Court of Appeals of Texas, Corpus Christi-Edinburg.
Patrick HALFERTY, Appellant,
FLEXTRONICS AMERICA, LLC; Flextronics International Management Services, Ltd.; and Tom Shaw, Appellees.
Delivered and filed February 15, 2018
*709 On appeal from the 261st District Court of Travis County, Texas.
Attorneys & Firms
Neil Solomon, Patrick Toomey, Zinda & Davis, 8834 North Capital of Texas Highway, Austin, TX 78759, for Appellant.
J. Matthew Sikes, Dykema Gossette PLLC, 1717 Main Street, Suite 4000, Dallas, TX 75201, Ashkan Soleimanpour, Matthews Law Group, 100 Crescent Court, Suite 700, Dallas, TX 75201, for Appellees.
Before Justices Hinojosa
Opinion by Justice Benavides
In this workers’ compensation case, we decide whether appellees Flextronics America, LLC., Flextronics International Management Services, Ltd., and Thomas Alvin Shaw (collectively Flextronics, unless otherwise noted) were entitled to the exclusive remedy defense in a common law negligence action filed against it by an injured subcontracted employee, appellant Patrick Halferty. See TEX. LABOR CODE ANN. § 408.001(a) (West, Westlaw through 2017 1st C.S.). Because we conclude that Flextronics was not entitled to the exclusive remedy defense in this case, we reverse and remand.
Flextronics entered into an agreement with Titan Datacom, Inc. (Titan), to perform various informational technology installs, layouts, designs, and network cablings at a Flextronics facility located in Austin. In the agreement between Flextronics and Titan, Titan agreed to “provide, pay for and maintain in full force and effect” workers’ compensation insurance “in compliance with statutory limits in the respective state/country where work was being performed by Titan.” Titan contracted with another entity known as Outsource, LLC (Outsource) to assist in installing networking cabling at the premises.2 The parties do not dispute that Titan and Outsource complied with the workers’ compensation provision of the agreement to cover all their employees on the project, including Halferty, who was an employee of Outsource.
In September 2013, Halferty was installing cable at the Flextronics facility. This installation required Halferty to climb to the top of a stepladder at Flextronics’s facility. Halferty testified in his deposition that as he descended the ladder, he heard a “roll-up door” open near the stepladder which gave the ladder a “quick shove” that sent him over the ladder causing him to fall to the floor resulting in various personal injuries. The record shows that Shaw, a Flextronics employee, opened the door that pushed the ladder.
Halferty subsequently sued Flextronics for negligence and gross negligence alleging that Shaw, as a Flextronics employee, negligently opened the roll-up door causing *710 Halferty to “fall and sustain serious injuries.”
In response, Flextronics filed a traditional and no-evidence motion for summary judgment. Regarding its traditional motion for summary judgment, Flextronics argued that it is entitled to the Texas Workers’ Compensation Act’s exclusive remedy defense, see id., which would bar Halferty’s claim against it, because as the general contractor, it served as Halferty’s employer for purposes of the Texas Workers’ Compensation Act. See id. §§ 406.123(a), (e) (West, Westlaw through 2017 1st C.S.). Regarding its no-evidence motion, Flextronics asserted that Halferty failed to show any evidence that Flextronics owed him a duty, breached that duty, or demonstrate how any breach of that duty was responsible for his injuries. The trial court granted Flextronics’s traditional motion for summary judgment only, and this appeal followed.
II. FLEXTRONICS’S ENTITLEMENT TO THE EXCLUSIVE REMEDY DEFENSE
By his sole issue, Halferty asserts that the trial court erred by granting Flextronics’s traditional motion for summary judgment because Flextronics failed to establish its entitlement to the exclusive remedy defense bar as a matter of law.
A. Standard of Review
We review the trial court’s summary judgment de novo. Id.
The party moving for summary judgment carries the burden of establishing that no material fact issue exists and that it is entitled to judgment as a matter of law. Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996).
B. Applicable Law
The Texas Workers’ Compensation Act outlines a process by which a general contractor qualifies for immunity from common-law tort claims brought by the employees of its subcontractors known as the “exclusive remedy” defense. TEX. LABOR CODE ANN. § 408.001(a) (“Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee.”).
The first step of the process is that the general contractor and subcontractor must enter into a written agreement under which the general contractor provides workers’ compensation insurance coverage to the subcontractor and the employees of the subcontractor. TEX. LABOR CODE ANN. § 408.001(a)).
Halferty argues that Flextronics is not entitled to summary judgment because it did not “provide” workers’ compensation insurance coverage to Halferty that would entitle him to the exclusive remedy defense. In response, Flextronics disagrees and argues that Flextronics did provide coverage to Halferty pursuant to Texas Labor Code section 406.123(a), did Flextronics “provide” workers’ compensation insurance to Halferty as an employee of Outsource?
1. HCBeck v. Rice
In support of their respective positions, both parties direct us to Id. at 351.
During the construction project, HCBeck entered into a subcontract with Haley Greer. Id. Rice subsequently sued HCBeck for negligence.
HCBeck moved for summary judgment claiming that its original contract with FMR specified that FMR’s OCIP shall apply to all work at the project performed by HCBeck and subcontractors and, but for HCBeck’s subcontract with Haley Greer, Rice would not be working on a project that contractually provided workers’ compensation insurance covering Haley Greer’s employees. Id.
After winning at the trial court and losing at the intermediate appellate court, HCBeck petitioned the Texas Supreme Court to determine whether through its contractual arrangements with FMR and Haley Greer, it “provided” insurance to *712 Haley Greer so as to qualify for immunity under the exclusive remedy defense. Id. at 351–52.
In analyzing the issue, the Texas Supreme Court highlighted that the contract documents contained an alternate insurance paragraph, which stated that HCBeck was specifically identified as the party that was contractually obligated to obtain the insurance to cover employees on the jobsite. Id.
Based on the facts in that case, the Texas Supreme Court observed that the coverage that was actually provided to Haley Greer by FMR under the agreement “was backed by HCBeck’s specific obligation assuring that Haley Greer remained covered in the event FMR decided to discontinue its OCIP.” Id. at 354.
In summary, the Texas Supreme Court held that the exclusive remedy defense is available to a general contractor who, by use of a written agreement with the owner and subcontractors, provides workers’ compensation insurance coverage to its subcontractors and subcontractors’ employees. Id.
2. Application of HCBeck
Turning to the facts of this case, we find id. (“the insurance plan incorporated into both its upstream contract with FMR and its downstream subcontract with Haley Greer included workers’ compensation coverage to Haley Greer’s employees”). Instead, the downstream contract specifically obligated Titan to “provide, pay for and maintain in full force and effect” workers’ compensation *713 insurance for their employees and “any and all subcontractors, or anyone directly or indirectly employed by any of them....” Stated another way, workers’ compensation coverage began with Titan—not with Flextronics.
Second, we note that the contract at issue in this case does not place any onus on Flextronics to ensure that subcontracted employees, like Halferty, were covered as was the case in section 406.123(a).3
3. Statutory Construction of “Provide”
Moreover, our conclusion today draws support not only from the case law, but also from the meaning of “provide” as contemplated by the Texas Workers’ Compensation Act. The meaning of a statute is a legal question, which we review de novo to ascertain and give effect to the Legislature’s intent. Id. We may consider other matters in ascertaining legislative intent, including the objective of the law, its history, and the consequences of a particular construction.
“Provide” is not statutorily defined under the Texas Workers’ Compensation Act, so we apply it according to its common meaning. The common meaning of “provide” in this context is “to supply or make available.” Provide, MERRIAM WEBSTER’S COLLEGIATE DICTIONARY (10th ed. 1996); see also Valadez v. MEMC Pasadena, Inc., No. 01-09-00778-CV, 2011 WL 743099, at *4 (Tex. App.–Houston [1st Dist.] Mar. 3, 2011, no pet.) (mem. op.) (holding that a general contract that “merely” requires a subcontractor to obtain workers’ compensation does not constitute providing coverage within the meaning of the Texas Workers’ Compensation Act that would entitle a general contractor to the exclusive remedy defense).
Further, we acknowledge that to “provide” does not equate to “purchase” and if the legislature intended “provide” to mean “purchase” it would have used “purchase” rather than “provide” or would have defined “provide” to mean “purchase” in the statute’s definition. See HCBeck, 284 S.W.3d at 353; or, Flextronics could have built enforcement mechanisms into its contract with subcontractors—such as withholding payment, or deducting insurance premium costs—that would trigger in the event that the subcontractors failed to provide coverage to its employees.
In summary, based on the record in this case, we conclude that Flextronics is not entitled as a matter of law to the protections and benefits of the exclusive remedy defense because it did not provide workers’ compensation benefits to Halferty. See HCBeck, 284 S.W.3d at 349–54.
We sustain Halferty’s sole issue.
We reverse the trial court’s judgment and remand for further proceedings consistent with this opinion.
This cause was transferred from the Third Court of Appeals pursuant to a docket equalization order issued by the Texas Supreme Court. See TEX. GOV’T CODE ANN. § 73.001 (West, Westlaw through 2017 1st C.S.).
The record is devoid of any written agreement between Titan and Outsource.
While the record shows that Halferty received benefits from Outsource’s workers’ compensation insurance provider due to his injuries, consideration of such evidence is irrelevant to decide the ultimate legal question currently before us today—that is, whether Flextronics was an “employer” under TEX. LABOR CODE ANN. § 406.123(a); 408.001 (West, Westlaw through 2017 1st C.S.).