Court of Appeals of Texas,

Corpus Christi-Edinburg.

TEXAS WORKERS’ COMPENSATION INSURANCE FUND

v.

Jose SERRANO and Graciela Chairez.

No. 13-95-482-CV.

|

Jan. 9, 1997.

Attorneys & Firms

Roger W. Hughes, John T. Dailey, Lynne Liberato, Michelle E. Mccoy Monger, Jeffery T. Nobles, Kent Geoffrey Rutter, and Anne Marie Mcgowan, for Texas Workers’ Compensation Insurance Fund.

Kevin Glasheen, Ramon Garcia, Frank Costilla, John W. Weber, Jr., Thomas M. Thomson, Sam L. Fadduol, Christopher Todd Carver, and Suzanne M. Schwartz, for Jose Serrano and Graciela Chairez.

Before Justices YAÑEZ, CHAVEZ and RODRIGUEZ.

OPINION

Opinion by Justice CHAVEZ.

*1 This case involves the subrogation right of a worker’s compensation insurance carrier to the proceeds of an injured beneficiary’s recovery from a liable third party. Jose Serrano, a Mexican citizen, was severely injured while working as a migrant farm worker in Texas. Serrano was standing next to a truck trailer cleaning and loading cabbages into the trailer when another truck backed into him and pinned him between the truck and the trailer. Serrano was hospitalized for over a month and remains paralyzed from the waist down as a result of the accident. His accident was covered by worker’s compensation insurance with the Texas Worker’s Compensation Insurance Fund (“the Fund”). The Fund paid $247,602.20 for Serrano’s medical bills and $3200.14 for lost wages.

Serrano and his wife, Graciela Chairez Serrano, individually and as next friend of their three minor children, sued Mares, the driver of the truck that backed into him, Saenz, the owner of the truck, and Ruiz, the owner of the trailer. Saenz and Mares settled with the Serranos for $750,000, and the Fund intervened to protect its subrogation interest in the Serranos’ recovery. The trial judge approved the settlement and apportioned the proceeds as $250,000 for Jose Serrano, $200,000 for his wife, and $100,000 for each of his three minor children. The trial judge approved the Fund’s subrogation claim to the $3200.14 for lost wages, but denied the medical claim because the Fund had failed to prove that the payments made for Serrano’s medical expenses were for “reasonable and necessary” expenses.

The Fund brings four points of error. The Fund’s first complaint is that the trial court erred in requiring them to establish that the Serrano’s medical expenses were “reasonable and necessary.” The Fund contends that its only burden is to prove that payments were made to the beneficiary in order to establish their full subrogation right to the proceeds of any third-party recovery by the beneficiary. The Fund’s second and third points of error argue that the evidence was legally and factually insufficient to support the trial court’s apportionment of the settlement proceeds, and that the concentration of the apportionment in Serrano’s family, to whom the Fund’s subrogation rights do not attach, served to deprive the Fund of its proper share of the proceeds of the settlement. The fourth point of error complains of the trial judge’s failure to file findings of fact and conclusions of law. We affirm the judgment of the trial court.

Appellant’s first point of error argues that its subrogation interest in the payments made to Mr. Serrano was established as a matter of law. In reviewing a “matter of law” challenge to an adverse finding of fact, we first examine all the evidence that supports the finding while ignoring all evidence to the contrary. Sterner v. Marathon Oil Co. 767 S.W.2d 686, 690 (Tex.1989). Then, if no evidence supports the fact finder’s answer, we examine the entire record to see if the contrary proposition is established as a matter of law. Id. Appellant first argues that the trial court improperly required it to show that the Mr. Serrano’s medical expenses were “reasonable and necessary.” Next, they argue that, even if they were required to prove that the expenses were reasonable and necessary, they have met this burden.

*2 The right of an insurance carrier to a subrogation interest in a beneficiary’s recovery from a third party is well established. The carrier is entitled to recoupment of its claims first to the extent of all compensation paid. Watson v. Glens Falls Ins. Co., 505 S .W.2d 793, 795 (Tex.1974); Home Indem. Co. v. Pate, 866 S.W.2d 277, 279 (Tex.App.-Houston [1st Dist.] 1993, writ withdrawn). The injured employee has no right to any such funds until the carrier is paid in full. Capitol Aggregates, Inc. v. Great Am. Ins. Co., 488 S.W.2d 922, 923 (Tex.1966); Employers Casualty. Co. v. Henager, 852 S.W.2d 655, 658 (Tex.App.-Dallas 1993, writ denied). However, the precise issue of whether a carrier must first prove that payments made for medical expenses were “reasonable and necessary” before it may enforce its subrogation rights has never been discussed in any reported cases.

Our analysis of this issue is guided by the language of the statute itself.¹ Insurance carriers are entitled to reimbursement for “benefits, including medical benefits, that have been paid for the compensable injury.” Tex. Lab.Code Ann. § 417.002(a) (Vernon 1996). “Benefits” is defined to mean “a medical benefit, income benefit, death benefit, or burial benefit based on a compensable injury.” Tex. Lab.Code Ann. § 401.001(5) (Vernon 1996). There is no question that the payments for Mr. Serrano’s medical bills can not be classified as either income benefits, death benefits, or burial benefits, but must be classified as “medical benefits.”² Medical benefits are defined to mean “payment for health care reasonably required by the nature of a compensable injury.” Tex. Lab.Code. Ann. § 401.001(31) (Vernon 1996). The definition of “health care” also limits that term to “reasonable and necessary medical aid.” Tex. Lab.Code Ann. § 401.001(19) (Vernon 1996). We hold that, under the terms of the statute, the Fund was required to prove that the medical aid for which it made payments of $247,602.20 was “reasonable and necessary.”

The Fund also argues that it did prove that the medical expenses were “reasonable and necessary.” It points to testimony that licensed insurance adjuster DeWayne Lofton had reviewed the bills to determine whether they were reasonable and necessary. However, Lofton did not testify. Instead, the Fund presented the testimony of Judith Wilkins, who testified that Lofton had reviewed the bills. However, Wilkins did not know whether Lofton had reviewed each of the bills, or what his determination had been regarding their reasonableness. Wilkins worked as a team leader in the Fund’s subrogation unit. Her job was to pursue cases where the Fund might be able to assert a subrogation right, not to assess the reasonableness of medical claims made against the Fund. Wilkins testified that she did not consider herself qualified to give an opinion about whether the charges were reasonable and necessary.

*3 Rehabilitation nurse Ann Marie Jaime also testified that the total cost of approximately $250,000 for Mr. Serrano’s medical treatment “appeared” reasonable. However, she had only become aware of Mr. Serrano’s case one week before the trial and had no prior contact with the Serranos. She had little knowledge of the details of Mr. Serrano’s care. She testified that she could not say which parts of Mr. Serrano’s care had been reasonable and which, if any, might not have been reasonable. She could only testify that the overall amount appeared reasonable. Both Wilkins and Jaime lacked the specific knowledge that would be required to establish the Fund’s claim as a matter of law.

The Fund also argues that, under section 413.071 of the Labor Code, payments made for charges that comply with the fee guidelines are presumed to be reasonable and necessary. Tex. Lab.Code Ann. § 413.071 (Vernon 1996). However, the Fund failed to present evidence establishing, as a matter of law, that the charges complied with the fee guidelines. The Fund argues only that it was prohibited from paying charges in excess of the fee guidelines, and so, by inference, the charges must have complied with the fee guidelines. However, the Fund was unable to present evidence that this general prohibition had been followed with any of the charges in this case. The Fund also argues that the statutory definitions relied on by the appellee apply only to whether the medical services were reasonable and necessary, not whether the fees charged for those services were reasonable and necessary. However, the Fund failed to prove as a matter of law either that the medical services provided to Mr. Serrano’s were reasonable and necessary or that the fees charged were reasonable and necessary. Appellant’s first point of error is overruled.

We need not address appellant’s second and third points of error complaining of the apportionment of the settlement because our disposition of the first point renders them moot. Tex.R.App. P. 90(a). We have affirmed the trial court’s finding that the Fund established a subrogation right to only $3200.14. Because the apportionment approved by the trial court gave $250,000 to Mr. Serrano, the Fund has ample funds available to satisfy its subrogation right.

Appellant’s fourth point of error challenges the failure of the trial court to file findings of fact and conclusions of law. The trial court is required to file findings of fact and conclusions of law when presented with a proper request. Tex.R. Civ. P. 296, 297. The failure of the trial court to file findings is presumed to be harmful error unless the record affirmatively shows that the complaining party has suffered no injury. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989). The test for determining whether a party suffered harm by the trial court’s failure to file findings is whether the circumstances of the particular case require an appellant to guess the reason or reasons the judge has ruled against her. Matter of O.L., 834 S.W.2d 415, 418 (Tex.App.-Corpus Christi 1992, no writ).

*4 The appellant in this case had no need to guess what the judge’s reasons were for ruling as he did. The parties argued extensively before the trial judge on the issues of whether the Fund was required to prove that the medical expenses had been reasonable and necessary, and whether that burden of proof had been met. There were no other issues in dispute regarding the subrogation interest. In ruling on these issues, the trial court must have found that the Fund did have the burden of proving that the medical expenses were reasonable and necessary, and that the Fund had failed to meet that burden. Appellant has identified and argued both points in its first point of error alleging that its subrogation interest was established as a matter of law. On the issue of the apportionment of the settlement among the Serranos, the trial court heard evidence about the damages each had suffered, and the final judgment obviously reflects the proportion of damages it felt had been suffered by each. We hold that appellant was not required to guess the trial judge’s reasons for his ruling. Appellant’s fourth point of error is overruled.

The judgment of the trial court is AFFIRMED.

	Footnotes
1		The application of the Fund’s subrogation rights are set out by Tex. Lab.Code Ann. § 417.002, which provides: (a) The net amount recovered by a claimant in a third party action shall be used to reimburse the insurance carrier for benefits, including medical benefits, that have been paid for the compensable injury. (b) Any amount recovered that exceeds the amount of the reimbursement required under Subsection (a) shall be treated as an advance against future benefits, including medical benefits, that the claimant is entitled to receive under this subtitle.
2		The only evidence of the Fund’s payments came from Judith Wilkins, an employee of the Fund. She testified that the Fund “had issued $3200.14 for his lost time or indemnity benefits and we’ve issued $247,604.20 for his medical benefits.” It is the subrogation rights to the $247,604.20 for “medical benefits” that is disputed in this case.