Court of Appeals of Texas, El Paso.

Frank R. SCHEUBEL, Appellant,

v.

PETROLEUM CASUALTY COMPANY, Appellee.

No. 08-99-00381-CV.

|

Nov. 29, 2001.

OPINION

ANN CRAWFORD McCLURE, Justice.

*1 Frank R. Scheubel appeals a summary judgment granted in favor of Petroleum Casualty Company (PCC). We reverse and remand.

FACTUAL SUMMARY

Frank R. Scheubel suffered a back injury at work on February 18, 1994. He obtained medical care from Dr. Shelby Hillis, a chiropractor, and claimed benefits under the Texas Workers’ Compensation Act. On May 13, 1994, Dr. Hillis’s office staff prepared a Form TWCC 69 stating that Scheubel had reached maximum medical improvement and had a whole body impairment rating of zero percent. The document was signed with a facsimile signature stamp. Scheubel acknowledged receiving a copy within a short time after it was prepared. Two years later, Dr. Hillis referred Scheubel to a medical doctor, Dr. Monty Wright, for the purpose of obtaining a whole body impairment rating. Dr. Wright certified that Scheubel reached maximum medical improvement on April 15, 1996, with a nine percent impairment rating. PCC refused to accept the later impairment rating, claiming that the May 13, 1994, rating had become final under the Texas Administrative Code.

Dr. Hillis then wrote two letters to the Texas Workers’ Compensation Commission indicating the May 13, 1994, Form TWCC-69 was erroneous and had been issued without his authorization as the result of a clerical error. The form had been submitted, and his signature stamped thereon, by someone on his staff. The dispute concerning the finality of the May 13, 1994, impairment rating was presented to a Commission hearing officer.

At the contested hearing, Scheubel testified that although he had notice of the zero percent impairment rating, he did not become aware of its significance or finality until sometime after August or September 1996. Dr. Hillis never discussed an impairment rating with him and never performed an evaluation similar to the one Dr. Wright performed. Scheubel had never missed work due to the injury and had not received benefits. Records introduced during the hearing indicated that Dr. Hillis does not assign impairment ratings, but refers injured workers to Dr. Wright for an impairment evaluation. When Dr. Hillis issues a Form TWCC-69, it bears an original signature. He dictated information for a Form TWCC-64 in May 1994, which his office was authorized to type and stamp with his signature. However, a staff member used the wrong form, Form TWCC-69, and stamped his signature to it by mistake.

The hearing officer found:

• Dr. Hillis did not perform an impairment rating evaluation on May 11, 1994;

• Dr. Hillis’s office practice is to refer injured workers to Dr. Wright for impairment evaluation and to issue a Form TWCC-69 based on Dr. Wright’s evaluation;

• Dr. Hillis personally signs a Form TWCC-69 issued from his office;

• Dr. Hillis referred Scheubel for an impairment evaluation in August 1996, unaware that the Form TWCC-69 dated May 13, 1994, had been issued;

• the signature on the Form TWCC-69 dated May 13, 1994, was not an authorized signature; and

*2 • the Form TWCC-69 dated May 13, 1994, was not the assignment of an impairment rating, but rather a clerical error on the part of Dr. Hillis’s staff.

Based upon these findings, the hearing officer concluded that the May 13, 1994, impairment rating was invalid because it was not assigned by a doctor but through a clerical error of his office. Because no impairment rating was assigned, it could not become final under Rule 130.5(e). See former 28 Tex.Admin.Code § 130.5(e)(West 2000). PCC was ordered to pay benefits to Scheubel in accordance with the decision.

A divided appeals panel affirmed the factual findings of the hearing officer, with the majority finding sufficient evidence to support his decision. The majority stressed that a certification of maximum medical improvement and impairment rating must be made by a doctor pursuant to Section 408.123(a) of the Labor Code, and that when the issue is whether a doctor made a certification, a hearing officer may decide the issue. Finding the signature on the May 13, 1994, Form TWCC-69 was not an authorized signature, the majority concluded that the form was not the assignment of an impairment rating but a clerical error on the part of Dr. Hillis’s staff. Although prior panel decisions had determined that a stamped signature did not constitute a basis for invalidating a certification absent evidence indicating unauthorized execution by someone other than the doctor, the majority noted the hearing officer had found additional evidence indicating such an unauthorized execution and concluded this finding was not so against the great weight and preponderance of the evidence as to be clearly wrong or manifestly unjust. The dissent complained that the majority had opened up “a whole new exception” allowing an inquiry into the validity of a Form TWCC-69 signed with a signature stamp. Acknowledging prior appeals panel decisions holding an unsigned Form TWCC-69 to be invalid, the dissent disagreed that a certifying doctor’s stamped signature could render it invalid.

PCC timely sought judicial review. In its motion for summary judgment, PCC contended that under the Texas Administrative Code, impairment ratings become final if not disputed within 90 days of assignment, and that the appeals panel had exceeded its jurisdiction by carving out an exception to Rule 130.5(e). Prior to the trial court reaching a decision on the motion, the Texas Supreme Court rendered its opinion in Rodriguez v. Service Lloyds Ins. Co., 997 S.W.2d 248 (Tex.1999). In correspondence addressed to counsel, the trial judge advised:

The court feels the Appeals Panel has amended Rule 130.5(e) by carving out an ‘unauthorized execution’ exception. This is certainly an action which amends rather than interprets the rule. The Appeals Panel has no authority to make such an amendment.

The court granted summary judgment, finding that the impairment rating assigned on May 13, 1994, was valid and had become final under Rule 130.5(e). On appeal, Scheubel contends that this is not a case where the Commission hearing officer or appeals panel applied an exception to Rule 130.5(e) but rather a case of whether an impairment rating, as the term is used in the Act, was ever issued by Dr. Hillis.

STANDARD OF REVIEW

*3 If the nature of a workers’ compensation dispute involves compensability or eligibility for or the amount of income or death benefits, the courts review the Commission appeals panel decision under a modified de novo standard. Rodriguez, 997 S.W.2d at 253. The Supreme Court has determined that the finality of an impairment rating directly affects eligibility for and the amount of benefits due to the employee. Id. Consequently, the modified de novo standard of review applies to impairment rating disputes, including disputes that challenge the finality of an impairment rating. Id. Modified de novo review means that (1) the trial court is informed of the appeals panel’s decision; (2) unless the trial court makes a finding that the claimant’s condition has substantially changed, evidence of the extent of the claimant’s impairment is limited to that presented to the Commission; and (3) the court is required to adopt the specific impairment rating assigned by one of the physicians that treated the claimant. Tex.Lab.Code Ann. §§ 410.304, 306-307 (Vernon 1996). The court is not required to accord any weight to the panel decision and the fact finder does not review it for reasonableness but decides the issues by a preponderance of the evidence.

PCC filed a motion for summary judgment, contending that there was no genuine issue as to any material fact and that it was entitled to judgment as a matter of law. In reviewing the summary judgment, we must determine whether PCC carried its burden. See Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex.1991); Nixon v. Mr. Property Management Co., Inc., 690 S.W.2d 546, 548 (Tex.1985); Cortez v. Liberty Mut. Fire Ins. Co., 885 S.W.2d 466, 469 (Tex.App.-El Paso 1994, writ denied). Thus, the question on appeal is not whether the summary judgment proof raises fact issues as to required elements of PCC’s cause or claim, but whether the summary judgment proof establishes, as a matter of law, that there is no genuine issue of material fact as to one or more elements of its cause or claim. See Gibbs v. General Motors Corporation, 450 S.W.2d 827, 828 (Tex.1970). In resolving the issue of whether PCC has carried this burden, all evidence favorable to Scheubel must be taken as true and all reasonable inferences, including any doubts, must be resolved in his favor. See Nixon, 690 S.W.2d at 548-49; DeLuna v. Guynes Printing Company of Texas, Inc., 884 S.W.2d 206, 208 (Tex.App.-El Paso 1994, writ denied).

THE RULE

The rule at the heart of this controversy, known as the “90 day Rule,” is Texas Workers’ Compensation Commission Rule 130.5(e), which provides:

The first impairment rating assigned to an employee is considered final if the rating is not disputed within 90 days after the rating is assigned.

See former 28 Tex.Admin.Code § 130.5(e).¹ The rule affords a method by which parties may rely upon an impairment assessment and a finding of maximum medical improvement by providing the time limit in which either party may dispute the assessment. A first certification of impairment rating becomes final by operation of law if Form TWCC-69 is valid on its face.

*4 Administrative rules have the same force and effect as statutes and are construed in the same manner as statutes. Rodriguez, 997 S.W.2d at 254. In interpreting this rule, Commission appeals panels have created exceptions, including “significant error,” “clear misdiagnosis,” and “substantial change of condition.” “While we defer to the Commission’s interpretation of its own regulation, we cannot defer to an administrative interpretation that is ‘plainly erroneous or inconsistent with the regulation.’ “ Rodriguez, 997 S.W.2d at 254-55, citing Public Util. Comm’n of Tex. v. Gulf States Util. Co., 809 S.W.2d 201, 207 (Tex.1991). Consequently, the Supreme Court has refused to recognize the ad hoc exceptions created by the Commission, holding that the Commission is not empowered to formulate exceptions to Rule 130.5(e) without complying with the procedures of the Administrative Procedure Act. See Rodriguez, 997 S.W.2d 255-56. Against this backdrop, PCC argues that the appeals panel impermissibly carved an “unauthorized execution” exception prohibited by Rodriguez.

WAS AN IMPAIRMENT RATING ISSUED?

In his first issue for review, Scheubel contends that the May 13, 1994, Form TWCC-69 was not an impairment rating at all because it was not made by a doctor, and therefore, Rule 130.5(e) does not even apply. PCC counters that Form TWCC-69 was valid on its face because (1) it included a numerical impairment rating of zero percent; (2) it contained a date upon which Scheubel reached maximum medical improvement; (3) the date of maximum medical improvement was before the date the Form TWCC-69 was prepared; and (4) the Form TWCC 69 was signed with Dr. Hillis’s stamped signature. The hearing officer reasoned that while a stamped signature without other indication of unauthorized execution does not invalidate an impairment rating, here there was other evidence. He concluded that Form TWCC-69 was not the assignment of an impairment rating but a clerical error on the part of Dr. Hillis’s staff. Relying upon Rodriguez, PCC contends that the “unauthorized execution” rationale creates an “unauthorized execution” exception to Rule 130.5(e). PCC’s reliance on Rodriguez is misplaced.

We agree that certain material facts are undisputed. Dr. Hillis examined Scheubel on May 11, 1994, and dictated information which was used by his staff to complete a Form TWCC-69 rather than a Form TWCC-64. PCC echoes the dissenting opinion of the appeals panel, claiming it is inconceivable that the information contained within the May 13, 1994, Form TWCC-69 was intended to be typed on a Form TWCC-64. Moreover, PCC suggests that because an agency relationship may be shown by direct testimony or by circumstantial evidence showing the relationship of the parties and their conduct, Dr. Hillis must be held responsible for the impairment certification filed with his stamped signature such that “[i]f Dr. Hillis’ staff made the mistake, Dr. Hillis made the mistake.” Indeed, PCC notes that “[t]here has been no evidence presented that Dr. Hillis’ staff acted outside his control in assisting him in the performance of medical services….”

*5 The law does not presume agency. Bernsen v. Live Oak Ins. Agency, Inc., 52 S.W.3d 306 (Tex.App.-Corpus Christi 2001, no pet .). The party asserting the agency relationship has the burden of proving it. Royal Mortgage Corp. v. Montague, 41 S.W.3d 721, 732 (Tex.App.-Fort Worth 2001, no pet.); Lyons v. Lindsey Morden Claioms Mgmt., Inc., 985 S.W.2d 86, 90 (Tex.App.-El Paso 1998, no pet.). While a question of agency is generally one of fact, the existence of a principal-agent relationship under established facts may be determined as a matter of law based on the agreement between the parties, their words, and their conduct. Royal Mortgage, 41 S.W.3d at 733. Absent actual or apparent authority, an agent cannot bind a principal. Suarez v. Jordan, 35 S.W.3d 268, 272-73 (Tex.App.-Houston [14th Dist.] 2000, no pet.). Both actual and apparent authority are created through conduct of the principal communicated either to the agent (actual authority) or to a third party (apparent authority). Id. at 273. Actual authority denotes that authority which the principal intentionally confers upon the agent, or intentionally allows the agent to believe he has, or by want of ordinary care allows the agent to believe himself to possess. Id. Apparent authority is determined by looking to the acts of the principal and ascertaining whether those acts would lead a reasonably prudent person using diligence and discretion to suppose the agent had the authority to act on behalf of the principal. Id. The principal must have either affirmatively held the agent out as possessing the authority or the principal must have knowingly and voluntarily permitted the agent to act in an unauthorized manner. Id. A party dealing with an agent must ascertain both the fact and the scope of the agent’s authority, and if the party deals with the agent without having made such a determination, he does so at his own risk. Id. As the moving party, PCC was required to establish its entitlement to summary judgment as a matter of law. To the extent it sought to rely upon an agency theory to establish that the staff member who stamped Dr. Hillis’s signature to the Form TWCC-69 had authority to do so, it was required to present evidence. This it failed to do. Instead, it argues in this court, as it did below, that Scheubel offered no evidence that Dr. Hillis’s staff acted outside his control.

Bearing in mind that we are required to take as true all evidence favorable to Scheubel and to resolve all inferences in his favor, we conclude there is a genuine issue of material fact as to whether the stamped signature was authorized. PCC has not established as a matter of law that the staff member who stamped the signature had authority to do so, and we cannot presume such authority existed. Lyons, 985 S.W.2d at 91 (the bare assertion of agency, made solely by the party claiming the relationship, is insufficient to support summary judgment). We sustain the first issue for review. Because of our disposition, it is unnecessary that we consider the second. The judgment is reversed and remanded.

	Footnotes
1		The Austin Court of Appeals has recently determined that Rule 130.5(e) is invalid because it impermissibly shortens the statutory time period allotted to an injured worker to achieve maximum medical improvement. Fulton v. Associated Indem. Corp., 46 S.W.3d 364, 372 (Tex.App.-Austin 2001, pet. filed). Finding that the Supreme Court’s opinion in Rodriguez was not controlling on the issue, the court concluded that the Commission had exceeded its authority in enacting the rule. Id. at 368-69, 372. Because Scheubel does not challenge the validity of the rule, we do not address it here.