Court Opinion

ID: 4132187
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:23:58.600012+00
Date Added: 2024-06-11T14:33:52.770029
License: Public Domain

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                      The Attorney                General of Texas
                                               June    23,     1978

JOHN L. HILL
Attorney General

                   Honorable Cue D. Boykin, Chairman                    Opinion No. H- 1193
                   Texas Industrial Accident Board
                   Lyndon Baines Johnson Building                       Re:   Payments to     the Second
                   Austin, Texas 78’711                                 Injury Fund after      it exceeds
                                                                        $250,000.

                   Dear Mr. Boykin:

                           You inquire about the liability of insurance carriers for payment to the
                   Second Injury Fund after it equals $250,000 in excess of existing liabilities.
                   The fund was established to help provide compensation to employees when the
                   combined effects of a first and second injury produce a greater incapacity
                   than the second injury alone would have caused. Texas Employers’ Ins. Ass’n
                   v. Haunschild, 527 S.W.2d 270 (Tex. Civ. App. - Amarillo 1975, writ ref’d
                   n.r.e.); Attorney General Opinion H-902 (1976); see Houston General Ins. Co.
                   v. Teague, 531 S.W.2d 457 (Tex. Civ. App. - Wazl975, writ ref’d n.r.e.). Its
                   purpose is to encourage the employment of persons handicapped by a previous
                   injury by limiting the insurer’s liability to the disabili,ty caused by the second
                   injury only. Second Injury Fund v. Keaton, 337 S.W.2d 841 (Tex. Civ. App. -
                   1960) rev’d on other grounds 345 S.W.2d 711(Tex. 1961).

                         The fund is created     in accordance        with section 12c-2 of article   8306,
                   V.T.C.S:

                                  (a) In every case of the death of an employee under
                               this Act where there is no person entitled to compen-
                               sation surviving said employee, the association shall
                               @ to the Industrial Accident Board the full death
                               benefits . . . for the benefit of said Fund. . . .

                   (Emphasis added). ~When it reaches $250,000 in excess of existing liabilities,
                   payments into the fund cease until it is reduced below $125,000, as follows:

                                  (b) When the total amount of all such payments into
                               the Fund, together with the accumulated        interest
                               thereon,  equals or exceeds Two Hundred Fifty

                                                      p.     4798
Honorable Cue D. Boykin        -   Page 2    (H-1193)

            Thousand Dollars ($250,000.00) in excess of existing liabil-
            ities, no further payments shall be required to be paid to
            said Fund; but whenever thereafter the amount of such Fund
            shall be reduced below One Hundred Twenty-Five Thousand
            Dollars ($125,000.00) by reason of payments from such Fund,
            the payments to such Fund shall be resumed forthwith, and
            shall continue until such Fund again amounts to Two
            Hundred Fifty Thousand Dollars ($250,000.00) including
            accumulated interest thereon.

V.T.C.S. art. 8306, S 12c-2.

       You inform us that a payment into the fund on March 1, 1978, caused it to
exceed $250,000 in excess of existing liabilities. You inquire about the liability of
insurance carriers during the interval before the fund is reduced below $125,000;
whether they have no liability for claims arising during this period, or whether they
remain liable for such claims, payments merely being deferred until the fund is
reduced below $125,000. You also ask whether the fund may now receive payment
of death benefits for deaths which occurred before March 1,1978.

       Article 8306, section 12c-2 states that “the association shall pay” certain
death benefits to the board. It thus creates a statutory liability to make payments
to the fund under certain circumstances.     See Industrial Accident Board v. Texas
Employers’ Insurance Association, 345 S.Wm 718 (Tex. 1961). Section 12c-2fbj
states that when the fund exceeds a certain sum, “no further payments shall be
required to be paid to said Fund.” We interpret this language to mean that no
statutory liability will come into existence after the fund exceeds the stated
amount. Thus, carriers will have no liability to the fund for deaths occurring after
March 1, 1978, and prior to a future date when the “Fund shall be reduced below . . .
$125,000. . . .I’

        Our interpretation of section 12c-2 is based in part on our observation that it
speaks solely in terms of the carrier’s obligation to pay without referring to the
board’s action to collect the money. We believe that the statutory references to
‘pay” and “payment” denote the carrier’s legal duty to make payments, and not its
actual    tendering of money to the fund.       When the statute ends the required
payments, it thus prevents statutory liability from arising, rather than merely
inhibiting the flow of money into the fund.

      The   courts have required that the board claim death benefits from the carrier
and prove    that no one entitled to compensation survived the employee. Industrial
Accident    Board v. Texas Employers’ Insurance Association, w;             Industrial
Accident    Board v. Miears, 227 S.W.2d 571 (Tex. Civ. App. - Galveston), aff’d in

                                      p.    4799
Honorable Cue D. Boykin     -   Page 3 ( H- 119 3 1

part, rev’d in part, 232 S.W.2d 671 (Tex. 1950). The carrier usually does not tender
payment until some time after the death. Nevertheless, the existence of survivors,
and consequently the carrier’s statutory liability, is determined by the facts as of
the time of the employee’s death. V.T.C.S. art. 8306, S 8a. We believe that section
12c-2 makes the carrier’s statutory liability depend on the size of the fund at the
time of the employee’s death.      Therefore the board may collect death benefits
attributable to deaths prior to March 1, 1978.

       It has been suggested that the fund’s value at various other dates should
control the carrier’s liability to it. These dates include the date of the board’s
award, the date of final adjudication, and the date that payment is tendered. We
do not believe any of these dates reflect a correct interpretation of the language of
section 12c-2. Moreover, the selection of one of these dates would introduce
unnecessary complications into the administration of the fund. When a proceeding
to claim death benefits begins, the date of death is the only certain date. The
other three events are uncertain future events, and their timing is subject to
control by the board or the carrier.      The factfinders would have to look to the
death date on the survivorship question and to an uncertain future date with
respect to the fund’s~value. We recognize that our conclusion that the death date
controls liability may result in further payment being made into the fund after it
has reached the $250,000 mark. We do not believe that section 12c-2 prohibits the
tender of payment after this event, but only the creation of new obligations to pay.
See Pennsylvania Mfrs. Assn. Ins. Co. v. Sheppard, 373 A.2d 760 (Pa. Commw. Ct.)
Griers     must pay full assessment, even though Workmen’s Compensation Security
Fund will as a result exceed statutory amount).

                                   SUMMARY

            Workmen’s Compensation carriers have no liability to the
            Second Injury Fund for death benefits attributable to deaths
            occurring after the fund exceeds $250,000 in excess of
            existing liabilities and before it is reduced below $125,000.
            The fund may continue to receive payment of death benefits
            derived from deaths occurring before the fund exceeded the
            statutory amount.

                                           Very truly yours,

                                             ttorney General of Texas

                                      p.   4800
Honorable Cue D. Boykin   -   Page 4   (H-1193)

APPROVED:

Opinion Committee”

jsn

                                  p.   4801