Court Opinion

ID: 9679888
Source: CourtListenerOpinion
Date Created: 2023-08-24 07:12:27.891161+00
Date Added: 2024-06-11T13:14:05.002933
License: Public Domain

PHILLIPS, Chief Justice,
joined by CORNYN and OWEN, Justices, concurring in part and dissenting in part.
While I agree with the Court that Corina Saenz cannot recover actual or punitive damages in this case, I disagree that this holding compels us to render judgment that Saenz take nothing. I would instead remand this cause to the trial court in the interest of justice to allow her the option of pursuing the remedy she has previously foregone, that of equitable rescission.
The jury found that Gisela Armstrong, Fidelity’s adjuster, fraudulently induced Saenz into executing the compromise settlement agreement. While the Court does not address the issue, there is at least some evidence supporting this finding. Saenz testified that she repeatedly asked Fidelity, through Armstrong, to agree to provide lifetime medical coverage for her head injury.1 According to Saenz’s testimony, Armstrong responded as follows:
Q: During these conversations that you had with her, what did [Armstrong] tell you about your request for lifetime medical?
A: She said that the most that workers comp would pay was five year medical, and that’s what they were going to pay.
Q: Did this lady ever tell you that you had the right — well, first of all, were there any discussions about a lawyer?
A: There was, yeah, because I mentioned once maybe I should get a lawyer, and she said — she didn’t tell me not to get a lawyer. She just said that I didn’t need one because whether I got a lawyer or not, that was — I was going to get the same settlement, but I was going to have to give the lawyer 25 percent.
Saenz reiterated this testimony on cross-examination:
Q: What did [Armstrong] tell you about the medical specifically?
A: When I told her I wanted lifetime medical, she said that the most workmans comp would pay was five years, and that’s all they were paying, that’s all they were going to pay.
This testimony, viewed in the light most favorable to Saenz, supports the jury’s finding that Armstrong misrepresented the scope of benefits available under the Workers’ Compensation Act.
As the Court acknowledges, Saenz’s only remedy for this fraud is to seek rescission of the compromise settlement agreement and reassert her compensation claim before the Commission. 925 S.W.2d at 612. From the record, it appears that Saenz may be entitled to this remedy. To rescind the agreement, Saenz must establish: 1) that misrepresentations concerning her injuries were made by the employer or compensation carrier; 2) that she relied on those misrepresentations in making the settlement; and 3) that she had a meritorious claim for more compensation than was paid. See Rodriguez v. American Home Assurance Co., 735 S.W.2d 241, 242 (Tex.1987).
Saenz obtained an express finding that Armstrong made fraudulent misrepresentations, satisfying the first element for rescission. The jury also found that Saenz acted in reasonable reliance on Armstrong’s misrepresentations. While Saenz did not obtain a jury finding that she had a meritorious claim for additional compensation, there is evidence in the record that would have supported a finding to that effect had she properly presented the issue to the jury.
The jury awarded Saenz $500,000 for future medical care. If this award represented the medical cost of Saenz’s on-the-job injury, it clearly would constitute a finding of a meritorious claim for additional compensation. However, I agree with the Court that, under the literal wording of the trial court’s *616charge, the $500,000 award could not have been for that injury.
Question 11 and the jury’s answers are as follows:
What sum of money do you find, if any, would fairly and reasonably compensate Corina Saenz for her actual damages, if any, sustained by her by reason of any acts or omissions of Gisela Armstrong?
You are to consider each element of damages separately so as not to include damages for one element with any other element.

Do not include any amount for any condition existing before or not resulting from the settlement of Plaintiff, Corina Saenz’s, Workers’ Compensation claim.

You are instructed that her injury of February 6, 1986, is a condition existing before and not resulting from the settlement of her Workers’ Compensation claim.
Answer separately in dollars and cents, if any, with respect to each of the following elements:
a. Mental anguish in the past. ($50,000)
b. Mental anguish that in reasonable probability she will suffer in the future. ($200,000)
c. Reasonable costs of future medical care reasonably required of Corina Saenz after April 8,1992 as a result of the injury in question. ($500,000)
(emphasis added). Because this question instructed the jury not to include any amount for any condition existing before the settlement, including Saenz’s head injury, we cannot construe question 11(c) as awarding medical costs for that injury.
Saenz’s entire ease, however, was about recovering the costs of her future medical care for her on-the-job injury. The only evidence presented at trial of future medical costs were those associated with that injury. A rehabilitation consultant, testifying as an expert for Saenz, predicted that these costs would ultimately exceed $1.6 million. Moreover, the threshold date noted in question 11(c) — April 8, 1992 — is the date the five year open medical awarded in the settlement terminated. Saenz contended, however, that her damages for future medical care were in fact tort damages, resulting from Fidelity’s fraudulent conduct in settling the compensation claim. She necessarily took this position in an attempt to avoid the longstanding rule prohibiting a trial court from awarding compensation benefits that have not been previously determined by the Commission. See Brannon v. Pac. Employers Ins. Co., 148 Tex. 289, 224 S.W.2d 466, 468 (1949); Texas Employers Ins. Ass’n v. Kennedy, 135 Tex. 486, 143 S.W.2d 583, 585 (1940). Presumably, this is why question 11 focused on the time period of the fraudulent settlement, instructing the jury not to consider any preceding injury. Saenz’s purported tort damages, however, directly corresponded to the lost compensation benefits, i.e., the medical costs for her head injury. It therefore appears that the jury probably intended to award $500,000 for the medical costs of Saenz’s head injury, which equates to the amount of lost compensation benefits.
This Court has broad discretion to remand causes to the trial court “if it shall appear that the justice of the cause demands another trial.” Tex.R.App. P. 180. I would exercise this discretion here. It appears that Saenz, in seeking tort damages for her future medical costs, pursued the wrong legal theory, bypassing a potentially meritorious rescission claim. Where it appears from the record that the losing party may be able to recover under some alternative factual or legal theory not pursued at the first trial, we have frequently remanded in the interest of justice. See, e.g., Texas Real Estate Comm’n v. Nagle, 767 S.W.2d 691 (Tex.1989) (to allow plaintiff an opportunity to prove a material fact after the Court held that the fact could not be established by collateral estoppel); Porras v. Craig, 675 S.W.2d 503 (Tex.1984) (to allow plaintiff to pursue an alternative theory of damages); Continental Southern Lines, Inc. v. Hilland, 528 S.W.2d 828 (Tex.1975) (to allow plaintiff an opportunity to pursue an alternative legal theory); Mitchim v. Mitchim, 518 S.W.2d 362 (Tex.1975) (to allow defendant an opportunity to show that jurisdiction under foreign judgment was lacking, after parties had proceeded below under a mistake regarding the burden of proof); Continental Cas. Co. v. Cook, 515 S.W.2d 261 *617(Tex.1974) (to allow plaintiff an opportunity to pursue an alternative theory of good cause for failing to timely file his workers’ compensation claim); Members Mut. Ins. Co. v. Tapp, 469 S.W.2d 792 (Tex.1971) (to allow plaintiff a second opportunity to prove a key fact, where plaintiffs failure to do so at first trial may have been due to a misunderstanding as to the effect of a trial stipulation); Houston Fire and Cas. Ins. Co. v. Nichols, 436 S.W.2d 140 (Tex.1968) (to allow insured an opportunity to prove the value of destroyed property, after the Court held that the policy amount did not constitute an agreement as to value); C. & R. Transport, Inc. v. Campbell, 406 S.W.2d 191 (Tex.1966) (where it appeared that the jury may have misunderstood the trial court’s charge); Aetna Ins. Co. v. Klein, 160 Tex. 61, 325 S.W.2d 376 (1959) (to allow plaintiff an opportunity to put on evidence of the policy amount in an action against his insurer, where this evidence had never been offered at first trial); City of San Antonio v. Pigeonhole Parking of Texas, 158 Tex. 318, 311 S.W.2d 218 (1958) (to allow plaintiff an opportunity to prove that ordinance was unconstitutional as applied, after Court held that it was not facially unconstitutional).
As the Court points out, Saenz not only did not ask for rescission in this Court, she also expressly disclaimed this remedy. She may very well have taken this position, however, as a strategic maneuver, attempting to reaffirm the notion that she was seeking tort damages, not lost compensation benefits. In light of the Court’s appropriate rejection of this argument, Saenz may now desire to pursue rescission in an attempt to secure long-term medical coverage. While we have the authority to bind Saenz to the legal maneuvering of her lawyers, a better course is to use our discretion under Rule 180 to promote the cause of justice. There is evidence that Saenz has suffered a serious, debilitating injury, for which she may need indefinite medical care. Further, there is evidence, and a jury finding, that Fidelity’s adjuster defrauded her out of her right to that care under the Workers’ Compensation Act. Under these circumstances, we can and should afford Saenz another trial.
Of course, if Saenz still does not desire to pursue rescission in light of the Court’s holdings today, she should not be required to. Instead, she should be allowed to take a nonsuit on remand. I note that, to pursue a claim for rescission of a workers’ compensation compromise settlement agreement, Saenz need not return the benefits she has received under the agreement. See Texas Employers Ins. Ass’n v. Kennedy, 135 Tex. 486, 143 S.W.2d 583, 585 (1940). Although a party seeking rescission of a contract ordinarily must return, or offer to return, the consideration received under the contract, id., we recognized an exception in Kennedy for suits to rescind workers’ compensation compromise settlement agreements. We reasoned that the claimant’s obligation to prove a meritorious claim for additional compensation negated any duty to tender back the benefits already received. Id. Of course, if rescission were awarded, Fidelity would be entitled to a credit for amounts already paid against any future award by the Commission. See id.
Accordingly, I would reverse the judgment of the court of appeals, rendering judgment that Saenz take nothing on her claims for actual and punitive damages. I would, however, remand the cause to the trial court to allow Saenz the opportunity to pursue a claim for rescission of the compromise settlement agreement.

. This portion of Saenz’s testimony is confirmed by a post-settlement letter from Fidelity’s attorneys to Armstrong stating that Saenz had been "stuck on a desire for lifetime medical regardless of the amount of money we were willing to pay.”