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Biotech Institute v. St. Paul Fire & Marine Ins. Co.
April 10, 2001
Unpublished Opinion

Biotech Institute v. St. Paul Fire & Marine Ins. Co.

Court of Appeals of Texas, Dallas.




No. 05-98-00625-CV.


April 10, 2001.

On Appeal from the 59th Judicial District Court, Grayson County, Texas, Trial Court Cause No. 98-0441.




*1 Biotech Institute, a medical service provider, appeals a take-nothing judgment after it intervened in a bad faith suit brought by an employee, Delton Kemp, against his employer’s workers’ compensation insurance carrier. In its intervention, Biotech alleged the insurance carrier, St. Paul Fire & Marine Insurance Company, owed Biotech money it was awarded in a Workers’ Compensation Commission board award. Because the trial court lacked jurisdiction to decide Biotech’s claim for debt, we vacate that portion of the trial court’s judgment relating to this claim and dismiss this cause for want of jurisdiction.


In December 1990, Delton Kemp was injured while working at TEF McKinney Job Corps Center. St. Paul was TEF’s workers’ compensation insurance carrier. Kemp filed a claim with the Texas Workers’ Compensation Commission.

Biotech, who provided health care services to Kemp following his injury, billed St. Paul for the charges. St. Paul disputed the charges. Biotech’s claim was heard along with Kemp’s. After hearing the case, the Texas Workers’ Compensation Commission issued an award in favor of Kemp (the “board award”), also ordering the “Named carrier to pay Dr. Harvey Loomstein/BioTech Institute $12,344.13, derivative to that of the employee.”

St. Paul and Kemp both appealed the award in state district court. Biotech was never notified of the suit and never became a party to that case. After a jury trial, the court entered judgment in favor of Kemp, vacated the board award, and awarded Kemp a lump sum for his on-the-job-injury. Kemp’s guardian then filed suit against St. Paul, alleging bad faith. Biotech intervened, alleging that St. Paul failed to pay it $12,344.13 pursuant to the board award.1 St. Paul filed a motion to dismiss/strike or in the alternative a motion to sever Biotech’s claim. Biotech filed a motion for summary judgment, and St. Paul filed an amended motion to strike and for summary judgment on Biotech’s petition for intervention. The trial court granted St. Paul’s amended motion without stating the basis for its ruling and ordered that Biotech take nothing. The trial court also severed Biotech’s case from Kemp’s. This appeal followed.


We first decide whether the trial court had jurisdiction over Biotech’s claim that St. Paul owed it money. In determining this jurisdictional issue, we decide whether Biotech had standing to bring this claim. Standing, as a component of subject matter jurisdiction, cannot be waived and may be raised for the first time on appeal by the parties or by the court. Texas Ass’n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 445-46 (Tex.1993).

To determine whether Biotech has standing, the critical inquiry is whether it had a right to a direct appeal of the board award. In Id. at 106. The Latham court suggested that the Commission should “designate in the award those persons who are independent claimants, and designate separately any persons named to receive payment out of the benefits awarded to the injured employee and whose rights and standing are derivative to those of the employee.” Id. The Latham court concluded by holding that a person whose standing is derivative to that of the employee would not be entitled to enforce the award if the award was subsequently set aside in a suit in which the derivative claimant was not a party, and that he need not even be made a party to such suit. Id.

*2 The critical question here, then, is whether Biotech was a derivative claimant. Biotech argues it had an independent claim and was therefore entitled to stand on the award even after the award was vacated as to Kemp. See id. We disagree. The award expressly stated Biotech’s right to payment was derivative of Kemp’s right.

While Biotech acknowledges that it is, in some sense, a derivative claimant, it argues that the Commission’s designation of its claim as “derivative” means only that its rights are contingent on whether Kemp suffered a compensable injury, and that once the jury found there was an injury, Biotech was entitled to payment under the award. We are not persuaded. In this case, the Commission followed the Supreme Court’s directive in Latham to designate whether claims were derivative. See id. The Commission determined that Biotech did not have a direct claim against St. Paul but was a derivative claimant. Biotech did not complain of the Commission’s finding that its claim was derivative. Therefore, when St. Paul appealed and the award was set aside, any derivative award to Biotech was also set aside. Biotech cannot later, in a separate proceeding, try to collect on the award that was set aside in an earlier action.

Because Biotech’s claim for debt is derivative of the Commission’s award to Kemp, Biotech has no standing to enforce the award itself, and thus no standing to assert that claim in the district court. Absent standing, the trial court had no jurisdiction over Biotech’s debt claim against St. Paul. Thus, we vacate that portion of the trial court’s judgment relating to Biotech’s debt claim and dismiss this cause for want of jurisdiction. See Latham, 491 S.W.2d at 105-06.



Biotech also alleged St. Paul breached a duty of good faith and fair dealing and violated article 21.21(16) of the Texas Insurance Code by refusing “to pay benefits [to Biotech] when [its] liability was reasonably clear.” Biotech does not complain on appeal of the trial court’s disposition of these claims.

End of Document