Court Opinion

ID: 3117032
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:48:42.714218+00
Date Added: 2024-06-11T10:41:24.155290
License: Public Domain

NO. 07-08-0279-CV

                             IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                        PANEL C

                                  MARCH 25, 2010
                          ______________________________

                      TEXAS MUTUAL INSURANCE COMPANY,

                                                               Appellant

                                            v.

               GOETZ INSURORS, INC. AND GOETZ INSURORS, INC.,
                AS ASSIGNEE OF THE CLAIMS OF CATTLCO, INC.,

                                                      Appellee
                         _______________________________

             FROM THE 64TH DISTRICT COURT OF SWISHER COUNTY;

          NO. A-10810-05-11; HON. ROBERT W. KINKAID, JR., PRESIDING
                       _______________________________

                                     Opinion
                         _______________________________

Before QUINN, C.J., and HANCOCK and PIRTLE, JJ.

       Texas Mutual Insurance Company (Texas Mutual) appeals from a final judgment

wherein it claims that the trial court erred in awarding attorney’s fees and prejudgment

interest on attorney’s fees to Goetz Insurors, Inc. and Goetz Insurors, Inc., as assignee

of the claims of Cattlco, Inc. (Goetz). We reverse in part.

                                      Background

       The story before us is a long one that started about seven years ago. It involves

a feedlot, Cattlco, Inc., Stanley (a Cattlco employee), and Goetz (entities in the business
of providing insurance to Cattlco). It begins with Goetz attempting to find worker’s

compensation insurance for Cattlco.                    The latter’s current policy was expiring and

another was needed by December 31, 2002. Texas Mutual was contacted via an initial

application for insurance sent on December 20, 2002. Per correspondence from Texas

Mutual, an amended application was sent on December 30, 2002. Accompanying it

was a deposit for the requisite insurance. Both items were received and the monies

were deposited by Texas Mutual long before January 22, 2003. The latter date is of

import for that is when Stanley broke his leg while on the job. Nevertheless, Texas

Mutual denied coverage, contending that the policy had not been effective on that date.

Rather, it purportedly became effective on February 1, 2003.

          While Cattlco, Goetz, and Texas Mutual quarreled over the policy’s effective

date, Stanley’s medical needs necessitated redress. So, Cattlco and Goetz paid for his

care and settled any claims he may have had not only against Cattlco but also Texas

Mutual. Cattlco then assigned its claims against Texas Mutual for breach of contract

and the like to Goetz. This lead to Goetz suing Texas Mutual in a Travis County district

court for, among other things, breach of contract.1

          No one denied that the central issue in dispute involved the effective date of the

policy.          Yet, Texas Mutual argued that the subject was related to issues of

compensability and implicated the Texas Worker’s Compensation Act. And, because it

purportedly did, the Texas Worker’s Compensation Commission purportedly had

exclusive jurisdiction over it. Moreover, it convinced our sister court in Austin to accept

the proposition. See In re Texas Mutual Ins., 157 S.W.3d 75 (Tex. App.–Austin 2004,

          1
              Other causes of action were also alleged, but they are not pertinent to this appeal.
                                                          2
orig. proceeding). As a result of that court’s decision, Goetz was obligated to submit

the dispute for resolution by the TWCC. Though various departments within that entity

disagreed, the Commission finally decided in favor of Texas Mutual. Believing that to

be the wrong answer, Goetz initiated another suit in a Swisher County district court to

test the ruling’s accuracy.

       The original petition filed by Goetz included complaints about various findings of

the Commission, a cause of action sounding in breached contract for the failure to abide

by the agreement with Cattlco, and requests for damages and attorney’s fees. Trial

was convened, and the trial court afforded a jury opportunity to resolve the controversy.

Moreover, that jury was asked if Texas Mutual had entered “into a contract to provide

worker’s compensation insurance coverage for Cattlco . . . to be effective on or before

January 22, 2003 . . . .” It answered “yes.” It was also asked if Cattlco or its assignee

Goetz was “entitled to reimbursement of indemnity and medical payments for Texas

Mutual . . . that resulted from such failure to comply with the contract to provide worker’s

compensation insurance.” 2 The jury answered “yes” to that question as well. When

asked about the amount of damages that would “fairly and reasonably compensate

Goetz . . . for damages . . . that resulted from the failure of Texas Mutual . . . to comply

with the contract . . .,” the jury found approximately $39,500 to be the appropriate sum.

Then, it found that a reasonable attorney’s fee for the legal services provided Goetz

would be $109,971 for the preparation and trial of the matter outside the environs of the

       2
          Apparently, all recognized that Texas Mutual failed to perform the contract for a question
inquiring about that was not posed to the jury. Nor did Texas Mutual complain about the omission on
appeal.
                                                 3
Commission, $25,810 for the services rendered in prosecuting the matter within the

Commission, and $35,000 if various appellate steps were taken.

       After the trial court entered judgment upon the jury’s verdict, Texas Mutual

appealed. It did not contest the findings that it had entered into the contract and was

obligated to pay damages due to its breach of the agreement.               Rather, it merely

attacked the attorney’s fees awarded Goetz, contending, among other things, that the

suit was not actually one for breach of contract but rather for judicial review of an

administrative decision. Though this position seems somewhat inconsistent with the

questions submitted to the jury and about which Texas Mutual did not complain, we

conclude that the trial court lacked jurisdiction to award fees at this time.

                                            Law

       In Texas, attorney's fees may not be recovered from an opposing party unless

such recovery is provided for by statute or by contract between the parties. Travelers

Indem. Co. of Connecticut v. Mayfield, 923 S.W.2d 590, 593 (Tex. 1996).                 The

authorization of attorney's fees in civil cases may not be inferred; rather it "must be

provided for by the express terms of the statute in question." Id. (citing First City Bank–

Farmers Branch v. Guex, 677 S.W.2d 25, 30 (Tex. 1984)).

        Next, the "Workers' Compensation Act vests the power to award compensation

benefits solely in the Workers' Compensation Commission[], subject to judicial review."

American Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 803 (Tex. 2001) (citing Saenz v.

Fidelity & Guaranty Insurance Underwriters, 925 S.W.2d 607, 612 (Tex.1996)).

Furthermore, judicial review is "limited to issues decided by the commission’s appeals

panel and on which judicial review is sought."         TEX. LABOR CODE ANN. § 410.302

                                              4
(Vernon 2006); see Krueger v. Atascosa County, 155 S.W.3d 614, 619-20 (Tex. App.

–San Antonio 2004, no pet.) (holding that claimant could not assert the Downs waiver

contention in trial court, having not raised issue before appeals panel). And, the issues

decided by the appeals panel which may be reviewed are those addressed in the

contested-case hearing, as developed by the record of that hearing. TEX. LABOR CODE

ANN. § 410.203.    It is this procedural mechanism that we find ultimately controlling

here.

        As alluded to above, we are not writing on a clean slate. The Austin Court of

Appeals previously determined that the substance of Goetz’ claim for breached contract

(i.e. whether the worker’s compensation policy was effective on the date of Stanley’s

injury) was within the exclusive control of the TWCC. In re Texas Mutual Ins., 157
S.W.3d at 82. Thus, we must follow that lead. See Justice Bail Bonds v. Samaneigo,

68 S.W.3d 811, 813 (Tex. App.–El Paso 2001, pet. denied) (discussing the theory of law

of the case). What this means then is that only those disputes tied to the matter of

compensability and which were addressed by the Commission could be judicially

reviewed by the trial court here. Whether the matter of attorney’s fees was one such

topic is what we now address.

        No one disputes that the facts and circumstances underlying Goetz’ suit in

Swisher County are those originally presented to the Commission per the directive of

the Austin Court of Appeals.     Goetz simply plugged them into the framework of a

common law claim for breached contract.        And, because they evinced a breached

contract, it purportedly was able to use that moniker to secure attorney’s fees under

§38.001 of the Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM.

                                           5
CODE ANN. §38.001 (Vernon 2008) (providing for the recovery of attorney’s fees in

causes of action sounding in breached contract). Yet, a like argument was proffered

and rejected by our sister court in Bestor v. Service Lloyds Ins. Co., 276 S.W.3d 549

(Tex. App.–Waco 2008, no pet.). There, the claimant alleged that the insurer’s refusal

to pay compensation benefits was tantamount to a breach of contract. Therefore, he

sued Service Lloyds under that common law theory to recover the administrative

attorneys fees incurred while prosecuting his claim before the TWCC. Despite finding

logical basis to Bestor’s legal theory, the appellate panel nonetheless concluded that

logic had to “yield to the requirement that he have exhausted his claim administratively.”

Id. at 552. In other words, the question of whether he could recover his attorney’s fees

fell within the Commission’s exclusive jurisdiction. This was so because the demand

for attorney’s fees was “based on Service Lloyd’s dispute of Bestor’s entitlement to

worker’s compensation benefits.” Id. at 553. It did not matter if the claim implicated

contract or tort principles causes of action; whether the Commission had exclusive

jurisdiction over it depended upon whether the claim was “based on” an alleged delay or

denial of worker’s compensation benefits.         Id.; accord, Cigna Ins. Co. v. Killion, 50
S.W.3d 17, 20 (Tex. App.–Amarillo 2001, pet. denied) (wherein we held that a claim is

within the Commission’s exclusive jurisdiction unless it arises under a body of law other

than the Worker’s Compensation Act and involves damages which exclude

compensation and benefits encompassed by the Act); see Cunningham Lindsey Claims

Mgmt., Inc. v. Snyder, 291 S.W.3d 472, 477 (Tex. App. –Houston [14th Dist.] 2009, pet.

filed) (holding that unless a claim for relief is not dependent, either directly or indirectly,

                                              6
upon the resolution of a matter within the Commission’s exclusive jurisdiction, a trial

court may not proceed and entertain it).

      Much like the attorney’s fees incurred in Bestor, those sought and awarded at bar

were incurred in effort to resolve the legitimacy of Texas Mutual’s refusal to pay

worker’s compensation benefits.     That such a refusal may also be a common law

breach of contract, as found by the jury here matters not. The Commission had and

has exclusive jurisdiction over it, and Goetz must first present it to that body for

administrative determination.

      Accordingly, we reverse that portion of the trial court’s judgment awarding Goetz

attorney’s fees and prejudgment interest on attorney’s fees and affirm the remainder.

                                               Brian Quinn
                                               Chief Justice

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