Court Opinion

ID: 8092
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:34:21+00
Date Added: 2024-06-11T09:38:16.039018
License: Public Domain

United States Court of Appeals,

                            Fifth Circuit.

                            No. 94-20954.

           NORTHWINDS ABATEMENT, INC., Plaintiff-Appellant,

                                   v.

         EMPLOYERS INSURANCE OF WAUSAU, Defendant-Appellee.

                            Dec. 5, 1995.

Appeal from the United States District Court for the Southern
District of Texas.

Before KING, DeMOSS and STEWART, Circuit Judges.

     PER CURIAM:

     Northwinds Abatement, Inc. ("Northwinds"), initially brought

this action in state district court against Employers Insurance of

Wausau   ("Wausau"),   alleging   several   theories    of   recovery   for

damages resulting from actions taken by Wausau as the servicing

company for Northwinds's workers' compensation insurance policy.

Wausau removed the action to federal district court.         The district

court granted summary judgment to Wausau on all claims. Northwinds

appeals.    We affirm in part and reverse in part the court's order

granting summary judgment and remand with instructions that the

case be held in abeyance until relevant administrative procedures

are completed.

                 I. FACTUAL AND PROCEDURAL BACKGROUND

     Northwinds is a corporation in the business of asbestos

abatement remediation and removal work.        Northwinds applied for

workers'    compensation   insurance    through   the    Texas   Workers'

                                   1
Compensation Insurance Facility ("the Facility").1 The Facility is

a nonprofit unincorporated association of insurers created by

statute. Tex.Ins.Code Ann. art. 5.76-2, § 2.01.          One of the stated

purposes of the Facility is to provide insurance coverage for

employers who are unable to obtain insurance in the voluntary

market.    Id. § 4.01.     Specifically, the Facility provides such

coverage   through   the   Texas   Workers'      Compensation   Employers'

Rejected Risk Fund ("the Fund").        Id.

     When the Facility determines that an employer is entitled to

insurance through the Fund, the Facility calculates the employer's

deposit premium and, upon payment, designates a "servicing company"

to issue the policy.     Id. § 4.02(b).       The servicing company may be

an insurer that is a member of the Facility, an insurer that is not

a member of the Facility, or a non-insurer.           Id. § 4.08(a), (d).

The servicing company contracts with the Facility to issue policies

evidencing the insurance coverage provided by the Fund and to

service the risk.    Id. § 1.01(15).     While the servicing company is

the issuer of the policy, the Facility itself is the insurer.         See

id. § 4.02(b);   Maintenance, Inc. v. ITT Hartford Group, Inc., 895
S.W.2d 816, 819 (Tex.App.—Texarkana 1995, writ denied).               The

undertaking of the policy is in turn reinsured by all members of

the Facility;    that is, the members of the Facility collectively

     1
      The Facility was formerly known as the Texas Workers'
Compensation Assigned Risk Pool ("the Risk Pool"), and is
referred to by that designation in many documents in this
lawsuit. The Facility replaced the Risk Pool effective January
1, 1991. Act of Dec. 11, 1989, 71st Leg., 2nd C.S., Ch. 1, §
17.09(1) 1989 Tex.Gen.Laws 1, 117.

                                    2
reinsure each policy issued through the Facility.                         Tex.Ins.Code

Ann. art 5.76-2, § 4.02(b). Each member's share of the reinsurance

liability is based on the relative amount of premiums on insurance

written by the member during the preceding year.                    Id.     Therefore,

the servicing company that issues the policy is not liable under

the policy as the primary insurer.                   Rather, if the servicing

company is a member of the Facility, its liability under the policy

is limited to its usual share of the reinsurance liability;                      if the

servicing company is not a member of the Facility, it is not liable

under the policy at all.            Id.

     Notwithstanding the servicing company's limited liability

under the         policy,    it   still   performs   many    of     the    traditional

functions of an insurer. Besides issuing the policy, the servicing

company      is    also     responsible    for,    inter    alia,    investigating,

reporting, and paying claims, inspecting risks for classification

purposes, and conducting legal support as required by the policy.

Id. § 4.08(c).        The coverage itself, however, comes from the Fund,

which   is    separate       from   the    state   treasury    and        has   its   own

investment policy.           Id. § 2.07.

     Wausau, a member of the Facility, was designated as the

servicing company for Northwinds's workers' compensation insurance

policy. On April 30, 1993, Northwinds filed suit against Wausau in

state district court in Harris County, Texas.                         Wausau timely

removed the case to the United States District Court for the

Southern District of Texas based on diversity of citizenship under

28 U.S.C. § 1441.           Northwinds did not seek remand.

                                            3
       In its complaint, Northwinds alleged that Wausau mishandled

four    workers'    compensation      claims    during     calendar    year   1991.

Specifically,       Northwinds       asserted     that     these    claims       were

fraudulent, but that Wausau paid the claims without investigating

them.    As a result of these improper payments, Northwinds alleged

that its premiums for workers' compensation coverage increased and

its coverage was ultimately cancelled. Further, Northwinds claimed

that the improper payments caused its experience modifier rate

("EMR") to exceed 1.0, thereby impeding its ability to compete for

asbestos abatement contracts because many customers will not accept

bids from a contractor with such a high EMR.

       The   complaint      sought    relief    under     several     theories    of

recovery:     breach of an insurer's duty of good faith and fair

dealing,     the    Texas    Deceptive       Trade   Practices      Act,    certain

provisions of the Texas Insurance Code, breach of fiduciary duty,

negligence,        gross    negligence,       unfair     settlement        practice,

affirmative    misrepresentation,         and    breach    of    contract.       The

complaint prayed for the recovery of $15 million in actual damages,

$60 million in exemplary damages or $45 million in statutory treble

damages, attorneys' fees, interest, and costs.

       On August 18, 1994, Wausau filed a Rule 12(b)(1) motion to

dismiss for lack of jurisdiction on the grounds that Northwinds had

failed to exhaust its administrative remedies through the Facility

and the Texas Department of Insurance.               The district court denied

this    motion,     finding    that    the      doctrine    of     exhaustion     of

administrative remedies did not apply in this case.

                                         4
     Wausau then filed a motion for summary judgment, contending

that it was not liable to Northwinds under any theory because it

was only a servicing company for the Facility and not Northwinds's

insurer.      The     district    court       granted   this    motion,    relying

principally on an opinion by the Texas Court of Appeals that dealt

with this precise issue, Maintenance, Inc. v. ITT Hartford Group,

Inc., No. 06-94-00046-CV, 1994 WL 575769 (Tex.App.—Texarkana Oct.

21, 1994) (not designated for publication).                    In that case, an

employer insured through the Risk Pool, the Facility's predecessor,

sued the designated servicing company on its policy. Specifically,

the employer alleged that the servicing company's mishandling of

workers' compensation claims caused its EMR to rise to the point

where it could no longer afford workers' compensation insurance.

The employer sought recovery for breach of the duty of good faith

and fair dealing and violations of the Texas Deceptive Trade

Practices Act.        The court apparently held that the servicing

company was not liable under any of these theories because the

servicing company was not the employer's insurer and because the

servicing company did not otherwise have a contractual relationship

with the employer.2       Relying on this holding, the district court

granted    Wausau's    summary     judgment      motion   as    to   all   claims.

Northwinds timely appealed.

                                 II. DISCUSSION

     2
      The Texas Court of Appeals' holding in Maintenance must be
inferred from the district court's Memorandum and Order because
the text of this Maintenance opinion is not available. The text
is unavailable because the opinion has been withdrawn.

                                          5
A. Jurisdiction

     On appeal, Wausau renews its challenge to the jurisdiction of

the district court.    We must address such a challenge upon proper

suggestion.    Silver Star Enters., Inc. v. M/V Saramacca, 19 F.3d
1008, 1013 n. 6 (5th Cir.1994);           Sarmiento v. Texas Bd. of

Veterinary Medical Examiners, 939 F.2d 1242, 1245 (5th Cir.1991).

The essence of Wausau's argument is that the statute creating the

Facility provides for administrative remedies for employers that

are exclusive of remedies such as the kind sought by Northwinds,

and that Northwinds was required to exhaust those remedies before

seeking redress in a judicial forum.

     Wausau argues that Tex.Ins.Code Ann. art. 5.76-2 provides

exclusive    administrative   remedies   for   employers.   First,   the

statute grants authority for the creation of exclusive procedures

for employers to secure and maintain insurance.        Section 2.04(a)

states:

     Subject to the approval of the [State Board of Insurance ("the
     Board") ], the facility may adopt, amend and repeal bylaws,
     rules, and regulations necessary to implement this article.

Section 2.05(b) then provides:

     After the rules adopted under Section 2.04 of this article
     have been approved by the board, the procedures and remedies
     established under this article shall be the exclusive
     procedure for any applicant to the facility to secure or
     maintain the insurance available under this article.

     Second, the statute creates both general and particularized

procedures through which employers may contest acts and decisions

of the Facility.      Section 2.08 establishes a general grievance

procedure:

                                   6
     (a) An applicant for insurance, an insured, or an insurer
     aggrieved by an act or decision of the facility may appeal to
     the board not later than the 30th day after the affected party
     had actual notice that the act occurred or the decision was
     made.

     ....

     (d) A decision of the board under this section is subject to
     judicial review in the manner provided in the Administrative
     Procedure and Texas Register Act....

The Texas Administrative Code expressly establishes a procedure for

appeals to the Board.     Tex.Admin.Code tit. 28, § 1.51(b).   The

Texas Government Code provides for the procedures for judicial

review of the Board's decision.    Tex.Gov't Code Ann. §§ 2001.171-

.178. Specific cases of fraud and violations of the Insurance Code

are referred to the Texas Workers' Compensation Commission ("the

Commission") under § 2.05(d) of the statute:

     The facility shall refer all cases of suspected fraud and
     violations of this code relating to workers' compensation
     insurance to the commission to:

     (1) perform investigations;

     (2) conduct administrative violation proceedings;   and

     (3) assess and collect penalties and restitution.

Section 4.05(d) authorizes a procedure for the Facility to review

high EMRs at an employer's request.3

     3
      As further evidence that these remedies are the exclusive
remedies available to an employer, Wausau argues that § 2.12 of
the statute explicitly preempts the types of claims asserted in
Northwinds's complaint. This provision states:

            There shall be no liability on the part of and no cause
            of action shall arise against the governing committee,
            the facility, its executive director, or any of its
            staff, agents, servants, or employees arising out of or
            in connection with any judgment or decision made in
            connection with the performance of the powers and

                                   7
     Finally, Wausau asserts that, because the Texas Legislature

has prescribed the exclusive rights, procedures, and remedies

available to an employer insured by the Facility, those statutory

remedies must be exhausted before seeking judicial review.           Wausau

cites both statutory and case law to this effect.         Tex.Gov't.Code

Ann. § 2001.171;     Texas Catastrophe Property Ins. Ass'n v. Council

of Co-Owners of Saida II Towers Condominium Ass'n, 706 S.W.2d 644,

645-46 (Tex.1986);      Testoni v. Blue Cross & Blue Shield of Texas,

Inc.,   861 S.W.2d 387,   390   (Tex.App.—Austin   1992,   no   writ);

Stephanou v. Texas Medical Liab. Ins. Underwriting Ass'n (JUA), 792

              duties under this article or for recommendation or
              decision concerning any inspections or safety
              engineering investigations performed or for any
              recommendation or decision made in good faith.

     Tex.Ins.Code Ann. art. 5.76-2, § 2.12 (emphasis added). As
     an agent of the Facility, Wausau asserts that this provision
     preempts any common law or other statutory causes of action
     against it in relation to its investigation and payment of
     claims on behalf of the Facility.

          Because of the manner in which Wausau has presented
     this argument to this court, we decline to address it.
     First, we note that Wausau failed to make this argument to
     the district court. We do not normally consider arguments
     raised for the first time on appeal. Quenzer v. United
     States (In re Quenzer), 19 F.3d 163, 165 (5th Cir.1993).
     Also, Wausau did not even make this argument in its initial
     appellate brief; rather, Wausau raised it for the first
     time in a "response brief" that it had obtained special
     leave to file in answer to Northwinds's reply brief. We
     have held that the raising of claims for the first time in a
     reply brief is insufficient to preserve an argument on
     appeal. Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir.)
     ("An appellant abandons all issues not raised and argued in
     its initial brief on appeal."), cert. denied, --- U.S. ----,
     115 S. Ct. 189, 130 L. Ed. 2d 122 (1994). Finally, by waiting
     until this response brief to raise § 2.12, Wausau precluded
     Northwinds from offering any briefing on the subject.
     Accordingly, we do not consider Wausau's arguments with
     respect to § 2.12 as properly before this court.

                                      8
S.W.2d 498, 500 (Tex.App.—Houston [1st Dist.] 1990, writ denied).

     Northwinds      counters        that      the      doctrines    of     exclusive

jurisdiction and exhaustion of administrative remedies do not apply

because the    Facility,       the   Board,       and    the   Commission     are   not

empowered to award Northwinds monetary damages for injuries that

were a consequence of past tortious actions by Wausau.                        Rather,

Northwinds contends that the doctrine of primary jurisdiction

applies and that this court can utilize the ultimate findings

regarding   the     fraudulent       nature       of    the    contested     workers'

compensation   claims     to    adjudicate        Northwinds's      damages      claims

against Wausau.

     Northwinds draws an analogy between the present case and our

decision in Penny v. Southwestern Bell Tel. Co., 906 F.2d 183 (5th

Cir.1990). In Penny, the plaintiffs alleged that the phone company

had charged their business at telephone rates that were higher than

their competitors' rates and that this disparate rate application

had impeded their ability to compete and eventually forced them out

of business. Id. at 184-85. The plaintiffs pursued administrative

review of the allegedly discriminatory rates.                  Id. at 184.       At the

same time, however, they also brought a claim against the phone

company in state district court seeking recovery under the Texas

Deceptive   Trade    Practices       Act    for      damages   suffered     by   their

business due to the disparate rates.                   Id. at 184-85.       The phone

company removed the case to federal district court on diversity

grounds.    Id. at 185.        The district court dismissed the case for

lack of jurisdiction because the plaintiffs had failed to exhaust

                                           9
their administrative remedies.         Id.

      On appeal, we held that the doctrine of exhaustion of remedies

did not apply because the agency in question did not have the power

to provide the remedy sought by the plaintiffs.                  Id. at 186.

First, we noted that the agency's exclusive jurisdiction over the

regulation and application of rates did not necessarily translate

into exclusive jurisdiction over tort claims against a phone

company.     Id.   We then distinguished the power to regulate rates

from the power to remedy past wrongs.          Specifically, we noted that

the agency was not explicitly authorized by statute to grant relief

for tort actions:

      [W]here the claim is not for future compliance but for damages
      based on past acts, the exhaustion of administrative remedies
      doctrine may not apply. Th[is] notion is based on the absence
      of a statute authorizing the Public Utility Commission to fix
      or adjudicate claims for damages.

Id.   (internal quotations and citations omitted).              Therefore, we

held that the agency did not have exclusive jurisdiction over the

claims   brought     against   the    telephone    company     and   that   the

plaintiffs    were   not   required   to     exhaust   their   administrative

remedies before filing an action for damages.

      Instead, we found that this was an appropriate case in which

to apply the doctrine of primary jurisdiction.                 Id. at 186-87.

This doctrine "comes into play whenever enforcement of the claim

requires the resolution of issues [which, under a regulatory

scheme, have been placed] within the special competence of an

administrative body;        in such a case the judicial process is

suspended pending referral of such issues to the administrative

                                      10
body for its views."          Id. at 187 (internal quotations and citations

omitted). In particular, we found that it was appropriate to defer

to the Public Utility Commission's findings regarding whether the

rates    charged       were   discriminatory             because    such    findings       were

corollary to the determination of whether the phone company had

violated the Deceptive Trade Practices Act.                        Id.     Accordingly, we

remanded the case to the district court, instructing it to hold the

case in abeyance until such findings were made.                          Id. at 189.

      Northwinds        urges    a     similar      result       here.         As   in   Penny,

Northwinds notes that Tex.Ins.Code Ann. art. 5.76-2 does not vest

either    the    Facility,       the       Board,    or    the     Commission       with    the

authority to adjudicate tort and contract claims or to award

damages.    Rather, these entities only have authority to regulate

the   payment     of    claims       and    the     assignment      of     EMRs.         Because

Northwinds can only obtain the relief it seeks in a judicial forum,

it contends that the district court has original jurisdiction of

the case.

      Northwinds        further      points        out    that     it    has    pursued     its

administrative remedies with respect to the review of the claims

that it alleges were mishandled.                   Indeed, in response to Wausau's

12(b)(1) Motion to Dismiss for Lack of Jurisdiction, Northwinds

submitted       evidence      that     it    had     obtained       findings        from    the

Commission that two workers that Wausau had agreed to pay had not

suffered    compensable          on-the-job          injuries.           Northwinds        also

submitted evidence that the Texas Department of Insurance had

directed Wausau to correct Northwinds's EMR to account for the

                                              11
findings that two of the contested claims were not compensable.

Because such findings are relevant to the claims that Northwinds

has asserted against Wausau in this lawsuit, Northwinds suggests

that the doctrine of primary jurisdiction applies;         that is, the

district court should hold its proceedings in abeyance until the

completion of administrative findings regarding all of the alleged

fraudulent workers' compensation claims, including judicial review

of those administrative findings.4         At that point, the district

court can then adjudicate Northwinds's common law and statutory

claims for relief.

      We agree with Northwinds's assertion that Penny controls this

case;     moreover, we find Wausau's arguments to be inapposite.

First, Wausau's citation of the "exclusive procedures and remedies"

provision in § 2.05(b) clearly does not apply to Northwinds's

claims.    That section states that "the procedures and remedies

established under this article shall be the exclusive procedure for

any applicant to the facility to secure or maintain the insurance

available under this article."         Tex.Ins.Code Ann. art. 5.76-2, §

2.05(b) (emphasis added).       Northwinds is not bringing this action

"to   secure   or   maintain"   its   workers'   compensation   coverage;

rather, it seeks to recover damages for injuries it allegedly

suffered due to the past actions of Wausau.

      4
      The findings mentioned are only in the record because
Northwinds submitted them in opposition to Wausau's
jurisdictional challenge in the district court. It is quite
possible that more findings have been made since the disposition
of Wausau's 12(b)(1) motion, or even that all administrative and
judicial proceedings relating to the contested claims have been
completed, but such facts are outside of the record.

                                      12
     Second, the general grievance procedure authorized under §

2.08 does not pertain to these claims.          The remedy under that

procedure is that the Board will "affirm, reverse, or modify the

act of the facility that is the subject of the appeal to the

board."    Id. § 2.08(b).      In the case sub judice, the "acts" of

which Northwinds complains are the payment of allegedly fraudulent

claims and the increase in its EMR.        Under the statute, the most

relief that the Board and the Commission could afford Northwinds

would be to find that the claims should not have been paid and to

adjust Northwinds's EMR accordingly, which apparently has been done

in at least two instances.      Still, such relief does not compensate

Northwinds for the damages it suffered as a consequence of the acts

being appealed.      The Board and the Commission can only remedy acts

of the Facility, not the consequences of those acts.

     Third, the specific procedures for addressing cases of fraud

and Insurance Code violations, and for reviewing high EMRs, also

appear    to   be   inapplicable.   With   respect   to   fraud   and   code

violations, § 2.05(d) refers these cases to the Commission to

perform investigations, to conduct administrative proceedings, and

to assess and collect penalties and restitution. If these remedies

even apply to claims for damages which are the consequence of fraud

and code violations—and it is not clear that they do5—they would

not provide Northwinds with any relief because the penalties and

     5
      More likely, the provision for restitution applies to
employees who have received benefits for claims which are
subsequently determined to be fraudulent, rather than to
servicing companies who have improperly paid claims to the
detriment of employers.

                                    13
restitution do not redound to the benefit of the aggrieved party.

Rather, any restitution collected is deposited in the rejected risk

fund.   Id. § 2.05(f).       Any penalties collected are credited to the

account of the Commission.         Id. § 2.05(g).      Also, the provision for

review of high EMRs apparently only contemplates that the Facility

will exclude an employer from the "extraordinary risk provisions of

the rating plan" in appropriate cases.            Id. § 4.05(d).

     Finally, there is no statutory provision that expressly gives

the Facility,    the   Board,      or   the   Commission    the   authority   to

adjudicate    common   law    or   statutory    tort    actions   or   to   award

damages.     By contrast, the cases cited by Wausau that required

exhaustion of administrative remedies all involved agencies vested

with the authority to adjudicate the claims asserted and to award

the relief requested.

     Our analysis of the statute suggests that this case falls

squarely within Penny 's holding that, where an agency "has no

power to provide the remedy sought, then, exclusive jurisdiction

cannot rest in that body."         Penny, 906 F.2d at 186.        Moreover, the

claims asserted by Northwinds, which are in the nature of common

law tort and statutory remedies for damages, are cognizable in a

federal district court in a diversity case.              Accordingly, we hold

that the district court has original jurisdiction of the claims

asserted by Northwinds.        See id.

        Although we hold that the district court properly exercised

jurisdiction over these claims, we must still consider whether

application of the primary jurisdiction doctrine is appropriate in

                                        14
this case.    In Penny, we held that this doctrine applies where:

(1) the court has original jurisdiction over the claim before it;

(2) the adjudication of that claim requires the resolution of

predicate issues or the making of preliminary findings;              and (3)

the legislature has established a regulatory scheme whereby it has

committed the resolution of those issues or the making of those

findings to an administrative body.            See id. at 187.

     We have already held that the district court has original

jurisdiction in this case.          As to the second prong, it is clear

that Northwinds's damages claims against Wausau depend upon a

finding   that   the    contested   workers'     compensation    claims    were

fraudulent and that Wausau improperly paid these claims without

investigating them.       If the claims were properly paid, Northwinds

would have no ground for relief against Wausau.              With respect to

the third prong, our analysis of the relevant provisions of the

Texas   Insurance      Code   reveals   that   the   Texas   Legislature   has

committed the making of such findings to the Facility, the Board,

and the Commission. These findings in turn are subject to judicial

review in Travis County district court.              Tex.Gov't Code Ann. §

2001.176;    Tex.Ins.Code Ann. art. 5.76-2, § 2.08(d).           Because the

Texas Legislature has vested these entities with the authority to

make these findings, and because the special expertise of these

entities makes them uniquely qualified to make such findings, it is

more appropriate that the district court defer to this procedure

rather than to make these necessary determinations in the first

instance. Specifically, under the doctrine of primary jurisdiction

                                        15
as outlined in Penny, the district court should have abstained from

resolving the damages claims asserted by Northwinds until the

administrative and judicial review procedures prescribed by the

Texas Insurance Code had yielded final determinations on the issue

of   whether     Wausau   improperly          paid    the     contested       workers'

compensation claims.      Because the district court did not do this,

we remand the case to the district court with instructions that it

hold the case in abeyance until these final determinations have

been made.

B. The Summary Judgment

     Of course, it would be futile to remand this case to the

district court with instructions to hold the case in abeyance if

summary judgment were appropriate regardless of the outcome of the

prescribed     administrative      and    judicial       procedures.           Because

subsequent     developments   in    Texas      case     law    warrant    a    partial

reversal of the summary judgment, however, remand is the proper

result.

      After the district court granted Wausau's motion for summary

judgment, the Texas Court of Appeals withdrew its opinion in

Maintenance, Inc. v. ITT Hartford Group, Inc., No. 06-94-00046-CV,

1994 WL 575769 (Tex.App.—Texarkana Oct. 21, 1994) (not designated

for publication), and superseded it with another, Maintenance, Inc.

v. ITT Hartford Group, Inc., No. 06-94-00046-CV, 1994 WL 668038

(Tex.App.—Texarkana,       Dec.     1,        1994)     (not     designated        for

publication).        This second Maintenance opinion was also later

withdrawn      and   superseded    by     a     third       Maintenance       opinion,

                                         16
Maintenance, Inc. v. ITT Hartford Group, Inc., 895 S.W.2d 816

(Tex.App.—Texarkana 1995, writ denied). This third opinion changed

in part the substantive holding relied upon by the district court

in ruling on Wausau's summary judgment motion.   The Texas Court of

Appeals continues to hold that an employer insured through the

Facility has no cause of action against a servicing company for

breach of the duty of good faith and fair dealing because the

servicing company is not the employer's insurer.   Maintenance, 895
S.W.2d at 819.    However, that court now holds that a servicing

company may be liable to an insured employer for negligence or

violations of the Deceptive Trade Practices Act or the Insurance

Code.   Id.   The court's rationale was that "[a]n agent may be

liable for its own acts of negligence or fraud committed in

performing a contract for its principal if those negligent or

fraudulent acts cause reasonably foreseeable harm to a third

party." Id. (citing Whitson Co. v. Bluff Creek Oil Co., 278 S.W.2d
339 (Tex.App.—Fort Worth 1955), aff'd, 156 Tex. 139, 293 S.W.2d 488

(1956)).

     Because this third Maintenance opinion renewed the Texas Court

of Appeals' holding that an employer does not have a cause of

action against a servicing company for breach of the duty of good

faith and fair dealing, counsel for Northwinds stated at oral

argument that he was abandoning the appeal of the summary judgment

in this regard.   Accordingly, we affirm the district court's order

granting summary judgment to Wausau on this claim.

     With respect to Northwinds's other theories of recover, the

                                 17
sole basis for Wausau's summary judgment motion was that such

claims did not lie against a servicing company. Also, the district

court relied exclusively on the now-withdrawn original Maintenance

opinion in granting summary judgment to Wausau on Northwinds's

other claims.      Maintenance now holds, however, that those claims

are viable against a servicing company.         Consequently, we think it

is appropriate to reverse the summary judgment order as to those

claims and to remand to the district court for further proceedings,

with the caveat that the court should suspend such proceedings

until the relevant administrative and judicial findings described

in Part II.A. have been made.

                              III. CONCLUSION

     For the foregoing reasons, we AFFIRM the district court's

order   granting    summary    judgment   to    Wausau   with   respect   to

Northwinds's claim for breach of the duty of good faith and fair

dealing;   however, we REVERSE the district court's order granting

summary judgment to Wausau with respect to Northwinds's other

theories of recovery and REMAND for further proceedings with

instructions that the court hold the case in abeyance until the

administrative and judicial review of the payment of the contested

workers' compensation claims is complete.

                                    18