Court Opinion

ID: 3102487
Source: CourtListenerOpinion
Date Created: 2015-10-16 05:23:32.914237+00
Date Added: 2024-06-11T11:51:42.834980
License: Public Domain

NO. 07-11-00256-CV

                              IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                      AT AMARILLO

                                         PANEL A

                                   JANUARY 27, 2012

                   DONALD DAVIS, APPELLANT/CROSS-APPELLEE

                                             v.

                AMERICAN CASUALTY COMPANY OF READING, PA,
                       APPELLEE/CROSS-APPELLANT

             FROM THE 251ST DISTRICT COURT OF POTTER COUNTY;

                 NO. 97,526-C; HONORABLE ANA ESTEVEZ, JUDGE

Before CAMPBELL and HANCOCK and PIRTLE, JJ.

                                         OPINION

       Cross-appellant, American Casualty Co. of Reading, Pa. (ACC), appeals an

order from the trial court denying its plea to the jurisdiction. In the same cause, the trial

court granted a motion for partial summary judgment in favor of Donald Davis on the

issue of the correct amount of temporary insurance benefits (TIB) that he should have

received. ACC appeals the granting of the motion for partial summary judgment. The

trial court also granted a motion to sever and abate the bad faith case filed by Davis.
Davis filed a notice of appeal from the trial court’s granting of the motion to sever and

abate his bad faith claims. We reverse and render.

                          Factual and Procedural Background

      Donald Davis was injured while in the course and scope of his employment.

Subsequently, Davis filed for benefits pursuant to Title 5 of the Texas Labor Code. See

TEX. LAB. CODE ANN. §§ 409 - 419 (West Supp. 2011).1 The compensability of Davis’s

injury was never contested by ACC. The contested issue was a reduction of Davis’s

TIB for the amount of the health insurance premium that his employer continued to pay

after the date of the injury. In order to contest the action of ACC characterizing these

employer payments as post-injury benefits, a benefits review conference (BRC) was

conducted. This resulted in a finding against Davis. Davis then requested a Contested

Case Hearing (CCH). The decision of the hearing officer in the CCH was mailed to all

parties on January 7, 2009. The hearing officer found against Davis on the TIB issue.

Davis is statutorily presumed to have received the hearing officer’s decision by January

12, 2009; however, the record reflects that the original mailing to Davis was returned by

the Texas Department of Criminal Justice to the Texas Department of Insurance,

Division of Workers’ Compensation.         Subsequently, Davis received the notice,

according to his sworn pleadings, on February 24, 2009.        Thereafter, Davis filed a

petition for review before the Appeals Panel of the Division of Workers’ Compensation.

The Appeals Panel issued its decision on May 4, 2009.          The record reflects that,

      1
         Further reference to the Texas Labor Code Ann. will be by reference to “section
___” or “§ ____.”
                                           2
according to the records of the Division of Workers’ Compensation, the Appeals Panel

decision was mailed to all parties on that same day.

       Davis filed his suit for judicial review on April 28, 2009. This was six days before

the Appeals Panel decision was rendered. ACC filed its original plea to the jurisdiction

of the trial court on July 17, 2009. The trial court’s order denying ACC’s original plea to

the jurisdiction was filed on July 21, 2009. Davis filed his first amended pleading on

July 29, 2009. ACC subsequently filed a motion to reconsider its plea to the jurisdiction

on September 30, 2010. The trial court heard this motion to reconsider on March 9,

2011. This plea to the jurisdiction was subsequently overruled by order of the trial court

entered on March 10, 2011. ACC is appealing the denial of the plea to the jurisdiction.

       During the period prior to the trial court’s ruling on the re-urged plea to the

jurisdiction, Davis filed a motion for partial summary judgment on the issue of the TIB

reduction for the insurance premiums paid by his employer. Davis’s motion for partial

summary judgment was considered by the trial court, and an order granting the partial

summary judgment on the issue of the TIB deduction for health insurance benefits was

entered on March 10, 2011. ACC is appealing the granting of the partial summary

judgment.

       On April 5, 2011, ACC filed a motion to sever and abate all of Davis’s bad faith

claims from the workers’ compensation case. The trial court granted the motion and

entered an order granting the same on June 30, 2011. Davis is appealing the order of

severance and abatement.

                                            3
      We will reverse the trial court’s order denying the plea to the jurisdiction, and

dismiss the workers’ compensation portion of the case for the reasons hereafter

expressed.

                                Finality of the Judgment

      As reflected in the factual and procedural background section of this opinion,

Davis filed suit claiming that the Workers’ Compensation Division erred in determining

that the employer’s portion of the health insurance benefits were properly denoted as

post-injury earnings (PIE) and, therefore, deductible from the TIB due Davis. This was

the subject of Davis’s motion for partial summary judgment. The trial court agreed with

Davis and granted the motion for partial summary judgment.         Therefore, all issues

involving judicial determination of the workers’ compensation claim were disposed of.

The only other matters pending were the bad faith claims filed by Davis against ACC.

These were the claims that were the subject of the motion to sever filed by ACC. The

trial court granted the motion to sever and Davis has appealed that decision.

      We review a decision to grant a severance under an abuse of discretion

standard. See F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 693 (Tex.

2007). A trial court’s ruling is an abuse of discretion when it is made arbitrarily or

without regard to guiding legal principles. See Goode v. Shoukfeh, 943 S.W.2d 441,

446 (Tex. 1997). A claim is properly severable if 1) the controversy involves more than

one cause of action, 2) the severed claim is one that would be the proper subject of a

lawsuit if independently asserted, and 3) the severed claim is not so interwoven with the

                                           4
remaining action that they involve the same facts and issues. See F.F.P. Operating

Partners, L.P., 237 S.W.3d at 693.

       After reviewing the facts of Davis’s allegations against ACC, we find that the bad

faith claims are properly severable. They are different causes of actions that could be

asserted independently, and the factual basis for the bad faith claims are not so

interwoven with the facts of the workers’ compensation case as to require the trial court

to maintain the bad faith action in the workers’ compensation case. Therefore, the trial

court did not abuse its discretion in granting the severance.          Davis’s issue to the

contrary is overruled.

       Since the trial court did not err in granting the severance, the judgment of the trial

court granting the partial summary judgment is a final decision and appealable because

the same disposes of all of the parties and claims that have not been severed. See

Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001).

                         Plea to the Jurisdiction of the Trial Court

       ACC presents two different complaints regarding the trial court’s rulings on its

plea to the jurisdiction.     First, ACC contends that Davis failed to exhaust his

administrative remedies. Second, ACC contends that Davis failed to file suit in a timely

manner.

Standard of Review

       Whether a trial court has subject matter jurisdiction is a question of law that we

review de novo. See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226
                                             5
(Tex. 2004). Whether the uncontroverted evidence of jurisdictional facts demonstrates

subject matter jurisdiction is a question of law. See id.

Workers’ Compensation Cases

       The Texas Labor Code provides for a comprehensive process to resolve issues

surrounding compensation to employees injured in the course and scope of their

employment. See §§ 409 - 419. The process as outlined is, for the most part, an

administrative process designed to resolve disputes in four steps. See Tex. Mut. Ins.

Co. v. Ruttiger, No. 08-0751, 2011 Tex. LEXIS 600, at *14 (Tex. Aug. 14, 2011). These

steps are a BRC, CCH, review by an administrative Appeals Panel, and judicial review.

Id. (citing §§ 410.021, 410.104, 410.201, and 410.251).

       As applicable to the case before the Court, there are certain deadlines that

attend to the various steps in the process of claim determination. The decision by a

hearing officer in a CCH is final pending an appeal to the Appeals Panel. § 410.169.

To be timely, an appeal of a hearing officer’s decision must be filed with the Division’s

Appeals Panel by the fifteenth day after the day on which the decision was received

from the Division. § 410.202(a). If either party is not satisfied with the decision of the

Appeals Panel, judicial review of the Appeals Panel decision may be sought if the party

filing suit has exhausted its administrative remedies. § 410.251. Any suit seeking

                                             6
judicial determination of the issues decided by the Appeals Panel must be brought

within 40 days after the Appeals Panel decision is filed with the Division.2 § 410.252.

Failure to Exhaust Administrative Remedies

      ACC contends that Davis failed to exhaust his administrative remedies and is,

therefore, foreclosed from filing for judicial review. According to ACC, this is because

Davis did not request review by the Division’s Appeals Panel in a timely manner. A

request for review by the Appeals Panel must be filed with the Division “not later than

the 15th day after the date on which the decision of the hearing officer is received from

the Division.” § 410.202(a). Further, according to the Division’s rules, a challenging

party is deemed to have received the decision of the hearing officer five days after the

decision was mailed.     28 TEX. ADMIN. CODE § 102.5(d) (2011) (Tex. Dep’t of Ins.,

General Rules for Written Communications to and from the Commission).

      The record of the Division that is part of this record reflects that the hearing

officer’s decision was dated January 7, 2009. Under the presumptive rule, Davis is

deemed to have received the decision on January 12, 2009. ACC posits that Davis’s

appeal request was due to be filed on or before February 3, 2009. The record reflects

that the Division received the request for appeal of the CCH hearing officer’s decision

on March 3, 2009. Thus, according to ACC, the appeal was not timely and, because

there was no timely appeal, Davis did not exhaust his administrative remedies.

      2
          The Labor Code was amended, effective September 1, 2009, enlarging the
filing deadline to 45 days; however, for purposes of this litigation, the deadline remains
at 40 days.

                                            7
       However, the record further reflects that the Appeals Panel did, in fact, consider

the case. The Appeals Panel issued a decision on May 4, 2009. The decision issued

by the Appeals Panel on that day contained the following language:

       Accordingly, this constitutes notice that the Hearing Officer’s Decision and
       Order signed on December 18, 2008[,] became final on the date listed at
       the top of this notice under the provisions of § 410.169 or § 410.204(c) of
       the Texas Labor Code. If the Hearing Officer’s Decision and Order
       became final under § 410.169, a notice of untimely appeal is enclosed.

Section 410.169 is the provision that makes the hearing officer’s decision final unless

timely appealed to the Appeals Panel. § 410.169. The record contains no notice of

untimely appeal. Section 410.204(c) is the provision that allows the decision of the

hearing officer to become final without the issuance of a decision of the Appeals Panel.

§ 410.204(c). From this record and the interplay of the two sections of the law cited, it is

clear to the Court that the Appeals Panel considered Davis’s appeal and overruled the

same. Therefore, contrary to ACC’s contentions, Davis did exhaust his administrative

remedies. ACC’s first issue is overruled.

Timeliness of Suit For Judicial Review

       ACC’s next issue contends that Davis’s lawsuit was not timely filed and,

therefore, the trial court did not have subject matter jurisdiction. We begin by observing

that Davis filed his original petition on April 28, 2009. The record reflects that the

Appeals Panel decision is dated May 4, 2009. Therefore, on the face of the record,

Davis’s petition was filed some six days before the Appeals Panel final decision.

Subsequently, Davis filed a first amended petition on July 29, 2009.

                                             8
          Initially, we observe that section 410.251, styled “Exhaustion of Remedies”

states:

          A party that has exhausted its administrative remedies under this subtitle
          and that is aggrieved by a final decision of the Appeals Panel may seek
          judicial review under this subchapter and Subchapter G, if applicable.

§ 410.251. As we have previously determined that Davis did exhaust his administrative

remedies, the initial question before us concerns whether there was a final decision of

the Appeals Panel at the time Davis sought judicial review by filing suit. From the

record before us, the answer to that inquiry is no. At the time Davis filed his original

petition, the Appeals Panel had yet to issue its decision. Because the original petition

was filed before the Appeals Panel decision, it was ineffective to invoke the subject

matter jurisdiction of the trial court. § 410.251.

          Does this mean that the trial court did not obtain subject matter jurisdiction over

Davis’s request for judicial review? Davis did file an amended petition after the Appeals

Panel decision was filed with the Division. However, Davis’s amended petition was filed

some 86 days after the Appeals Panel decision. The statute requires that the petition

seeking judicial review be filed within 40 days after the date on which the decision of the

Appeals Panel was filed with the Division. § 410.252. When the deemed receipt rule is

applied to the Appeals Panel decision, the 40th day would have been June 13, 2009,

which was a Saturday. This would have resulted in the petition seeking judicial review

being due on June 15, 2009. See TEX. R. CIV. P. 4; Holmes v. Tex. Mut. Ins. Co., 335
S.W.3d 738, 741 (Tex.App.—El Paso 2011, pet. abated).

                                               9
       This Court has previously sustained a trial court’s dismissal of a workers’

compensation petition for judicial review that was not filed within the 40 day requirement

of section 410.251. See State Office of Risk Mgmt. v. Herrera, 288 S.W.3d 543, 549

(Tex.App.—Amarillo 2009, no pet.). Other of our sister appellate courts have held that

filing within the 40 day period required by the statute is mandatory and jurisdictional.

See Fire & Cas. Ins. Co. of Conn. v. Miranda, 293 S.W.3d 620, 624 (Tex.App.—San

Antonio 2009, no pet.); Johnson v. United Parcel Serv., 36 S.W.3d 918, 921

(Tex.App.—Dallas 2001, pet. denied).       We agree with the thought that the 40 day

requirement is mandatory and jurisdictional. Id.

       However, Davis contends that the premature filing figuratively held his place in

line until he could file after the Appeals Panel decision was filed with the Division. The

problem with this approach is that it completely discounts the jurisdictional aspect of our

previous holding. If the 40 day time period for filing for judicial review were a statute of

limitations instead of a jurisdictional requirement, this theory might have more traction.

See Tex. Emp’t Comm’n v. Stewart Oil Co., 153 Tex. 247, 267 S.W.2d 137, 138 (1954)

(holding that, when petition remains in possession of clerk and was in possession of

clerk when the court would have attained jurisdiction, the case is properly before the

trial court). The Stewart case was interpreting the statute of limitations regarding an

appeal of the action of the Texas Employment Commission. By its own terms, Stewart

did not deal with a statute that had been determined to be jurisdictional in nature.

Accordingly, we decline to follow Davis’s contention.

                                            10
       Because we have held that the premature filing of an original petition did not

properly invoke the jurisdiction of the trial court, we conclude that an amended pleading

filed after the expiration of the 40 day period defined by statute cannot relate back and

grant jurisdiction to the trial court where it did not previously exist. Johnson, 36 S.W.3d

at 921 (holding, even though the original suit was timely filed but named an improper

party, amending the lawsuit after the expiration of the 40 day period for appealing the

decision of the Appeals Panel did not confer jurisdiction upon the trial court).

Accordingly, we sustain ACC’s second issue and find that the trial court erred in denying

its plea to the jurisdiction.

       Davis further contends that he was never served with the Appeals Panel decision

until after the 40 day deadline had passed. The record reflects that, during the initial

BRC, Davis was asked about the proper address to mail all his correspondence

regarding his claim. He provided, “12071 FM 3522, Abilene, TX 79601-8749.” The

record reflects that the Appeals Panel decision was mailed to that address. Pursuant to

the rules in the Texas Administrative Code, Davis is deemed to have received the notice

of the Appeals Panel decision five days after the same was mailed. See 28 TEX. ADMIN.

CODE § 102.5(d). We are not unmindful that the quoted rule contains a provision stating

that, “unless the great weight of evidence indicates otherwise,” the deemed date of

delivery five days after the notice was mailed controls.      However, in reviewing the

record, we note a lack of evidence regarding Davis’s receipt of the Appeals Panel

decision, and a significant amount of evidence regarding when Davis received the CCH

decision. At the end of the day, the only evidence concerning delivery or non-delivery of

the Appeals Panel decision is Davis’s statement that he never got a decision from the
                                            11
Appeals Panel. This assertion standing alone is not “great weight of the evidence”

referred to in the rule. Finally, the record does reflect that there were issues regarding

the delivery of the CCH decision because the Division was not including Davis’s inmate

number as part of the address. However, the record contains nothing indicating that

Davis ever requested the inmate number be added to the address where he would

receive mail regarding his claim for workers’ compensation benefits. The same rule

referred to above contains the provision that, “All written communications to the

claimant. . . . will be sent to the most recent address . . . supplied on either . . . verbal

communication from the claimant, . . .” Id. § 102.5(a). The only address ever furnished

by the claimant is that shown above. Therefore, Davis is deemed to have received the

Appeals Panel decision within five days of the date the same was mailed. That date

would have been May 9, 2009. Filing an amended petition on July 29, 2009, would not

grant jurisdiction to the trial court.

       Having sustained ACC’s second issue, and because we have found that the

severance was properly granted, thereby making the judgment of the trial court on

Davis’s partial summary judgment a final appealable judgment, we need not address

ACC’s third issue regarding the correctness of that partial summary judgment. See TEX.

R. APP. P. 47.1.

                                             12
                                     Conclusion

      Having determined that the trial court erred in denying ACC’s plea to the

jurisdiction, we reverse and render, ordering that the judicial review of the workers’

compensation case be dismissed.

                                                    Mackey K. Hancock
                                                         Justice

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