United States District Court, N.D. Texas.
Andrew E. BRAY, Plaintiff,
UTICA MUTUAL INSURANCE CO., Defendant.
Aug. 26, 1998.
*1 Before this court is the motion of the defendant, Utica Mutual Insurance Company (“Utica”), to dismiss the claims of plaintiff, Andrew E. Bray (“Bray”) or, in the alternative, for summary judgment. For the following reasons, defendant’s motion is denied. However, this case is temporarily stayed and administratively closed, pending resolution of all related administrative proceedings currently before the Texas Workers’ Compensation Commission (“TWCC”).
Bray is a workers’ compensation claimant. Utica provides workers’ compensation insurance to Bray’s employer. Bray injured his lower back in 1991 while in the course and scope of his employment. In 1992, Bray underwent back surgery. However, the TWCC determined that Utica was not responsible for any of the costs of the 1992 surgery. See Motion to Dismiss, Exhibit A–4.
During the 1992 surgery, Bray’s doctor installed certain hardware in his back designed to facilitate the fusion of Bray’s vertebrae. In 1996, Bray underwent “follow-up” back surgery to remove the hardware installed during the 1992 surgery. Prior to the follow-up surgery, Utica exercised its right to a second opinion examination. The physician consulted for the purpose of rendering a second opinion determined that the follow-up surgery would benefit Bray. The TWCC then issued a letter informing Utica of the result of the second opinion process and stating that Utica would be liable for the “reasonable and necessary costs of spinal surgery related to the compensable injury.” See Plaintiff’s Original Petition, Exhibit A.
Utica refused to pay for Bray’s follow-up surgery. Utica maintained that it was not liable for the costs of the follow-up surgery because that surgery was necessitated by an earlier surgical procedure for which Utica had no responsibility, and, thus, was not related to any “compensable injury.” Bray’s doctor, who performed the 1992 surgery and the follow-up surgery, filed a Request for Medical Review with the TWCC to determine Utica’s liability for the the follow-up surgery. The dispute involving the follow-up surgery remains pending before the TWCC.
Bray filed suit against Utica in state court in 1998, alleging that Utica’s refusal to pay for the follow-up surgery violates Article 21.21 of the Texas Insurance Code and is a breach of contract. Utica removed Bray’s case to this court on diversity grounds and now moves to dismiss, or, in the alternative, for summary judgment.
Bray’s claim against Utica centers on Utica’s refusal to pay for the follow-up surgery. Utica’s responsibility for the costs of the follow-up surgery hinges upon whether Bray’s case involves a compensable injury. That issue is currently pending before the TWCC. Therefore, this court will apply the doctrine of primary jurisdiction and will temporarily close this case pending the resolution of the compensable injury issue by the TWCC.
Under the doctrine of primary jurisdiction, a court may refrain from exercising its jurisdiction until after an administrative agency has determined a particular question arising in the proceeding before the court. See Penny v. Southwestern Bell Telephone Company, 906 F.2d 183, 187 (5th Cir.1990). Deference to an administrative proceeding under the doctrine of primary jurisdiction is particularly appropriate in situations where the resolution of the case would be aided by an initial determination of the question by the administrative agency. See id. Thus, where an administrative agency has specialized knowledge of the question in the case or is more accustomed to adjudicating the particular type of question, a court may hold the case in abeyance until the administrative agency has had an opportunity to decide the question. See id.
*2 There is a three-prong test for determining whether the primary jurisdiction doctrine will apply in a particular case. The doctrine applies when:
(1) the court has original jurisdiction over the claim before it;
(2) the adjudication of that claim requires the resolution of predicate issues or the making of preliminary findings; and
(3) the legislature has established a regulatory scheme whereby it has committed the resolution of those issues or the making of those findings to an administrative body.
Utica argues that Bray has failed to exhaust his administrative remedies and, therefore, this court has no jurisdiction to hear Bray’s claims for relief.1 However, Bray’s complaint includes extra-contractual and statutory claims for damages. Such claims are cognizable in a federal district court in a diversity case. Cf. Northwinds, 69 F.3d at 1306–07, 1310–11 (rejecting defendant’s contention that the federal court lacked jurisdiction to hear plaintiff’s claims based on common law tort and statutory remedies for damages); Golden, 981 F.Supp. at 473 (noting that, although the TWCC has the power to determine the merits of a coverage dispute, the district court has original jurisdiction over extra-contractual claims arising out of coverage disputes). Therefore, this court has original jurisdiction over the claims before it, and the first prong of the test is satisfied.
With respect to the second prong, Bray’s damages claims depend upon a finding by the TWCC that Bray’s case involves a compensable injury. If the follow-up surgery is not related to any compensable injury, then Utica has no responsibility to pay the costs of that surgery. Furthermore, if Utica properly denied Bray’s claims for payment, there would have been no breach of contract and Bray would not be able to maintain his extra-contractual or statutory claims. Thus, a primary determination of the compensable injury issue by the TWCC would assist the resolution of this case.2
As to the third prong, the Texas Legislature has committed the resolution of disputes related to workers’ compensation to the TWCC. See Tex. Lab.Code Ann. § 410.001 et seq. (Vernon 1996). Moreover, the TWCC routinely adjudicates cases involving the question of whether a compensable injury is present and, thus, has developed specialized knowledge related to the central question in this case. As the TWCC is uniquely qualified to make the initial determination of the compensable injury question, the doctrine of primary jurisdiction applies.
Defendant’s motion to dismiss or, in the alternative, for summary judgment is DENIED. This case is TEMPORARILY STAYED and ADMINISTRATIVELY CLOSED, pending the resolution of all related administrative proceedings currently before the Texas Workers’ Compensation Commission. Either party may reopen this case by filing an appropriate motion within thirty days after the administrative proceedings are concluded.
*3 SO ORDERED.
Utica argues that the dispute regarding Utica’s responsibility for the follow-up surgery must be resolved through administrative proceedings provided for by Texas statute and that, “[u]nless and until those proceedings are concluded,” this court has no jurisdiction to adjudicate the dispute. See Motion to Dismiss at 11.
Utica has submitted to the court the Declaration of Jim Marshall, a claims professional employed by Utica. In this Declaration, Marshall states that “[i]f it is ultimately determined that Utica is responsible for the charges associated with the hardware removal surgery, ... Utica intends to abide by the final ruling and decision on that matter.” It is the Court’s hope that a final determination of Utica’s responsibility for the follow-up surgery by the TWCC will assist the parties in settling Bray’s other claims without the necessity of further court involvement.