Court Opinion

ID: 9404721
Source: CourtListenerOpinion
Date Created: 2023-06-24 00:00:28.290145+00
Date Added: 2024-06-11T17:20:16.604047
License: Public Domain

Case: 22-50303        Document: 00516798385             Page: 1      Date Filed: 06/23/2023

             United States Court of Appeals
                  for the Fifth Circuit
                                                                                 United States Court of Appeals
                                                                                          Fifth Circuit

                                     ____________                                       FILED
                                                                                     June 23, 2023
                                      No. 22-50303                                   Lyle W. Cayce
                                     ____________                                         Clerk

   Eddi R. Diyenno-Messenger; Amanda L. Diyenno-
   Messenger,

                                                                  Plaintiffs—Appellants,

                                            versus

   United States of America,

                                               Defendant—Appellee.
                     ______________________________

                     Appeal from the United States District Court
                          for the Western District of Texas
                               USDC No. 1:21-CV-201
                     ______________________________

   Before Barksdale, Southwick, and Higginson, Circuit Judges.
   Per Curiam:*
         Plaintiff Eddi R. Diyenno-Messenger was injured while working as a
   contractor for the United States Postal Service. Messenger sued the Postal
   Service for his injuries. The district court found that, under Texas law, the
   Postal Service provided workers’ compensation and was therefore immune
   from his claims. We AFFIRM.

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-50303         Document: 00516798385              Page: 2       Date Filed: 06/23/2023

                                          No. 22-50303

               FACTUAL AND PROCEDURAL BACKGROUND
           The United States Postal Service (“USPS”) contracted with Le-Mar
   Holdings, Inc., for mail transportation services in and around Austin, Texas,
   for the period of July 1, 2015, to June 30, 2019.
           When pricing its proposal, Le-Mar included the costs of maintaining
   workers’ compensation coverage, which USPS accepted as an allowable
   expense, in accordance with USPS policy to require workers’ compensation
   insurance as part of such contracts. USPS requested proof of workers’
   compensation insurance. That proof was provided in an email signed by
   Chuck Edwards, CEO of Le-Mar and Edwards Mail Service, Inc. Edwards
   Mail Service, a private Texas corporation, is a wholly owned subsidiary of
   Le-Mar. Voluntary Petition for Non-Individuals Filing for Bankruptcy at 11,
   In re Le-Mar, No. 17-50234-RLJ, (Bankr. N.D. Tex. Sept. 17, 2017), Dkt. No.
   1 (“Le-Mar Holdings, Inc. owns 100% of the equity interests of Edwards Mail
   Service, Inc.”).1
           In 2018, Eddi R. Diyenno-Messenger was an employee of Edwards
   Mail Service. In March 2018, Messenger was working as a contractor at a
   USPS facility when he was injured while pushing a bulk metal container.
   Messenger sought and received workers’ compensation benefits for his
   injury. For the contract year 2017–2018, USPS paid Le-Mar $22,551 to be
   used for workers’ compensation insurance premiums.
           In 2021, Messenger and his spouse, to whom we will refer collectively
   as “Messenger,” brought claims for premises liability and negligence against

           _____________________
           1
             This court may take judicial notice of matters of public record. FED. R. EVID. 201;
   Colonial Oaks Assisted Living Lafayette, L.L.C. v. Hannie Dev., Inc., 972 F.3d 684, 688 n.9
   (5th Cir. 2020).

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Case: 22-50303     Document: 00516798385           Page: 3   Date Filed: 06/23/2023

                                    No. 22-50303

   the United States. The United States moved to dismiss under Rule 12(b)(1)
   for lack of subject-matter jurisdiction based on Texas’s “exclusive remedy”
   provision for “statutory employers” that have provided workers’
   compensation to subcontractors.
          The magistrate judge entered a Report and Recommendation
   dismissing the suit for lack of subject-matter jurisdiction. The judge found
   that the federal government was Messenger’s “statutory employer” under
   Texas law. Therefore, Messenger’s “sole remedy is through the workers’
   compensation scheme, and the Government has not waived sovereign
   immunity under the” Federal Torts Claims Act, or FTCA. The judge also
   found no significance to the absence of a written agreement between Edward
   Mail Service and USPS. That was because Messenger had not cited any “law
   holding USPS is not entitled to statutory employer status because the
   workers’ compensation premiums and benefits passed through another
   entity.”
          The district court rejected Messenger’s objections and adopted the
   Report and Recommendation. Messenger timely appealed.
                                 DISCUSSION
          “The question of whether the United States has waived sovereign
   immunity pursuant to the FTCA goes to the court’s subject-matter
   jurisdiction and may therefore be resolved on a Rule 12(b)(1) motion to
   dismiss.” Willoughby v. United States ex rel. U.S. Dep’t of the Army, 730 F.3d
   476, 479 (5th Cir. 2013) (citations omitted). When “applying Rule 12(b)(1),
   the district court has the power to dismiss for lack of subject matter
   jurisdiction on any one of three separate bases: (1) the complaint alone; (2)
   the complaint supplemented by undisputed facts evidenced in the record; or
   (3) the complaint supplemented by undisputed facts plus the court’s
   resolution of disputed facts.” Id. (quotation marks and citation omitted).

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                                   No. 22-50303

          When addressing a dismissal of an FTCA suit for lack of subject-
   matter jurisdiction under Rule 12(b)(1), we review the dismissal de novo and
   disputed factual findings for clear error. Alfonso v. United States, 752 F.3d
   622, 625 (5th Cir. 2014).
          We answer one dispositive question: is USPS immune from
   Messenger’s claims under Texas law and the FTCA?
          The FTCA provides “a limited waiver of sovereign immunity and
   allows tort claims against the United States ‘in the same manner and to the
   same extent as a private individual under like circumstances.’” Willoughby,
   730 F.3d at 479 (quoting 28 U.S.C. § 2674). “[T]he Government’s consent
   to be sued must be construed strictly in favor of the sovereign.” Id. at 480
   (quotation marks and citation omitted).
          Relevant here, the Texas Workers’ Compensation Act “prohibits
   employees from seeking common-law remedies from their employers by
   making workers’ compensation benefits an injured employee’s exclusive
   remedy” for tort liability; in exchange, employees receive the “guaranteed
   prompt payment of their medical bills and lost wages [for workplace injuries]
   without the time, expense, and uncertainty of proving liability under
   common-law theories.” TIC Energy & Chem., Inc. v. Martin, 498 S.W.3d 68,
   72–73 (Tex. 2016).
          Several   statutory   provisions   implement      Texas’s   workers’
   compensation scheme. Under Section 406.123 of the Texas Labor Code:
          (a) A general contractor and a subcontractor may enter into a
          written agreement under which the general contractor
          provides workers’ compensation insurance coverage to the
          subcontractor and the employees of the subcontractor.
          ...

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                                     No. 22-50303

          (e) An agreement under this section makes the general
          contractor the employer of the subcontractor and the
          subcontractor’s employees only for purposes of the workers’
          compensation laws of this state.
          Thus, an employer that “provides” workers’ compensation insurance
   to a subcontractor is that subcontractor’s “statutory employer.” See
   HCBeck, Ltd. v. Rice, 284 S.W.3d 349, 350 (Tex. 2009). Under Section
   408.001, workers’ compensation is an employee’s “exclusive remedy”
   against her statutory employer:
          (a) Recovery of workers’ compensation benefits is the
          exclusive remedy of an employee covered by workers’
          compensation insurance coverage or a legal beneficiary against
          the employer or an agent or employee of the employer for the
          death of or a work-related injury sustained by the employee.
          We have explained that “the United States cannot directly pay
   workers’ compensation benefits to non-federal employees or employees of
   independent contractors.” Willoughby, 730 F.3d at 480. To qualify as a
   statutory employer under Texas law for purposes of the FTCA, however, the
   United States need not directly pay for the workers’ compensation benefits
   if it provides the benefit as an allowable expense in the contract covering the
   work being performed. Id. at 480–81 (citing HCBeck, 284 S.W.3d at 353).
   Neither party disputes that USPS’s contract with Le-Mar included workers’
   compensation as an allowable expense.
          Messenger, though, argues that USPS was not his “statutory
   employer” because there is no contract between the general contractor
   (USPS) and his employer (Edward Mail Service). Instead, there is only a
   contract between USPS and Le-Mar. Edwards Mail and Le-Mar, Messenger
   says, are distinct corporate entities, and Edwards Mail was not a d/b/a of Le-
   Mar. Messenger contends that the fact that Edwards Mail is a subsidiary of

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                                         No. 22-50303

   Le-Mar “does not alter the fact that Le-Mar and Edwards Mail are separate
   corporations.”
           Relevant to this argument is the guidance from Texas law that a direct
   contracting relationship between USPS and Edwards Mail is not necessary
   for USPS to qualify as a statutory employer. In HCBeck, for example, the
   Supreme Court of Texas explained that “multiple tiers of subcontractors
   [can] qualify as statutory employers entitled to the exclusive remedy
   defense.” HCBeck, 284 S.W.3d at 359.
           There, “FMR Texas Ltd. (FMR) contracted with HCBeck, Ltd., to
   construct an office campus on FMR’s property.” Id. at 350. Through their
   agreement, FMR provided a workers’ compensation plan in which HCBeck
   and all subcontractors working on their project were required to enroll. Id.
   HCBeck, in turn, subcontracted with Haley Greer, a private company. Id. at
   351. “Charles Rice, Haley Greer’s employee, was injured while working on
   the construction project.” Id. The court stated that, if no insurance policy
   were in place, “then neither the owner [FMR] nor the general contractor
   [HCBeck] would qualify as a statutory employer entitled to the exclusive
   remedy defense.” Id. at 357–58. It logically follows that, with FMR’s
   insurance policy in place, both FMR and HCBeck qualified as statutory
   employers, even though FMR was not in a direct contracting relationship
   with Rice’s employer.2

           _____________________
           2
              Other Texas caselaw also supports that “statutory employer” status does not
   hinge on a direct contracting relationship. See, e.g., TIC Energy & Chem., Inc., 498 S.W.3d
   at 76 (rejecting a reading of Section 406.123 that would bar “higher-tier contractors” from
   “claim[ing] the [exclusive remedy] defense” and therefore indicating that “higher-tier
   contractors,” including those not in direct contract with lower-tier subcontractors, are
   statutory employers); Etie v. Walsh & Albert Co., 135 S.W.3d 764, 768 (Tex. App.—
   Houston [1st Dist.] 2004, pet. denied) (holding that “the statutory employer/employee
   relationship extends throughout all tiers of subcontractors”).

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                                    No. 22-50303

          The same logic applies here. Though USPS did not contract directly
   with Edwards Mail, it provided for workers’ compensation insurance
   through its contract with Le-Mar. That is sufficient.
          There is one remaining, relevant factual issue. Though Messenger
   does not dispute that he received workers’ compensation benefits, he does
   dispute whether the Le-Mar policy, funded by USPS, was the source of the
   benefits. The Report and Recommendation, adopted by the district court,
   concluded that Messenger’s workers’ compensation benefits simply “passed
   through another entity,” i.e., Le-Mar, before reaching Messenger.
   Therefore, Le-Mar was effectively the source of Messenger’s benefits. We
   see no clear error with that finding. See Alfonso, 752 F.3d at 625.
          In summary, USPS did “provide” workers’ compensation insurance
   to Messenger and that insurance is his exclusive remedy under Texas law.
   See TEX. LAB. CODE §§ 406.123, 408.001.
          AFFIRMED.

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