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At a Glance:
Morales v. Liberty Mut. Ins. Co.
December 7, 2007
241 S.W.3d 514
Texas Supreme Court
Published Opinion

Morales v. Liberty Mut. Ins. Co.

Supreme Court of Texas.

Margarita MORALES, Individually and as Next Friend of Paulette Morales and Laura Morales, Minor Children of Guadalupe D. Morales, Deceased, Petitioner,


LIBERTY MUTUAL INSURANCE COMPANY and Continental Casualty Company, Respondents.

No. 05–0754.


Argued Nov. 16, 2006.


Decided Dec. 7, 2007.

Attorneys & Firms

*515 Marc S. Tabolsky, Yetter & Warden, L.L.P., Austin, TX, for Petitioner.

David L. Brenner, Amanda Lewis, Burns Anderson Jury & Brenner, L.L.P., Austin, TX, for Respondents.

Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP, Austin, TX, for Amicus Curiae.


Justice O’NEILL delivered the opinion of the Court.

The Texas Workers’ Compensation Act provides alternative avenues for judicial review of a Texas Workers’ Compensation Commission appeals panel decision depending upon whether the nature of the dispute regards “compensability or eligibility for ... benefits” or something else. See section 410.301(a) of the Texas Labor Code, and reverse and remand the case to the El Paso district court for further proceedings.

I. Background

Guadalupe Morales sustained fatal head injuries when he fell from a ladder while repairing the roof of a motel. Contending Guadalupe’s injuries were sustained while in the course and scope of his employment with Turnkey Services, Inc. (insured by Liberty Mutual Insurance Company), State National Bank (insured by Continental Casualty Company) and PGD, Inc. (a nonsubscriber), his wife, Margarita, filed a claim for workers’ compensation insurance benefits. A benefit-review conference was held to attempt to mediate the dispute between Margarita and the insurance carriers, but the parties were unable to reach an agreement and proceeded to a contested-case hearing. The hearing examiner determined that Guadalupe’s employment status at the time of his injury was that of an independent contractor rather than an employee of any of the three named companies, and thus he was not entitled to benefits. The Texas Workers’ Compensation Commission (TWCC) appeals panel affirmed the hearing examiner’s decision, holding that Guadalupe was an independent contractor, not an employee, and therefore he had not suffered a “compensable injury.”

Margarita sought judicial review of the TWCC’s decision by filing two lawsuits, this one in El Paso County and another in Travis County. Among other things, Margarita sought review of the appeals panel’s determination that her husband was not an employee under the Texas Workers’ Compensation Act. Liberty Mutual filed a plea to the jurisdiction in the El Paso proceedings, which the trial court granted. Following dismissal of her suit in El Paso County, Margarita voluntarily nonsuited the Travis County suit. The court of appeals affirmed the trial court’s dismissal of the El Paso case for *516 want of jurisdiction, holding that “the status of being an employee of an insured for which a carrier is liable is an issue of ‘coverage,’ not compensability.” 169 S.W.3d 485, 488.1 We granted Margarita’s petition for review to consider the appropriate avenue for judicial review of a TWCC appeals panel’s decision regarding a worker’s employment status.

II. Discussion

A. Avenues of Judicial Review

The Texas Workers’ Compensation Act provides exclusive compensation benefits for the work-related injuries of a subscribing employer’s employees. 410.201–209. A claimant may appeal a TWCC appeals panel’s decision by filing suit in the district court. Id. § 410.251.

The Act divides judicial review of workers’ compensation appeals by drawing a distinction between issues that concern compensability and those that do not. Id. Id.

TEX. GOV’T CODE § 2001.176(b)(1).

Accordingly, the appropriate judicial review mechanism depends upon the nature of the issue in dispute. Margarita claims that the question of who Guadalupe was working for when he was injured falls under 410.255 of the Labor Code. But first, we address a preliminary issue.

B. Preservation of Employment–Status Issue

As a threshold matter, Liberty Mutual contends the compensability issue is not properly before us because Margarita failed to specifically identify the issue of Guadalupe’s employment status in her original petition to the district court. See Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 449 (Tex.1996), the district court properly exercised jurisdiction over all of the appeals panel’s determinations, including its decision regarding Guadalupe’s employment status.

C. Compensability

Our objective in construing a statute is to determine and give effect to the Legislature’s intent. See Bridgestone/Firestone, Inc. v. Glyn–Jones, 878 S.W.2d 132, 133 (Tex.1994) (stating “[o]nly in the context of the remainder of the statute can *518 the true meaning of a single provision be made clear”)).

TEX. LAB.CODE § 410.301(a). While the Act does not define “compensability or eligibility” or enumerate which issues these concepts concern, it does define other terms that shed light on their meaning. “Benefit” is defined as “a medical benefit, an income benefit, a death benefit, or a burial benefit based on compensable injury.” Id. § 401.011(5). A “compensable injury” is defined as one that “arises out of and in the course and scope of employment for which compensation is payable under [the Act].” Id. § 401.011(10). “Course and scope of employment” is defined as “an activity ... that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer.” Id. § 401.011(12). An “employee” is a “person in the service of another under a contract of hire, whether express or implied, or oral or written,” id. § 401.012(a), and an “employer” is “a person who ... employs one or more employees, and has workers’ compensation insurance coverage,” id. § 401.011(18). Thus, the concept of “compensability” has several elements, any of which may be in dispute depending upon the particular circumstances presented.

In this case, the TWCC hearing examiner determined that Guadalupe Morales was an independent contractor at the time he was injured and thus his injury did not occur in the course and scope of employment with any of the three named defendants. We have identified “whether [the injury] occurred in the course and scope of employment” as an example of an issue that regards compensability under the statute. id. The carriers do not contend otherwise. They acknowledge that course-and-scope inquiries generally concern compensability, but only so long as all potential employers are subscribers. When a potential employer is not a subscriber, they argue, the question of who was the employer at the time of injury becomes an issue of coverage because nonsubscribers are not subject to the Act and the TWCC has no jurisdiction over them.

We do not disagree that assessing a potential employer’s subscriber status concerns coverage under the Act, or that this issue must be resolved before an employer’s liability for workers’ compensation benefits can be determined. But the concepts of coverage and compensability are not necessarily mutually exclusive as the carriers presume. The Act’s judicial-review provisions speak not in terms of “coverage” but of (1) issues concerning “compensability or eligibility for ... benefits” under 410.301(a), and (2) “all issues other than those covered under section 410.255(a). The issue in this case is whether Guadalupe Morales suffered a “compensable injury” that entitles Margarita to recover workers’ compensation death benefits. See id. § 408.181(a) (providing that benefits are payable to the legal beneficiary “if a compensable injury to the employee results in death”). It is true an element of that inquiry may concern a potential employer’s subscriber status for purposes of determining coverage under a policy of workers’ compensation insurance. *519 But resolving that issue in this case will directly impact whether Guadalupe suffered a “compensable injury” and determine Margarita’s eligibility for workers’ compensation benefits. Under these circumstances, we cannot conclude that something “other than” compensability is in issue for purposes of judicial review.

In Cont’l Cas., 19 S.W.3d at 400 n. 6.3

The existence of a compensable injury is the threshold requirement for payment of benefits under the Act. See section 410.301.

III. Conclusion

For the foregoing reasons, we reverse the court of appeals’ judgment and remand this case to the district court for further proceedings consistent with this opinion.



The court of appeals, the trial court, and the parties all treat the issue as one of subject-matter jurisdiction, but we have held that it is not. See Dubai, 12 S.W.3d at 76. Here, it is clear the Legislature did not mean subject-matter jurisdiction, as the remedy it provided was transfer rather than dismissal.


Texas Property and Casualty Insurance Guaranty Association for Paula Insurance Company, Impaired Insurer, and Texas Mutual Insurance Company submitted amicus curiae briefs in support of Margarita’s petition.


The parties cite a number of appellate court decisions in support of their respective positions in this case. See, e.g., Houston Gen. Ins. Co. v. Ass’n Cas. Ins. Co., 977 S.W.2d 634, 636 (Tex.App.-Tyler 1998, no pet.) (holding that the question of which insurance carrier was responsible for the worker’s injury is not one of compensability). However, none of these cases present the precise circumstances now before us and we express no opinion on those decisions.

End of Document