Court Opinion

ID: 4067108
Source: CourtListenerOpinion
Date Created: 2016-09-29 23:02:57.098872+00
Date Added: 2024-06-11T14:32:36.185236
License: Public Domain

ACCEPTED
                                                                                                      01-15-00152-cv
                                                                                          FIRST COURT OF APPEALS
                                                                                                  HOUSTON, TEXAS
                                                                                                8/26/2015 2:56:24 PM
                                                                                               CHRISTOPHER PRINE
                                                                                                              CLERK

                                    NO. 01-15-00152-CV
                                                                                    FILED IN
                                                                             1st COURT OF APPEALS
                                 In the Court of Appeals                         HOUSTON, TEXAS
                          For the First Judicial District of Texas           8/26/2015 2:56:24 PM
                                          at   Houston                       CHRISTOPHER A. PRINE
                                                                                     Clerk

          DONALD B. MULLINS and BLUE SKY RIGHT OF WAY, LLC
                                Cross-Plaintiff(s)    —   Appellants

                                                VS.

      MARTINEZ R.O.W., L.L.C. f/k/a MARTINEZ INVESTMENTS, L.L.C.
                                Cross—Defendant — Appellee

           On Appeal   from the   149"‘ District Court     of Brazoria County, Texas;
                            Trial Court   Cause No. 79750—CV

             BRIEF OF APPELLEE MARTINEZ R.O.W., LLC
               F/K/A MARTINEZ INVESTMENTS, L.L.C.

WRIGHT & GREENHILL, P.C.
David P. Boyce
State Bar No. 02759770
dboyce@w—g.com
221 W. 6"‘ Street, Suite 1800
Austin, Texas 78701
512-476-4600
512-476-5382 (Fax)

ATTORNEYS FOR APPELLEE
                             IDENTITY OF PARTIES AND COUNSEL

      Cross-         Donald B. Mullins and Blue Sky Right of Way, L.L.C.‘
     Plaintiffs
        and
    Appellants
    Counsel for      Patrick F.   Timmons
      Cross-         Timmons Law Firm
     Plaintiffs      8556 Katy Freeway, Suite 120
        and          Houston, Texas 77024-1806
    Appellant        713/465-7638 — Telephone
                     713/465-9527 - Facsimile

      Cross-         Martinez R.O.W., L.L.C.          f/k/a   Martinez Investments, L.L.C.
    Defendant
       and
     Appellee
    Counsel for     David P. Boyce
      Cross-        Wright & Greenhill, P.C.
    Defendant       221 West 6"‘ Street, Suite 1800
       and          Austin, Texas 78701
     Appellee       512/476-4600 — Telephone
                    512/476-5382 - Facsimile

'

    Blue Sky Right of Way, L.L.C. (“Blue Sky”) is listed as Appellant on Appellant’s Briefbut was not a
party before the  trial court and was not granted leave to appear as a cross-plaintiff in the Court below.

                                                        ii
                                                  TABLE OF CONTENTS

Identity    of Parties and Counsel ................................................................................                 ..

Table of Contents            ..............................................................................                         ..   iii

Index of Authorities            .................................................................................................   ..

Statement of the Case ...............................................................................................               ..

Issues Presented for            Review ....................................................................................         ..

Statement Regarding Oral Argument .......................................................................                           ..

Citations to the         Record ............................................................................................. ..

Statement of Facts .................................................................................................... ..

Scope and Standard of Review ................................................................................                       ..

Summary of Argument                  ............................................................................................   ..

Argument       ................................................................................................................. ..      ll

     I.    The Court was           correct in granting Appellee’s                    Motion       for
     Summary Judgment under Tex. Labor Code § 417.004
     because      itnegated the statutory exception and Appellant
     failed to    produce any evidence to satisfy the exception ....................................                                ..   11

     II.   The   trial   court correctly denied Appellant’s Motion to
     Vacate Judgment and for New Trial and for Leave to File
     Amended Pleading and Supplemental Material in
     Response to Cross-Defendant Martinez R.O.W., L.L.C.’s
     Motion      for   Summary Judgment .........................................................................                   ..   21

Conclusion and Prayer .............................................................................................                 ..   30

Certiﬁcate of Compliance ........................................................................................                   ..   32

Certiﬁcate of Service             ...............................................................................................   ..   32

                                                                     iii
Appendix

      Tab   1 ——   Tex. Civ.   Stat.   Ann., Art. 8306 § 3

      Tab 2 — Tex.      Civ. Stat. Ann., Art.     8306      § 3(d)

      Tab   3   — Tex. Labor Code § 401.011

      Tab 4 — Tex. Labor Code            §   408.001

      Tab   5   — Tex. Labor Code § 417.004

                                                       iv
                                           INDEX OF AUTHORITIES

Cases

Automaker, Inc. v. CCRT Company, Ltd., 976 S.W.2d 744, 746
(Tex. App. — Houston [1" Dist] 1998, no pet.) .......................................................                      ..      22

Boarder to Boarder Trucking C0,, Inc. v. Mondi, Inc., 831 S.W.2d
495, 498-99 (Tex. App. — Corpus Christi 1992, no writ) .........................................                           ..      22

City   ofBeaumont v. Graham, 441 S.W.2d 829                        (Tex. 1969) .................................... ..              12

City 0fEl Paso         v.   Collins,   440 S.W.3d 879 (Tex. App. — E1Paso 2013, no pet.)                                           29

Ensearch Corp.         v.   Parker, 794 S.W.2d 2 (Tex. 1990)                ............................................   ..       13

Fairfield Insurance Company v. Stephens Martin Paving, LL. .,                            C
246 S.W.3d 653 (Tex. 2008) ....................................................................................            ..      24

Gilbane Building Co.           v.   Keystone Structural Concrete, 263 S.W.3d 291
(Tex. App.         — Houston    [151 Dist.]2007, no pet.) .......................................................          ..       14

Granite Construction Co. v. Bituminous Insurance Cos., 832 S.W.2d 427, 430
(Tex. App. — Amarillo 1992, no writ) Argument .....................................................                        ..       16

Henkel v. Norman, 441 S.W.2d 925, 927 (Tex. 1996)                           ............................................   ..        8

Hill  Milani, 678 S.W.2d 203, 205 (Tex. App. — Austin 1984)
       v.

affd 686 S.W.2d 610 (Tex. 1985) ...........................................................................                ..      22

Houston Lighting & Power Co. v. Eller Outdoor Advertising Company,
635 S.W.2d 133 (Tex. App. ~— Houston [1S' Dist.] 1982, writ ref’d n.r.e.) ...............                                  ..      19

Johnson          & Johnson Med, Inc.         v.   Sanchez, 924 S.W.2d 925, 927 (Tex. 1996) ....... ..                                8

Koninklyke Nederlandsche Stoomboot Maalschappy, N. V v. Royal Netherlands
Steamship Company, 301 F.2d 741 (5‘“ Cir. 1962) ..................................................                         ..      26

Leinen   Buﬂington 's Bayou City Service Co., 824 S.W.2d 682, 685
            v.

(Tex. App. ~ Houston [14"' Dist] 1992, no writ) Argument ................................... ..                                    22

Monsanto Co. v. Owens-Corning Fiberglas Corp., 764 S.W.2d 293, 294
(Tex. App. ~ Houston [1s' Dist.] 1988) Argument ...................................................                        ..   18, 19
Nall   v.   Plunkett,        404 S.W.3d 552, 555 (Tex. 2013) .................................................                           ..              8

Port Royal Development Corp. v. Braselton Construction Co.,
716 S.W.2d 630 (Tex. App. — Colpus Christi 1986, writ refused                                             n.r.e.)    .................   ..             13

Randall ’s Food Markets,                      Inc.   v.   Johnson, 891 S.W.2d 640, 644 (Tex. 1995)                            ........   ..              8

Scottsdale Insurance Co.                      v.   Shahinpour, 2006 WL 870642 (S.W.2d Tex)                      .............   ..             16

Texas General Indem. Co. v. Ellis, 888 S.W.2d 830, 831-32
(Tex. App. — Tyler 1994, no writ) ............................................................................                           ..             22

Valence Operating Co.                    v.    Dorsett, 164 S.W.3d 656, 661 (Tex. 2005) ....................                        ..              8

Varela      v.    American Petroﬁna Co.                    o_/‘Texas, Inc.,      658 S.W.2d 561 (Tex. 1983) .....                        ..             28

West Texas               Renner, 32 S.W.2d 264 (Tex. Civ. App. — Eastland
                       Utilities   Co.    v.

1930, affd, 53 S.W.2d 451 (Tex. Comm’n App. 1932) .......................................... ..                                                   25,   26

Westfall         v.   Lorenzo Gin Company, 287 S.W.2d 551 (Tex. Civ. App. ~ Eastland
1956, no writ) ........................................................................................................... ..                     25,   26

Statutes         and Rules

Tex. Labor            Code

            §401.011(18) ...............................................................................................                 ..             14
            §408.001 ......................................................................................................              ..       14,30
            §408.001(a), (b)              ..........................................................................................     ..          30
            §408.001(b), (c)                                                                                                                  ~
                                                                                                                                                     30
            §4l7.004 ......................................................................................................              ..       33,37

Tex. Civ.         Stat.   Ann.

            Art.      8306   § 3   ................................................................................................      ..I7, 18,      19
            Art.      8306
                      § 3(d) ....... ..                                                                                                           17,   33
            Art. 2212(a) (repealed) .................................................................................                                   34
                                                                                                                                              ~
                                                                                                                                         ..

                                                                        vi
Tex. Civ. Prac.    & Rem. Code

       § 33.oo4(;)(1)(2)          ..                                                                                          35
       § 33.oo4(1)(1).                                                                                                        35
       §33.o11(3)....                                                                                                         16
       § 33.011(6).                                                                                                           34
       § 33.015 ........................................................................................................ ..   34

                                                              vii
                                      STATEMENT OF THE CASE
             An   entity   owned   or controlled by Appellant Donald Mullins (“Mullins”), Blue

Sky Right of Way, L.L.C. (“Blue Sky”) entered                         into a contract with Southern           Brush

S.W., Inc. to perform certain clearing of land and trimming of trees along a right of way.

(lCR:l92—195). Blue Sky             in turn   subcontracted a portion of the work to Martinez Right

of Way, L.L.C. f/k/a Martinez Investments, L.L.C. (“Martinez”).                               (lCR:25).      In the

course of performing that work, one of Martinez’s employees, Bonifacio                           Gomez,    suffered

an injury in the course and scope of his employment and he                           later initiated   an action for

damages against Mullins, among                others.    (lCR:5—12). Mullins asserted defenses to Mr.

Gomez’s        allegations and filed a cross-claimz against Martinez, arguing that Martinez had

agreed to indemnify and hold harmless Blue Sky, as well as Mullins individually, for any

liability arising        from Martinez’s work pursuant           to its   agreement with Blue Sky, including

supervision of its         own employees      at the   job   site.   (lCR:5—12). Mullins sought indemnity

based on that alleged agreement, as well as contribution under Chapter 33 of the Tex.

Civ. Prac.      & Rem. Code.       (lCR:5—12).

             Martinez’s answer included a general denial, as well as the affirmative defense

that    it   was afforded protection under the Texas Workers’ Compensation Act because                            it

was covered         for workers’    compensation insurance                at the   time of the on the job injury

suffered by       its   employee, Bonifacio Gomez. (2CR:7—9).

             Martinez then moved for a no evidence and traditional summary judgment with

respect to Mullins’ claims for indemnity and contribution, under § 417.004 of the Tex.

Labor Code. That provision insulates an employer protected by workers’ compensation

from any claim for reimbursement asserted by a                        third party in     an action for damages

2
    While incorrectly styled as a cross—claim, Mullins was actually asserting a third party     action.

                                                             1
brought by the injured employee against that third party, unless the employer executed,

prior to the time of the           on the job      injury, a written      agreement to assume the third party’s

liability.    (lCR:l4-20).

         Martinez presented summary judgment evidence that                             it   was covered by a policy

of workers’ compensation                at the    time of Mr. Gomez’s accident and that there was no

written agreement under               which Martinez assumed Mullins’             liability.    (lCR:41-95).

         Mullins ﬁled a motion to continue the summary judgment hearing (lCR:98-101)

and a response             in   which he asserted           that a certiﬁcate    of insurance “authorized” by

Martinez and the existence of a                 liability   policy covering Martinez demonstrated an intent

to   indemnify Mullins and thus satisﬁed the statutory exception under Tex. Labor Code                             §

417.004. (lCR:l08-176).

         The       trial   court denied Mullins’ motion for continuance (lCR:330) and granted the

Motion       for   Summary Judgment (2CR:24) and                     Martinez’s motion to sever the claims

Mullins had asserted against               it   from the main action (lCR:328—329).                 Mullins ﬁled a

motion   to vacate the          judgment and for new            trial,   for leave to ﬁle an     amended   pleading,

and for leave          to ﬁle      supplemental materials in response to Martinez’s Motion for

Summary Judgment (2CR:366-372),                        relief that   was overruled by operation of law on

February      9,   215 as    to the   Motion    to   Vacate and for New       Trial,   and denied by the Court on

February 10, 2015 (2CR:420)               at the     same time     the Court sustained Appellee’s objections

to Mullins’ afﬁdavit. This appeal followed.
                         ISSUE PRESENTED         FOR REVIEW
       Mullins presented no summary judgment evidence of any written agreement

executed by Martinez prior to Bonifacio Gornez’s on the job injury of June      7,   2010,

arguing instead that a certiﬁcate of insurance and the existence of a    liability   policy

covering Martinez sufficed to satisfy the statutory exception.

       Did the district court properly grunt Martinez ’s Motion for Summary Judgment

       under Tex. Labor Code § 417.004 absent evidence that any pre-accident written

       agreement had been executed by Martinez under which       it   assumed Mullins’

       liability?
                  STATEMENT REGARDING ORAL ARGUMENT
       Oral argument should not be necessary. The statute in this case       is   unambiguous,

the limited   and well deﬁned exception      is   inapplicable here   and the two additional

exceptions advanced by Appellant have no basis in law.

                              CITATIONS TO THE RECORD
       “CR”   refers to the   two volume C1erk’s Record, with volume number        listed before

“CR,” followed by a colon and then page number.
                                 STATEMENT OF FACTS
         The   facts material to Martinez’s   Motion   for   Summary Judgment          are not disputed.

Appellant unsuccessfully attempted to supplement the summary judgment record with

deposition excerpts from Mr.       Gomez      and his    own       conclusory statements regarding

alleged gross negligence on the part of Martinez.        The Court disallowed Mullins’ motion

for leave to supplement the    summary judgment        record. In     any event, testimony allegedly

indicating gross negligence on the part of Martinez           is   irrelevant to the issue before the

Court.

         Appellant Mullins owns Blue Sky Right of Way, L.L.C. (“Blue Sky”), whose

business includes the clearing of land, tree trimming and related               work (1CR:1 16). Blue

Sky contracted with Southern Brush S.W.,          Inc. to     perform certain clearance and            tree

trimming work along a right—of—way (lCR:l92—195) and                       in turn entered      into    an

agreement with Martinez       to provide labor at a location in Brazoria                County, Texas.

(1CR:1 16). Bonifacio     Gomez was     an employee of Martinez, an employer covered by

workers’ compensation insurance.       (lCR:4l—92; lCR:l09). Mr.                 Gomez was    injured at

the job site while working for Martinez and performing the             work Martinez had agreed         to

undertake for Blue Sky. (1CR:116).

         There was no written agreement between Martinez and Blue Sky or Mullins

pertaining to Martinez’s     work on   the “Southern Brush” job site in Brazoria County,

something Mullins acknowledged under oath         in his deposition that          was taken on June     5,

2013, well before Martinez’s entiy into the lawsuit. (lCR:94).             It   appears that either prior

to or   contemporaneous with Martinez’s commencement of the work Mullins received a

certiﬁcate of insurance dated June 7, 2010, that                   shows   as the insured Martinez
Investments, L.L.C., and identiﬁes three separate policies of insurance issued by three

insurers        for    comprehensive          general     liability,    automobile       liability   and workers’

compensation, respectively.                  The   certificate identifies as “certiﬁcate holder”             Blue Sky

Right of Way, L.L.C.             It   nowhere      indicates that Blue     Sky or Mullins would be shown            as

an additional insured under any of the three policies. (lCR:l20).

           Mullins contends that Martinez agreed to assume Blue Sky’s or his                            liability for

injuries to Martinez’s          employees on the job, and              to provide insurance for      Blue Sky, but

there   is   no written proof           to support either assertion.              Martinez was protected by an

insurance policy issued by the Travelers’ Indemnity                               Company of      Connecticut that

contained commercial general                 liability   coverage, a (possibly incomplete) copy of which

was attached          to Mullins’     summary judgment         response, but the policy nowhere mentions

Blue Sky or Mullins, nor                is   there any evidence that         it   provided additional insurance

coverage for either        at the     time of the accident.

           Mr.    Gomez        initiated a personal injury action against                 Mullins and others, in

response to which Mullins asserted certain afﬁrmative defenses (lCR:5—l3).                                On March

27, 2014, Mullins included with his second                    amended answer what he             titled as   a “cross-

clairn,”     although     it   initiated actions against persons            and     entities   who were      not prior

parties to the case (Martinez                and Hallmark Specialty Insurance Company), and should

have been identified as an original                third party action. (lCR:5—l3).

           As    to Martinez,         Mullins sought contractual indemnity as well as contribution

pursuant to Chapter 33 of the Tex. Civ. Prac.                 & Rem.       Code, noting he joined       in a   motion

to designate      Martinez as a responsible third party.
              Martinez ﬁled         its   original    answer on     May       15, 2014, asserting a general denial         and

    as an afﬁnnative defense, the protections afforded to                             it    under the Texas Workers’

    Compensation Act,           in   View of         its   position as a covered employer, as those terms are

    deﬁned    in the Act. (2CR:7~9).

              On    October 17, 2014, Martinez ﬁled                     its   no evidence and         traditional   motion for

partial       summary judgment.3 As a                      basis for   its    motion, Martinez relied on Tex. Labor

Code      §    417.004, insulating a covered employer under the Act from a reimbursement

claim by a third party                    who   is    potentially liable to an injured employee, unless the

employer executed before the on the job injury a written agreement with                                      that third party

to    assume       its liability.    (1CR:l4—20).

              Mullins filed a motion to continue the summary judgment hearing (lCR:98-101)

and a response           to Martinez’s          summary judgment motion (lCR:l08-176), with                           exhibits.

The    trial   court denied Mullins’ motion for continuance and granted Martinez’s                                   summary

judgment motion (2CR:24) and                         its   Motion      for Severance (1CR:328—329).                 Thereafter,

Mullins filed a motion to vacate the judgment and for                              new     trial,   and for leave    to file   an

amended pleading and                 to   supplement the summary judgment evidence. (2CR:366-372).

That motion was overruled by operation of law on February                                    9,     2015 and denied by the

Court on February 10, 2015, which further sustained Martinez’s objections to Mullins’

supplemental affidavit. (2CR:420). This appeal followed.

3
  The motions were designated as “partial" because Mullins had cross-claims pending against Hallmark
and, of course, Plaintiff Bonifacio Gomez had asserted causes of action against a number of parties,
including Mullins and Southern Brush, S.W., Inc.
                                   SCOPE AND STANDARD OF REVIEW
          This Court’s review of the               district court’s      Order granting Martinez’s no evidence

    and traditional motion for summary judgment                     is    de novo.       Valence Operating Co.       v.

Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).                             A    defendant     may move     for    summary

judgment on an affirmative defense                    that has    been pled or raised in the motion             itself.

Randall’s          Food   Markets, Inc.      v.   Johnson, 891 S.W.2d 640, 644 (Tex. 1995).                  When    it

does    so,   it   must prove each element of its defense             as a matter    of law. Johnson    & Johnson
Med,     Inc.      v.   Sanchez, 924 S.W.2d 925, 927 (Tex. 1996).                    A   defendant   may move      for

summary judgment by disproving as a matter of law an essential element of the plaintiff’ s

cause of action. Henkel              v.   Norman, 441 S.W.3d 249, 251 (Tex. 2014); Nall                 v.   Plunkett,

404 S.W.3d 552, 555 (Tex. 2013).

                                     SUMMARY OF THE ARGUMENT
          This case        is   controlled by statute, speciﬁcally § 417.004 of the Tex. Labor Code,

which effectively          insulates a covered employer4           from an action seeking contribution and

indemnity brought by parties                      who have been          sued by the subscribing employer’s

employee           for injuries in the course        and scope of employment. The exclusive remedy

provision of the Workers’ Compensation Act, Tex. Labor                           Code      § 408.001, protects the

covered employer from a                   common law     cause of action asserted by an employee or the

legal beneficiaries             of an employee injured or killed                in the course        and scope of

employment, with the sole exception a                  suit for   exemplary damages brought by the spouse

4
  The Act deﬁnes “Employer” as “a person who makes a contract of hire, employs one or more employees,
and has workers‘ compensation coverage.” Tex. Labor Code § 401.011(18). By deﬁnition, an employer
carries workers’ compensation coverage.
or heirs of the body of the deceased employee for intentional or grossly negligent conduct

on the part of the employer.

          Tex. Labor Code § 417.004 protects the employer from having to reimburse a

third party that is sued             by the employee or   his beneﬁciaries for       damages, barring the

liable third party’s claims for contribution               and indemnity unless the employer has

executed, before the on the job injury or death, a written agreement with the third party to

assume    its liability.

          Mullins’ “cross—claim” against Martinez was clearly an attempt by a third party

sued by the covered employee, Bonifacio Gomez, to obtain reimbursement from

Martinez       in the   form of contractual indemnity, or contribution under Chapter 33 of the

Tex. Civ. Prac      & Rem Code.
          Martinez promptly asserted the protections of the Texas Workers’ Compensation

Act   in its initial pleading.           Its   summary judgment motion       established     its   status as   an

employer covered by a policy of workers’ compensation issued by Texas Mutual

Insurance Company.              It   further established the lack of   any pre—injury written agreement

executed by Martinez to assume Mullins’ potential                     liability to Mar’tinez’s      employees

injured   on the job. Martinez negated as a matter of law the one exception                  to the statutory

protection afforded        it   against third party claims for contribution or indemnity, and indeed,

produced sworn testimony from Mullins acknowledging the absence of any written

agreement between Mullins (or Blue Sky) and Martinez relevant                     to the   work underway       at

the time of Mr.     Gomez’s          injuries.

          At   that point, the        burden shifted to Mullins      to present   evidence of Martinez’s

execution of a written agreement under which                it   expressly assumed Mullins’ liability to
Martinez’s employees.                   Mullins presented no evidence to meet that burden, claiming

instead that the statutory exception could be satisﬁed with circumstantial proof that there

                      ”
was an “inten             on the   part of Martinez to     assume Mullins’          liability,   namely, a certiﬁcate

of insurance delivered to Mullins               at or   before Martinez’s        commencement of the work,          as

well as a copy of Martinez’s general liability policy.                            (lCR:l08-l76).         However, a

certiﬁcate of insurance            is   not the equivalent of a written agreement to indemnify a party,

and the policy simply shows that Martinez had insurance coverage                             in place at the time   of

the accident.         Neither document         is   evidence that Martinez undertook, in writing, on or

before June      7,   2010, to assume Mullins’           liability.

          In Mullins’ belated             motion    to vacate,    amend      his pleading        and supplement the

summary judgment              record, he advanced for the ﬁrst time the                  argument     that there   was

another exception to the statutory protection afforded covered employers from third party

claims, that being          when    the employee’s non-fatal injuries allegedly result from employer

gross negligence. Tex. Labor                 Code   §   417.004 does not mention such an exception, nor

does any other Labor Code provision or case handed                          down    in the last   50 years even hint

at   such an exception.

         Finally, Mullins’ post—hearing                 motion argued        that   because Martinez had been

designated as a responsible third party under Chapter 33 of the Tex. Civ. Prac.                                & Rem.
Code,    it   was subject      to a claim for contribution             under Chapter 33.           That argument    is

specious. Chapter 33 permits a defendant                   who   is   jointly   and severally     liable for   damages

to the plaintiff to         seek contribution against any other “liable defendant,” a term that                     is

deﬁned        in §    33.0ll(3) of the Tex. Civ. Prac.                &     Rem. Code      in a    way   that clearly

distinguishes        it   from “responsible     third party.”         The   fact that a party is designated as a

                                                            10
responsible third party does not                    make   it   a liable defendant. Because Martinez cannot be

liable to its         employee, Bonifacio Gomez, for injuries                              in the course        and scope of

employment,            due   to     the       exclusive         remedy provisions of the Texas Workers’

Compensation Act,            it   cannot be a “liable defendant,” and accordingly, there                           is   no viable

contribution claim against              it   under Chapter 33 of the Tex. Civ. Prac                      & Rem. Code.

                                                        ARGUMENT
I.             The Court was correct in granting Appellee’s Motion for Summary
               Judgment under Tex. Labor Code § 417.004 because it negated the statutory
               exception and Appellant failed to produce any evidence to satisfy the
               exception.

               Mullins readily admits that there                is   no “separate contract of indemnity”                that   was

executed by Martinez prior to Mr. Gornez’s on the job injury on June                                                    7,   2010.

(Appellant’s Brief, p.            8).     He argues        instead that Martinez “caused the delivery” of a

certificate       of insurance referencing a           liability      policy     (Id.), that    it   performed work pursuant

to      an agreement (presumably oral) with Blue Sky, that                          it   was    later   paid for that work, and

that Martinez’s liability policy “covers the activities                          undertaken by Blue Sky and Mullins

.   .
        .”   (Appellant Brief,    p. 15).      Appellant nowhere explains                  how       a certiﬁcate of insurance

or a liability insurance policy                is   the equivalent of a written agreement executed by the

employer to assume the              liability       of a third party. Those two documents, taken singly or

together,        do not constitute an         explicit written            agreement to indemnify Mullins, as even a

cursory review of the applicable case law makes clear.

               Cases construing Tex. Labor Code.                     § 417.004,    and    its   predecessor under the prior

Workers’ Compensation Act, Tex. Civ.                            Stat.     Ann.   Art.    8306     § 3 (later Article 8306, §

3(d),        have held that to    satisfy the statutory exception to a                    covered employer’s protection

                                                                     11
from   third party   “reimbursement” actions, there must be a written, signed, pre—injury

indemnity agreement under which the employer explicitly assumes the                         liability     of the

third party that seeks     reimbursement or indemnity.

        The Texas Supreme Court considered the question of what                          sort    of indemnity

language would    satisfy the exception in the prior          Workers’ Compensation Act, Art. 8306,

§ 3, in City   0fBeaumont         v.    Graham, 441 S.W.2d 829 (Tex. 1969).           An    employee of a

workers’ compensation subscriber, Texas Tower                     &    Construction      Company (Texas

Tower) was     fatally injured         while working in an elevated storage tank belonging to the

City of Beaumont. Id. at 832. His beneficiaries sued the City, which in turn ﬁled a third-

party action against Texas              Tower seeking indemnity       or contribution.     Id.       The Texas

Supreme Court noted          that      Texas Tower,   as a workers’      compensation subscriber, was

protected against claims for indemnity and contribution by Art. 8306, §                         3.   Id. at 837.

The City contended         that   its    contract with Texas   Tower contained indemnity language

sufficient to satisfy the statutory exception.

        The Texas Supreme Court               disagreed, concluding that the indemnity provisions

showed an    intent to   indemnify the City only for damages or claims resulting solely from

the acts or conduct of Texas Tower. Id. at 838.                The Texas Supreme Court agreed with

the Court   below that the language          in the City   of BeaumonUTexas Tower contract did not

“evidence an intention of the parties that Texas Tower should indemnify the City for the

consequences of      its    own        negligent conduct, or for the consequences of the joint

negligence of the parties, or for the consequences of the negligent conduct of the City and

the non—negligent conduct of Texas Tower.” Id. at 838-839.                   The Court concluded            that

the City’s contribution and indemnity claims were not sustainable.

                                                      12
        In Port Royal Development Corp.                            V.    Braselton Construction C0,, 716 S.W.2d 630

(Tex. App.    — Corpus     Christi 1986, writ refused n.r.e.), the Court considered whether an

indemnity agreement between the general contractor for the work, Port Royal

Development Corporation, and the injured person’s employer, Braselton Construction

Co., satisﬁed the statutory exception to the workers’ compensation bar to Port Royal’s

reimbursement claim.             The Court reviewed                           the indemnity language, noting that                   it

speciﬁcally excluded indemnity for injury arising out of the act or neglect of Port Royal.

The Court concluded       that in             View of the         fact the        indemnity agreement did not indemnify

Port Royal for   its   own negligence,                   it   did not satisfy the statutory exception set forth in the

prior Workers’       Compensation Act,                   Art.    8306 §      3,   Tex. Civ.   Stat.        Ann.

       The Texas Supreme Court again considered what language was                                                        sufficient to

satisfy the statutory exception to the workers’                                   compensation bar against                third party

reimbursement actions       in    Ensearch Corp.                    v.   Parker, 794 S.W.2d 2 (Tex. 1990). In that

case, the Court held that the                 Act did not bar a pipeline owner’s claim for indemnity from

an independent contractor whose employees were asphyxiated during their work. Under

the indemnity agreement in that case, the independent contractor                                                   assumed    “entire

responsibility   and   liability for                  any claims or actions based on or arising out of                       injuries,

including death, to persons           .       .   .   sustained or alleged to have been sustained in connection

with or to have arisen out of or incidental to the performance of this contract by

[independent contractor]      .   .       .   regardless of whether such claims or actions are founded in

whole or   in part   upon alleged negligence of [pipeline owner]                               .   .   .   Id. at 6-7.

                                                                        13
              The Court concluded        that the indemnity language in question sufficed to                        show

that the      employer expressly assumed            third party liability for injuries to its           own employees

and thus met the exception to the workers’ compensation                              bar. Id. at 8.

              A more recent decision that addresses the current statutory bar, Tex.                        Labor Code

§ 417.004,        is   Gilbane Building Co.             v.    Keystone Structural Concrete, 263 S.W.3d 291

(Tex. App.        — Houston      [151   Dist.]    2007, no              pet.).   In that case, Gilbane Building Co.

(“Gilbane”) and Keystone Stuctural Concrete, Ltd. (“Keystone”) contracted for Keystone

to act as subcontractor          on a construction                 project, during     which a Keystone employee

suffered injuries and sued Gilbane, resulting in a settlement. Id. at 294. Gilbane and                                   its

liability insurer,       Zurich, sued Keystone for,                  among       other things, contractual indemnity.

Id.    The Court        ﬁrst determined that the indemnity language in the Gilbane/Keystone

contract did not satisfy the express negligence test and                           was thus unenforceable, affirming

the   trial   court’s grant of   summary judgment                   as to Gilbane’s contractual indemnity claim.

However, Gilbane also argued                     that        Keystone had breached contractual obligations

relating to use         of equipment that was                     in a safe condition       and   in   compliance with

applicable regulations, codes, ordinances, etc. Id. at 302. In response, Keystone asserted

that Gilbane’s claim for breach             of contract was merely a reformulation of                     its   indemnity

claim and that regardless of how Gilbane characterized that reimbursement action,                                  it   was

barred by Tex. Labor          Code      §   417.004.              The Court of Appeals agreed, noting             that the

statute prohibited        indemnity absent an express agreement by the employer to indemnify

the third party in writing. Id. at 303.             The Court concluded:

          The indemnity agreement here      unenforceable because it fails to comply with
                                                             is
          the express negligence rule [citation omitted]. Accordingly, we hold that §
          417.004 bars Gilbane’s breach of contract claims against Keystone.

                                                                   14
Id.

         In short, Texas courts that have considered the applicability of Tex. Labor                           Code     §

417.004 and      its   predecessor have concluded that the exception to the bar against third

party reimbursement actions requires an exp_l§i_t written agreement by the employer to

assume the     liability   of the   third party in the   form of enforceable indemnity language                    that

satisﬁes the express negligence           test.   In this case, by Mullins’         own admission,        there   is   Q
written agreement relating to Martinez’s                work       for Mullins or Blue Sky,             much   less a

conspicuous indemnity provision that meets the express negligence                           test.

        Mullins does not        cite   any case holding that the statutory exception can be                  satisfied

by something other than a written contract of indemnity under which the employer

expressly assumes the third pa1'ty’s              liability.      Indeed, in the “contractual indemnity”

section of his brief (Appellant Brief, pp. 15-16), he cites              no case     at all.        Rather, he argues

that there    was   in fact   a written agreement to indemnify him evidenced by the certiﬁcate

of insurance he received and by Ma1tinez’s                     liability policy,    which he attached          to his

summary judgment           response.      (lCR:l23-176).5           The argument       is    unsuppoitable, for a

number of reasons.

        First, the certiﬁcate        of insurance that       is   dated June   7,   2010 speciﬁcally notes,            at

the outset:

        [THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
        ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
        HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR
        NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE
        AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF
        INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN
        THE ISSUING INSUR_ER(S), AUTHORIZED REPRESENTATIVE OR
        PRODUCER, AND THE CERTIFICATE HOLDER]
5
 The copy of the Travelers policy in the record is incomplete (lCR:l23-176); what appears to be a more
complete copy is attached in the appendix to Appellant’s Brief.

                                                        15
            The law regarding          certiﬁcates of insurance is well established.                A certiﬁcate of
insurance      is   not the equivalent of an insurance policy,                it    cannot   alter the   terms of an

insurance policy, and          it   does not estabish any contractual relationship between the entity

issuing the certiﬁcate and the certiﬁcate holder.                    See,   e.g.,   Scottsdale Insurance Co.                v.

Shahinpour, 2006 WL 870642 (S.W.2d Tex) (certiﬁcate of insurance                that states          it   does

not amend, extend or alter coverage afforded by the policies below, does not alter the

terms of any insurance policy, and creates no contract for insurance coverage); Granite

Construction Co.         v.   Bituminous Insurance Cos., 832 S.W.2d 427, 430 (Tex. App. -

Amarillo 1992, no writ) (any insurance afforded                       to Granite Construction Co., despite

being shown as an additional insured in a certiﬁcate of insurance,                             is   afforded by the

policies and not the certiﬁcate                itself).   Accordingly, the certiﬁcate itself        is   not a written

“agreement” of any kind between Mullins or Blue Sky and the certiﬁcate issuer (an

insurance agency        is    identified as the producer), or          any insurer of Martinez.            It   was not

executed by Martinez, and                 it    certainly cannot constitute an express agreement                           by

Martinez      to    assume Blue Sky’s or Mullins’                 liability for injury to      one of Martinez’s

employees.

            Second, setting aside the fact that the Martinez                liability   policy Mullins also relies

on   is   not certiﬁed or proven up through a business records afﬁdavit of any kind,                            it   has no

relevance here.        The afﬁdavit Mullins               attached to his    summary judgment            response, in

paragraph 6 (lCR:ll6—ll7), offers his opinion that the policy in question “provides

liability    insurance coverage for the ofﬁcers and agents of covered organizations.”

Needless      to say, the interpretation           of an insurance policy presents an issue of law for the

Court, not susceptible to construction by interested parties.

                                                             l6
          Mullins asserts in the summary judgment response                                itself that   “Paragraphs l.a and

2.b(2) of the   Coverage Form                   at    pages 2 and     3   of 16” provide coverage for Blue Sky and

Mullins.    (1CR:l 12). Mullins’                      efforts at insurance policy construction              do not avail him

here.

          Paragraph      l.a   of the Commercial General Liability Coverage Form (lCR:134)

simply states that the insurer “will pay those sums that the insured becomes legally

obligated to pay as damages because of “bodily injury” or “property                                      damage”     to   which

this insurance applies           .    .
                                           .”    That provision does not define the term “insured,” but

language preceding that provision on the same page of the policy indicates that the word

insured   “means any person or organization qualifying                            as such under Section         II   —   Who Is
An Insured.”     (ICR: 134).

          The Section       II       — Who            Is   An   Insured provision of the Commercial General

Liability   Coverage Form                 in the policy included in the                 appendix to Appellant’s Brief,

subpart   (c), states that if        the    named          insured   is   a limited   liability   company    (the case here),

the entity itself   is   an insured,            its   members, “but only with respect              to the   conduct of your

business,” and the        named            insured’s managers.               That deﬁnition does not include either

Mullins or Blue Sky.

          Mullins also appears to                      cite   Exclusion 2(b)(2) on page 2 of the Commercial

General Liability Coverage Form in the Travelers policy                                 (in the   appendix    to Appellant’s

Brief), but that provision                 merely excludes coverage for bodily injury for which the

insured “is obligated to pay damages by reason of the assumption of liability in a contract

or agreement.”       There       is       an exception          to the contractual liability exclusion for,               among

other things, an “insured contract,” but Appellant                            makes no argument          that the exception

                                                                     17
applies here.6         Of course,        the fact that Martinez’s liability policy                   may     include coverage

for certain of       its   indemnity obligations                is   not evidence that such an indemnity obligation

exists.      Once      again, Mullins appears to believe, mistakenly, that proof of liability

coverage for Martinez, either                in the            form of a certiﬁcate of insurance or the                 liability

policy     itself,    somehow         equates to an explicit assumption of Mullins’ or Blue Sky’s

liability.       Proof of insurance        that   might cover an obligation                is   not the same as an explicit

assumption of that obligation.

           In short, after acknowledging in                           sworn testimony           that there    was no      written

agreement between himself or Blue Sky and Martinez, Mullins’ only response                                                to the

Appellee’s        summary judgment motion was                          to   produce documents that           at   most evidence

insurance coverage for Martinez. Mullins cites no case that has held that a party seeking

indemnity from a covered employer need not produce any writing actually executed by

the employer expressly assuming such                            liability.     Having    failed to present         any evidence

that   meets the statutory exception                   to the        employer’s protection from third party                suits,

Mullins has no basis to challenge the correctness of the summary judgment granted

against him.

          Mullins argues that a contract of indemnity (and presumably one sufficient to

satisfy the requirements              of Tex. Labor Code               §    417.004)   may be either express or implied,

citing    Monsanto Co.           v.   0wens—Coming Fiberglas                     Corp., 764 S.W.2d 293, 294 (Tex.

App.     — Houston         [lS‘ Dist.]   1988), which in turn cites Houston Lighting                          &   Power   Co.   v.

°
  The policy in question deﬁnes “insured contract” to include (subpart t): “That part of any other contract
or agreement pertaining to your business       under which you assume the tort liability of another party to
                                                   .   .   .

pay  for  ‘bodily injury’ or ‘property damage’  to a third person or organization. Tort liability means the
liability that would be imposed by law in the absence of any contract or agreement.” In effect, the “insured
contract” exception restores coverage for explicit indemnity obligations by which the insured assumes the
tort liability   of another party.

                                                                      18
Eller Outdoor Advertising        Company, 635 S.W.2d 133 (Tex. App. ~ Houston                        [ls'   Dist.]

1982, writ ret’d     n.r.e.).    Neither case supports the notion that anything other than a

“written agreement” executed by the employer pre—injury satisﬁes the exception to the

statutory protection afforded employers         from       third party actions.       Monsanto involved an

employee of a subcontractor, Owens~Corning Fiberglas Corp. (“Owens-Corning”), who

brought a personal injury action against the Monsanto                     Company (“Monsanto”).             Id. at

294.     Monsanto asserted       a third party action against               Owens-Corning based on the

indemniﬁcation language contained in a written contract between the two companies.

Citing the indemnity provision           at length,   the Court noted that the provision              nowhere

included the word “negligence” or adequately deﬁned the scope of the protection that

was provided and: “Because          the intent of the parties        is   not specifically stated within the

four corners of the contract,       we    find that this indemnity provision does not satisfy the

express negligence test.” Id. at 295.

         The Court concluded,       in effect, that the failure      of the written indemnity provision

to satisfy the express negligence test did not bring           it   within the exception of the statutory

protection provided the employer under the Texas Workers’ Compensation Act (albeit an

earlier version   of the Act).

         The Houston Lighting         & Power     decision did not involve a written contract of

indemnity.     Rather, an employee of Eller Outdoor Advertising                          Company of Texas

(“Eller”)   was electrocuted     after contacting     an   HL&P     line.    His   widow and     children sued

HL&P, which settled that action and then sought indemniﬁcation from Eller pursuant to a
section of the Public Utilities     Act   setting forth the duties        of any party working within six

feet   of a high voltage    line,   a violation of which entitles the              utility to   indemniﬁcation

                                                      19
under an applicable provision of the Public               Utilities Act. Eller     argued the predecessor to

the Tex.     Labor Code   §   417.004 barred the indemnity action, but the Court concluded that

HL&P’s indemnity         action     was not “on account of’           injury to or death of Eller’s   employee

but rather      was an   action arising from a breach of the duties Eller                     owed under     the

applicable provision of the Public Utilities Act. Id. at 135.

            The Court accepted HL&P’s reasoning, concluding                    that the “later,   more speciﬁc

Public Utilities Act should be given controlling effect over the older,                  more general terms

of the Workers’ Compensation Act.”                  Id.       The Houston Lighting        &   Power    decision

simply recognizes that the speciﬁc indemnity granted to public                       utilities against entities

who    violate the “six foot rule” trumps the statutory protection afforded employers under

the Texas Workers’       Compensation Act.          It    does not stand for the proposition that a third

party not entitled to statutory indemnity can dispense with the requirements of Tex. Labor

Code    §   417.004 of a written agreement.

            Finally, Mullins disputes the applicability             of the express negligence      rule.   While

as noted above,      numerous cases have held            that written     indemnity language that does not

satisfy the express negligence test              does not meet the requirements of the statutory

exception in Tex. Labor Code § 417.004, that                  is   not the dispositive issue here. While in

theory there     may be language         in a written   agreement executed by the employer by which

it   expressly assumes the liability of the third party that falls short of the express

negligence standard, that          is   not the case here.         In the instant matter, there simply is    Q
indemnity agreement of any kind executed by Martinez and accordingly, the question of

whether or not the indemnity language must                    satisfy the express negligence test to       meet

the statutory exception       is   moot.

                                                         20
II.       The      court correctly denied Appellant’s Motion to Vacate Judgment and
                 trial
          for   NewTrial and for Leave to File Amended Pleading and Supplemental
          Material in Response to Cross-Defendant Martinez R.O.W., L.L.C.’s Motion
          for Summary Judgment.

          It   appears Mullins’ primary complaint with respect to the Court’s denial of his

motion     to vacate, etc. is the refusal to permit                 him   to   amend      his pleading to   add a new

party and to assert an entirely           new basis      to    circumvent the workers’ compensation bar to

his third party action,          and   to present additional         summary judgment evidence              to support

same.

          The   trial    court   was   correct in denying the motion, for a                 number of reasons.      First,

the proposed      first   amended cross—claim attempted to add an                      entirely   new party, Blue   Sky,

for reasons      nowhere addressed             in the    motion for leave              itself.    Blue Sky was not a

defendant      in the action initiated        by Bonifacio         Gomez and accordingly, there would              be no

legal basis     under any theory alleged by Mullins, or                        later    by Blue Sky, for    it   to seek

indemnity for       liability     it   could not have had to Mr. Gomez,                      who had never       asserted

claims against Blue Sky. Blue Sky could not seek indemnity or contribution for                                   liability

it   could not have to Plaintiff Bonifacio Gomez,                   who had never sued it.

          Second, the proposed amended pleading attempted to add an entirely                                new     basis

for contribution or indemnity,            namely    that      Martinez was guilty of gross negligence with

respect to Mr.           Gomez’s       injuries,   and   that      somehow        supported Mullins’ claim for

contribution or indemnity.              The   assertions of gross negligence                 had never been pleaded

previously, and Mullins did not               make such        contentions in any          amended pleading       that   he

could have      filed,   without leave of court, after Martinez’s Motion for                       Summary Judgment

was ﬁled on October          17, 2014,     and before     it   was heard on November 25, 2014.

                                                              21
              It is   well established that a                 trial   court does not abuse            its   discretion   by refusing      to

allow a non-movant                  to    amend         its    pleadings after the             summary judgment hearing has

taken place. Leinen                v.   Bujfngtons Bayou City Service                          Co.,   824 S.W.2d 682, 685 (Tex.

App. — Houston             [14”' Dist.] 1992,                 no   writ); Hill        v.    Milani, 678 S.W.2d 203, 205 (Tex.

App. — Austin 1984) afﬂd 686 S.W.2d 610 (Tex. 1985). Furthermore,                                                   after the trial court

has rendered judgment on a motion for summary judgment,                                               it    cannot grant a motion to

amend         the pleadings.            Automaker,            Inc.    v.   CCRT Company,              Ltd.,    976 S.W.2d 744, 746

(Tex. App.            — Houston         [151   Dist.] 1998,           no   pet.);   Texas General Indem. Co.               v.   Ellis,   888
S.W.2d 830, 831-32 (Tex. App. ~ Tyler 1994, no                                             writ);   Boarder    to   Boarder Trucking

Co., Inc.       v.    Mandi,      Inc.,    831 S.W.2d 495, 498-99 (Tex. App.                           — Corpus       Christi 1992,      no

writ). In the present action, the                   Court granted Martinez’s Motion for                          Summary Judgment

and     its   Motion      to   Sever Mullins’ claims against                           it    on November        25, 2014. (2CR:24;

1CR:328-329). The summary judgment order, combined with the severance, effectively

made      the    summary judgment                 final       and appealable for              all   purposes and accordingly, the

Court acted correctly in refusing Mullins’ efforts to amend his pleadings post~summary

judgment hearing and                post-final      judgment.

              The Court did not                err in    denying Mullins’ request to supplement the summary

judgment record with a new                          affidavit              from Mullins (2CR:393-394)7 purporting                         to

address, for the          first   time, the circumstances of the accident, as well as excerpts from the

deposition of Bonifacio                   Gomez taken on April                  30,   2013 (more than 18 months before the

summary judgment hearing                          in this matter).                  Mullins offered no basis for seeking

permission to submit summary judgment evidence four weeks after the summary

judgment hearing and the Order granting same, merely pointing out                                                         that    he had

7
    The Court sustained Martinez’s             objections to Mullins’ supplemental afﬁdavit. (2CR:420).

                                                                           22
previously     moved   for a continuance to permit            him   “to submit additional argument              and

authorities   on the issue of Ma1tinez’s indemniﬁcations of Mullins,                      in order to   thoroughly

present that issue to the Court.” (2CR:367). In that regard,                  it   is   important to note that in

his original   motion    to continue the      summary judgment             hearing, he cited as a basis for

same the need      to “properly    respond” to case law, submit evidence to the Court of

payments made by Mullins          to Martinez,         and   to permit Mullins to prepare a “detailed

affidavit” to discuss “the facts leading to the              engagement of Martinez              to provide labor,

and the consideration therefore       .   .
                                               .”    None of    the “supplemental” evidence Mullins

sought leave to submit post-hearing ﬁts within any of the categories offered in support of

his prior   motion to continue the summary judgment hearing.

        Setting aside the fact Mullins offered no justification for his belated effort to

revise the pleadings, add a    new party,       assert   new bases    to   circumvent the Texas Workers’

Compensation Act, and         to offer        summary judgment evidence                   that   presumably was

available to    him    previously, neither the proposed             amended pleading nor any of                  the

“supplemental” evidence affects the outcome here.

       Mullins advanced as an “additional legal theory” (Appellant’s Brief,                             p.   26) the

notion that if Martinez’s conduct             somehow        constituted gross negligence, that               would

create an exception to the statutory bar to third party actions absent a prior explicit

assumption of the third party’s     liability.        The argument     is   completely without merit, not

supported by any provision in the Texas Workers’ Compensation Act, and the only

decisions Mullins cites in support are              more than 50 years        old and pre~date the current

Workers’ Compensation Act by decades.

                                                       23
        The Workers’ Compensation Act exclusive remedy                        provision, Tex. Labor   Code   §

408.001, recognizes only one exception to the protection afforded employers for injury to

or death of employees, that          is,   the “surviving spouse or heirs of the        body of a deceased

employee whose death was caused by an                   intentional act or omission     of the employer or

by the employer’s gross negligence” may bring an action against an employer. Tex.

Labor Code § 408.001(a),            (b).    Nothing     in the   Act indicates   that in a non-fatal case, a

third party sued     by the injured employee may seek contribution or indemnity from the

employer,   if there is   evidence that the       latter is guilty      of gross negligence. Presumably,     if

such an exception existed,          it   would be     set out in Tex.      Labor Code   § 4l7.004, dealing

speciﬁcally with an employer’s liability to a third party sued by the injured worker.

Mullins cites no case handed             down   since the effective date of the       new Texas Workers’

Compensation Act          that    even suggests such a “gross negligence” exception                   to the

protection of the Act exists.

        Mullins does       cite    a recent Texas Supreme Court decision, Fairﬁeld Insurance

Company     v.   Stephens Martin Paving, L.L.C., 246 S.W.3d 653 (Tex. 2008). Fairfield in

no way supports Appellant’s argument regarding the “gross negligence exception.”

Rather, the case deals with the insurability of exemplary                       damages under a workers’

compensation/employer            liability policy.     An employee         of Fairﬁeld’s insured, Stephens

Martin Paving, suffered          fatal injuries in the   course and scope of his employment and his

spouse and children brought a              suit for   exemplary damages as permitted by Tex. Labor

Code   § 408.001(b),(c). In a lengthy           and well reasoned opinion, the Texas Supreme Court

concluded that the Fairﬁeld policy’s employer                  liability   provisions covered the employer

for gross negligence claims (Id. at 660),                and     that   such insurance protection was not

                                                        24
against Texas public policy. Nothing in the decision suggests that there                     is   any exception

to the exclusive    remedy protection afforded employers under                 the Act, other than claims

brought by the surviving spouse and heirs of the body of an employee                        who    suffers fatal

injuries in the course         and scope of employment, allegedly as a result of the employer’s

gross negligence.       No      issue   was presented      to or discussed    by the Court as          to   whether

gross negligence by the employer in a non-fatal injury context creates an additional

exception to the protection from third party claims.

          The other two cases            cited    by Mullins are simply too remote                to    have any

precedential Value.       In Westfall      v.    Lorenzo Gin Company, 287 S.W.2d 551 (Tex. Civ.

App. — Eastland l956, no           writ), third parties that     were sued by an employee of Lorenzo

Gin Company        arising     from a collison between two trucks sought contribution from the

gin company, a Texas Workers’ Compensation Act subscriber, alleging,                              among       other

things, that the gin    company was        guilty   of gross negligence, contributing         to the accident.

The Court       ultimately determined that the evidence the third parties had produced in

response to the gin company’s motion for                  summary judgment was           insufficient to raise

any    fact question   on the issue of gross negligence, but language              in the decision implied

that   had there been such proof of gross negligence, a contribution or indemnity action

might have been sustainable.             Id. at   554.     In support of that proposition, the Court in

Westfall cited West Texas Utilities Co.              v.   Renner, 32 S.W.2d 264 (Tex. Civ. App.                  —

Eastland 1930),     aft’ cl,   53 S.W.2d 451 (Tex.         Comm’n App.        1932).     In Rermer, the third

party utility    company sought          contribution and indemnity from           its   contractor,        Mosher

Steel   & Machinery Company, for a lawsuit brought against               it   by a Mosher employee who

sustained serious electrical injuries.            Among    other things, in affirming a directed verdict

                                                          25
    in favor   of Mosher, the Court of Appeals noted that the              utility   had   failed to establish that

    Mosher was       guilty        of “active negligence,” and thus, any               common law             right to

    contribution    was unsustainable, even             setting aside the protections           of the Workers’

    Compensation Act. The Court went on                  to say, in   what amounted        to dicta, that      Mosher

    had “fully protected himself against                his   own   negligence (not amounting to gross
I

    negligence) by providing compensation insurance for his employees, and could not be

    compelled to pay indirectly when no             liability existed to   pay directly.”     Id. at   270.

             Needless   to say, distinctions        between active and passive negligence as a basis for

    common law        contribution have no relevance here, given the fact that actions for

    contribution are controlled by Chapter 33 of the Tex. Civ. Prac.                       & Rem.       Code, which

    makes no such     distinctions.

             The other case            cited     by Mullins, Koninklyke Nederlandsche Stoomboot

    Maalschappy, N.V.         v.   Royal Netherlands Steamship Company, 301 F.2d 741                          (5“‘ Cir.

    1962), effectively recognizes that a written stevedoring contract in a maritime context

    enforceable under federally developed maritime law provided a basis for a third party

    ship   owner   to sue a stevedoring         company covered by Texas workers’ compensation                       for

    indemnity, in an action brought by a longshoreman employee. The Court concluded that

    if   a longshoreman’s action against the shipping                  company was           permitted, “a state

    compensation act cannot prevent an action against the employer by the third party based

    on a federally judicially established maritime contractual warranty.”                   Id. at   746.

            In discussing Westfall and Rermer, the Court interprets the state of Texas law in

    1962, suggesting “that Texas         is    a_sygt unwilling to to rule out an indemnity            where there    is

    a showing of gross negligence on the part of the injured man’s employer, and                              it   might

                                                           26
even be read to     my          that   such an indemnity         is   not barred by Art. 8306.” Id. at 646

(emphasis added).

         The   Fifth Circuit decision        from more than 50 years ago indicating Texas law                         (as

reflected in   two appellate decisions from 1932 and 1956, respectively) was                            still   unsettled

as to whether allegations of gross negligence                    on the     part of the        employer created an

exception to the Act’s protections from third party                   liability,   has been echoed by no Texas

appellate court at any time in the ensuing            ﬁve decades, and no case                  citing §   417.004 of

the   new   Act, which has been in effect since 1993, or any decision construing                                      its

predecessor, Art. 8306, § 3(d), of the prior Texas Workers’ Compensation Act, dating                                  all

the   way back to the   1970s, suggests that any “gross negligence” exception actually exists.

         In short, there   is   nothing in the current statutory provision relied on by Appellee,

any other provision      in the current       Texas Workers’ Compensation Act, or any case law

since the   new Act became             effective to support Mullins’ belated assertion of a “gross

negligence”     exception to the statutory                 protection        from      third    party      actions    for

reimbursement.      Accordingly, even if the               trial      court had permitted a post-summary

judgment pleading raising          this   outdated theory, and permitted the supplemental                       summary

judgment evidence       that Mullins argues raises a fact question regarding gross negligence,

the   outcome would not have changed.

         Finally, Mullins argued in his          Motion     to     Vacate that because Martinez had been

designated as a responsible third party at            some    prior point,         it is   therefore “subject to the

rules that apply to proportionate responsibility unless                  an exception thereto        is   applicable.”

(Appellant’s Brief, p. 29).            The argument   is   specious, as a simple reading of Chapter 33

of the Tex. Civ. Prac.            &     Rem. Code demonstrates.                    The deﬁnition of             the term

                                                       27
“responsible third party” in pertinent part                        means “any person who          is   alleged to have

caused or contributed                   to causing in    any way the harm for which recovery of damages              is

sought   .   .
                 .”
                      § 33.0l1(6),            Tex. Civ. Prac.     & Rem.     Code. That same section deﬁnes a

“liable defendant” as “a defendant against                       whom a judgment can be entered for at least a
portion of the damages awarded to the claimant.”                         §   33.015, titled “Contribution,” states,

under subpart         (a):

         If a defendant   who is jointly and severally liable under § 33.013 pays a
         percentage of the damages for which the defendant is jointly and severally
         liable greater than his percentage of responsibility, that defendant has the
         right of contribution for the overpayment against each other liable
         defendant     .”    .   .

Emphasis added.

         Accordingly, contribution would exist in favor of Mullins against Martinez only                             if

the latter could constitute a “liable defendant,” as the term                           is   defined in Chapter 33.

Because Martinez cannot be                      liable to the   “claiman ” (Bonifacio Gomez) for any portion

of the damages he                    is entitled to   recover, because of the exclusive        remedy provisions of

the   Texas Workers’ Compensation Act, there                           exists   no   right of contribution against

Martinez under Chapter 33.

         Case law also supports the notion that there can be no contribution claim against a

covered employer. In Varela                      v.   American Petrofina C0. of Texas, Imn, 658 S.W.2d 561

(Tex. 1983), the Court construed the prior statute relating to contribution                               among   joint

tortfeasors, Art. 22l2(a), Tex. Civ. Stat.                      Ann. (repealed), holding that the protections of

the prior Texas Workers’                    Compensation Act were an exception               to the statute permitting

contribution actions between joint tortfeasors.

                                                                 28
          The    distinction     between a    liable      defendant and a responsible third party             is set   out

plainly in the case of City of El             Paso   v.    Collins,   440 S.W.3d 879 (Tex. App. — El Paso

2013, no pet).

          The case involved the near drowning of                      a six year old girl while in the care of

Children’s Place Daycare.               The   child’s parents brought an action against the daycare,

which    in turn designated the City           of El Paso as a responsible third party. The                   plaintiffs

then amended their action to include the City as a defendant, incorporating the motion to

designate the City as a responsible third party as a basis for their affirmative claims

against the City. Id. at 882.

          The El Paso Court of Appeals concluded                   that to the extent the plaintiffs attempted

to   impose    liability   on    the City based solely           on the responsible      third party designation,

without establishing a waiver of the City’s immunity,                     it   was   error to   deny the City’s plea

to the jurisdiction.            Id.    The Court noted,           citing Tex. Civ. Prac           &   Rem. Code         §

33.004(i)(1)(2):        “The ﬁling or granting or a motion               for leave to designate a person as a

responsible third party does not impose liability against that person and                          may      not be used

in   any other proceeding, on the basis of res judicata,                collateral estoppel, or       any other    legal

theory, to    impose     liability    on that person.”

          The Court noted approving              the City’s position that a responsible third party

designation could not establish            liability against       a party, stating: “The City         is   correct that

the ﬁling or granting of a motion for leave to designate a person as a responsible third

party or a ﬁnding of fault against the person “does not by itself impose liability                               on the

person.”     141.,   citing Tex. Civ. Prac     & Rem. Code §33.004(i)(l).

                                                            29
           In short, the language of Chapter 33                  itself,      and in particular the deﬁnitions of

responsible third party and liable defendant,                    make    it   clear that a responsible third party

designation does not establish liability of the party so designated, and that a claim for

contribution under Chapter 33 can arise only against a liable defendant.                                  Accordingly,

Mullins’ argument that the mere designation of Martinez, a covered employer, subjects                                     it

to a contribution claim          under Chapter 33      is   entirely without merit.

                                       CONCLUSION AND PRAYER
           The   trial   court   was   correct in granting Martinez’s             Motion    for   Summary Judgment

based on the protections afforded              it   as an   employer under the Workers’ Compensation

Act.      Once Martinez demonstrated           that   it   was a covered employer and                 that there   was no

written agreement executed by Martinez before the                               Gomez      accident under which           it

expressly assumed the liability of Mullins and/or Blue Sky,                          it   estabished a complete bar

to Mullins’ claims for indemnity or contribution.                             Mullins’ efforts to circumvent the

literal   requirements of the statutory exception by producing a certiﬁcate of insurance

identifying policies covering Martinez, as well as a copy of Martinez’s commercial

insurance policy, establish merely that Martinez had liability coverage in place at the time

of the incident.          Neither document constitutes proof of an explicit written agreement

executed by Martinez pre—accident under which                      it   assumed the       liability   of Mullins and/or

Blue Sky.

           Mullins’ belated effort to replead to include gross negligence allegations, or to

supplement the summary judgment evidence with information purporting                                    to create a fact

question on the issue of gross negligence                   is   of no use to him here because there                is   no

                                                            30
recognized exception to § 417.004 for an employer’s alleged gross negligence.                           Gross

negligence by the employer can provide a basis for recovery only to the spouse and heirs

of the body of an employee             who   suffers fatal injuries in the course             and scope of

employment, not the case      here.

          Finally, Mullins’   argument that the designation of Martinez as a responsible                 third

party creates a right of contribution under Chapter 33                    is   contradicted by the plain

language of the statute   itself.

          WHEREFORE, PREMISES CONSIDERED,                           Appellee Martinez R.O.W., L.L.C.

f/k/a   Martinez Investments, L.L.C. prays that        this   Court affirm the     trial   court’s   judgment

and further grant Appellee     all   other relief to which    it   may show itself justly entitled.

                                                              Respectfully submitted,

                                                              WRIGHT & GREENHILL, P.C.
                                                              221 W. 6th Street, Suite 1800
                                                              Austin, Texas 78701
                                                              512/476-4600
                                                              512/476-5382 (Fax)

                                                              By:/s/   David P. Boyce
                                                                    David P. Boyce
                                                                    State Bar No. 02759770
                                                                    dbo ceFzD\_v_-g.com

                                                              ATTORNEYS FOR APPELLEE

                                                  31
                             CERTIFICATE OF COMPLIANCE

       Ihereby certify that the above and foregoing Brief of Appellee contains 6,740
words and therefore complies with the maximum length required under Tex. R. App. P.
9.4.

                                                   David P. Bovce
                                                 /s/
                                                 David P. Boyce

                              CERTIFICATE OF SERVICE
       I hereby certify that a true and correct copy of the above and foregoing has been
served on the following counsel of record in accordance with the Texas Rules of Civil
Procedure, on this 26"‘ day of August, 2015:

Via ECF and Facsimile
Patrick F. Timmons, Jr.
8556 Katy Freeway, Suite 120
Houston, Texas 77024-1806
pftfcbtiininonslawﬁrm.coin

                                                   David P. Boyce
                                                 /s/
                                                 David P. Boyce

                                          32
APPENDIX TAB 1
=ici..   436         ssrn "LEGISLATURE-1-I'tEGULAR SESSION
 suspended; and that this Act shall take e&‘ect and be in force from and
 after its passage, and it is so enacted.‘
    Passed the Senate, March 12, 1963: Yess 25, Nays 6; May 23. 1968,
      Senate concurred in House amendment by :1 Viva voee vote; passed
      the House, May 23, 1963, with amendment, by s non-record vote.
      Approved June      10, 1968.
      Eﬁective 90 days after       May 24,          1963, date of adjournment.

                WORKMEN’S COMPENSATION~—-LIABILITY OF
                                         ASSOCIATION
                                         CHAPTER          437
                                     -

                                         S. B.      No. 223
      A" AC‘   ﬂmendlﬂi! ‘ha TEX“ Workman’; Compensation lnuursneo Lows 12! thlc
               mm:by amending Sectlon 3 of Article 3305, Revised Clvll statutes of
           1025, so amended; providing n unvlnnu clause; and declaring an emer-
           Honey.

 Be it enacted by
                the Legislature of the State of Texas:
    Section 1. Section 3 of Article 8306, Revised Civil Statutes of Texas,
 1925, as amended,“ is amended to read hercnfter as follows:
    "Sec. 3. The employees of a subscriber and the parents of minor em-
ployees shall have no right of action against their employer or ssuinst any
agent, servsnt or employee of said employer for damages for personal in-
juries, and the representatives and beneﬁciaries of deceased employees
shall have no right of action against such subscribing employer or his
agent, servant or employee for damages for injuries resulting in death,
but such employees and their representatives and beneﬁciaries shall look
for compensation solely to the association, as the same is hereinafter pro-
vided Ior. All compensation mllowed under the succeeding sections herein
shall be exempt from garnishment, attachment, judgment and all other
suits or claims, and no such right of action end no such compensation and
no part thereof or of either shall be assignable, except as otherwise herein
provided, and any attempt to assign the same shall be void. If an action
for damages on account of injury to or death of an employee of s subscrib-
er is brought by such employee, or by the representatives or beneﬁciaries
of such deceased employee, or by the association for the joint use and
beneﬁt of itself and such employee or such representatives or beneﬁciuries,
against a person other than the subscriber, as provided in Section (is, Arti-
cle'8307, Revised Civil Statutes of Texas, 1925, and if such action results
in a judgment against such other person, or results in a settlement by
such other person, the subscriber, his agent, servant or employee, shall
have no liability to reimburse or hold such other person harmless on such
judgment or settlement, nor shall the subscriber, his agent, servant or em-
ployee, have any tort or contract liability for damages to such other person
because of such judgment or settlement. in the sbsence of a written sgree—
ment expressly assuming such liability, executed by the subscriber prior
to such injury or death. No part of this Section is intended to lessen or
alter the employees existing rights or cause of action either against his
employer, its subscriber, or any third party.
65.   Vex-non‘n Ann.Clv.St. art. 8305,    g   3.

                                                   1132
                                          LIBRARIES                                   Ch. 438
      “The Association. its agent, servant or employee, shall have no lia-
bilitywith respect to any accident based on the allegation that such acci-
dent was caused or could have been prevented by a program, inspection,
or other activity or service undertaken by the association for the preven-
tion of accidents in connection with operations of its subscriber; provid-
ed, however. this immunity shall not aifect the liability of the association
for compensation or as otherwise provided in this law, No ‘part of this
Section is intended to lessen or alter the employees existing rights or cause
of action either against his employer,   its subscriber, or any third party.”
      Sec.   2. any Section, paragraph or provision of this Act he declared
                  If
unconstitutional or invalid for any reason, such holding shall not in any
manner affect the remaining Sections, paragraphs or provisions of this
Act, but the same shall remain in full force and effect.
   Sec. 8. The importance of this legislation and the crowded condition
of the calendar in both Houses create an emergency and an imperative
public necessity that the Constitutional Rule requiring bills to be read
on three several days in each House be suspended, and said Rule is hereby
suspended; and that this Act shall take atfect and be in force from and
after its passage. and it is so enacted.
   Passed the Senate. March 21, 1963: Yeas 30, Nays 0; May 20, 1963, by
      authority of H.C.R. No. 100 bill was returned from Governor's oﬁice
      and correction made; passed the House, May 8, 1963, by a non-record
         vote;    May
                    20, 1963, I-I.G.R~ No. 100 was‘ adopted.
      Approved June   10, 1963.
      Effective 90 days after May 24, 1963, date of adjournment.

         LIBRARIES—DIS'I"RIBU'I‘ION                  OF STATE DOCUMENTS
                                      CHAPTER        438   5‘

                                         S. B.   No. 266
      An Act    to establish depository libraries with nuihority in the Director and Librar-
             ian of the Texas state Library; requiring certain act: to be performed to
             facilitate distribution of state documents; and declaring an emergency.

Be it enacted bythe Lrgisloiicrc of ilic State of Texas:
    Section 1. The term "state document” as used in this Act means all
publications of state agencies which the Texas State Library is authorized
                                                                                                '

by Revised Civil Statutes, 1925, Article 5442, to acquire and distribute.
   Sec. 2. The term “depository libraries” as used in this Act means the
Texas State Library, libraries of state institutions oi‘ higher education, and
other libraries so designated by the Texas Library and Historical Com-
mission upon determination that such designations are necessary to pro-
vide adequaie access to state documents.
   Sec. 3. Each state agency shall furnish the Texas State Library with
state documents in the quantity speciﬁed in the Revised Civil Statutes,
1925, Article 5442.
   See. 4. State documents shall be made available to depository li-
braries under the direction of the Texas State Library.
   Sec. 6. To facilitate distribution of state documents, each state agen-
cy shall furnish the Texas State Library with a list of state documents
65.   Vernon's Ann.Ci\'.St. nrt. uuzn.
                                              H33
APPENDIX TAB 2
                           Bath        LEGIl3LATURE—REGULAR smssxorq                                         Ch. 131
and       that        this Act taxi: affect and be in fO!‘CI from                                     Ind utter its
ptluul, and              it 1: no Inactld.

1983‘l’g;,sx;dnE)l:‘e.r§;2;11§:juV‘;:tx;April
                                                21, 1988:      Yen   31,    Nxyn     0:    passed the House on   Mny    6,

       Approved May         17, 1983.

       Effective Aug. 29, 1983, 90 days after date of adjournment.

  WORKERS‘ COMPENSATION—BENEFITS—ASSIGNMEN’l                                                                      1'0
                INSURANCE COMPANY
                                                       CHAPTER          131

                                                       H. B. No. 68

                                                             All AC1‘

ranting to the nniqnmont of                                          cox-tnin             vim-kart‘     compunution
bnntﬂtl to An innurlncu complny.
            BE IT ENACTED BY THE LBOXSLATURE                                 OE‘ ‘DEE       STATE OF TEXAS:
            SECTION         1.          sncczlon        3,     Articlo             B306,     Rcviud Bntutu,              in
unnndudssto rand nu                     follmu:
            Etc. 3.          _(__:_l     Thu umpluyuuu or               I     uubucribor Ind            thu      plrlntn
of      minor         employer:            lhlll         have        nu right of action lqlinlt their
omploycr or against any Iqont. nrvnnt or umplayto at Ilid Impluyor
for dunnqn {or pcrnannl snjurhu, and thn rnpronntntivon and
bnnuticluiu of dccmnad nnploycu nhnll hnvn no right a! nation
nqninlt such subscribing ampluyor or his aunt. urvnnt or Iwloyu
tar dun: on for injurhn rnlultinq in death, but such cmplcyucl uzé
their rupx-uuntntivcn and bununcuri-I nhnu. look for canpnnntlon
Iulcly to the unocintian, nu thy Inn: 1: hu-unnttur providod Int.
           All conspunution nllowod undur U1: Iuccaodinq uctionu
            _0_:_)_

huruin shun be oxnnpt {ram qlrninhacnt, nttnchnont, Judgment Ind
:11 othu: suit: or clntmn. Ind no such right at action And no                                                       such
campcnntion And no part theme: or ot                                               nun:       shall   1::   uuiqmhlo,
cxcupf. an cthnrwiun h-rain prnvidnd,                                      111:!   any attempt to usual:                the
 |u..¢    shall bu void.

 55.    Vernon's Ann.Civ.SL art. 8306. §          3.

                Addition:        in    text lndicaud by         mngnﬂm;            dolations by [Ma-ikoouu]

                                                               613
Ch. 131                  each   LEGlSLAT‘URE—REGULAR SESSION
        (c)      In the event the unacietinn denies liability in n claim
$6     an     Accident           or health innunnco congenx provide: benefits tn
the   Iglogee for medical aid hougitel ux-vice:                                   nurling        service:
or    medicine, then the right to recover Iuch amount may he unsigned
by the emgleyee to the health or nccident inlurlnce COEEIHE.
        lg)         X: In nation for        denuqu on account at injury to or
duth     of         An employee of e nubncriber is brought by such employee.
or    by      the        repreeentntiven       or     beneticilriel               cf     such    deceeeed
employee,           or    by     the nseucietian for the joint ule end benefit of
itself end such employee or luch reprenentetivex or beneficiaries,
against        | person other then the Iubscriber, II provided in Section

6:, Article 8307. Revised Civil Stetutel of                                Texts,        1925,    end    if
such       lction         reeultl      in   a judgment ngninut much debt? person. at
result: in I settlement by much other person, the                                      subscriber,      hi:
nqant, Iervent or employee, shell hnve no liability to reimburse or
hold much other person hnrmless on such judgment er settlement, nor
Ihell the Iuhlcriber, hil luent. Iervnnt or employee, hIVl lny tort
or     conttlct           linbility tar damage: to Iuch other person beceune or
Iuch judgment or settlement, in the nbuence c£ : written                                         Agreement
expuuly euuminu                   Iuch lid:-ility, executed by the subscriber prior
to     much      injury or death.             [Ne-pertai-ehh~Snet-.§an-Le-éntendebte
iesuen-or-alter-the-employee:-extntin[-:§¢hte-er--eeuee--e£--action
either--eye§nIt--h§I-empieyerr-its-euheeribs:r-er-eny-third-pertyw]
           131 The Alnocintion, its nqent, Iervnnt at employee, shall
have       no linbility with respect to my accident based on the
Illeqetion thnt                 such   Accident      wnl        ceueed       or    could        have    been
prevented           by     e    praqrem, inlpection. or other Activity or aervice
undertaken by the nslecinticn for the prevention                                   of     Accident:       in
connection           with        uperetione    oi its IUDICXLDUI; provided, hcweven
thin immunity shall not                 -sue: the lhbility of the eseocinticn for
compentntion or II otherwise pravided in this luv.
           Lg)      Na pert of this Section is intended to Xesuen                                or    Alter
the  gggiggggig [empieyeeej existing right: or clule a£ Action
either eqeinlt his employer, its subscriber. or any third pnrty.
            Additions in text indicated by        _u[n_§Lg,r_I‘mg:   deletions by letnikoouiel
                                                    614
                        68th     LEGISLATURE-REGULAR SESSION                                                     Ch. 132
          station       2.       ‘ma       importanca             at       this          lcqialation              and   tha
crowded          condition           M     the    calandara                in      both hcuan                    craato an
emergency           and         an        inpcrativa              public             nacaaaity               that       th-
conatitutiunal               2-uh        x-aquix-inc        billa          to be raad            can   thus        aavnnl.
daya in cash        noun         ba auapnndod, and thin rule in ha:-oby auapandad,
and that thin Act take afloat and be in                                    torn from and any:                           ita
pnnqa,           and it in no enacted.
    Passed by the House on March 90, 1983: Yeas 137, Nays                                     0, 1   present, not voting;
passed by the Senate on May 5. 1983: Yeas 31, Nays 0,
      Approved May      17, 1983.

      Effective   May   17, 1983.

            WORKERS’ COMPENSATION——-DEATH BENEFITS-
                        PBIOR INCAPACITY
                                                 CHAPTER               132

                                                  H. E. No. 99
                                                       AN   AC1‘

ralatinq to tan reduction of workcrﬂ companaation                                                    death benafita
because at banafita paid for prior pariod 0! incapacity.
          BE IT ENACTED BY IEIE LEGISLATURE                             0!‘     '1'!!!       STATE   0!‘   TEXAS:
          SECTION       1.        saction ab, Article 8305, Raviaod civil Statute:
ct‘   Toxaa, 1925, is amcndndssto raad aa touovax
          sec. ah.      111 in can daath accu:-I as a result of tho injury
after       a     period of total or partial incapacity.       for   which
compansation            haa       been         paid,        thn    period                of incapacity shall be
deducted from           (‘Jun   total pariod of                   compensation                  and        tho    bonufita
paid thnraunder tron the maximum alloucd for the death.
          (13)    Suction 8b deal net agglg to lifatima daath bonalita aa
grovidad by section B or this article but                                         aggllu only to than
blnaficiariaa racaivin                     360 vaoka of banelita.                        ~

          SECTION       2.        It      in     uncartain             and        has          not    bun        judicially
datormincd uhuthat tha oifant px-ovidcd by Saction Bb, Article 8306.
Raviud civil statucaa                     oz’   Taxaa,        X925,           appliaa            to        thu     utctima
banatita proviaiana oz sanction 8 or that articla.                                                   Tha tact that nu
db.   Vernon‘: Ann.Civ.St. art. 8306, § Sb.

            Addition:     in    text indicated by       ,un_d_g_r_l1n_g;   deletions by [ateikoeutsl
                                                        615
APPENDIX TAB 3
                                       TITLE 5. WORKERS’ COMPENSATION
                           SUBTITLE A. TEXAS WORKERS’ COMPENSATION ACT
                                                                                                                                ~
                                      CHAPTER 401. GENERAL PROVISIONS
 SUBCHAPTER A. SHORT TITLE; APPLICATION OF SUNSET ACT
 Sec. 401.001. SHORT TITLE.
 This subtitle may be cited as the Texas Workers’ Compensation Act.

 Sec. 401.002.      APPLICATION OF SUNSET ACT.

                                                                                                                                ~
 Ed: Repealed by Acts 2005, 79th Leg., H.B. 7,    eff. Sept. 1,2005. As a division wit1n'u the Texas Department of Insurance
 (TDI), the Divsion of Workers’ Compensation      is   governed by the sunset provisons regarding TDI.

 Sec. 401.003.      ACTIVITIES OF THE STATE AUDITOR.
 (a)    The division is subject to audit by the state auditor in accordance with Chapter 321, Government Code. The ~
       state auditor may audit:
        (1)  the structure and internal controls of the division;
       (2)   the level and quality of service provided by the division to employers, injured employees, insurance
             carriers, sell‘-insured governmental entities, and other participants;
       (3)   the implementation of statutory mandates by the division;

                                                                                                                                ~
       (4)  employee turnover;
       (5)  information management systems, including public access to nonconﬁdential information;
       (6)  the adoption and implementation of administrative rules by the commissioner; and
       (7)  assessment of administrative violations and the penalties for those violations.
(b)    Nothing in this section limits the authority of the state auditor under Chapter 321, Government Code.

Ed: This section was added by the 2001 Legislature.

SUBCHAPTER B. DEFINITIONS
Sec. 401.011.    GENERAL DEFINITIONS.
In this subtitle:
(1)    “Adjuster” means a person licensed under Chapter 4101, Insurance Code.

Ed: Section 4101.001 of the Insurance Code deﬁnes “adjuster” as an individual who investigates or adjusts losses on behalf
of an insurer as an independent contractor or as an employee of an adjustment bureau, an association, a general property and
casualty agent, an independent contractor, aninsurer, or a managing general agent, or who supervises thehandling of claims.
However, Section 4101.002 provides that this deﬁnition does not apply to, among others, clerical or salaried personnel not
engaged regularly in the negotiation of contested claims, attorneys, photographers, private detectives, estimators, and other
exp erts.

(2)    “Administrative violation” means a violation of this subtitle, a rule adopted under this subtitle, or an order
       or decision of the commissioner that is subject to penalties and sanctions as provided by this subtitle.
(3)    “Agreement” means the resolution by the parties to a dispute under this subtitle of one or more issues
       regarding an injury, death, coverage, compensability, or compensation. The term does not include a
       settlement.
(4)    “Alien” means a person who is not a citizen of the United States.

16
                                                                                                               Labor Code
~       Ed; This term does
                           not include “psychologist.”

    lag) “Employer” means, unless otherwise speciﬁed, a person who makes a contract of hire, employs one or more
         employees, and has workers’ compensation insurance coverage. The term includes a governmental entity
                                                                                                                                          EW
                                                                                                                                          O
                   that scIf—insurcs, either individually or collectively.                                                                O.
                                                                                                                                          0.
    /Ed: This deﬁnition is not strictly applied throughout the Act. For example, Subchapter           A
                                                                                                   of Chapter 406, dealing with           0.

~    coverage, does not exclusively apply to subscribers. To that end, Section 406.001 provides:
                                                                                                 “In this subchapter, ‘employer’          I11

     means aperson who employs one orinore employees.” Other sections, too, usethe term loosely due to subsequent legislative
    amendments. For example, in Section 408.042(c), dealing with the average weekly wage of employees with multiple
    V

        employment, the use of the word “employer”        is   likewise not limited to subscribers.

        (18-a)“Evidence-based medicine” means the use of current best quality scientific and medical evidence formulated
             from credible scientiﬁc studies, including peer-reviewed medical literature and other current scientifically
             based texts, and treatment and practice guidelines in making decisions about the care ofindividual patients.

        Ed: Thistenn was added bythe200S Legislature and is usedin the definition of “health care reasonably required.” It arguably
        incorporates the concepts required for the admission of expert evidence under E.1. Dupont de Nemours and Co., Inc. v.
        Robinson, 923 S.W.2d 594 (Tex. 1995) or for areview of the sufficiency of the evidence underMerreIl Dow Pharmacezzticals
        v. Havner, 953 S.W.2d 706 (Tex. 1997).

        (19)       “Health care” includes all reasonable and necessary medical aid, medical examinations, medical treatments,
                   medical diagnoses, medical evaluations, and medical services. The term does not include vocational
                   rehabilitation. The term includes:
                   (A) medical, surgical, chiropractic, podiatric, optornetric, dental, nursing, and physical therapy services
                         provided by or at the direction of a doctor;
                   (B) physical rehabilitation services performed by a licensed occupational therapist provided by or at the
                         direction ofa doctor;
                   (C)   psychological services prescribed by a doctor;
                   (D)   the services of a hospital or other health care facility;
                   (E)   a prescription drug, medicine, or other remedy; and
                   (F)   a medical or surgical supply, appliance, brace, artificial member, or prosthetic or orthotic device,
                         including the fitting of, change or repair to, or training in the use of the appliance, brace, member, or
                         device.

        Ed: All health care must be provided by or at the direction of a doctor. Vocational rehabilitation is not included in this Act,
        but may be provided by the Texas Department of Assistive and Rehabilitative Services (DARS) (See Section 409.012).
              Subsection (l9)(F) was amended in 2007 by SB. 458. The Senate Bill Analysis stated: “Currently, artiﬁcial limbs are
        not treated by all workers’ compensation carriers as a physical structure of the body. Therefore, an accident resulting in a
        broken leg would be treatable under workers’ compensation, but the same accident causing injury to an artiﬁcial leg would
        not cover repair or replacement of the artiﬁcial leg. ‘The goal of the workers’ compensation system is to get workers healthy
        and back to work. SenateBill 45 8 ensures workers’ compensation carriers treat artiﬁcial limbs as natural limbs.” To that end,
        deﬁnitions of “Oithotic device” and “Prosthetic device” were added, as well asredefining “health care” to include the ﬁtting
        of, change to, or repair to, the device. However, the amendments do not achieve the desired effect, or for that matter, any
        change to the law at all. The Bill did not provide a change to the definition of “injury,” which still requires damage or harm
        to the “physical structure of thebody” as opposed to an artiﬁcial limb. Further, by only amending the deﬁnition of “health
        care,” the Bill still links the entitlement to such devices only to situations where the carrier would otherwise be liable for
        “health care.” Pursuant to Section 408.021, a claimant is only entitled to “health care” ifhe sustains “a compensable injury.”
        Thus, this amendment in no way “ensures workers’ compensation carriers treat artiﬁcial limbs as natural limbs.” Rather,
        it simply further defines certain terms and ensures that the carrier is liable for the replacement or repair of the device. As

        such theAppeals Panel’s analysis in Texas Workers’ Compensation ComniissionAppeal No. 91001, decided July 31, 1991,
        is still   applicable.

    Labor Code                                                                                                                      19
APPENDIX TAB 4
                      Notwithstanding Subsection (a), the guaranty fund is not liable for the payment of any penalties assessed
                      for any act or omission on the part of any person other than the guaranty fund.                                        |—..
                                                                                                                                             ;>
                                                                                                                                              W,

~~
              407A.461. POSSESSION OF SECURITY BY GUARANTY FUND.                                                                             O
             the assumption of obligations on behalf of an insolvent
                                                                     group by the guaranty fund under the commissioner’s                     W
                                                                                                                                             O,
             rmination, the guaranty fund is entitled to immediate possession of any assets ofthe insolvent group and any                    O
     _l1

              my deposited or the proceeds of any surety bond deposited by the insolvent group, along with all interest on                   U
             security. All assessments from members of the insolvent group shall be paid to the guaranty fund.
                                                                                                                                             l'|'l

~~~
~
              407A.462. RELEASE OF CLAIMINFORMATION T O                        GUARANTY
                                                                                  FUND. If the guaranty fund has assumed
             pensation obligations on behalf of an insolvent group, information on a workers’ compensation claim may be

~~~          ased to the guaranty fund as provided by Section 402.084(a).

             .
                     407A.463. GUARANTY FUND AS PARTY IN INTEREST.
                      The guaranty fund is a party in interest in a proceeding involving a workers’ compensation claim against an
                      insolvent group whose compensation obligations have been paid or assumed by the guaranty fund.
                      The guaranty fund has the same rights and defenses as the insolvent group, including the right to:
                     (1)   appear, defend, or appeal a claim;                                          7

                 _   (2)   receive notice of, investigate, adjust, compromise, settle, or   pay   a claim;   and
                     (3)   investigate, handle, or deny a claim.

                     407A.464. PREFERENCES.
~~~
             .

                      Beneﬁt payments made by the guaranty fund under this subchapter are entitled to the same preference over
             §        other debts ofthcinsolvent group as provided bylaw to beneﬁt payments owed by the insolvent group to the
                     person entitled to the beneﬁts.
                      The guaranty fund has the priority status provided by Section 8, Article 21.28, Insurance Code.

~~~                  _407A.465.   SPECIAL FUND.
         onies advanced by the association under this chapter do not become assets of the insolvent group but constitute
         special fund advanced to the commissioner, receiver, or other statutory successor only for the payment of

~~
         mpensation liabilities, including the costs of claim administration and legal costs.

                                        CHAPTER 408. WORKERS’ COMPENSATION BENEFITS
     UBCIIAPTER A. GENERAL PROVISIONS
~~~Sec. 408.001. EXCLUSIVE REMEDY; EXEMPLARY DAMAGES.
                 ,   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.
                     This section does not prohibit the recovery of exemplary damages by the surviving spouse or heirs of the body
                     ofa deceased employee whose death was caused by an intentional act or omission of the employer or by the
             ‘

                     employer’s gross negligence.
                                                               meaning assigned by Section 41.001, Civil Practice and Remedies
                     In this section, “gross negligence” has the
                     Code.
                     A determination under Section 406.032, 409.002, or 409.004 that a worli—related injury is noneompensable
     ‘

             /\      does not adversely affect the exclusive remedy provisions under Subsection (a).

         .       The right of recovery for a covered employee orlegal beneﬁciary against the employer or agent or employee of employer
     restricted solely to          compensation beneﬁts unless the employee dies as a result of an intentional act or the gross negligence

~~       bor Code                                                                                                                     101
        of the employer. In that situation, the spouse and children of the deceased can recover exemplary (punitive) damage from
        the employer. This exception to the general rule is required by Article 16, Section 26 of the Texas Constitution.
              “Gross negligence” is deﬁned in the Civil Practice and Remedies Code as “more than momentary thoughtlessnessl
CODE
        inadvertence, or error ofj udgment. It means such an entire want of care as to establish that the act or omission was the resu[(
        of actual conscious indifference to the rights, safety, or welfare of the person affected.”
              Additionally, despite the exclusivity language, Article 1, Section 13 of the Texas Constitution preserves the right to
LABOR
        sue the employer for intentional injury. Unless the employee elects to take the compensation remedy, the right to sue for
        intentional injury is not destroyed by a mere statute. Further, the Constitution further protects the spouse’s right to sue
        the employer for loss of consortium due to intentional injury.
              Except for the election against beneﬁts allowed by an employee by Section 406.034, an agreement to waive beneﬁts
        is void. Section 406.035. See Section 504.002 regarding these issues as related to political subdivisions.
              Subsection (d) was added by the 2005 Legislature to addresspotential prohlemsraisedinthe Supreme Court cases, Walls
        Regional Hospital v. Bomar, 9 S.W.3d 805 (Tex. 1999) and Payne v. Glaen Hospital Hospital Corp., 28 S.W.3d 15 (Tex,
        2000).

        Sec. 408.002. SURVIVAL OF CAUSE OF ACTION.
        A right of action survives in a case based on a compensable injury that results in the employec’s death.
        Ed: The purpose of this section is not immediately clear in light of other sections in the 1989 Act. It is derived from Article
        8306, §16 of the “old law.” It has been held that the former section didnotrefer to suits against a covered employer and gives
        no right of recovery against the employer; rather it was “intended to preserve causes of actions arising from those accidents
        to which the [workers’ compensation] insurance is applicable— i.e., injuries snstainedinthe course of employment, for which
        third parties are liable — and to prevent such causes of action against third persons not insured, from abatement by death.”
        Orange Ice, Light & Wafer v. Texas Compensation Ins. C o. , 278 F. 8 (5"' Cir 1922). In other words, if the employee is injured
        in the course and scope of his employment due to the negligence of a third party, and that injury subsequently results in
        death, the cause of action against the third party survives the employee’s death. This ensures, among other things, that the
        carrier’s subrogation interest is not eliminated.
             Although the language of this section is differentthan that contained in Article 8306, § 16, according to one of the authors
        of the 1989 Act, this section does not create a “substantive change from the prior law on survival of a cause of action.” 1
                             &            A
        MONTFORD. Bzuznnn DUNCAN, GUIDE To TEXAS WORKERS’ Com. REFORM, § 4.03, at 4-39 (1991).
             Section 408.181(a) provides a derivative, but separate, cause of action to the beneﬁciaries for deaths that result from
        a compensable injury.
              When an employee dies of causes unrelated to the compensable injury (except in the case of a specific injury), “the only
        claim that survive[s] his death [is] one for benefits accrued and unpaid from the date of his injury until the date of his death.“
        /lntwine v. Dallas1ndependentSchooI District,698 S.W.2d 226,228 (Tex.App.—Dallas 1985,writref’dn.r.e.). See aIsoBaz'Iey
        v. Travelers Insurance Co. , 383 S.W.2d 562 (Tex. 1964); Burris 'Estate v. Ass ocialedEmplayers Insurance C o. , 374 S.W.2d
223 (Tex. 1963): Fitzhugh v. Associated Indemnity Corp., 746 S.W.Zd36l (Tex.App.—Eastland l988,no writ). TheAppeals
        Panel has held that an estate’s right to accrued and unpaid beneﬁts survives a non-compensable death. Texas Workers’
        Compensation Commission Appeal No. 950310, decided April ll, 1995.
             However, regardless of the compensability of the death, Section 408.081(d)providesthat“[a]n interest infunu-2 income
        beneﬁts does not survive after the employee’ s death.” Although it might be argued that impairment income beneﬁts accrue
        on the date of maximum medical improvement if the impairment rating is known, pursuant to Section 408.l2l(a)(2), the
        decedent’s entitlement to these benefits ends on “the date of the en1ployee’s death.”

        Sec. 408.003. REIMBURSABLE EMPLOYER PAYMENTS; SALARY CONTINUATION; OFFSET AGAINST
        INCOME BENEFITS; LIMITS.
        (a)    After an injury, an employer may:
               (1)   initiate beneﬁt payments, including medical beneﬁts; or
               (2)   on the written request or agreement ofthe employee, supplement income beneﬁts paid by the insurance
                     carrier by an amount that does not exceed the am ount computed by subtracting the amount ofthcincome
                     beneﬁt payments from the employce’s net preinjury wages.
        (in)   Ifan injuryis found to be compensable and an insurance carrier initiates compensation, the insurance carrier

        102                                                                                                                  Labor Code
APPENDIX TAB 5
                                                                the court shall award to the attorney payable out of the
                rance carrier. In the absence of an agreement,
               mace carrier’s recovery:
                 3 reasonable fee for recovery of the insurance
                                                                  earrier’s interest that may not exceed one-third of the           5W
                 insurance carrier’s recovery; and                                                                                   C
                    proportionate share of expenses.                                                                                 PD
                 ,.
                                                                                                         carrier shall make          0
                no;-ney who represents the claimant and is also to represent the subrogated insurance                                O
                                                                                                                                    .U
               “written disclosure to the claimant before employment as an attorney by the insurance carrier. The
               mant must acknowledge the disclosure and consent to the representation. A signed copy of the disclosure
                                                                                                                                    I'll

                be furnished to all concerned parties and made a part of the division file. A copy ofthe disclosure with
                ]aimant’s consent shall be ﬁled with the claimant’s pleading before a judgment is entered and approved
                                                                                          to which the attorney is otherwise
               he court. The claimant’s attorney may not receive a fee under this section
               ﬂed   under an agreement with the insurance carrier unless the attorney complies with the requirements
               his subsection.
                                                                                               participates in obtaining a
               n attorney actively representing the insurance carrier’s interest actively
                very, the court shall award  and  apportion between  the claimant’s  and the insurance  carrier’s attorneys
                 payable out of the insurance  carrier’s suhrogation recovery. In apportioning   the award,  the court shall
                      the benefit accruing  to  the insurance  carrier as a result  of each  attorney’s  service. The total
                ider
               rney’s fees may not exceed one—third of the insurance carrier’s recovery.
               purposes of determining the amount of an attorney’s fee under this section, only the amount recovered
               beneﬁts, including medical beneﬁts, that have been paid by the insurance carrier may be considered.

          ilethe carrier is still required to pay an attorney’s fee not to exceed one-third of its subrogation recovery to either
                         the carrier’s lawyer, or both, the fee only applies to the past subrogation lien amount, rather than any
                t’s lawyer,
          ture amounts. On the other hand, carrier is now responsible for its proportionate share of expenses in
                                                                                                                      recovering
            monies,   said  expenses   to be paid out of the carrier’s part of the recovery.

~
           e*ernployee’s attorney represents carrier for subrogation recovery, full disclosure of dual representation must be

~~
           rnployec, furnished to all parties, ineludingthe commission, and ﬁledwith the court prior to approval ofjudgment.
             observethat a claimant’s attorney representingboth the claimant and insurance company has an inherent conﬂict
            particularly when third party proceeds are inadequate to fund fully the subrogation interest and the desires of

~
     giniant. Carrier’s own counsel should be employed independently to avoid conﬂict or violation of Texas Disciplinary
     /W
               rofessional    Conduct of the   State   Bar of Texas.

                04.   EMPLOYER LIABILITY TO THIRD PARTY.
          tion for damages brought by an injured employee, a legal beneﬁciary, or an insurance carrier against a
          rty liable to pay damages for the injury or death under this chapter that results in a judgment against the
          ity or a settlement by the third party, the employer is not liable to the third party for reimbursement or
          shased on thcjudgnient or settlement unless the employer executed, before the injury or death occurred,
          In agreement with the third party to assume the liability.

            mployee, beneﬁciary or carrier sues a third party and recovers either by judgment or settlement, the employer
          have liability to the thirdparty in the absence of an express written indemnity agreement creating liability executed
          he accident. Indemnity agreements are widespread in industry, and if drafted properly, valid and enforceable.

                                           CHAPTER 418. CRIMINAL PENALTIES
                01.   PENALTY FOR FRAUDULENTLY OBTAINING OR DENYING BENEFITS.
          person commits an offense if the person, with the intent to obtain or deny payment ofbenelits, including
          cdical beneﬁts, under this subtitle or Subtitle C, for himself or another, knowingly or intentionally:
              makes a false or misleading statement;
           '

              misrepresents or conceals a material fact; or
                -

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