.102(g) The Company next asser

ts th a t T o b e r ny ’ s impairment rating is not 25 perc ent beca use

a worke r’s i m p ai rm ent rating must be based on compensa ble medical conditions and there is conclusive evidenc e th a

t her impairment rating was based only on non-compe nsable conditions. The
C o m p any also claims that the “compe nsable injury does not extend to and include the diag no s ed conditions of scoliosis and deg ener ative disc disease of the lumbar and thorac ic spine,” as found by the Division and the trial court, beca use there is leg ally and fac tually insufficient evidenc e to support that conclusion. I n post-submissi on briefing and on motion for rehe aring , the Company also asser ts that the Texas Supreme Court’s rec ent decision in Sta t e Of f i ce of Risk Managem ent v. Lawt on , 295 S.W .3d 646 (Tex. 2009), a case addre ssing the deadlines for conte s t i n g ex tent of injury , is dispositi ve of this ca se.

These arg uments involve at l east three int err elated conce pts , wh i ch we first define befor e discussing in more depth. A compensa ble injury is define d as “an injury that arises out of and in the course and scope of employ ment for which compensa tion is pay able under [subt itle A of the Workers’ Compensation Act].” Tex. L ab. Code Ann. § 401.011(10). An impairment rat i n g i s define d as “the perc entag e of perma nent im p a ir me nt of the whole body resulting from a compensa ble

We note that the leg islature has s i n ce am en d ed the labor code to addre ss the issue of 6 impairment-ra ting finality

. See Act of J une 20, 2003, 78th L eg ., R.S., ch. 1190, § 1, 2003 Tex. Gen. L aws 3397, 3397-98 (codifie d at Tex. L ab. Code Ann. § 408.123(d)- (g) (West 2006)). Section 408.123 finalizes undisputed impairment rating s within 91 day s of cer tification, subject to ree x amination in cer

tain limit ed ca ses. Tex. L ab. Code Ann. § 408.123( e), ( f) ( West 2006). 13injury .” Id. § 401.011(24). The term “exten t o f i njury ” is not define d in the code, but rela tes to

situations wher e a worke r who has sustained an otherwise compensa ble injury rec eives trea tment for an injury or other c ondition that is unrela ted to the compensa ble injury

. See id

. § 408.0042 (West 2006) (conte x tually defining extent of injury as “tre atment .

. . for an injury or diag nosis unr elated to the compensa

ble injury ”).
I n the prese nt case , the Division and the trial court found that Toberny ’s compensa ble conditions extended to the diag nosed cond i t i o n s of scoliosis and deg ener ative disc disease, conditions that the Company asser ts are bey ond the extent of the compensa ble low-bac k strain injury that Toberny suffe red. The Division found that former rule 130.102(g ) opera ted t o deem those conditions compensa

ble, rea soning that beca

use the rule finalized Toberny ’s impairment rating , and beca use an impairment rating is c alculate d using only compensa ble conditions, the conditions tha t
went into calc ulating Toberny ’s impairment rating —scoliosis and deg ener at i ve disc disease—be came compensa ble as well. The Company arg ues that the plain lang uag e of the rule does
not ad d re s s compensabilit y and that it was err or for the Division and the trial court to rea d that require ment into the rule.

Whil e it is true that the plain lang uag e of the rule doe s not address c ompensability , for the rule to opera te to finalize an impairment rating , it is nece ss ary to imply that any condition used to calc ulate that rating must be deem ed compensa ble for the purpose of that calc ulation. I f the
compensa bility of the conditi o n s u s ed to calc ulate the impairment rating wer e fore ver subject to revie w, and, if a future finding that a condition used to calc ulate an im p airment rating was not
compensa ble could invalidate a prior, finalized rating , then the rule could never truly fi n al i z e a

14rating

. For us to hold otherwise here would eff ectively nullify the rule. There fore , even assuming that Toberny ’s impairment rating was made with non-compe nsable conditions, the rule functioned
to deem them compensa ble for the purpose of computing the impairment rating

. I t wa s n o t, 7
there fore , err or for the Division and the trial cour t to conclude that Toberny ’s compensable i njury extends to the diag nosed conditions of deg ener ative disc dise ase and scoliosis for the purpose of computing he r impairment ra ting. 8

Arg uing that it can never waive its rig ht to conte st the extent of Toberny ’s
compensa ble injury , the Company cites Lawt on , a rec ent supreme court decision addre ssing whether the 60-day deadline for an insurance car rier to contest compensabi l i t y al s o forecloses a contest t o
extent of i njury if the carrier had noti ce of the facts underly ing the extent-of-injury dispute befor e the 60th day

. See 295 S.W .3d at 647; see also Tex. L ab. Code Ann. § 409.0 21(c) (West 2006) (wa iving car

rier’ s rig ht to contest compensa bility if not filed within 60 day s from date it was notified

We note that with the adoption of section 408.123(f) in 2003, the leg islature addre ssed this 7 issue direc tly by providing that a finalized impairment rating can be disputed based on “compe lling medical evidenc e” evincing (1) a signific ant err or in apply ing the Amer i ca n Medica l Association Guidelines or in calc ulating the impairment rating , (2) a clea rly mistaken diag nosis or undiag nosed condition, (3) improper or inadequa te trea tment of the injury that would rende r the impairment rating invalid, or (4) other “compelling circ umstances” as dec ided by the Divi sion. Id. § 408.123(f) (1). For rea sons noted above, this proce dure was not available to the parties in the prese nt case , but will g overn f uture c ases with re spect to this issue. Our opinion clar ifies the trial court’s judgme nt with respe ct to its finding s of the extent of 8 Tobery ’s compensa

ble conditions. The trial court’s judgme nt states that “[t] he compensa ble injury of May 10, 2000, does extend to and include the diag nosed conditions of scoliosis and deg ener ative disc disease of the lumbar and thorac ic spine.” Those conditions are deeme d compensa ble for the purpose of Toberny ’s finali ze d 2 5

- p e r c e nt impairment rating

. For rea sons discussed below, deeming these conditi o n s co m p en sable for the purpose of Toberny ’s finalized impairment rating does not mean that the Company has waived, for all time, its ability to bring an extent-of-injury contest, but it does prohibit any such challeng e from disturbing Toberny ’s finalized 25-per cent impairment rating

. 15of emp l o y ee’ s injury ). I n Lawt on , the car

rier rec eived notice that L awton neede d surg ery on her knee—a trea

tment it would later contend was unrela ted to her co m p en s able injury —befor e the expiration of 60 d ay s from the date it was notified of her injury

. 295 S.W .3d at 647. I t failed to bring a dispute within the 60-day time period. Id. Shortly afte r the 60-day window, the car rier filed

a notice that it was contesting the extent of L awton’s compensa ble injury

. Id. The Division found that beca use the car

rier had notice of L awton’s supposed need for surg ery befor e the end of the 60-day time period, a rea sonable investiga tion on their part would have led them to discover the full
extent of her claimed injury wi t h i n t h at p eriod. Id. The Division rea soned that since the car rier failed to file a contest within the 60-day window, it waived its rig ht to later contest whether L awton’s
compensa ble injury included the conditions for which she require d surg ery . Id. The trial court and the cour t of appe als aff

irmed.
I n reve rsing the court of appea ls, the supreme court held that labor code s ec t i o n 409.021(c) applies only to contests about compensa bility ; its deadline does not opera te to fore close disputes reg arding the exte nt of a c ompensable injury

. Id. at 648. That function, the cour t said, is perf ormed by Division rule 124.3(e) , which states:

Texas L abor C o d e, § 4 09.021 and subsection (a) of this section do not apply to disputes of extent of injury

. I f a car rier rec eives a medical bill that involves trea tment(s) or service( s) that the ca rrier believes is not re lated to t he compensable injury , the car

rier shall file a notice of dispute of extent of injury (notice of dispute). The noti ce of dispute shall be filed in acc ordanc e with §124.2 of t his title (re lating to Carrier Reporting and Notifica

tion Requirements) and be filed not later tha n the ear lier of: (1) the date the car

rier de nied the medica l bill; or

16(2) the due date for the car rier to pay or deny the medical bill as provided in Cha pter 133 of this title (re lating to Gene ral Medica l Provisions).

28 Tex. Admin. Code § 124.3(e) (2009) (Tex. Div. Workers’ Comp., I nvestig ation of an I njury and Notice of Denial/Dispute); see Lawt on , 295 S.W .3d at 650-51. The court held t hat t he carrie r di d
not waive its rig ht to contest extent of injury beca use it met the deadline set out in the rule. Lawt on , 295 S.W .3d at 650-51.

The Company asser

ts that Lawt on is dispositi ve here

. I t arg ues that, like the car rier in Lawt on , it does not dispute that T o b er ny was injured, or that her on-the-job injury was
compensa ble. Rather, the Company disputes tha t some of the medic al trea tment she rec eived wa s for conditions unrela ted to her compensa ble injury , and that those conditions improperly formed the b as i s of her impairment rating

. The Company asser ts that Lawt on decide d the issue of wh et h er “extent of injury disputes may be waived throug h car rier inaction.” The Company also asser ts that

t h e re as o n i ng in Lawt on means that “[t] o the extent that the Appea ls Panel has rec og nized th e

conce pt of ex t en t o f injury waiver under Rule 130.102(g ) it has eng ag ed in improper ad hoc rulemaking .” We conclude tha t Lawt on is not dispos itive here

.

First, Lawt on did not decide the issue of whether “extent-of-injury disputes ma y be waived by car

rier inaction.” I t decide d that the car rier does not waive its extent-of-injury dispute if it fails to bring the dispute within the 60-day statutory window to contest compen s ab i l i ty , even though it was put on notice of the extent of the claimant’s claimed co m p ensable injury

. Id. I ts deadline to con t est the extent of the claimant’s injury is g overne d by rule 124.3(e)

. Id. Second, contra

ry to the Com p an y ’s as s er tion, the Lawt on court did not hold that there “ar e no

17deadlines” to contest extent of injury

. I t held that extent-of-injury dispute deadlines are found in the

rule. Id. I f, in the prese nt case , Toberny submits a medical bill for trea tment that, to the Company , 9

seems to exceed the scope of her compensa ble injury , nothing in our holding here would fore close it from filing a

dispute with the Division based on extent of i njury

. What that dispute cannot do 1 0
is r eopen long- closed wounds, so to speak, to rende r an otherwise final impairment rating invalid. Doing so is supported neither by the common-sense application of former rule 130.102(g ) nor by the holding a nd the re asoning of Lawt on . 1 1

Others Issu es Fail Due to Waiver

The Company asks us to decla re that “ther e is no valid impairment rating from which
to decide the i mpairment rating issue” and to rema nd this portion of t he case to the Divi sion for a

new dispute-re solution proce ss. Be cause former rule 130.102(g ) is valid, and beca use the Company did not have a “pending dispute” within the meaning of the rule, for the rea sons discussed above, the

I t is fair to say that rule 124.3(e) evince s a “rolling deadline” insofar as a car rier would be 9 allowed to pay bills for trea tment that exceede d the scope of the compensa ble injury without waiving i t s rig hts to contest future medical bills for extent of injury as they come in. I n other wo rd s , a car rier’ s “inac tion” or lack of diligent revie w of submitt ed medical bills befor e pay ing them would not fore close its ability , when prese nted with another bill some time in the fut u re , t o contest that treatment as bey ond the scope of the c ompensable injury

.

We note, howeve r, that extent-of-injury contests about past medical bills— i.e. , bills that 1 0 the car rier has rec eived for which extent-of-injury contes t s have not been filed within the time allowed by rule 124.3(e) —are likely barr ed by the rule. See 28 Tex. Admin. Code 124.3(e) (2009). I n 2005, the leg islature added a proce dure to de fine the extent of a compensa ble injury

. 1 1 See Act of May 20, 2005, 79th L eg ., R.S., ch. 265, § 3.085, 200 5 T ex . Gen. L aws 469, 511-12 (codifie d at Tex. L ab. Code Ann. § 408.0042 (West 2006)). We need not specula te about the interplay of rule 124.3(e) and section 408.0042. We note only that a medical exam conducte d under section 408.0042, had that option ex isted at the time of Tobe rny ’s surg ery , would have fore stalled many of the issues pre sented in this appea l. 18Division did not err in holding that the Company had waived its rig hts to contest this issue, nor did

the trial cour

t err in a ffirming the Division. W e over rule the Company ’s first issue. The Company notes that expert-witness testimony is ne eded to e stablish causation

as to medical conditions outside the knowledg e of normal individuals. We need not rea ch this issue beca use former rule 130.102(g ) bars the Company from contesting Toberny ’s finalized impairment. We overrule the Company ’s sec ond issue.

I n its third and fourth issues, the Company claims that Toberny is not ent i t l ed to supplemental income benef its for the ninth and tenth quarte rs and that she is not entitled to attorney ’s fe es fo r d ef

ending the Company ’s suit ag ainst her in district court and its appea l in this Court. Supplemental income benef its are pay able to injur ed workers whose impairment rating s are 15 perc ent or g rea ter from a compe n s able injury

. See Tex. L ab. Code Ann. § 408.142(a) (West 2006). For the rea sons stated above, we af fi rm the Division’s deter mination that Toberny ’s impairment rating is 25 perc ent; there fore , the Company ’s third issue is overr uled. Attorney ’s fee s

ar e awarded to a claimant when an insurance car rier appea ls a decision of the Division and the claimant “pre vails on an issue on which judicial revie w is soug ht by the insurance car rier in

acc ordanc e with the limit ation of issu es co ntained in Section 410.302.” Id. § 408.221(c)

. Since Toberny is the preva iling party in both her suit for judicial revie w and this a ppeal, the Company is require d to pay her rea sonabl e and nece ssary attorney ’s fee s. We overr ule the Company ’s 1 2
fourth issue.

The Company

does not contest the amount of attorne y ’s fe es aw arde d by the trial cour

t. 1 2 19CONCLUSION Having overr

uled t he C ompany ’s four issues on appea l, we a ffirm the judg ment of the trial cour

t.

__________________________________________ J . Woodfin J ones, Chief Just ice
Be fore Chief J ustice Jones, J ustices Waldrop and He nson Affir med on Motion for Rehea ring Filed: Mar ch 19, 2010

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