Court of Appeals of Texas, Amarillo.

LIBERTY MUTUAL FIRE INSURANCE COMPANY, Appellant,

v.

MISSOURI FARM BUREAU INSURANCE COMPANY, Appellee.

No. 07-97-0157-CV.

|

Feb. 25, 1998.

Before DODSON and QUINN and REAVIS, JJ.

OPINION

DON H. REAVIS, Justice.

*1 Appellant Liberty Mutual Fire Insurance Company (Liberty Mutual) seeks reversal of a judgment in which the trial court denied recovery on its subrogation claim against appellee, Missouri Farm Bureau Insurance Company (Missouri Farm). By a sole point of error, Liberty Mutual contends the trial court erred in concluding as a matter of law that its subrogation action under applicable workers’ compensation provisions was barred by the statute of limitations. Based upon the rationale expressed herein, we affirm.

The case was tried upon a stipulation of facts signed by counsel and filed with the clerk. After a bench trial, the court made findings of fact and conclusions of law. The stipulations and findings of fact show that on July 21, 1992, Kenneth Stone (employee), while acting within the course and scope of his employment with Gorman Phillips Construction (employer), was involved in a vehicular accident with Delbert Wells (third party). At the time of the accident, the employer maintained workers’ compensation insurance with Liberty Mutual and Missouri Farm was the third party’s liability insurance carrier. On August 3, 1992, Liberty Mutual commenced paying workers’ compensation benefits to the employee for injuries sustained in the accident.

The stipulations and findings of fact show, that without filing any action against the third party, the employee negotiated a settlement of his claims against the third party. However, this compromise and settlement agreement is not in the appellate record and is therefore not before us. The stipulations reflect that Missouri Farm agreed to settle the employee’s claim for a total of $45,000.00, which included a payment of $16,796.64 to Liberty Mutual for the amount of workers’ compensation benefits paid by Liberty Mutual to the employee as of December 21, 1993. On December 21, 1993, Missouri Farm mailed the employee a check for $28,203.36, together with a release which was signed and returned by the employee. On the same day, Missouri Farm mailed Liberty Mutual a check in the amount of $16,796.64 and the release, but Liberty Mutual refused to sign the release, and instead returned the check to Missouri Farm.

On March 9, 1995, Liberty Mutual made a demand upon Missouri Farm for payment of $17,014.43, and then filed this action against Missouri Farm on October 26, 1995, which, although brought within two years of the December 21, 1993 payment to the employee, was more than two years after both the date of the underlying accident and the initial payment of workers’ compensation benefits by Liberty Mutual to the employee. Liberty Mutual did not seek any relief from the third party in this action, but instead filed its subrogation claim directly against the liability insurance carrier of the third party.

By it’s pleadings, Liberty Mutual contended it was entitled to recover for wrongful settlement of the third party claim under former article 8308, section 4.05(f) of the Texas Workers’ Compensation Act,¹ and, in the alternative, for conversion. In addition to a general denial, Missouri Farm alleged (1) the action was barred by limitations, (2) Liberty Mutual was estopped from maintaining the action, and (3) asserted waiver as an affirmative defense. By its sole conclusion of law, the trial court concluded that the claims of Liberty Mutual were barred by limitations and rendered judgment that Liberty Mutual recover nothing from Missouri Farm.

*2 In its first cause of action, Liberty Mutual specifically premised its subrogation claim upon former article 8308, section 4.05(f),² which was in effect at the time of the subject work related injury. Liberty Mutual contends now, as they did at trial, that because subsection (f) provides in part that, “the net amount recovered by the claimant from the third party action shall be applied to reimburse the insurance carrier for past benefits and medical expenses paid,” it is entitled to the “first money” paid to resolve a third party claim. However, subsection (f) addresses subrogation rights and procedures where an action has been filed against the third party and the action has been concluded favorably to the claimant. Therefore, subsection (f) does not support Liberty Mutual’s contention in this instance because the employee did not file an action and the third party payment was not made after the conclusion of a third party action.

Moreover, an action by an employee against a third party tortfeasor is owned by the employee, and Liberty Mutual’s subrogation action is derivative of the employee’s rights under the statute. Guillot v. Hix, 838 S.W.2d 230, 232 (Tex.1992). In Guillot, the Supreme Court resolved any uncertainty as to when an action for subrogation accrues, holding that an action for subrogation accrues at the same time the employee’s action against the third party accrues. Id. at 235. However, the Court limited the application of its ruling to cases arising after the date of its opinion of September 23, 1992, and held that injuries occurring before such date would be controlled by Fidelity Union Gas Co. v. Texas Power & Light Co., 35 S.W.2d 782, 783-84 (Tex.Civ.App.-Dallas 1931, writ ref’d); Texas Employers Ins. Ass’n v. Brandon, 126 Tex. 636, 89 S.W.2d 982, 984 (Tex. Comm’n App.1936, opinion adopted); Campbell v. Sonford Chem. Co., 486 S.W.2d 932, 933-34 (Tex.1972). Id. Because the underlying accident occurred before September 23, 1992, the rule announced in Guillot is not applicable.

In Guillot, while commenting on Fidelity, Brandon, and Campbell, the Court discussed the applicable rule in different fact scenarios. Id. at 233. Because Liberty Mutual commenced paying workers’ compensation benefits on August 3, 1992, the month following the accident, the rule announced in Brandon is controlling. In Brandon, the Court held that a cause of action for subrogation under the Workers’ Compensation Act accrues when the carrier has either paid or assumed to pay compensation. Brandon at 984, 89 S.W.2d 982. Also, in Buss v. Robison, 255 S.W.2d 339, 345 (Tex.Civ.App.-Amarillo 1952, n.r.e.), this Court held that a claim for subrogation accrues when the workers’ compensation carrier assumed liability for compensation. Fidelity and Campbell present distinguishable factual scenarios from the instant case and are not controlling. Because former article 8308, section 4.05 subsection (f) is not applicable, and because Liberty Mutual filed this action more than two years after it commenced the payment of workers’ compensation benefits, the trial court did not err in holding that limitations barred Liberty Mutual’s claims.

*3 By its trial pleadings and as a sub-point of error, Liberty Mutual asserts that Missouri Farm’s refusal to pay the $17,014.43 demanded on March 9, 1995, constituted a conversion. Even assuming that Liberty Mutual’s action was timely filed, conversion does not lie in this instance. Generally, conversion consists of the wrongful exercise of dominion or control over another’s property in denial of or inconsistent with the other’s rights in that property. Waisath v. Lack’s Stores, Inc., 474 S.W.2d 444, 446 (Tex.1971). Money can be the object of conversion only when it can be described as a specific chattel, but not where an indebtedness may be discharged by the payment of money generally. Estate of Townes v. Townes, 867 S.W.2d 414, 419 (Tex.App.-Houston [14th Dist.] 1993, writ denied); Wheat v. American Title Ins. Co., 751 S.W.2d 943, 944 (Tex.App.-Houston [1st Dist.] 1988, no writ). Because Liberty Mutual did not allege, and the evidence did not establish, that the money delivered to Missouri Farm (1) was for safekeeping, (2) intended that it be kept segregated, (3) substantially in the same form in which it was received, and (4) was not the subject of a title claim by Missouri Farm, see Edlund v. Bounds, 842 S.W.2d 719, 727 (Tex.App.-Dallas 1992, writ denied), no grounds for conversion were presented and a limitation question was not raised.

Finally, Liberty Mutual contends that its subrogation claim is an independent cause of action. However, as above noted, a claim for subrogation is derivative to the cause of action owned by the injured worker. Also, there is only one cause of action against a third party tortfeasor, and it is owned by the injured worker. See Guillot at 232. We decline to hold that the subrogation claim is an independent cause of action because a single cause of action may not properly be divided into a number of different causes. Pierce v. Reynolds, 160 Tex. 198, 329 S.W.2d 76, 78 (Tex.1959). Moreover, whether the action is grounded in conversion or denominated an independent cause of action, the rule announced in Brandon is controlling.

For all of the above reasons, we overrule Liberty Mutual’s sole point of error and affirm the judgment of the trial court.

	Footnotes
1		Effective September 1, 1993, this article was repealed by Act of May 12, 1993, 73rd Leg., R.S., ch. 269, § 5(2), 1993 Tex. Gen. Laws 1273; see Tex. Lab.Code Ann. § 417.001 (Vernon 1996).
2		In effect on January 1, 1991, but repealed effective September 1, 1993, by Act of May 12, 1993, 73rd Leg., R.S., ch. 269, § 5(2), 1993 Tex. Gen. Laws 1273.