Court Opinion

ID: 3098966
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:55:07.446569+00
Date Added: 2024-06-11T09:45:12.754749
License: Public Domain

COURT OF
APPEALS
                                                   EIGHTH DISTRICT OF
TEXAS
                                                              EL
PASO, TEXAS
 

 
 
THE CITY OF SAN ANTONIO,
 
                                   
  Appellant,
 
v.
 
JAMES DIEHL,
 
                                    Appellee.
  
 

 
 '
   
 '
   
 '
   
 '
   
 '
 
'

 
 
                  No. 08-10-00204-CV
 
                         Appeal from
 
 166th District Court
 
of Bexar County,
  Texas
 
(TC #
  2008-CI-05948)

 

 

 

                                                                  O
P I N I O N
 
            This case addresses whether line of
duty payments made to an injured police officer may be later recouped from his
paycheck once he has received all benefits paid pursuant to workers’
compensation law.  Many facts are
stipulated, including compensability and the amount of temporary income
benefits (TIBs) paid.  The parties agree
that a self-insured may not recoup payments made for TIBs.  They disagree whether the City may recoup
line of duty pay to offset for payment of compensation benefits.
FACTUAL SUMMARY
This appeal originated with two separate lawsuits, both filed by James
Diehl, an employee of the San Antonio Police Department.  Diehl sustained a compensable on-the-job
injury on July 15, 2007.  He returned to
full duty on January 4, 2008. 
                The City of San Antonio is self-insured for workers’
compensation purposes.  During Diehl’s
recovery, the City paid him the maximum weekly
benefits to which he was entitled -- $674 per week for a total of $7,462.31.  This amount was calculated from Diehl’s
average weekly wage of $1,326.43.  Diehl
also received line of duty pay pursuant to Section 143.073 of the Texas Local
Government Code.  The line of duty pay was
in an amount equal to his full salary which
encompasses base pay and longevity. 
Diehl was paid $962.77 per week for the 11.57 weeks he was completely
off work for a total of $11,140.64.  Between
the TIBs and the line of duty pay, Diehl received more than 100 percent of his
salary.  One can readily ascertain the
dispute.  “Average weekly wage” exceeds
base pay and longevity because the former considers overtime and the latt1er
does not.
THE STATUTES
Because the City is a self-insured municipality, it must pay its
employees injured on the job a percentage, generally 70 percent, of their
pre-injury wages while they recover from their injuries.  Tex.Lab.Code
Ann. § 408.103 (West 2006).  Here,
the City retains a third-party administrator to process and pay the City’s
workers’ compensation claims.
Section 143.073 of the Texas Local Government Code requires the City to
pay police officers or firefighters their full salary when they suffer job
related injuries.[1]  Tex.Loc.Gov’t
Code Ann. § 143.073 (West 2008).  However,
Section 504.051 of the Texas Labor Code provides:  
§ 504.051.  Offset Against Payments for Incapacity
 
(a) Benefits
provided under this chapter shall be offset:
 
(1) to the
extent applicable, by any amount for incapacity received as provided by:
 
(A) Chapter
143, Local Government Code; or
 
(B) any other
statute in effect on June 19, 1975, that provides for the payment for
incapacity to work because of injury on the job that is also covered by this
chapter; and
 
(2) by any
amount paid under Article III, Section 52e, of the Texas Constitution, as added
in 1967.
 
(b) If benefits
are offset, the employer may not withhold the offset portion of the employee’s
wages until the time that benefits under this chapter are received.
 
(c) If an
employee’s wages are offset, the employee and employer shall contribute to the
pension fund on the amount of money by which the employee’s wages were offset.
An employee’s pension benefit may not be reduced as a result of the employee’s
injuries or any compensation received under this chapter unless the reduction
results from a pension revision passed by a majority vote of the affected
members of a pension system.
 
Tex.Lab.Code
Ann. § 504.051 (West
2006).   The purpose of Section 504.051
was to eliminate double dipping while ensuring that the officer’s pension is
not negatively affected.  The interplay
of these statutes has been addressed by the San Antonio Court of Appeals.  The
City of San Antonio v. Vakey, 123 S.W.3d 497 (Tex.App.--San Antonio 2003,
no pet.).  
CITY OF SAN ANTONIO v.
VAKEY
The City paid line of duty pay equal to Vakey’s full pay for one year
pursuant to Section 143.073 of the Local Government Code.  Id.  The City also paid Vakey temporary income
benefits in accordance with the workers’ compensation statutes.  Id.
at 499.  After Vakey returned to work,
the City began making deductions from his paycheck.  Id.  Vakey obtained a temporary restraining order
preventing the City from making any further deductions.  Id.  The City argued that overpayments to Vakey
were overpayments of workers’ compensation benefits.  Id.
at 499.  In upholding the injunction, the
Fourth Court of Appeals construed Section 504.051 as follows:
Section 504.051
permits the City to offset the amounts paid for temporary income benefits under
the workers’ compensation statutes by the amounts paid for line of duty pay
under section 143.073.  See Tex.Lab.Code
Ann. § 504.051 (Vernon 1996).  In applying the offset, the amount paid
under section 143.073 is reduced, not the workers’ compensation benefits.  Texas
Workers’ Compensation Commission, Appeal No. 931084, 1994 WL 20165 (Jan.
12, 1994).
 
Vakey, 123 S.W. 3d at 500 [Emphasis
added].  The court continued by noting
that if the City failed to make the offset by reducing the amount paid pursuant
to Section 143.073, “the question becomes whether the City can later reduce an
employee’s wages to recoup the overpayment.”  The court then answered the question in the
affirmative: 
Section
504.051(b) states, ‘If benefits are offset, the employer may not withhold the
offset portion of the employee’s wages until the time that benefits under this
chapter are received.’  See Tex.Labor
Code Ann. § 504.051(b)(Vernon 1996).  This
appears to permit an employer to withhold wages on a later date after benefits
are received, ‘if benefits are offset.’
 
Id. at 500.  
            Diehl takes issue with the Vakey decision, complaining that it “incorrectly
determined that the offset is to the line of duty mandated ‘full pay’ not the
workers’ compensation benefit.”  He then
directs our attention to conflicting decisions from other courts, as well as an
inconsistent prior decision from the Fourth Court of Appeals.  But this case was transferred to us from the
San Antonio Court of Appeals by virtue of the Supreme Court’s docket equalization
plan and we must apply the precedent of that court.  TEX.GOV’T CODE ANN. § 73.001 (West 2005); Tex.R.App. P. 41.3.
THE LAWSUITS
In Lawsuit #1, Diehl sought a restraining order against the City of San
Antonio to prevent it from making further deductions from his paycheck as
reimbursement for payments made to Diehl arising from an on-the-job
injury.  The City filed a counterclaim
seeking a declaratory judgment that it was entitled to deduct overpayments of “line
of duty” pay from Diehl’s wages after he returned to work.  In Lawsuit #2 Diehl sought judicial review of
the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC)
Appeals Panel decision.  In response, the
City filed an answer and a plea to the jurisdiction.  In its plea, the City claimed that Diehl
lacked standing because:  (1) he was not
aggrieved by the TDI-DWC decision; and (2) the suit did not present a
justiciable controversy.  In its answer,
the City re-asserted its claim that it was entitled to recoup overpayments of “line
of duty” pay made to Diehl while he was absent from work due to injuries
sustained from his on-the-job injury. 
These two cases were consolidated and the parties entered into a Rule 11
Agreement whereby the City agreed not to deduct any additional amounts of money
from Diehl’s wages until the parties had exhausted all appeals in this case.
DENIAL OF THE PLEA TO THE JURISDICTION
            In Issue One, the City argues that
the trial court erred in denying its plea to the jurisdiction because Diehl was
not aggrieved by the TDI-DWC final decision and therefore had no standing to
appeal that decision.  We agree.
            On November 7, 2007, the Texas Department
of Insurance, Division of Workers’ Compensation (TDI-DWC) held a benefit review
conference to mediate a resolution of the dispute between Diehl and the
City.  When the parties were unable to
reach an agreement, a contested case hearing was scheduled for December 19,
2007.  The hearing was later reset and
held on April 7, 2008.  The hearing
officer rendered the following decision which was adopted by the TDI-DWC
Appeals Panel on July 21, 2008: 
The Self-Insured
is not entitled to reduce the Claimant’s income benefits by the amount paid
under Chapter 143, Local Government Code, pursuant to TEXAS LABOR CODE
ANN. § 504.051.  The Self-Insured is not entitled to reduce
the Claimant’s income benefits due to an overpayment under Chapter 143, Local
Government Code, and the Claimant is entitled to the full amount of TIBs owed
for the period in which he received line of duty pay under TEX.LOC.GOV’T CODE § 143.073 up to
the date he returned to work full duty (January 4, 2008) subject to TEXAS LABOR CODE ANN. § 408.061(a) and
(g).  The Division does have jurisdiction
to determine if the Employer is entitled to reduce or suspend the Claimant’s
post-injury earnings in order to recoup an overpayment of workers’ compensation
benefits. The Employer is not entitled to reduce or suspend the Claimant’s
post-injury earnings to recoup an overpayment of workers’ compensation
benefits, if any.  [T]he Self-Insured is
not entitled to reduce the Claimant’s income benefits by the amount paid under
Chapter 143, Local Government Code, pursuant to TEXAS LABOR CODE ANN. § 504.051.  The Division does not have jurisdiction to
make a determination regarding the Employer’s off set of Claimant’s ‘line of
duty’ benefits paid, pursuant to TEX.LOC.GOVN’T CODE § 143.07[3].  The Claimant did have disability resulting
from an injury sustained on July 15, 2007 beginning July 16, 2007 and
continuing through January 3, 2008. 
 
On August 28,
2008, Diehl appealed the TDI-DWC Appeals Panel decision to the district court
and the City filed a plea to the jurisdiction. 
The court’s final judgment included a statement that it had jurisdiction
over the subject matter and the parties, effectively overruling the City’s
plea.  
Standard
of Review
            A plea to the jurisdiction is a
dilatory plea by which a party challenges the court’s authority to determine
the subject matter of a cause of action. 
Bland Independent School Dist. v.
Blue, 34 S.W.3d 547, 554 (Tex. 2000); see
Texas Department of Transp. v. Jones, 8 S.W.3d 636, 637-38 (Tex.
1999).  In asserting the plea, the
plaintiff bears the burden to allege facts affirmatively proving that the trial
court has subject matter jurisdiction.  Texas Dept. of Criminal Justice v. Miller,
51 S.W.3d 583, 587 (Tex. 2001); Texas Ass’n
of Business v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).  
            In deciding a plea to the
jurisdiction, the reviewing court considers only the plaintiff’s pleadings and
the evidence pertinent to the jurisdictional inquiry.  See
Bland Indep. Sch. Dist., 34 S.W.3d at 554-55. If a plea to the jurisdiction
challenges the existence of jurisdictional facts, the court considers relevant
evidence by the parties when necessary to resolve the jurisdictional issues
raised.  Texas Department of Parks and Wildlife v. Miranda, 133 S.W.3d 217,
227 (Tex. 2004).  If the evidence is
undisputed or fails to raise a fact question on the jurisdictional issue, then
the court rules on the plea to the jurisdiction as a matter of law.  Id.
at 228.
Analysis
            Only a party that has exhausted all
its administrative remedies and that is aggrieved by a final decision of the
appeals panel may seek judicial review.  Tex.Lab.Code Ann. § 410.251 (West
2006).  A party is aggrieved only when
the loss resulting from the final decision is actual and immediate.  Insurance
Company of the State of Pennsylvania v. Orosco, 170 S.W.3d 129, 133
(Tex.App.--San Antonio 2005, no pet.).  The
future defense of a personal injury lawsuit is not an actual and immediate
loss.  See Orosco, 170 S.W.3d at 133 (the possibility of a future loss is
not an actual and immediate loss).
            Here, the TDI-DWC, determined that
Diehl was entitled to receive workers’ compensation benefits, did receive such
benefits, and that there were no overpayments of those benefits.  The Division’s decision did not require Diehl
to pay any money nor did it authorize the City to recoup funds.  In fact, it could not have done so, as the
panel duly noted.  Therefore, Diehl was
not aggrieved by the Appeals Panel decision and lacked standing to appeal.  See In
re Texas Mutual Insurance Company, 331 S.W.3d 70 (Tex.App.--Eastland 2010,
orig. proceeding).  Because the trial
court erred in denying the City’s plea to the jurisdiction, we sustain Issue
One.  Our disposition of Issue One
renders it unnecessary to consider Issue Two.
THE CITY’S COUNTERCLAIM
In response to Lawsuit #1, the City filed a counterclaim seeking a
declaratory judgment that it was allowed to recoup overpayments of line of duty
pay once Diehl returned to full active duty. 
The trial court denied the City’s counterclaim “in its capacity as
employer.”  In other words, the trial
court denied the City’s counterclaim as it pertained to the City’s ability to
recoup “line of duty” payments.[2]  Presumably, this decision was based on the
fact that the trial court found overpayments of workers’ compensation benefits,
a determination that the trial court lacked jurisdiction to make.
Declaratory
Judgment
            A declaratory judgment is
appropriate only if a justiciable controversy exists as to the rights and
status of the parties and the controversy will be resolved by the declaration
sought.  Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex.1995).  “To constitute a justiciable controversy,
there must exist a real and substantial controversy involving genuine conflict
of tangible interests and not merely a theoretical dispute.”  Id.,
quoting Bexar-Medina-Atascosa Counties
Water Control & Improvement Dist. No. 1 v. Medina Lake Protection Ass’n,
640 S.W.2d 778, 779-80 (Tex.App.--San Antonio 1982, writ ref’d n.r.e.).  A trial court has the discretion to enter a
declaratory judgment so long as it will serve a useful purpose or will
terminate the controversy between the parties.  Id.
at 468.  But a trial court may refuse to
render or enter a declaratory judgment or decree if it would not terminate the
uncertainty or controversy giving rise to the proceeding.  Tex.Civ.Prac.&Rem.Code
Ann. § 37.008 (West 2008).
Analysis
The City construes Vakey to
mean that all payments above and beyond Diehl’s full salary are necessarily
overpayments of line of duty pay.  This
appears to be a logical conclusion.  It
is clear from Vakey that workers’
compensation benefits are paid first, and the difference between the TIBs and
the employee’s full salary is supplemented by line of duty pay.  See
Vakey, 123 S.W.3d at 499-500.
                Diehl responds that line of duty pay is statutorily mandated,
and that it must be paid, period.  He
directs our attention to Section 408.105:
§ 408.105.  Salary
Continuation in Lieu of Temporary Income Benefits
(a) In lieu of payment of temporary income benefits
under this subchapter, an employer may continue to pay the salary of an
employee who sustains a compensable injury under a contractual obligation
between the employer and employee, such as a collective bargaining agreement,
written agreement, or policy.
 
The City argues that it has no salary
continuation plan.  Indeed, it paid both
TIBs and salary.  Instead, it has always had a policy to pay its police officers and
firefighters not only full workers’ compensation benefits but also full line of
duty benefits while those persons are absent from work due to on-the-job
injuries.  It also has a policy to recoup
those overpayments when the police officers and firefighters return to work.  Diehl was aware of this policy.  Ricardo G. Granado, an employee of the City’s
human resources department, offered the following testimony: 
Q.  To your
knowledge, has there been a policy of the City of San Antonio to pay not only
full workers’ compensation benefits but also pay the full line-of-duty
benefits, in other words full base pay?
 
A.  Yes, sir, that is
the policy.
 
Q.  And how long has
that been the policy of the City of San Antonio?
 
A.  It’s my
understanding it’s been the policy for at least 20 years is my understanding.
 
Q.  All right.  Now, whenever the city makes these excess
payments of line-of-duty pay or benefits, let’s say, in excess of the officer’s
full regular duty -- regular salary, preinjury salary, does the city intend to
recoup those excess payments whenever they’re made?
 
A.  Yes, sir, we do.
 
Q.  All right.  And is it your department that recoups those
excess payments?
 
A.  Yes, sir, it is.
 
.          .          .
 
Q.  Now, tell us your
understanding of why the City of San Antonio intentionally overpays benefits,
line-of-duty pay we say, but benefits to police officers rather than just
paying them the 30 percent line of duty above the workers’ compensation
benefits.  That’s really all the law says
we owe.  But why does the city -- why
does the city overpay in the first place?
 
A.  Right.  It’s my understanding the reason that the
overpayment is made is to assist officers and fire fighters where those
instances their deductions are in excess of that 30 percent.  It can be for various reasons.  Some -- of course the big one is child
support.  However, there are other
deductions that an officer or fire fighter may have which will increase and
decrease.
 
Q.  And would put
them over that amount of 30 percent?
 
A.  That is correct.
 
.          .          .
 
Q.  And I believe you
say that’s been the practice for 20 years or so?
 
A.  Yes, sir, that is
my understanding.
 
Diehl also testified about the policy: 
[Direct Examination]
 
Q.  Okay.  In regard to payments that you received, are
you familiar with any type of policy of the City of San Antonio where they paid
both types of benefits in order to help with any deductions that may be from an
officer’s check? 
 
A.  No. 
 
Q.  Have you ever
been told about any such policy? 
 
A.  No. 
 
.          .          .
 
[Cross Examination] 
 
Q.  All right.  Now, we had said or mentioned to the court
awhile ago that a lot of officers have monthly deductions.  Are you aware of that fact, that quite a few
police officers have monthly deductions from their bi-weekly paycheck? 
 
A.  As an example --
 
Q.  An example,
yourself.  Do you have monthly
deductions? 
 
A.  Association dues.

 
Q.  All right.  Child support? 
 
A.  Child support,
yes, sir. 
 
.          .          .
 
Q.  Okay.  Now, if you had only received 30 percent of
your regular pay you would have had a problem meeting these deductions, would
you not, I mean financially?
 
A.  Yes, sir. 
 
Q.  All right.  So it was a benefit to you if you received a
full -- the full line-of-duty pay, was it not? 
 
A.  Yes. 
 
.          .          .
 
Q.  And you were
aware that you were going to -- that the city intended to recoup those
overpayments from you, were you not? 
 
A.  I knew that they
were going to recoup something. 
 
The City’s
policy prevented officers from encountering hardships based on automatic
deductions from their pay checks.  But it
did not prohibit the City from recouping those overpayments at a later
date.  
Finally, we address the meaning of Section 504.051 of the Labor Code.  Subsection (a) provides that “[b]enefits
provided under this chapter” shall be offset by “any amount for incapacity
received as provided by Chapter 143, Local Government Code . . . .  This provision of the Labor Code deals with
workers’ compensation and thus “benefits” can only refer to workers’
compensation benefits.  Subsection (b)
provides that if benefits are offset, the employer cannot withhold the employee’s
“wages” until the workers’ compensation benefits are received.  And subsection (c) clarifies that wages mean
salary because it directs pension contributions based on those wages.  As the City suggests, this section ensures
that an employee’s pension benefit may not be reduced just because the line of
duty pay is reduced by virtue of an offset. 
Tex.Lab.Code Ann. § 504.051.  We sustain
Issues Three and Four.
We reverse the
judgment of the court below.  We render
judgment in favor of the City that overpayments to Diehl are line of duty
payments which may be recouped only to the extent that Diehl receives 100
percent of his full salary.
 
April 25, 2012                                     ________________________________________________
ANN CRAWFORD
McCLURE, Chief Justice
 
Before McClure, C.J., Rivera, and Antcliff, JJ.

[1]  Section
143.073(a) states:  A municipality shall
provide to a fire fighter or police officer a leave of absence for an illness
or injury related to the person’s line of duty. The leave is with full pay for
a period commensurate with the nature of the line of duty illness or injury.  If necessary, the leave shall continue for at
least one year.  Tex.Loc.Gov’t Code Ann. § 143.073(a).

[2]  The City of San Antonio is self-insured and
therefore wears two hats - one as an employer and one as an insurer.  The City makes line of duty payments  in its capacity as Employer.  But workers’ compensation payments are made
by a third party administrator in the City’s capacity as Self-Insured.