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Court of Appeals of Texas, Eastland.

KNOX WASTE SERVICE, LLC and Adolpho Martinez, Jr., Appellants

v.

Jason SHERMAN and Melissa Miles Sherman, Appellees

No. 11-19-00407-CV

|

Opinion filed September 30, 2021

On Appeal from the 266th District Court, Erath County, Texas, Trial Court Cause No. CV35857

Attorneys & Firms

James Beam, David F. Johnson, for Appellees.

James Beam, for Appellees.

Gerard Thomas ‘Jerry’ Fazio, Christopher Lollis, for Appellant.

Panel consists of: Bailey, C.J., Trotter, J., and Williams, J.

MEMORANDUM OPINION

W. BRUCE WILLIAMS, JUSTICE

This is an interlocutory appeal of the trial court’s denial of Knox Waste Service, LLC’s (Knox) and Adolpho Martinez, Jr.’s motion to compel arbitration under the terms of an employment contract. Appellee Jason Sherman disputed his electronic signature on the arbitration agreement, an agreement that invoked the Federal Arbitration Act (FAA). See 9 U.S.C. §§ 1–16; TEX. CIV. PRAC. & REM. CODE ANN. § 51.016 (West 2015).

On appeal, Appellants claim that the trial court abused its discretion by:

(1) denying their motion to compel Appellees to arbitrate the personal injury claims against Appellants per the terms of the employment contract;

(2) failing to hold an evidentiary hearing before denying the motion; and

(3) failing to sustain Appellants’ oral motion to strike Appellees’ late response, which contained Sherman’s affidavit denying that he signed the arbitration agreement.

We affirm in part and reverse and remand in part.

I. Background Facts

Knox is a residential and waste collection service operating out of Tye, Texas. Knox employed Sherman to drive its waste collection vehicles and to assist in the collection of waste. Sherman was in the passenger seat of one of Knox’s waste collection vehicles driven by Martinez, another employee of Knox, when the truck was involved in an accident due to “mechanical issues.” Sherman sustained severe injuries as a result.

Sherman and his wife, Appellees, filed a common law action against Appellants for personal injuries and loss of consortium, alleging that Appellants’ negligence, negligence per se, and/or gross negligence was a proximate cause of their damages. All parties represented to the trial court that the suit was a personal injury claim against the employer—a nonsubscriber under the workers’ compensation system of the State of Texas. In response to Appellees’ petition, Appellants filed a motion to compel arbitration under the FAA pursuant to an alternative dispute resolution agreement (the Arbitration Agreement) between Sherman, Knox, and Benefit Staffing—a third-party company that contracted with Knox to perform administrative duties and assist in Knox’s hiring process. Execution of the Arbitration Agreement by Sherman was affirmatively alleged in Appellants’ answer filed on October 8, 2019, and no denial, verified or otherwise, was filed by Appellees prior to the date of the hearing on the motion to compel arbitration. On the evening before the hearing, Appellees filed a response to the motion to compel, attaching an affidavit of Sherman denying that he had signed the Arbitration Agreement. The trial court denied the motion to compel, and this appeal followed.

II. Analysis

We first note that we have jurisdiction to consider this interlocutory appeal pursuant to Section 51.016 of the Texas Civil Practice and Remedies Code, which permits an interlocutory appeal of an order denying a motion to compel arbitration when the FAA governs the arbitration agreement. CIV. PRAC. & REM. § 51.016; see also 9 U.S.C. § 16(a)(1)(B), (C); Beldon Roofing Co. v. Sunchase IV Homeowners’ Ass’n, 494 S.W.3d 231, 236 (Tex. App—Corpus Christi 2015, no pet.).

A. By Express Agreement the FAA was Invoked, but Does it Control Here?

Appellants attached a copy of the Arbitration Agreement purportedly signed by Knox, Sherman, and Jeannie King—an employee and agent for Benefit Staffing at the time the agreement was executed—in support of their motion to compel arbitration. In the Arbitration Agreement, the parties agreed “to resolve all Claims (as identified below) exclusively through mediation and arbitration, rather than through a jury trial, under the terms of this Agreement.... The promises by the Parties to arbitrate their differences, rather than litigate them before courts or other bodies, constitute considerations for this Agreement.” The Arbitration Agreement also states that each party “carefully read this Agreement, understand its terms, and are entering into this Agreement voluntarily and not under any form of duress.” Generally, “a written arbitration agreement is prima facie valid and must be enforced unless the opposing party ... ‘allege[s] and prove[s] that the arbitration clause itself was a product of fraud, coercion, or such grounds as exist at law or in equity for the revocation of the contract.’ ” Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 341 (5th Cir. 2004) (internal quotations omitted) (quoting Nat’l Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d 326, 332 (5th Cir. 1987)). Thus, Appellants’ copy of the signed Arbitration Agreement, by itself, sufficiently establishes the existence of a prima facie valid arbitration. See id.; see also In re DISH Network, L.L.C., 563 S.W.3d 433, 439 (Tex. App.—El Paso 2018, no pet.).

In our review, we note that Section K of the Arbitration Agreement expressly states that “the parties agree that this Agreement will be interpreted, enforced and governed under the [FAA].” Despite this express agreement, Appellees asserted in their response to Appellants’ motion to compel arbitration—as well as on appeal—that the FAA does not control for the following reasons:

1. The FAA’s “transportation worker” exception, see 9 U.S.C. § 1; Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001);

2. Waiver;

3. Sherman’s contention that he did not sign the Arbitration Agreement; and

4. The Arbitration Agreement terms do not require arbitration of a personal injury claim against a nonsubscriber opting out of the Texas workers’ compensation insurance coverage.

We will address each of the contentions made by the parties to determine whether an enforceable arbitration exists. We review de novo whether an enforceable agreement to arbitrate exists. In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003).

1. No Statutory Exclusion: Sherman was not a Transportation Worker

Although express agreements that certain disputes will be governed under the FAA may eliminate the need to establish that the transaction involves interstate commerce, it “does not preclude, however, the necessity of determining whether 9 U.S.C. § 1 excludes the employee from the FAA’s control. This matter must be analyzed under the FAA itself.” W. Dairy Transp., LLC v. Vasquez, 457 S.W.3d 458, 463 n.3 (Tex. App.—El Paso 2014, no pet.) (citing 9 U.S.C. § 1; Circuit City Stores, 532 U.S. at 119). Accordingly, we must determine whether 9 U.S.C. § 1 exempts the Arbitration Agreement from its scope. See id.

The FAA states that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1. The Supreme Court’s plurality opinion in Circuit City interpreted this language to mean that “Section 1 exempts from the FAA only contracts of employment of transportation workers.” Circuit City Stores, 532 U.S. at 119. Although not expressly defined by Circuit City, the term “transportation workers” has generally been defined as those workers “actually engaged in the movement of goods in interstate commerce.” Id. at 112 (quoting Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465, 1471 (D.C. Cir. 1997)); see also Eastus v. ISS Facility Servs., Inc., 960 F.3d 207, 211 (5th Cir. 2020); Rojas v. TK Commc’ns, Inc., 87 F.3d 745, 748 (5th Cir. 1996); Pilot Travel Ctrs., LLC v. McCray, 416 S.W.3d 168, 187 (Tex. App.—Dallas 2013, no pet.). Thus, the exemption should “be afforded a narrow construction.” Circuit City Stores, 532 U.S. at 118; see also Rojas, 87 F.3d at 748.

Several courts have used an eight-factor test—developed by the Eighth Circuit in Lenz v. Yellow Transportation, Inc.—to assist in determining who constitutes a “transportation worker.” 431 F.3d 348, 352 (8th Cir. 2005); see generally W. Dairy Transp., 457 S.W.3d at 465. Appellants apply this test in their brief, but the Fifth Circuit recently and explicitly rejected the adoption of the Lenz test in Eastus. Eastus, 960 F.3d at 211. We also decline to adopt such a test and instead choose to adhere to the general requirement that the worker must actually engage in the movement of goods in interstate commerce. See id.; see also Circuit City Stores, 532 U.S. at 119.

Regardless of whether the Arbitration Agreement is in fact an “employment contract,”1 or whether “waste” constitutes a “good,” we hold that Sherman is not a transportation worker exempted by 9 U.S.C. § 1. To be considered a transportation worker, one must actually engage in the interstate movement of goods. See Circuit City Stores, 532 U.S. at 119; see also Saxon v. Sw. Airlines Co., 993 F.3d 492, 497 (7th Cir. 2021) (“To resolve that question we ask ‘whether the interstate movement of goods is a central part of the class members’ job description,’ meaning that the workers are actively occupied in ‘the enterprise of moving goods across interstate lines.’ ” (quoting Wallace v. Grubhub Holdings, Inc., 970 F.3d 798, 801–02 (7th Cir. 2020))); Eastus, 960 F.3d at 211 (in holding that an airline worker who checked passengers’ tickets as they boarded the plane is not a “transportation worker,” the court noted that “[i]mportant to us is that though the passengers [—i.e., the goods] moved in interstate commerce, Eastus’ role preceded that movement”); Siller v. L & F Distribs., Ltd., No. 96-40549, 1997 WL 114907, at *1 (5th Cir. Feb. 18, 1997) (unpublished) (“[A] ‘carrier is engaged in interstate commerce when transporting goods either originating in transit from beyond Texas or ultimately bound for destinations beyond Texas, even though the route of a particular carrier is wholly within one state.’ ” (quoting Merchants Fast Motor Lines, Inc. v. I.C.C., 528 F.2d 1042, 1044 (5th Cir. 1976))). Here, the record contains no evidence that the waste which Sherman transported was ever moved across state lines or was ever bound for a destination outside of Texas. The record fails to create a fact issue that Sherman is an exempted “transportation worker” under 9 U.S.C. § 1.

Appellees assert that the Arbitration Agreement itself supports a finding that Sherman is a transportation worker. The Arbitration Agreement states, “[t]he parties agree and understand that Employer and / or Benefit Staffing are engaged in transactions involving interstate commerce and that, while performing duties during the course of employment, Employee is engaged in activity that affects interstate commerce.” However, as we discussed above, Circuit City expressly distinguished being “engaged in commerce” from activity merely “affecting commerce” or “involving commerce.” See Circuit City, 532 U.S. at 118 (emphasis added). While the FAA more broadly applies to any activity affecting or involving interstate commerce, the more narrowly construed transportation-worker exemption requires that the worker actually be engaged in the interstate movement of goods. See id.; 9 U.S.C. §§ 1, 2. The Arbitration Agreement stated that the parties were involved in activity “that affects interstate commerce,” which comports with their expressed intent to be governed by the FAA. The Arbitration Agreement does not similarly state that Appellant was engaged in the interstate movement of goods, and there is no evidence in the record to that effect.

Without any evidence that Sherman was actually engaged in the movement of goods in interstate commerce, the “transportation worker” exemption does not apply, and the FAA governs.

2. No Waiver of Appeal

We next address Appellees’ contention that Appellants have “waived their appeal.” Specifically, Appellees contend that Appellants waived their appeal by failing to properly challenge the trial court’s implied findings and by failing to challenge all grounds upon which the trial court’s order could have been based. We disagree.

Appellees correctly note that when no findings of fact or conclusions of law are requested or filed, we must imply all findings of fact that are necessary to support the trial court’s judgment and are supported by the evidence. Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52 (Tex. 2003); Wichita Cty. v. Envtl. Eng’g & Geotechnics, Inc., 576 S.W.3d 851, 861 (Tex. App.—Austin 2019, no pet.) (citing BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002)). However, a presumption exists against waiver of a right to arbitration. Prudential Sec. Inc. v. Marshall, 909 S.W.2d 896, 898 (Tex. 1995) (citing Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983)). As in Marshall, “[t]he record before us in this case does not overcome that presumption. Instead, the record indicates that [Appellants] consistently and timely sought to invoke any contractual rights to arbitration they might have.” Id. Further, it is well settled that when the appellate record includes both the reporter’s and clerk’s records, as it does here, the trial court’s implied findings of fact are not conclusive and may be challenged in this court for legal sufficiency. See Sibley, 111 S.W.3d at 52; Wichita Cty., 576 S.W.3d at 861.

Appellees assert that Appellants have waived their right to appeal because they did not specifically provide issue statements as to each implied finding and that “[i]t does not matter whether Knox and Martinez argued in the body of their brief various arguments.” However, Appellees cite to no authority, and we have found none, which requires that we must disregard the substance of Appellants’ arguments simply because they were not prefaced by an issue statement. To the contrary, Texas courts liberally construe the issues listed on appeal to achieve a just, fair, and equitable adjudication of the litigants’ rights. Holley v. Watts, 629 S.W.2d 694, 696 (Tex. 1982).

Appellees also contend that, because Appellants “have not challenged via argument the implied findings that the Texas Arbitration Act specifically excludes claims for personal injury/workers’ compensation,” Appellants have not challenged implied findings on a theory that could support the trial court’s order; Appellees suggest that we should summarily affirm the trial court’s order on the basis of this unassigned error. Appellants clearly and specifically address this issue in their brief, stating that “[t]he Arbitration Agreement’s plain language provides the FAA governs the agreement pursuant to Employer’s and Benefit Staffing’s involvement in interstate commerce, making any argument stemming from the Texas Arbitration Act preempted.” For these reasons, we conclude that Appellants have not “waived their appeal.”

3. Sherman’s Claim that he did not Sign the Arbitration Agreement

With regard to Appellees’ claim that Sherman did not sign the Arbitration Agreement and that Appellees were therefore not bound by it, several issues arise including the effect and enforceability of an electronic signature. Appellants argue, among other things, that Sherman’s affidavit is insufficient to create a fact question. We agree.

a. Affidavits Denying Electronic Signature — Aerotek

In addressing Sherman’s affidavit and related issues as to whether Appellees are or should be bound by the Arbitration Agreement, we note that the Texas Supreme Court in Aerotek, Inc. v. Boyd recently addressed similar facts and issues. 624 S.W.3d 199 (Tex. 2021). There, an employer filed a motion to compel arbitration against its employees, contending that the employees were bound to arbitrate their dispute pursuant to signed arbitration agreements between the employer and its employees. Id. at 200–02. The employees responded with affidavits denying that the employees “had ever seen, signed, or been presented with the [arbitration agreement].” Id. at 202.

The employer in Aerotek offered evidence of a signed arbitration agreement between the employer and its employees, its hiring and application process, and evidence that established the efficacy of its security procedures for the electronic signatures placed on the documents. Id. at 203–06. The employer utilized multiple security procedures; importantly, the evidence showed that each employee was required to enter personal information known only to the employee during the application process and was later required to input a secure passcode, which was known only to the employee, to log into the program and electronically sign the documents. Id. at 204–06. The employer provided a way in which, if the applicant desired, he could input his information at Aerotek rather than from home. The application program also recorded and timestamped the employee’s actions. Id. at 206. The application could not be submitted until all the steps were completed and all signatures were provided. Id. A candidate who claimed lack of ability to use a computerized hiring application was invited to Aerotek’s office for assistance.

The Texas Supreme Court held that the employer’s evidence conclusively established that the employees signed and agreed to the terms of the arbitration agreement; it also held that the employer’s evidence demonstrating the security procedures surrounding the signature authentication program conclusively proved its reliability such that the signatures on the agreement could be attributed to the employee pursuant to the Texas Uniform Electronic Transactions Act (the Act). See id. at 200, 205–07, 209 (citing TEX. BUS. & COM. CODE ANN. §§ 322.001–.009).

b. Standard of Review

We apply an abuse of discretion standard of review to the trial court’s order. Henry v. Cash Biz, LP, 551 S.W.3d 111, 115 (Tex. 2018). Under this standard, we defer to the trial court’s factual determinations if they are supported by evidence, but we review the trial court’s legal determinations de novo. Id.

To compel arbitration, a party must prove that a valid arbitration agreement exists. Aerotek, 624 S.W.3d at 204. Whether an arbitration agreement is valid and enforceable is a legal question subject to de novo review. In re D. Wilson Constr. Co., 196 S.W.3d 774, 781 (Tex. 2006) (citing J.M. Davidson, Inc., 128 S.W.3d at 227–28). In addressing this legal question, however, we must defer to the trial court’s implied factual finding that Sherman did not sign the Arbitration Agreement if such a finding is “supported by evidence.” See Aerotek, 624 S.W.3d at 204 (quoting Henry, 551 S.W.3d at 115).

c. Sherman: Electronic Signature

In addition to a copy of the signed Arbitration Agreement, Appellants offered two affidavits in support of its validity—one from Matt Knox, Knox’s vice-president, and one from Shelia Clark, the custodian of records for Benefit Staffing. These affidavits confirmed that it was routine practice to send employees to Benefit Staffing after their interview with Knox so that they could read, sign, and complete the necessary introductory documents—which included the Arbitration Agreement—prior to beginning work. Clark testified in her affidavit that these documents are forwarded directly to the new employee’s personal e-mail, unless the employee either does not have a personal e-mail or chooses not to use it, in which case an e-mail address specific to Knox is used to receive and sign the documents. Clark further stated that only after the new employee has signed all the required blanks within the document collection can the documents then be submitted to Benefit Staffing for completion. The affidavits also state that Sherman was sent to Benefit Staffing after his interview with Matt Knox, where he completed all of the required documents under the supervision and assistance of King. Clark stated that Sherman chose not to use his own e-mail address and the documents were sent to “applicant2018@gmail.com” to be completed.

Appellants also provided evidence of the application and documentation process, a copy of all of Sherman’s signed and completed documents, the signature authentication program, and the metadata from the signature authentication certificate, which provided detailed timestamps and records of Sherman’s completion of the documents. The pages of the subject documents were numbered beginning with “Page 1 of 10,” and so on, with the Arbitration Agreement labeled as “Page 7 of 10,” “Page 8 of 10,” “Page 9 of 10,” and “Page 10 of 10,” respectively. Many of the documents that Sherman was required to sign—both before and after the Arbitration Agreement—also included personal identifying information that could only have been known to Sherman at the time they were signed, such as his Social Security number, driver’s license number, bank account and routing number, and other identifying information.

Appellees contend that Appellants failed to produce any evidence of a valid Arbitration Agreement because Appellants’ two affidavits were not made on personal knowledge and are otherwise insufficient to support a finding that a valid Arbitration Agreement exists. We disagree.

We first note that it is inconsequential that neither Matt Knox nor Clark personally observed Sherman sign the Arbitration Agreement. Faced with a similar argument in Aerotek—“[t]he Employees argue[d] that no evidence supports a finding that they signed the MAAs because Marsh did not ‘observe’ them doing so”—the court held that “Marsh did not need to observe them because the hiring application did, invisibly storing in a database an electronic record of each action the Employees took.” Aerotek, 624 S.W.3d at 207. Applying this reasoning to the instant case, neither Matt Knox nor Clark needed to personally observe Sherman signing the Arbitration Agreement because the hiring application did. See id. Regardless, Appellants’ affidavits would, at minimum, be admissible to establish their routine practice of having new employees sign an arbitration agreement and would be admissible to support the reliability and security of their electronic signature authentication program. See generally id.; see also In re Copart, Inc., 619 S.W.3d 710, 716 (Tex. 2021) (per curiam) (holding “such knowledge [of the affiant] has no bearing on [the affiant’s] status as a witness qualified to verify the authenticity of the various documents attached to her declaration”); In re Astro Air, L.P., No. 12-10-00108-CV, 2010 WL 3582657, at *3 (Tex. App.—Tyler Sept. 15, 2010, pet. denied) (mem. op.).

Even so, Appellees assert that Appellants’ affidavits are not conclusive evidence of a valid arbitration agreement nor of any actual assent to be bound by the Arbitration Agreement. In support of this contention, Appellees liken the facts of the instant case to those of Astro Air. There, our sister court determined that evidence demonstrating the routine practice of entering into arbitration agreements with new employees is “not only admissible, but also strong and persuasive that [the employee] was notified of the arbitration agreement and that she signed the arbitration agreement.” Astro Air, 2010 WL 3582657, at *4. However, the court determined that such evidence was not conclusive because the movant was unable to provide the trial court with any actual arbitration agreement signed by the employee. See id.

The case before us is readily distinguishable from Astro Air. Here, not only did Appellants provide evidence of a routine practice, which is “strong and persuasive” evidence that Sherman was notified of and signed the Arbitration Agreement, Appellants also provided an Arbitration Agreement purportedly signed by the parties, as well as metadata showing all of Sherman’s actions beginning when King created the documents for Sherman to read and sign. For the reasons discussed above, we conclude that Appellants presented sufficient evidence of a valid arbitration agreement such that a reasonable factfinder could not have disregarded it in determining whether a valid arbitration agreement exists, at least as it pertains to Appellant Knox. See Aerotek, 624 S.W.3d at 204–07; Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 480 (Tex. 2017); see also Freudensprung, 379 F.3d at 341.

d. Sherman’s Consent by Electronic Signature Denied by Affidavit

In support of their position that Sherman never agreed to be bound by the Arbitration Agreement, Appellees provided only a single, self-interested affidavit from Sherman in which he stated that he never signed, nor was ever asked to sign, the Arbitration Agreement. Appellants contend that Sherman’s affidavit was not fully clear or credible2 and that Appellees failed to produce more than a scintilla of evidence raising a genuine issue of material fact. As relevant to this appeal, Sherman’s affidavit states:

“I am Plaintiff in the above-referenced matter. I met with Knox Waste Services and was offered a position on March 1, 2019.

“During the employment interview I was not provided or shown any paperwork or asked to sign anything that had an arbitration provision in it.

“No one, including Knox Waste Services, provided me with a copy of the Arbitration Agreement at any time during my employment. I did not see that document until after I was injured.

“I did not sign the document alleged to be the Arbitration Agreement either on a computer or in my own handwriting nor did I give any person permission to sign on my behalf.

“I have an email address that I could have used to sign electronic documents, if I had been asked to do so.

Generally, an interested witness’s affidavit must be clear, positive, direct, otherwise credible, free from contradictions and inconsistencies, and readily controvertible. Trico Techs. Corp. v. Montiel, 949 S.W.2d 308, 310 (Tex. 1997) (citing Republic Nat’l Leasing Corp. v. Schindler, 717 S.W.2d 606, 607 (Tex. 1986)). “ ‘Could have been readily controverted’ does not mean that the summary judgment evidence could have been easily and conveniently rebutted, but rather indicates that the testimony could have been effectively countered by opposing evidence.” Id. (citing Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989)).

Regarding his first statement, it is undisputed that Sherman met with Knox and was hired on March 1, 2019. This statement fails to controvert anything.

In his second statement, Sherman only contends that he was not provided or shown any paperwork or asked to sign anything that contained an arbitration provision during the employment interview. However, Sherman was not presented any of the documents to sign until he was sent to Benefit Staffing after his employment interview with Matt Knox that morning. Therefore, this statement also fails to clearly and directly controvert a material issue.

Concerning Sherman’s third statement, Sherman merely asserts that no one provided him with a copy of the Arbitration Agreement at any time and that he did not see it until after he was injured. However, this fails to clearly and directly controvert anything as well because the mere failure to be provided a copy of the Arbitration Agreement does not establish that the Arbitration Agreement was not included in the original set of electronic documents that he signed at Benefit Staffing, nor does it prove that he did not agree to be bound by arbitration. Additionally, a mere assertion that he did not see or read the document is insufficient to establish that he did not receive notice of it. See In re McKinney, 167 S.W.3d 833, 835 (Tex. 2005) (“Absent fraud, misrepresentation, or deceit, a party is bound by the terms of the contract he signed, regardless of whether he read it or thought it had different terms.”).

Sherman’s fifth assertion states that he had an e-mail address that he could have used to sign electronic documents, had he been asked to do so. Similarly here, the statement fails to actually controvert a material issue because Sherman does not affirmatively state that he was not asked to use his personal e-mail address and does not affirmatively state that he was not given the opportunity to use his personal e-mail address to complete the documents. Moreover, Clark stated in her affidavit that the new employee receives the introductory documents directly to their personal e-mail by default, unless the employee does not have a personal e-mail or chooses not to use it. Therefore, at no point would Sherman have ever been asked to use his personal e-mail, as it was his choice to make from the beginning. Therefore, it is immaterial that Sherman “had an email address” that he could have used.

The only statement that could be fairly argued as clearly, positively, and directly controverting anything is Sherman’s fourth assertion stating that he did not sign the document alleged to be the Arbitration Agreement and did not authorize anyone to sign it on his behalf. However, a mere denial by the nonmovant that he did not sign the agreement, without more, fails to create a genuine issue of material fact. See Aerotek, 624 S.W.3d at 208–09. According to Tipps, “[i]f the material facts necessary to determine the issue are controverted, by an opposing affidavit or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to determine the disputed material facts.” Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex. 1992). Some courts have since construed this rule to mean that a party opposing a motion to compel arbitration sufficiently raises a genuine issue of material fact merely by filing an affidavit that denies that party ever signed the agreement. See, e.g., Kmart Stores of Tex., L.L.C. v. Ramirez, 510 S.W.3d 559, 565 (Tex. App.—El Paso 2016, pet. denied). The Texas Supreme Court’s recent decision in Aerotek, however, directly addresses the adequacy of this type of evidence without more being shown. See generally Aerotek, 624 S.W.3d 199.

As we have discussed, the court in Aerotek concluded that the employer had produced clear evidence of a reliable and secure electronic signature procedure such that the signature found on the alleged agreement between the employer and employee could be attributed to the employee. Id. at 207, 209. In contrast, the employees offered affidavits that merely denied that the employee ever signed any arbitration agreement. See id. at 206–07. Based on the record, the court in Aerotek held that the trial court erred in denying the employer’s motion to compel arbitration. Id. at 210. The court in Aerotek concluded that such affidavits were nothing more than mere arguments that the employees did not sign the agreements, and “[b]ecause arguments are not evidence, no evidence supports the Employees’ contentions.” Id. at 208 (footnote omitted). When faced with evidence conclusively demonstrating the reliability of the authentication procedures for electronic signatures, “[m]ere denials do not suffice” to create a genuine issue of material fact. Id. at 209. “An opposing party may, of course, offer evidence that security procedures lack integrity or effectiveness and therefore cannot reliably be used to connect a computer record to a particular person. But that attribution cannot be cast into doubt merely by denying the result that reliable procedures generate.” Id. at 210.

Generally, if a party opposing the motion to compel arbitration denies the existence of an agreement, the court shall summarily determine that issue. CIV. PRAC. & REM. § 171.021(b) (West 2019); see Tipps, 842 S.W.2d at 269. Aerotek expressly holds, as a matter of law, that an affidavit merely denying the fact of whether a party signed the agreement is no evidence of the arbitration agreement’s invalidity. 624 S.W.3d at 208–09. Whether at a summary hearing to determine a motion to compel arbitration or at an evidentiary hearing, no evidence is no evidence. See id.

Importantly, Aerotek noted Ward v. Weaver’s holding that a sworn denial “that neither she nor anyone authorized to act on her behalf had ever signed the deed” created a material fact issue. Id. at 208 n.39 (quoting Ward v. Weaver, 34 S.W.2d 1093 (Tex. Comm’n App. 1931, judgm’t affirmed)). “Whatever Ward’s continued validity is today, it does not control here.” Id. at 208. Accordingly, an affidavit controverting evidence tending to establish a valid agreement to arbitrate must provide more than mere denials in order to raise a genuine dispute of material fact. See id. at 207–09. Otherwise, such an affidavit amounts to no evidence. See id. at 208.

Applying Aerotek to the instant case, the statements contained in Sherman’s affidavit constitute mere arguments and do not create a genuine issue of material fact. See id. With no affirmative defense pled and no evidence of fraud or lack of reliability of Knox’s application security procedures creating a genuine dispute of material fact, no evidentiary hearing was warranted and the trial court was left with no other option than to compel arbitration. See id. at 209–10; Tipps, 842 S.W.2d at 269; In re Jebbia, 26 S.W.3d 753, 757 (Tex. App.—Houston [14th Dist.] 2000, no pet.); see also Jackson v. Royal Caribbean Cruises, Ltd., 389 F. Supp. 3d 431, 445 (N.D. Tex. 2019) (“Just as in summary judgment proceedings, a party cannot avoid compelled arbitration by generally denying the facts upon which the right to arbitration rests; the party must identify specific evidence in the record demonstrating a material factual dispute for trial.” (quoting Tinder v. Pinkerton Sec., 305 F.3d 728, 735 (7th Cir. 2002))). For the same reasons, the trial court could not have implicitly found that Sherman did not sign the agreement, and Sherman’s affidavit did not constitute evidence that could support the trial court’s denial of Appellant Knox’s motion to compel arbitration. See Aerotek, 624 S.W.3d at 204.

It would be contrary to good policy to hold that the efficacy of an electronic signature’s validation could be cast into doubt by a person’s mere denial that he signed the agreement, particularly in light of such weighty evidence to the contrary and without any affirmative demonstration of actual fraud. Just as Aerotek comments,

As Texans continue to move online, the pace of innovation and change in everyday life continues to accelerate.... Although “applying old doctrines” to [online] interactions “is rarely straightforward”, it would be even less so if the electronic contracts governing them—terms of use or service, in many cases—were unnecessarily invalidated. When it comes to access to justice, the courts today are likewise heavily dependent on electronic signatures.... Our policymaking branch of government, the Legislature, has expressly declared it to be the policy of this State to facilitate [electronic] transactions. Courts cannot unnecessarily stand in the way of the Legislature’s attempts to keep pace with that innovation.

Id. at 209–10 (footnotes omitted). We likewise decline to stand in the way of the legislature’s attempt to keep pace with that innovation. We therefore conclude that the trial court abused its discretion in denying Appellant Knox’s motion to compel arbitration.

e. This Arbitration Agreement Does Not Bind Nonsignatories

The parties also dispute whether Appellant Martinez may enforce the Arbitration Agreement. Appellants contend that because Appellees did not separate their claims against each defendant, they “closely intertwine claims asserted against Appellant Knox, a signatory to the arbitration agreement, with their claims against Appellant Martinez.” Furthermore, Appellants contend that “[b]y asserting Appellant Knox is liable [under respondeat superior] for the actions of Appellant Martinez, Appellees create an interest for Appellant Knox to defend any alleged claims against Appellant Martinez.” Appellees contend, however, that Sherman never made any agreement with Martinez to arbitrate such disputes that they may have between them and that, therefore, Martinez cannot seek to compel arbitration pursuant to the Arbitration Agreement at issue here.

“Whether a non-signatory can compel arbitration pursuant to an arbitration clause questions the existence of a valid arbitration clause between specific parties and is therefore a gateway matter for the court to decide.” In re Rubiola, 334 S.W.3d 220, 224 (Tex. 2011) (citing In re Weekley Homes, L.P., 180 S.W.3d 127, 130 (Tex. 2005)). As such, courts apply state contract law. See id. (citing In re Kellogg Brown & Root, Inc., 166 S.W.3d, 732 738 (Tex. 2005)). The involvement of a nonsignatory is an important legal issue to be weighed here because a party cannot generally be forced to arbitrate absent a binding agreement to do so. Jody James Farms, JV v. Altman Grp., Inc., 547 S.W.3d 624, 632 (Tex. 2018). We review the resolution of this question de novo. Id. at 629.

Generally, an obligation to arbitrate not only attaches to the parties who have personally signed the agreement, but may also bind nonsignatories under principles of contract law and agency. See id.; Rubiola, 334 S.W.3d at 224. While “ ‘[a]rbitration agreements apply to nonsignatories only in rare circumstances[,]’ the question of ‘[w]ho is actually bound by an arbitration agreement is [ultimately] a function of the intent of the parties, as expressed in the terms of the agreement.’ ” Rubiola, 334 S.W.3d at 224 (alterations in original) (quoting Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 345 F.3d 347, 355, 358 (5th Cir. 2003)); see also Jody James Farms, 547 S.W.3d at 633; In re Golden Peanut Co., LLC, 298 S.W.3d 629 (Tex. 2009) (nonsignatory wife, children, and heirs bound to resolve wrongful death claims by arbitration pursuant to the arbitration agreement executed by decedent employee and employer). Absent an express intent to include certain nonsignatories as parties, courts have also articulated six scenarios in which nonsignatories may compel arbitration: “(1) incorporation by reference, (2) assumption, (3) agency, (4) alter ego, (5) equitable estoppel, and (6) third-party beneficiary.” Jody James Farms, 547 S.W.3d at 633 (citing Kellogg Brown & Root, 166 S.W.3d at 739).

As written, the terms of the Arbitration Agreement do not include nonsignatories. Furthermore, Appellants do not contend that any one of the above scenarios is specifically applicable. Rather, Appellants rely solely upon another scenario, which the Texas Supreme Court has neither explicitly adopted nor rejected: the “intertwined claims theory,” also known as the “alternative estoppel theory.” See Jody James Farms, 547 S.W.3d at 639–40. Under this theory, “non-signatories can successfully compel arbitration when (1) they have a ‘close relationship’ with a signatory to a contract with an arbitration agreement and (2) the claims are ‘intimately founded in and intertwined with the underlying contract obligations.’ ” Id. at 639 (quoting Thomson–CSF, S.A. v. Am. Arbitration Ass’n, 64 F.3d 773, 779 (2d Cir. 1995)). In order for this theory to apply, however, “ ‘the obligation to arbitrate depends on consent’; alternative estoppel requires not only a dispute intertwined with the contract but also a relationship between the parties that developed in a manner that makes it ‘unfair’ not to compel arbitration.” Id. (quoting Sokol Holdings, Inc. v. BMB Muani, Inc., 542 F.3d 354, 361 (2d Cir. 2008)).

Here, although the claims against both Appellants are virtually identical, they sound in tort law and are not contractual in nature. Because the dispute is not closely intertwined with the underlying contract, Appellants have failed to show the applicability of an alternative estoppel theory. See id. Without establishing that some theory applies that would permit Appellant Martinez, a nonsignatory, to enforce the Arbitration Agreement, we conclude that the trial court did not abuse its discretion in denying Appellants’ motion to compel arbitration as it pertains to Appellant Martinez.

Our decision to permit Appellees to proceed separately in a common law claim against Martinez, in his individual capacity, does not require risking inconsistent findings on issues of liability regarding the same accident or the uneconomic use of judicial resources. During the hearing before the trial court, Appellants specifically requested a stay of the remaining trial court proceedings while the matter is in arbitration; further, Sections 171.021(c) and 171.025 of the Texas Civil Practice and Remedies Code may require it. The FAA requires courts to stay litigation of issues that are subject to arbitration. In re Merrill Lynch Tr. Co. FSB, 235 S.W.3d 185, 195 (Tex. 2007) (citing 9 U.S.C. § 3). While the mandatory stay references parties to the arbitration agreement, a nonsignatory party’s claims may also be subject to the mandatory stay. See id. “We note the Texas Supreme Court has commented on a stay being appropriate to prevent ‘a non-signatory affiliate [from] simultaneously conduct[ing] discovery and chip[ping] away at the same issues in litigation.’ ” HEB Grocery Co. L.P. v. Del Cid, No. 04-19-00058-CV, 2019 WL 3432087, at *3 n.2 (Tex. App.—San Antonio July 31, 2019, no pet.) (mem. op.) (alterations in original) (quoting In re Merrill Lynch & Co., 315 S.W.3d 888, 892 (Tex. 2010)).

4. Construction: Nonsubscriber Claims are not Excluded from Arbitration

As we stated above, both federal and Texas policy strongly favor arbitration. See Henry, 551 S.W.3d at 115. Thus, once the party seeking enforcement establishes that a valid arbitration agreement exists between the parties, a presumption arises in favor of arbitration that the disputed claims fall within the scope of the agreement. See id.; Rojas, 87 F.3d at 749 (citing City of Meridian, Miss. v. Algernon Blair, Inc., 721 F.2d 525, 527–28 (5th Cir. 1983)). The presumption in favor of arbitration “is so compelling that a court should not deny arbitration ‘unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation which would cover the dispute at issue.’ ” Marshall, 909 S.W.2d at 899 (quoting Neal v. Hardee’s Food Sys., Inc., 918 F.2d 34, 37 (5th Cir. 1990)).

In construing a written contract, our primary concern is to ascertain the true intentions of the parties as expressed in the instrument. J.M. Davidson, 128 S.W.3d at 229. “As with any deed or contract, our task is to determine and enforce the parties’ intent as expressed within the four corners of the written agreement.” Piranha Partners v. Neuhoff, 596 S.W.3d 740, 743 (Tex. 2020) (citing Perryman v. Spartan Tex. Six Capital Partners, Ltd., 546 S.W.3d 110, 117–18 (Tex. 2018)). “When construing a contract, the court’s primary concern is to give effect to the written expression of the parties’ intent.” Sundown Energy LP v. HJSA No. 3, Ltd. P’ship, 622 S.W.3d 884, 888 (Tex. 2021) (citing Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994)). Words must be construed “in the context in which they are used.” Id. (quoting URI, Inc. v. Kleberg Cty., 543 S.W.3d 755, 764 (Tex. 2018)). Equally important, we avoid construing contracts in a way that renders contract language meaningless. Id. (citing Piranha Partners, 596 S.W.3d at 747. Whether the agreement is ambiguous is a question of law that we decide de novo. URI, 543 S.W.3d at 763. “[W]e look not for the parties’ actual intent but for their intent as expressed in the written document. We consider the entire agreement and, to the extent possible, resolve any conflicts by harmonizing the agreement’s provisions, rather than by applying arbitrary or mechanical default rules.” Piranha Partners, 596 S.W.3d at 744 (footnote and citation omitted).

We note at the outset that the Arbitration Agreement is not the epitome of clarity. For example, the capitalization of defined terms is not used uniformly; some phrases appear to be cut and pasted from another source; and certain punctuation is missing. However, the Arbitration Agreement appears to be a form-agreement used by all of Knox’s employees. The provisions of the Arbitration Agreement can be harmonized and given a definite or certain legal meaning, and therefore it is not ambiguous. See id. Given the presumption in favor of arbitration, the unambiguous Arbitration Agreement before us can be reasonably interpreted to cover the dispute at issue here.

Section B of the Arbitration Agreement states in relevant part:

B. CLAIMS COVERED BY AGREEMENT

Except as excluded by Section C below, this Agreement applies to ... (4) all tort Claims, including negligence, negligence per se, or gross negligence (including Claims for personal or bodily injury, whether or not sustained on the job) ....

This portion of Section B appears to be a fairly comprehensive incorporation of claims for personal and bodily injury that could be asserted against the employer, including nonsubscriber suits, “[e]xcept as excluded by Section C below.”

In light of the stated exception, we examine Section C, which states in relevant part:

C. CLAIMS NOT COVERED BY AGREEMENT

Excluded from this agreement are (1) administrative claims by employee for unemployment compensation benefits and for workers’ compensation or occupational accident benefits (except that this Agreement does not apply to claims for job-related injuries against an entity that is not Employee’s Employer and to Claims for an injury to or the death of employee that are not covered by Workers’ Compensation ....

In reference to the exceptions to claims that are subject to arbitration under Section C, Appellees argue that the phrase “and to Claims for an injury to or the death of employee that are not covered by Workers’ Compensation” refers to nonsubscriber claims against the employer and that, therefore, Appellees are entitled to maintain their common law nonsubscriber suit against Appellants. With their nonsubscriber claims, Appellees unambiguously asserted claims for negligence; negligence per se; gross negligence; and violations of certain laws, statutes, regulations, or ordinances.

In consideration of Appellees’ interpretation, we may not ignore that a presumption in favor of arbitration exists, and we may not disregard Section B of the Arbitration Agreement; rather, we must harmonize it if we can “and give effect to all the provisions of the contract so that none will be rendered meaningless.” J.M. Davidson, 128 S.W.3d at 229. Under Appellees’ narrow interpretation, the language in Section B that expressly includes “all tort Claims, including negligence, negligence per se, or gross negligence (including Claims for personal or bodily injury, whether or not sustained on the job)” would be rendered meaningless because there would be no personal injury claims of the employee left that Knox could arbitrate; as a nonsubscriber, all on-the-job personal injury claims that an employee may have against Knox would necessarily be a claim for injury to or death of an employee that is not covered by workers’ compensation.

Appellees’ interpretation also fails to consider the context in which this particular exclusionary language is written. The language upon which Appellees rely is notated within an introductory parenthetical (although there is no closing parenthesis), which is stated only as an exception to the exclusion of administrative claims under Section C(1). As written, the parenthetical language is intended to modify what administrative claims may be excluded. Thus the “claims” referred to by the parenthetical language, when harmonized with the full contextual language chosen by the parties, excludes, in addition to the three specified administrative claims for injury, any other “administrative claims” that are not covered by workers’ compensation. Further, defined claims that are not covered (1) include claims against those other than the employer, and (2) a distinction is made between “claims for job-related injuries” and “[c]laims for an injury ... not covered by Workers’ Compensation”3 (emphasis added). The phrase within Section C(1) upon which Appellees rely in their common law nonsubscriber personal injury claim against the employer is not only restricted to administrative claims but also to claims against nonemployers, or for injury that is not defined as “job-related.”

Accordingly, Section C(1) cannot be reasonably interpreted to be an exception to Section B. Appellees’ nonsubscriber claims against Knox therefore squarely fall into Section B’s list of claims that must be arbitrated—from which Section C gives no exception. Given our de novo construction of the contract and the presumption in favor of arbitration, it could not be found by the trial court “with positive assurance” that the Arbitration Agreement “is not susceptible of an interpretation which would cover the dispute at issue.” Marshall, 909 S.W.2d at 899 (quoting Neal, 918 F.2d at 37). The trial court, therefore, abused its discretion in finding otherwise.

For these reasons, we conclude that Appellants provided conclusive evidence demonstrating that a valid arbitration agreement exists between the parties and that, as a matter of law, Appellees’ claims fall within its scope. To the extent the trial court denied Appellants’ motion to compel arbitration because it determined that Appellants failed to meet their burden, the trial court erred.

B. Defenses to Enforcement

As a defense to enforcement, Appellees contend that Appellants waived their right to compel arbitration because they failed to comply with a mediation requirement within the Arbitration Agreement. As relevant here, the Arbitration Agreement states: “E. MEDIATION AS PRECONDITION TO ARBITRATION[:] Before arbitrating any Claim timely made under this Agreement, the Parties will attempt in good faith to resolve the Claim by mediation....” Appellees specifically contend that because Appellants did not seek mediation before filing their motion to compel, Appellants failed to comply with the terms of the Arbitration Agreement and therefore cannot compel arbitration.

Generally, “a trial court cannot compel arbitration when the provision [permitting arbitration] requires the parties to mediate before arbitration.” See Rodriguez v. Tex. Leaguer Brewing Co. L.L.C., 586 S.W.3d 423, 430 (Tex. App.—Houston [14th Dist.] 2019, pet. denied) (quoting Amir v. Int’l Bank of Commerce, 419 S.W.3d 687, 692 (Tex. App.—Houston [1st Dist.] 2013, no pet.)). “However, even when the agreement requires the parties to mediate before arbitration, a party who proceeds first to litigation waives the right to mediation and cannot assert the mediation provision as a condition precedent to arbitration.” Id. (citing LDF Constr., Inc. v. Bryan, 324 S.W.3d 137, 146–47 (Tex. App.—Waco 2010, no pet.)). Here, Appellees first proceeded to litigation when they filed their petition without first pursuing mediation. Accordingly, Appellees waived their right to complain of mediation as a precondition to arbitration. See id.

Appellees also contend that one possible basis upon which the trial court could have based its judgment was that Appellants failed to establish that Sherman “knowingly and voluntarily” waived his right to a jury trial. However, a conspicuous jury waiver provision is “prima facie evidence of a knowing and voluntary waiver and shifts the burden to the opposing party to rebut it.” In re Gen. Elec. Capital Corp., 203 S.W.3d 314, 316 (Tex. 2006) (per curiam). Here, the Arbitration Agreement conspicuously noted that the parties “agree to resolve all Claims ... exclusively through mediation and arbitration, rather than through a jury trial, under the terms of this Agreement.

C. Evidentiary Hearing

Both Appellants and Appellees contend that the others’ evidence was insufficient to raise a genuine dispute of material fact as to the Arbitration Agreement’s validity and that the trial court was therefore required to summarily determine the issue. Additionally, both sides contend that, in the alternative, their own evidence at least raised a genuine dispute of material fact. The parties’ position on appeal is that, in the alternative, the matter should be remanded to the trial court for an evidentiary hearing.

Even if we assume that this issue was preserved, and assuming without holding that the trial court did not abuse its discretion in refusing to strike Appellees’ response and affidavit, we have already held above that the affidavit of Sherman was not sufficient to create a fact question. Therefore, no evidentiary hearing is required under these circumstances. Because Appellees failed to produce evidence to raise a genuine issue of material fact, no evidentiary hearing was required, and the trial court had no other alternative than to compel arbitration. See Aerotek, 624 S.W.3d at 206–10; Jebbia, 26 S.W.3d at 757; see also Nabors Drilling USA, LP v. Carpenter, 198 S.W.3d 240, 246–47 (Tex. App.—San Antonio 2006, no pet.).

D. Timeliness of Response

Appellants also contend that the trial court erred in considering Appellees’ response—which included Sherman’s affidavit—because it was filed the evening before the hearing on the motion to compel arbitration and was thus untimely. Appellants preserved their objection by obtaining an oral ruling from the trial court and then a written order from the trial court overruling the objection. Because we hold that the trial court should have compelled arbitration, we need not address this issue.

III. This Court’s Ruling

We affirm the judgment of the trial court as it pertains to Appellant Martinez. We reverse the judgment of the trial court as it pertains to Appellant Knox, and we remand the cause with instructions to compel arbitration between Knox and Appellees.

Footnotes

1

At the hearing on Appellants’ motion to compel arbitration, Appellants argued that an arbitration agreement is not necessarily an “employment contract” to which 9 U.S.C. § 1 applies. Regardless of whether or not the agreement here is actually an employment contract, Appellants appear to have abandoned this argument on appeal. Therefore, on the issue of the applicability of the FAA, we assume, without deciding, that the Arbitration Agreement is an “employment contract” under 9 U.S.C. § 1.

2

We note that Appellants also assert that Sherman’s affidavit does not comply with the evidentiary rules governing affidavits and is therefore inadmissible. Specifically, Appellants contend that because the jurat within Sherman’s affidavit states that “Landon Northcutt” personally appeared before the notary, the affidavit does not adequately state that Sherman was properly sworn. We decline to discuss whether Sherman’s affidavit complies with the requisite evidentiary rules, as Appellants did not object to the admissibility of Sherman’s affidavit before the trial court; therefore, Appellants have waived this argument on appeal. See TEX. R. CIV. P. 166a(f) (defects to the form of an affidavit must be objected to or else waived on appeal); ACI Design Build Contractors Inc. v. Loadholt, 605 S.W.3d 515, 518 (Tex. App.—Austin 2020, pet. denied) (citing Mansions in the Forest, L.P. v. Montgomery Cty., 365 S.W.3d 314, 317 (Tex. 2012)) (holding that defects in a jurat concerning whether the affidavit was properly sworn to are defects in form).

3

A bodily injury that is not “job-related” is typically not a covered claim by workers’ compensation insurance. There is a myriad of fact situations where claims for an injury or death may not be covered by workers’ compensation including but not limited to intentional torts. Mo-Vac Service Company, Inc. v. Escobedo, 603 S.W.3d 119 (Tex. 2020).

Court of Appeals of Texas, Eastland.

MARK WHEELER, CINDY WHEELER, JEREMY RICH, AND DAVID KISER, Appellants

v.

BRANDON SCOTT FREE, RINGO DRILLING I, L.P., AND RINGO MANAGEMENT COMPANY, L.L.C., Appellees

No. 11-19-00256-CV

|

Opinion filed August 26, 2021

On Appeal from the 259th District Court

Shackelford County, Texas

Trial Court Cause No. 2010-070

Panel consists of: Bailey, C.J., Trotter, J., and Williams, J.

OPINION

JOHN M. BAILEY CHIEF JUSTICE

This is a personal injury case arising from a single-vehicle accident. Appellants Mark Wheeler,1 Jeremy Rich, and David Kiser were passengers in Brandon Scott Free’s vehicle. Wheeler, Rich, Kiser, and Free all worked for Appellees Ringo Drilling I, L.P. and Ringo Management Company, L.L.C. (collectively Ringo). At the time of the accident, Free was transporting Wheeler, Rich, and Kiser from an Allsup’s Convenience Store in Taylor County to Ringo’s drilling rig located in Throckmorton County.

Appellants filed suit against Free2 and Ringo, alleging that the accident was caused by Free’s negligence and that Ringo was vicariously liable for Free’s negligence under the doctrine of respondeat superior. Appellants also alleged that Ringo was directly liable for the negligent hiring, training, and retention of Free. In a single issue, Appellants appeal the trial court’s order granting summary judgment in favor of Ringo. We affirm.

Background Facts

Ringo employed Free, Wheeler, Rich, and Kiser as a drilling crew to operate one of its drilling rigs. Ringo produced summary judgment evidence that it was a subscriber to workers’ compensation insurance at the time of the accident. Ringo also produced evidence that the crew would meet at a location in Abilene, get in a single vehicle, and then drive to the drill site.

Under Ringo’s “Drive pay” policy, one member of the crew was paid a per diem to furnish transportation for himself and additional crew members to drive to the drill site. Jeff Kovach of Ringo testified at his deposition that the drive pay was for fuel and use of a personal vehicle. He further testified that the crew decided who among them is paid the drive pay. Logan McDonald, Ringo’s human resources manager, testified that participation in the carpool was voluntary and that the crew members could have driven to the drilling rig on their own.

For this particular drill site, the driller, Kiser, was the crew member that was being paid drive pay, and the rate was $67.50 a day because the rig was located over fifty miles away from Ringo’s office. On the date of the accident, however, Kiser’s vehicle was inoperable. Kiser asked Free to drive that night, and Kiser paid for the fuel for Free’s vehicle. Free testified that he did not receive drive pay for the date of the accident.

Ringo moved for traditional summary judgment, asserting that Appellants’ negligence action was precluded by the exclusive remedy provision of the Texas Workers’ Compensation Act (the Act).3 See TEX. LAB. CODE ANN. § 408.001(a) (West 2015). In the alternative, for Appellants’ respondeat superior claim against Ringo, Ringo asserted that Free was not in the course and scope of employment. Appellants moved for partial summary judgment, arguing that Ringo’s human resources manager, McDonald, admitted during his deposition that Wheeler, Rich, and Kiser were not in the course and scope of their employment at the time of injury. The trial court granted summary judgment in favor of Ringo, but it did not specify the grounds for its decision.

Analysis

We review the trial court’s grant of summary judgment de novo. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018) (citing Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003)). When both parties move for summary judgment, we review the evidence presented by both sides and “render the judgment the trial court should have rendered.” SeaBright Ins. Co. v. Lopez, 465 S.W.3d 637, 641–42 (Tex. 2015) (citing Comm’rs Court of Titus Cty. v. Agan, 940 S.W.2d 77, 81 (Tex. 1997)). When the trial court’s order does not specify the grounds for its summary judgment, we will affirm the summary judgment if any of the theories are meritorious. Knott, 128 S.W.3d at 216.

A party moving for traditional summary judgment bears the burden of proving that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254, 257 (Tex. 2017). To be entitled to a traditional summary judgment, a defendant must conclusively negate at least one essential element of the cause of action being asserted or conclusively establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). Evidence is conclusive only if reasonable people could not differ in their conclusions. City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). If the movant initially establishes a right to summary judgment on the issues expressly presented in the motion, then the burden shifts to the nonmovant to present to the trial court any issues or evidence that would preclude summary judgment. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678–79 (Tex. 1979).

In its motion for summary judgment, Ringo alleged that Wheeler, Rich, and Kiser were in the course and scope of employment under the Act at the time of the accident and that the Act’s exclusive remedy provision barred Appellants’ negligence claims against Ringo. See LAB. § 408.001(a). In this regard, the Act provides that “[r]ecovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage ... for the death of or a work-related injury sustained by the employee.” Id.

Whether Wheeler, Rich, and Kiser are subject to the Act’s exclusive remedy provision is dependent on the manner in which the Act defines course and scope of employment. See SeaBright Ins. Co., 465 S.W.3d at 642. Under the Act, a compensable injury is “an injury that arises out of and in the course and scope of employment for which compensation is payable under [the Act].” LAB. § 401.011(10). Course and scope of employment means “an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and 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). The Act’s definition of course and scope of employment requires “the injury to ‘(1) relate to or originate in, and (2) occur in the furtherance of, the employer’s business.’ ” SeaBright Ins. Co., 465 S.W.3d at 642 (quoting Leordeanu v. Am. Prot. Ins. Co., 330 S.W.3d 239, 241 (Tex. 2010)).

Ringo also alleged that, for liability purposes, Free was not in the course and scope of his employment, and that it owed no duty to Appellants with respect to Free’s act of driving the crew at the time of the accident. Whether Free was in the course and scope of employment at the time of the accident is determined under the common-law doctrine of respondeat superior. See Painter v. Amerimex Drilling I, Ltd., 561 S.W.3d 125, 130–31 (Tex. 2018) (Painter I).

Painter I and its progeny demonstrates the difference in the source of the law for resolving the question of course and scope of employment. The claimants in Painter I were employees of Amerimex. Id. at 129. They sued Amerimex asserting that it was vicariously liable for the negligent conduct of another one its employees as he drove the crew away from a drilling rig. Id. In Painter I, the Texas Supreme Court determined that, under the common law, a fact issue existed as to whether the driver was acting within the course and scope of his employment at the time of the accident. Id. at 130–39. On remand, the El Paso Court of Appeals addressed whether the passengers were in the course and scope of employment under the Act. Painter v. Amerimex Drilling I, Ltd., No. 08-19-00226-CV, 2021 WL 1345680, at *1 (Tex. App.—El Paso Apr. 12, 2021, no pet. h.) (Painter II).

We conclude as a matter of law that, under the common-law doctrine of respondeat superior, Free was not in the course and scope of his employment at the time of the accident. See Painter I, 561 S.W.3d at 130–39. Accordingly, we do not address Ringo’s contention that Wheeler, Rich, and Kiser were in the course and scope of employment under the Act at the time of the accident.

“Under the common-law doctrine of respondeat superior, or vicarious liability, ‘liability for one person’s fault may be imputed to another who is himself entirely without fault solely because of the relationship between them.’ ” Id. at 130 (quoting St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 540 (Tex. 2002) (plurality op.)). Vicarious liability is implicated in the employer–employee relationship if the employee’s negligent acts were within the course and scope of his employment. Id. at 131 (citing Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 757 (Tex. 2007)). It is undisputed that Free was Ringo’s employee. The critical question to be answered in this case is whether Free was “doing his job” at the time of the accident. See id. at 132. This element “hinges on an objective assessment of whether the employee was doing his job when he committed a tortious act.” Id.

Painter I involved a driller that was driving fellow crew members to lodging away from the drilling rig. Id. at 128–29. There was summary judgment evidence that one of the driller’s duties was to drive his crew to and from the drilling site and that he was paid a “bonus” for performing this task. Id. at 133. The court noted that, in the context of workers’ compensation law, a “coming-and-going” rule has been recognized wherein an employer is generally not liable for the acts of its employees while traveling to and from work. Id. at 136. The court further noted that this rule has been extended to the vicarious-liability context. Id. (citing Mancil v. Stroud, No. 11-13-00354-CV, 2016 WL 932949, at *3 (Tex. App.—Eastland March 10, 2016, no pet.) (mem. op.)). The court recognized that an exception to the coming-and-going rule exists when the employee undertakes a “ ‘special mission at the direction of his employer’ or is otherwise performing ‘a service in furtherance of [his] employer’s business with the express or implied approval of [his] employer.’ ” Id. (alterations in original) (quoting J & C Drilling Co. v. Salaiz, 866 S.W.2d 632, 636 (Tex. App.—San Antonio 1993, no writ); Gebert v. Clifton, 553 S.W.2d 230, 232 (Tex. App.—Houston [14th Dist.] 1977, writ dism’d)). The court found that a fact question existed as to whether the driller was in the course and scope because he was assigned the task of transporting the crew as a part of his job duties and he was compensated for this task. Id. at 138–39.

Appellants contend that at least a fact question exists as to whether Free was in the course and scope of his employment at the time of the accident because he was performing a specifically assigned task for the benefit of his employer at the time of the accident. We disagree. We first note that the facts in this case are distinguishable from the circumstances in Painter I. The driller in Painter I was specifically assigned the task of transporting the crew to and from the drill site. Id. at 133. He was also compensated for this task in the form of a payment referred to as a “bonus.” Id. The driller testified that he would have looked for work elsewhere if he was not paid this compensation for transporting the crew. Id. at 133 n.10.

Here, a specific crew member was not assigned the task of transporting the crew to and from the drill site. Furthermore, the crew member who drove the crew to the drill site was not compensated for driving the crew—he only received a travel allowance. In this regard, Ringo’s “drive pay” policy provided that the driller was responsible for designating on the time sheet the person that was to receive the drive pay for each “tour.” The drive pay was $67.50 for distances of over fifty miles and it was $58.50 for distances under fifty miles. Thus, the drive pay paid by Ringo was basically reimbursement for the crew member’s travel expenses for transporting the crew to the drill site.

The facts in this case are analogous to the facts in Pilgrim v. Fortune Drilling Co., 653 F.2d 982 (5th Cir. 1981) (applying Texas law).4 The employer in Pilgrim paid a travel allowance to a single member of the crew, the recipient of which was decided among the crew members.5 653 F.2d at 983. The employees were not on the payroll while traveling to and from the drill site. Id. As noted by the Texas Supreme Court in Painter I, the Fifth Circuit held in Pilgrim that “neither the long distance between the employees’ homes and the remote work site nor the payment of a travel allowance to one crew member per day was sufficient to create a special mission for the employer’s benefit that would remove the case from the ambit of the coming-and-going rule.” Painter I, 561 S.W.3d at 137 (citing Pilgrim, 653 F.2d at 987–88).

We agree with the holding in Pilgrim that an employer’s act of merely paying a travel reimbursement to an employee does not place the employee within the course and scope of employment for vicarious liability to be imposed against the employer. As applied to this case, Free was not specifically assigned the task of transporting the crew to the drill site. Furthermore, Free did not receive drive pay for the trip on the day of the accident. In fact, there is no evidence that any managers at Ringo even knew Free would be driving the crew on the date of the accident. As noted by the court in Pilgrim, the task of getting to and from the place of work is the responsibility of the employee, and his travel to a work site is not part of his service to his employer. 653 F.2d at 987–88. Furthermore, travel to a work site is not a mission with a special benefit to the employer so as to remove the employee from the coming-and-going rule. Id. at 987. Accordingly, we hold that the summary judgment evidence in the case before us conclusively established that Free was not in the course and scope of his employment while driving himself and his fellow crew members to Ringo’s drill site.

Our analysis is not complete, however, because Appellants also asserted claims of direct negligence against Ringo. Specifically, Appellants asserted that Ringo negligently hired, trained, and retained Free as an employee—because Ringo knew or should have known that Free was a reckless and incompetent driver.

“Negligent hiring, retention, and supervision claims are all simple negligence causes of action based on an employer’s direct negligence rather than on vicarious liability.” See Dangerfield v. Ormsby, 264 S.W.3d 904, 912 (Tex. App.—Fort Worth 2008, no pet.). Thus, a claim of negligent hiring, supervision, or retention is not dependent upon a finding that the employee was acting in the course and scope of his employment when the tortious act occurred. Dieter v. Baker Serv. Tools, a Div. of Baker Int’l, Inc., 739 S.W.2d 405, 408 (Tex. App.—Corpus Christi–Edinburg 1987, writ denied). However, the plaintiff’s injury must be the result of job-related conduct. Peek v. Equip. Servs., Inc., 906 S.W.2d 529, 534 (Tex. App.—San Antonio 1995, no writ); Dieter, 739 S.W.2d at 408. “Were such a connection not required, an employer would essentially be an insurer of the safety of every person who happens to come into contact with his employee simply because of his status as an employee.” Dieter, 739 S.W.2d at 408 (quoting Bates v. Doria, 502 N.E.2d 454, 459 (Ill. App. Ct. 1986)). This nexus requirement is an element of foreseeability, and foreseeability is an essential component of both proximate cause and duty. Fernea v. Merrill Lynch Pierce Fenner & Smith, Inc., 559 S.W.3d 537, 548 (Tex. App.—Austin 2011), judgm’t withdrawn, appeal dism’d, No. 03-09-00566-CV, 2014 WL 5801862 (Tex. App.—Austin Nov. 5, 2014, no pet.) (mem. op.); see Mellon Mortg. Co. v. Holder, 5 S.W.3d 654, 659 (Tex. 1999).

Ringo asserted in its motion for summary judgment that it owed no duty to Appellants for an off-duty employee’s act of driving coworkers to work. Ringo cited Nabors Drilling, U.S.A., Inc. v. Escoto, 288 S.W.3d 401 (Tex. 2009), for this proposition. Nabors Drilling involved a claim against an employer for a vehicle accident caused by its employee who was alleged to be fatigued as a result of his work conditions. 288 S.W.3d at 404. The court held that the employer owed no duty for its off-duty employee’s acts. Id. As noted by the court in Nabors Drilling, “[e]mployers in Texas generally do not owe a duty to third parties for the tortious activities of off-duty employees occurring off the work site.” Id. at 403 (citing Loram Maint. of Way, Inc. v. Ianni, 210 S.W.3d 593, 594 (Tex. 2006)).6 Exceptions to this rule have only been recognized in very limited circumstances when the employer exercises control over the injury-causing conduct of its employee. Id.

“The existence of a duty is a question of law.” Id. at 404. “An employer ordinarily will not be liable for torts committed by off-duty employees except when the torts were committed on the employer’s premises or with the employer’s chattels.” Id. at 404–05 (citing Otis Eng’g Corp. v. Clark, 668 S.W.2d 307, 309 (Tex. 1983)). “As a general rule, ‘an employer owes no duty to protect the public from the wrongful acts of its off-duty employees that are committed off the work site.’ ” Id. at 405 (quoting Ianni, 210 S.W.3d at 594). The exceptions to this general rule are based on circumstances when the employer affirmatively exercises control over its employee. Id.

In order to impose a duty on an employer for its employee’s off-duty and off-premises conduct, the employer must have actual knowledge of the employer’s deficit and it must exercise actual control over the employee at the time of the negligent act. Id. at 406–07. As noted in Pagayon v. Exxon Mobil Corp., 536 S.W.3d 499, 506 (Tex. 2017), “an employer should have no duty to control an employee when it neither knows nor should know of the need and opportunity to do so.” Ringo did not assign Free the job task of driving the crew to the drill site. Free did not perform any driving for Ringo. Furthermore, Ringo’s management did not know that Free would be driving any crew members in his personal vehicle at the time of the accident. Thus, Free’s alleged act of negligence was not related to his job, and Ringo had no control over Free’s conduct at the time of the accident. Accordingly, Ringo had no duty to Appellants with respect to their claims arising from the accident. See Nabors Drilling, 288 S.W.3d at 404–07. We overrule Appellants’ sole issue on appeal.

This Court’s Ruling

We affirm the judgment of the trial court.

Footnotes

1

Mark Wheeler’s wife, Cindy Wheeler, is also an Appellant. Unless otherwise noted, all references in this opinion to “Wheeler” are to Mark Wheeler.

2

Free has not filed a brief in this case. Additionally, Free did not join in Ringo’s motion for summary judgment. However, the summary judgment order grants final judgment against Appellants in favor of all defendants, and it concludes with the following sentence: “This Order disposes of all parties and issues, and is final and appealable.” Appellants do not complain on appeal of the inclusion of their claims against Free in the summary judgment order.

3

Cindy Wheeler’s negligence claims are barred insofar as the exclusive remedy provision applies because her claims are derivative of Wheeler’s claims. See Rodriguez v. Naylor Indus., Inc., 763 S.W.2d 411, 412 (Tex. 1989).

4

We note that the opinion in Pilgrim was written by Judge Thomas M. Reavley, a former member of the Texas Supreme Court.

5

As noted in the opinion, the travel allowance paid in Pilgrim was $25 in 1977. 653 F.2d at 983.

6

As noted in Nabors Drilling, an employer has no duty to instruct an employee “with regard to dangers that are ordinarily incident to driving a vehicle and require no special skills or knowledge other than that expected of all licensed drivers.” 288 S.W.3d at 413 (quoting Nat’l Convenience Stores Inc. v. Matherne, 987 S.W.2d 145, 149 (Tex. App.—Houston [14th Dist.] 1999, no pet.)).

Court of Appeals of Texas, Eastland.

IN RE SENTRY INSURANCE A MUTUAL COMPANY

No. 11-21-00107-CV

|

filed July 30, 2021

Original Mandamus Proceeding

Panel consists of: Bailey, C.J.,

Trotter, J., and Williams, J.

MEMORANDUM OPINION

W. BRUCE WILLIAMS JUSTICE

Opinion filed July 30, 2021

The parties appear before this court for the second time in less than a year respecting mandamus relief. In this proceeding, similar to the first proceeding, we address an order issued by the Honorable Glen Harrison, Presiding Judge of the 32nd District Court of Nolan County, in Cause No. DO-92-17,178 in which he denied Relator, Sentry Insurance a Mutual Company’s plea to the jurisdiction. Sentry requests that we instruct Judge Harrison to dismiss for lack of jurisdiction Real Party in Interest, Donald Bristow’s (1) claims against Sentry based on the alleged delayed payment of, or failure to pay, medical expenses and (2) appeal of a March 23, 2021 award by the Texas Department of Insurance, Workers’ Compensation Division (the Division).1 We conditionally grant the petition for writ of mandamus as to Bristow’s claims based on Sentry’s alleged delayed payment of, or failure to pay, medical expenses. We deny the petition for writ of mandamus in all other respects.

Background

As noted in our first opinion, Bristow suffered a work-related injury on September 17, 1990. See In re Sentry Ins. a Mut. Co., No. 11-20-00240-CV, 2020 WL 6554795, at *1 (Tex. App.—Eastland Nov. 6, 2020, orig. proceeding [mand. denied]) (mem. op.) (Sentry I). Sentry was the workers’ compensation carrier for Bristow’s employer. Id. Because Bristow’s injury occurred before January 1, 1991, his claim for workers’ compensation benefits was determined based on the law in effect at the time of the injury. See Act of Dec. 12, 1989, 71st Leg., 2nd C.S., ch.1, § 17.18(a), (c), 1989 Tex. Gen. Laws 1, 122.

After the Division issued an award on Bristow’s claim, Bristow filed this suit against Sentry. Sentry and Bristow settled the lawsuit on March 31, 1993. As relevant here, in a Compromise Settlement Agreement (CSA), the parties agreed (1) that Sentry would pay a monthly sum of $3,650 for future home health care, as incurred, to “Bristow and his attorney” and that the amount of Sentry’s monthly obligation would not “increase or decrease”; (2) that Sentry was required to pay for home health care “only for so long as Bristow [was] at his home residence and not absent in a hospital or other health care facility”; and (3) that based on Bristow’s physical and mental condition, Sentry could contest that he no longer needed home health care. The CSA was incorporated into a final judgment on April 6, 1993.

In 2014, Bristow filed two applications for a prehearing conference with the Division. In the first application, Bristow requested a prehearing conference to address “various issues regarding old law claim.” Bristow specifically indicated (1) that he had issues in obtaining nursing care and medical supplies and (2) that, although he no longer had an attorney, Sentry sent checks directly to an attorney’s estate. In the second application, Bristow indicated that he wanted an explanation for the partial reimbursement of out-of-pocket expenses. The record does not reflect that the Division responded to either of these applications.

On December 28, 2016, Bristow filed a third application for a prehearing conference with the Division. Bristow complained that his lifetime benefits had been reduced and that medical supplies had been denied. On January 18, 2017, the Division denied Bristow’s request for a prehearing conference. As to Bristow’s complaints that medical supplies had been denied by Sentry, the Division stated (1)that, after the entry of the final judgment and the CSA, it had jurisdiction only “to conduct a formal hearing to issue successive awards on the carrier’s liability on medical disputes ‘... for the cost or expense of any such items actually furnished to and received by said employee and (2) that any dispute as to home health care was required to be submitted to the 32nd District Court in accordance with the CSA. The Division also informed Bristow that, if he chose “to pursue for payment of medical bills (other than home health care) denied by the workers’ compensation carrier,” he could submit a written request “for a formal hearing to adjudicate the unpaid disputed medical bill(s).” The Division specifically advised Bristow that the written request was required to include (1) the itemized bill as originally submitted to the carrier, (2) a copy of the carrier’s denial to pay the bill, and (3) supporting medical documentation.

In 2018, Sentry sought to terminate the home health care payments on the basis that Bristow’s physical and mental condition did not reasonably require home health care. Sentry also moved to abate future payments for home health care because (1) it was required to pay Bristow $3,650 per month for home health care, as incurred; (2) since 2014, Bristow had incurred home health care costs of only $7,686.75; and (3) based on the excess payments, it was entitled to a credit or offset against future payments for home health care costs. Sentry also filed Cause No. 19,940 and requested a declaration that it was entitled to a credit or offset against any future amounts that it might owe Bristow for home health care pursuant to the CSA. Judge Harrison consolidated Cause No. 19,940 with Cause No. DO-92-17,178.

Bristow, through counsel, sent letters to the Division on February 14, February 21, and February 22, 2019. In all three letters, Bristow requested that the Division set a prehearing conference. In the first letter, Bristow indicated that Sentry had sued to set aside the CSA and that there was a dispute over the CSA and over attorney’s fees. In the second letter, Bristow stated that there was a dispute over the CSA and that the Division had continuing jurisdiction over medical benefits. Bristow specifically complained (1) that Sentry had failed or refused to replace dressing pads for a “wound care vac machine”; (2) that, because he did not have dressing pads, he would be required to go to a hospital; (3) that Sentry would not be liable for home health care payments while he was hospitalized; and (4) that the refusal to provide or approve the dressing pads was “an obvious attempt by [Sentry] to avoid these payments and [was] an act of bad faith and self dealing.” In the third letter, Bristow indicated that the subject of the prehearing conference would be “medical benefits for nursing care services, wound care, and home health care beginning April 1, 1993 to the present and continuing into the future.”

On February 22, 2019, Bristow filed an application for a prehearing conference using the Division’s form PHD-90. Bristow indicated that the grounds for the prehearing conference were a “[m]edical dispute” and “[o]ther” and referenced the three letters that he had sent to the Division.

On February 28, 2019, the Division denied Bristow’s February 14 request for a prehearing conference. The Division again informed Bristow that, after an award or a court judgment, it had jurisdiction only to issue successive awards regarding the insurance carrier’s liability on medical disputes for the cost or expenses of any such items actually furnished to and received by Bristow. According to the Division, “any dispute as to home health care must be submitted to the court in accordance with the terms of” the CSA. The Division informed Bristow that, to the extent that he wanted “to pursue an award on unpaid bills for medical services received by him and denied by the workers’ compensation carrier (other than home health care),” he could submit a written request to the Division for a “formal hearing to adjudicate the unpaid disputed medical bill(s) only.” The Division indicated that, on January 18, 2017, it had provided written information to Bristow regarding the Division’s dispute resolution process.

Bristow filed counterclaims against Sentry in the declaratory judgment action and alleged that Sentry (1) violated the Texas Deceptive Trade Practices Act (the DTPA), the duty of good faith and fair dealing, and the requirement that it engage in fair settlement practices pursuant to Chapter 541 of the Texas Insurance Code; and (2) committed fraud by making representations when it signed the CSA that certain benefits would be paid to Bristow and then attempting to “vitiate the agreement.” Bristow’s claims fell within two categories—claims based on Sentry’s obligations under the CSA and claims based on Sentry’s alleged delayed payment of, or failure to pay, medical expenses related to ulcers suffered by Bristow.

Sentry filed a plea to the jurisdiction. Sentry asserted that the Division had exclusive jurisdiction over all compensability and medical disputes in the workers’ compensation context and that a claimant’s failure to secure a determination by the Division that benefits were due precluded a suit for those benefits as well as for all damages that resulted from a denial of those benefits. Sentry also filed a nonsuit of its petition for declaratory judgment on the basis that Judge Harrison did not have jurisdiction over the request for a credit or offset because Sentry had not presented the claim to the Division.

Judge Harrison denied Sentry’s plea to the jurisdiction, and Sentry sought mandamus relief from this court. See Sentry I, 2020 WL 6554795, at *1. As relevant here, we held that Sentry had not shown that it was entitled to mandamus relief on Bristow’s common law and statutory claims related to Sentry’s performance under the CSA and request for enforcement of the CSA on the ground that Bristow still requires home health care, id. at *5, but conditionally granted mandamus relief as to Bristow’s common law and statutory claims that were based on or related to Sentry’s alleged delayed payment of, or failure to pay, medical expenses incurred by Bristow after March 31, 1993, because Bristow had failed to exhaust his administrative remedies as to those claims, id. at *6.

Pursuant to our opinion, on November 12, 2020, Judge Harrison dismissed for lack of jurisdiction Bristow’s claims (1) that Sentry violated the DTPA based on a “course of conduct” related to the delayed payment of, or failure to pay, medical expenses that was intended to avoid Sentry’s liability under the CSA; (2) that Sentry breached the duty of good faith and fair dealing when it engaged in a “pattern of conduct” to delay or fail to pay medical expenses for ulcers that Bristow had developed as a result of his confinement to a wheelchair; and (3) that Sentry violated Chapter 541 of the Texas Insurance Code based on Sentry’s alleged delayed payment of, or failure to pay, medical expenses and Bristow’s request that the CSA be enforced because “Sentry has denied payment of reasonable and necessary medical expenses.”

On December 11, 2020, Sentry filed an application for a prehearing conference with the Division on the issue of whether Sentry was entitled to a credit or offset on future home health care payments. The Division notified Sentry and Bristow that the prehearing conference would be held on February 24, 2021, at 10:00 a.m. Sentry and Bristow were directed to appear at the prehearing conference and attempt to settle disputes about the claim. The Division informed Sentry and Bristow that, in order to facilitate the negotiations, they were “required to provide the other parties and the [Division] with all available medical information including all unpaid medical bills before the conference date.”

At 5:53 p.m. on February 22, 2021, Bristow’s attorney provided exhibits for the prehearing conference to the Division and to Sentry. These exhibits consisted of (1) prescriptions, (2) a June 6, 2019 approval by Sentry of home health care services for Bristow through December 6, 2019, and a billing summary for some of those services, (3) e-mails from Bristow to his attorney with receipts attached, and (4) bills for medical services provided to Bristow. At 3:08 p.m. on February 24, 2021, Bristow’s attorney provided an additional bill for medical services.

After the conference, the prehearing officer recommended that an award be entered that Sentry was not entitled to a credit in the amount of $193,063.25 on future payment for home health care based on the claimed excess payments. Both Sentry and Bristow were instructed to file a written formal statement of position on the recommendation. In its statement of formal position, Sentry admitted that it had compensation coverage on the named insured on or about the date of the injury and that Bristow was employed by the insured. On all other contested issues, Sentry indicated that it would require Bristow to sustain his burden of proof through competent evidence. Bristow admitted in his formal statement of position that Sentry was not entitled to take credit in the amount of $193,063.25 on future payments for home health care. Bristow denied that the Division had jurisdiction over the CSA and noted that the Division had previously found that it lacked jurisdiction over the CSA. Bristow “except[ed]” to the Division’s failure to consider the “medical benefits and bills which have been provided to [Bristow] but which [Sentry] refuses to pay.” Bristow attached the same exhibits to the formal statement of position that he provided for the prehearing conference.

The Division issued an award on March 23, 2021. Stamped on the award is “MEDICAL ONLY.” The Division found (1) that, on the date of Bristow’s injury, his employer provided workers’ compensation coverage and was insured by Sentry and (2) that Sentry was not entitled to take a credit or offset on any future payments for home health care “on an incurred overpayment of $193,063.25 paid for the periods of January 2014 through December 2018, derivative to that” of Bristow. Both Bristow and Sentry filed notice that they did not intend to abide by the award and intended to appeal the award.

On March 23, 2021, Sentry appealed the Division’s award to the 251st District Court in Randall County, where Bristow lives. On April 8, 2021, Bristow filed his seventh amended answer and counterclaims in this litigation. Bristow reasserted the claims that had been dismissed by Judge Harrison pursuant to our opinion in the first mandamus proceeding. Bristow also appealed the Division’s award and argued (1) that the award should be set aside because the Division failed or refused to consider the disputed medical issues and (2) that the Division did not have jurisdiction over the parties’ agreement in the CSA as to the provision of home health care. Sentry filed a plea to the jurisdiction in this case, and Bristow filed a plea to the jurisdiction and plea in abatement in the Randall County lawsuit.

The Honorable Ana Estevez, Presiding Judge of the 251st District Court, found that “the matters in controversy” in the Randall County lawsuit were “subject to the dominant jurisdiction in the lawsuit pending between the parties in Nolan County, Texas.” Judge Estevez granted Bristow’s plea in abatement and abated the Randall County lawsuit “until such time as the issues in the Nolan County lawsuit are resolved.”

Sentry filed a petition for writ of mandamus in the Amarillo Court of Appeals. Sentry argued that it had appealed the Division’s award to the 251st District Court before Bristow appealed the award to the 32nd District Court and that the 251st District Court had dominant jurisdiction over the appeal of the award. Sentry requested that the Amarillo Court of Appeals direct Judge Estevez to vacate the order in which she abated the Randall County lawsuit and to issue an order in which she denied Bristow’s plea to the jurisdiction and plea in abatement and enjoined Judge Harrison from adjudicating Bristow’s appeal of the Division’s award.

The Amarillo Court of Appeals denied Sentry’s petition for mandamus relief on June 15, 2021. In re Sentry Ins. a Mut. Co., No. 07-21-00123-CV, 2021 WL 2448083, at *2 (Tex. App.—Amarillo June 15, 2021, orig. proceeding) (mem. op.) (Sentry II). In its opinion, the court described the litigation between Sentry and Bristow dating back to 2018 that related to (1) the CSA, (2) Sentry’s obligation to pay for Bristow’s home care pursuant to the CSA, and (3) the allegation that Sentry overpaid those expenses. Id. at *1. The court held (1) that “the allegations presented in the Randall County action mirrored those the insurer proffered earlier in Nolan County,” (2) that “the comparability between the parties and allegations underlying both district court actions illustrates that the proceedings are interrelated,” and (3) that “the Nolan County proceedings involving the common parties and claims were initiated long before the Randall County suit.” Id. at *2. The court held that Judge Estevez did not abuse her discretion when she abated the Randall County lawsuit. Id.

In its plea to the jurisdiction in this case, Sentry asserted that Bristow had failed to exhaust his administrative remedies as to the claims based on the delayed payment of, or failure to pay, medical expenses and requested that those claims be dismissed for lack of jurisdiction. On June 1, 2021, Sentry filed a reply in support of its plea to the jurisdiction in which it also asserted that Bristow lacked standing to appeal the Division’s award because he had prevailed on Sentry’s claim for a credit or an offset on future home health care payments. Judge Harrison denied the plea to the jurisdiction that same day.

Sentry filed this petition for writ of mandamus in which it requests that we direct Judge Harrison to dismiss for lack of subject-matter jurisdiction (1) Bristow’s claims based on the delayed payment of, or failure to pay, medical bills because Bristow failed to exhaust his administrative remedies as to those claims and (2) Bristow’s appeal of the Division’s award because Bristow lacks standing to appeal the award.

Analysis

Mandamus is an extraordinary remedy and is warranted only when the trial court clearly abused its discretion and there is no adequate remedy by appeal. In re C.J.C., 603 S.W.3d 804, 811 (Tex. 2020) (orig. proceeding); In re Murrin Bros., 1885, Ltd., 603 S.W.3d 53, 56 (Tex. 2019) (orig. proceeding). The relator bears the burden to prove both of these requirements. In re H.E.B. Grocery Co., 492 S.W.3d 300, 302 (Tex. 2016) (orig. proceeding).

A trial court abuses its discretion when its ruling is arbitrary and unreasonable or is made without regard for guiding legal principles or supporting evidence. In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (orig. proceeding). “Similarly, a trial court abuses its discretion when it fails to analyze or apply the law correctly.” Id.; see also In re Geomet Recycling LLC, 578 S.W.3d 82, 91 (Tex. 2019) (orig. proceeding). “A trial court has no ‘discretion’ in determining what the law is or applying the law to the facts.” In re Geomet Recycling, 578 S.W.3d at 91 (quoting Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding)).

A. Claims Based On Delayed Payment Of, Or Failure To Pay, Medical Expenses

Sentry first requests that we direct Judge Harrison to dismiss Bristow’s statutory and common law claims based on the delayed payment of, or failure to pay, medical expenses. Under the law in effect at the time of Bristow’s injury, “[a]ll questions” arising under the workers’ compensation act generally are required to be determined by the Division. Act of May 28, 1977, 65th Leg., R.S., ch. 412, § 1, 1977 Tex. Gen. Laws 1113, 1113. After the first final award or judgment, the Division has continuing jurisdiction “to render successive awards to determine the liability of the [carrier] for the cost or expense” of medical services “actually furnished to and received” by the employee not more than six months prior to the date of the successive award. Id. at 1114.

A party is required to give notice within twenty days of the Division’s final ruling or decision that he will not abide by the ruling or decision. Id. at 1113. The party must then file suit within twenty days of when he filed the notice not to abide. Id. If the party fails to timely file suit, the Division’s final ruling or decision is binding on all parties to the ruling or decision. Id. at 1114.

When, as in this case, the suit is settled and the settlement is approved by the court in an agreed judgment, any dispute that subsequently arises over “the payment of medical, hospital, nursing, chiropractic or podiatry services or aids or treatment, or for medicines or prosthetic appliances” must be “first presented” to the Division. Act of May 20, 1983, 68th Leg., R.S., ch. 501, § 1, 1983 Tex. Gen. Laws. 2934, 2934. Unless good cause is shown, all such disputes should be presented to the Division within six months of the time the dispute has arisen. Id. A dispute arises when a “written refusal of payment” is filed with the Division. Id. However, the Division does not have jurisdiction “to rescind or set aside” an agreed judgment approved by the court. Id. at 2935.

If the Division has jurisdiction over a dispute under an agreed judgment, the party is required to first submit that dispute to the Division. City of Houston v. Rhule, 417 S.W.3d 440, 443 (Tex. 2013) (per curiam). A claimant’s failure to exhaust his administrative remedy divests the trial court of subject-matter jurisdiction. Id.

In his seventh amended counterclaims, Bristow reasserted the claims that Judge Harrison dismissed pursuant to our opinion in the first mandamus proceeding. Specifically, Bristow alleged (1) that Sentry violated the DTPA based on a failure to “pay medical,” (2) that Sentry breached the duty of good faith and fair dealing when it engaged in a “pattern of conduct” to delay payment of, or fail to pay, medical expenses for the treatment for ulcers that Bristow had developed as a result of his confinement to a wheel chair, and (3) that Sentry violated Chapter 541 of the Texas Insurance Code “based on the same facts alleged above.” Bristow also sought enforcement of the CSA because “Sentry has denied payment of reasonable and necessary medical expenses.”

The Division has continuing jurisdiction to render a successive award to determine Sentry’s liability for medical services actually provided to Bristow after March 31, 1993. See Act of May 23, 1977, 65th Leg., R.S., ch. 412, § 1, 1977 Tex. Gen. Laws 1113, 1114. Therefore, Bristow was required to submit to the Division for determination any claim based on Sentry’s alleged delayed payment of, or failure to pay, medical expenses for treatment provided to Bristow after March 31, 1993. See Sentry I, 2020 WL 6554795, at *5. In support of a request for the Division to consider the dispute, Bristow was required to provide (1) the itemized bill as originally submitted to the carrier, (2) a copy of the carrier’s denial to pay the bill, and (3) supporting medical documentation. 28 TEX. ADMIN. CODE § 42.307(c)(2)– (4) (1989) (Tex. Dep’t of Ins., Div. of Workers’ Comp., Procedures for Requesting Dispute Review). The Division informed Bristow of these requirements on January 18, 2017, and referred him to this same information on February 28, 2019. Bristow’s failure to provide this information could constitute grounds for the Division to reject his request for a prehearing conference. 28 TEX. ADMIN. CODE § 61.5(a) (1989) (Tex. Dep’t of Ins., Div. of Worker’s Comp., Request for Prehearing Conference)

Bristow argues (1) that he submitted his claims related to the medical expenses to the Division for determination when, in response to the notice that the prehearing conference requested by Sentry had been scheduled, he submitted medical bills to the prehearing officer and when he submitted the same bills in support of his formal statement of position and (2) that the Division failed to consider those bills. However, Bristow was required to submit medical information that had “a bearing on the claim at hand.” 28 TEX. ADMIN. CODE § 61.30 (1977) (Tex. Dep’t of Ins., Div. of Worker’s Comp., Filing of Medical Information). The only claim scheduled for the prehearing conference was Sentry’s request that it receive a claim or offset on future home health care payments because it had made excessive payments for home health care expenses between 2014 and 2018. The evidence submitted by Bristow for the prehearing conference and in support of his formal statement of position did not have a bearing on Sentry’s claim.

Further, Bristow failed to comply with the Division’s dispute resolution process when he failed to provide documents to the Division that established that any of the bills had been submitted to Sentry or that Sentry refused to pay the bills and did not provide any supporting medical documentation for the medical bills. See 28 TEX. ADMIN. CODE § 42.307(c). Finally, the Division did not issue an order in which it found that Bristow was entitled to receive the medical benefits. 28 TEX. ADMIN. CODE § 42.310(d) (1988) (Tex. Dep’t of Ins., Div. of Worker’s Comp., Board Review and Resolution). Based on this record, because Bristow did not make a formal request that the Division consider any unpaid medical bill and the Division did not rule on any dispute over an unpaid medical bill, Bristow did not exhaust his administrative remedies as to any claims based on or related to those medical bills. See Pickett v. Tex. Mut. Ins. Co., 239 S.W.3d 826, 839 (Tex. App.—Austin 2007, no pet.) (holding that assertions by claimants under the new workers’ compensation law that they submitted certain claims to the Texas Workers’ Compensation Commission or made oral requests for the Commission to reconsider certain claims was not evidence that the Commission reviewed the benefits dispute or issued orders that the claimant was entitled to medical benefits); see also Am. Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 804 (Tex. 2001) (holding that claims for extracontractual damages based on a failure to pay or delay in paying medical benefits does not relieve a claimant from exhausting administrative remedies before the Division when the entitlement to the medical benefits is in dispute).

Because Bristow failed to exhaust his administrative remedies as to any claims based on or related to the allegedly delayed or unpaid medical bills, Judge Harrison did not have subject-matter jurisdiction over those claims. See Rhule, 417 S.W.3d at 443 (holding that claimant’s failure to exhaust his administrative remedies for breach of a settlement agreement divested the trial court of jurisdiction); In re Liberty Mut. Fire Ins. Co., No. 04-14-00254-CV, 2014 WL 3747332, at *4 (Tex. App.—San Antonio July 30, 2014, orig. proceeding [mand. denied]) (holding that, because the carrier’s obligation to pay any disputed expense was required to be determined by the administrative process before the trial court had jurisdiction to review the administrative determination, a claim for misrepresentation pursuant to the Insurance Code must also be dismissed for lack of jurisdiction); see also Fodge, 63 S.W.3d at 804 (“[J]ust as a court cannot award compensation benefits, except on appeal from a Commission ruling, neither can it award damages for a denial of payment of compensation benefits without a determination by the Commission that such benefits were due.”).

We hold that Judge Harrison abused his discretion when he denied Sentry’s plea to the jurisdiction as to Bristow’s claims based on the delayed payment of, or failure to pay, medical expenses. Further, relief by mandamus is appropriate when a claimant fails to exhaust his administrative remedies through the workers’ compensation system prior to filing suit. In re Accident Fund Gen. Ins. Co., 543 S.W.3d 750, 754–55 (Tex. 2017) (orig. proceeding) (per curiam); In re Crawford & Co., 458 S.W.3d 920, 928–29 (Tex. 2015) (orig. proceeding) (per curiam).

B. Division’s Award

Sentry also requests that we direct Judge Harrison to dismiss Bristow’s appeal of the Division’s award because Bristow does not have standing to appeal an award that did not adversely affect him. However, Bristow appealed the Division’s assertion of jurisdiction over the home health care payments made pursuant to the CSA. Although the substantive award entered by the Division was favorable to him, Bristow did not prevail on his position that the Division lacked jurisdiction to enter an award based on the CSA.

Sentry also argues that it is entitled to relief because, after the Amarillo Court of Appeals denied Sentry’s petition for writ of mandamus, “Sentry’s appeal of the Division’s award cannot proceed while Bristow’s improper appeal of the Division’s award remains pending.” However, the Amarillo Court of Appeals did not deny Sentry’s request for mandamus relief on the sole basis that the Nolan County District Court has dominant jurisdiction over the appeal of the Division’s award. Rather, it considered the entire litigation between Sentry and Bristow stretching back to 2018 and noted that the lawsuits in Randall County and Nolan County involve the same allegations regarding the overpayment of home health care expenses. Sentry II, 2021 WL 2448083, at *1–2. The Amarillo Court of Appeals specifically determined (1) that “the comparability between the parties and allegations underlying both district court actions illustrates that the proceedings are interrelated,” (2) that “Nolan County proceedings involving the common parties and claims were initiated long before the Randall County suit,” (3) that “the Nolan County actions/counterclaims and the related circumstances upon which they were based were already pending” at the time that the Division entered the award, and (4) that “irrespective of how fast Sentry may have rushed to Randall County after the Division’s decision, it was not quick enough to precede the Nolan County suits and their interrelated claims.” Id. at *2 & n.4. We agree with our sister court’s analysis. Therefore, even if Bristow’s appeal of the Division’s award were dismissed, Sentry would still be unable to proceed with its case in Randall County until this litigation is resolved.

We hold that Judge Harrison did not abuse his discretion when he denied Sentry’s plea to the jurisdiction as to Bristow’s appeal of the Division’s award.

This Court’s Ruling

We deny Sentry’s petition for writ of mandamus as to Bristow’s appeal of the Division’s award. We conditionally grant Sentry’s petition for writ of mandamus as to Bristow’s common law and statutory claims based on or related to Sentry’s alleged delayed payment of, or failure to pay, medical expenses incurred by Bristow after March 31, 1993. We direct Judge Harrison to dismiss for lack of subject-matter jurisdiction Bristow’s claims (1) that Sentry violated the DTPA based on a “course of conduct” related to the delayed payment of, or failure to pay, medical expenses that was intended to avoid Sentry’s liability under the CSA; (2) that Sentry breached the duty of good faith and fair dealing when it engaged in a “pattern of conduct” to delay or fail to pay medical expenses for ulcers that Bristow had developed as a result of his confinement to a wheel chair; and (3) that Sentry violated Chapter 541 of the Texas Insurance Code based on Sentry’s alleged delayed payment of, or failure to pay, medical expenses and Bristow’s request that the CSA be enforced because “Sentry has denied payment of reasonable and necessary medical expenses.” A writ of mandamus will issue only if Judge Harrison does not comply by August 11, 2021.

Footnotes

1

The legislature created the Texas Workers’ Compensation Commission in 1989 to implement and enforce the provisions of the Texas Workers’ Compensation Act. Tex. Mut. Ins. Co. v. PHI Air Med., LLC, 610 S.W.3d 839, 843 (Tex. 2020). The Commission is now the Division of Workers’ Compensation at the Texas Department of Insurance. Id.; see also Act of May 29, 2005, 79th Leg., R.S., ch. 265, §§ 1.001–8.016, 2005 Tex. Gen. Laws 469, 469–610.

Court of Appeals of Texas, Eastland.

PEDRO DE LA ROSA AND ANGELINA DE LA ROSA, Appellants

v.

BASIC ENERGY SERVICES, L.P., BY AND THROUGH ITS GENERAL PARTNER, BASIC ENERGY SERVICES GP, LLC, Appellee

No. 11-19-00123-CV

|

filed April 8, 2021

On Appeal from the 441st District Court

Midland County, Texas

Trial Court Cause No. CV52579

Panel consists of: Bailey, C.J., Trotter, J., and Williams, J.

MEMORANDUM OPINION

W. STACY TROTTER JUSTICE

Opinion filed April 8, 2021

Appellants, Pedro and Angelina De La Rosa, appeal the trial court’s order granting Appellee’s, Basic Energy Services, L.P., plea to the jurisdiction. Because the trial court possessed subject-matter jurisdiction over Appellants’ pleaded claims, we reverse and remand.

I. Factual Background

The facts set forth here, with respect to the incidents that gave rise to this suit, were derived from the allegations in Appellants’ operative pleadings filed in this cause. While employed by Appellee as a tanker-truck driver, Pedro De La Rosa was severely injured in a rollover accident as he was transporting water from an oil well operated by Endeavor Energy Resources to a disposal site. The rollover occurred in the early morning hours on an unpaved dirt road near Mentone, Texas. Pedro had worked throughout the night and was transporting his third consecutive load of water. It was still dark outside, and Pedro was driving slowly because the road, for the approximately fifteen miles leading to and from the well, was unpaved and “poorly-maintained.” A large animal ran onto the road as Pedro was maneuvering the tanker truck around a large pothole; the tanker truck he was operating then rolled over as he attempted to avoid the animal.

Because of the extent of Pedro’s injuries, he was transported by helicopter to a hospital in Odessa. Freddie Garcia, the “Area Superintendent” of Appellee’s office in Pecos, introduced himself to Pedro at the hospital, and at some point, Pedro heard Garcia direct the attending doctor not to provide certain medical care to Pedro “in an apparent effort to minimize the records of Pedro’s injuries.” Specifically, Pedro heard the attending doctor state that he needed to insert stitches on Pedro’s eye cavity; Pedro then heard Garcia instruct the doctor not to do so because “Pedro [was] fine.” Later, Pedro applied for and received workers’ compensation benefits to pay his incurred medical expenses; he also received income benefits.

Appellants subsequently filed suit against Appellee and others. As to Appellee, Appellants alleged that Pedro’s injuries from the rollover were intentionally caused (1) by Appellee’s failure to provide a safe place to work and (2) by Appellee’s knowledge that its drivers were fatigued and its requirement that the drivers nevertheless drive excessive hours with minimal rest. On behalf of Pedro, Appellants further alleged that Appellee’s subsequent conduct during Pedro’s post-accident treatment at the hospital in Odessa caused Pedro to sustain independent injuries because Garcia, as Appellee’s agent, pressured and coerced the medical staff to withhold medical care from Pedro and to release him prematurely. On behalf of Angelina, Appellants also pleaded a claim against Appellee for intentional loss of consortium.

In its third amended answer, Appellee included a plea to the jurisdiction in which it asserted that Appellants’ claims were barred by the Texas Workers’ Compensation Act (the Act) and the affirmative defense of election of remedies. Appellants filed a motion to strike Appellee’s plea. After a hearing, the trial court denied Appellants’ motion to strike and granted Appellee’s plea to the jurisdiction.

In their sole issue on appeal, Appellants contend that the trial court erred when it granted Appellee’s plea.1 We agree.

II. Standard of Review

Before a court may dispose of a case, it is essential that the court possess subject-matter jurisdiction. Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex. 2000). A plea to the jurisdiction is a dilatory plea and a proper method by which to challenge a trial court’s subject-matter jurisdiction. Id. at 554. Whether a trial court has subject-matter jurisdiction over a case is a question of law that we review de novo. Harris Cty. v. Annab, 547 S.W.3d 609, 612 (Tex. 2018) (citing Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004)); Ector Cty. v. Breedlove, 168 S.W.3d 864, 865 (Tex. App.—Eastland 2004, no pet.).

The purpose of a plea to the jurisdiction is to defeat a pleaded cause of action without reaching the merits. Blue, 34 S.W.3d at 554. A plea to the jurisdiction may challenge the pleadings, the existence of jurisdictional facts, or both. Alamo Heights Indep. Sch. Dist. v. Clark, 544 S.W.3d 755, 770 (Tex. 2018); City of Merkel v. Copeland, 561 S.W.3d 720, 723 (Tex. App.—Eastland 2018, pet. denied). When the plea challenges the pleadings, as in the case before us, we determine whether the pleader has alleged facts that affirmatively demonstrate the trial court’s subject-matter jurisdiction to hear the case. Houston Belt & Terminal Ry. Co. v. City of Houston, 487 S.W.3d 154, 160 (Tex. 2016) (citing City of El Paso v. Heinrich, 284 S.W.3d 366, 378 (Tex. 2009)). Therefore, our review requires that we accept as true all factual allegations in the pleadings, that we examine the pleader’s intent, and that we construe the pleadings liberally in the pleader’s favor. Id.; Miranda, 133 S.W.3d at 226; Cty. of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex. 2002); Tex. Mun. League Intergovernmental Risk Pool v. City of Abilene, 551 S.W.3d 337, 342–43 (Tex. App.—Eastland 2018, pet. dism’d).

III. Analysis

Appellants assert that the trial court erred when it granted Appellee’s plea because they had pleaded sufficient facts to affirmatively show that the trial court had subject-matter jurisdiction over their claims. Appellee maintains that the trial court properly granted its plea because (1) the Act provides the exclusive remedy for Appellants’ claims, (2) Appellants failed to exhaust their administrative remedies, and (3) Appellants elected to receive workers’ compensation benefits.2 We will address each ground raised by Appellee upon which the trial court could have granted the plea.

A. Exclusive Remedy

The Act provides remedies for the prompt payment of medical expenses and lost wages for covered employees who sustain work-related injuries, without the injured employee’s needing to prove liability under a common-law tort theory. TIC Energy & Chem., Inc. v. Martin, 498 S.W.3d 68, 72 (Tex. 2016) (citing HCBeck, Ltd. v. Rice, 284 S.W.3d 349, 350 (Tex. 2009)). In fact, in exchange for the guarantee of the payment of workers’ compensation benefits to the injured employee, the Act prohibits an injured employee from seeking common law remedies from his employer. Id.; see TEX. LAB. CODE ANN. § 408.001(a) (West 2015). Under its exclusive-remedy provision, the Act provides an employer that subscribes to workers’ compensation insurance immunity from common-law negligence claims that may be brought by its employees. LAB. § 408.001(a); Mo-Vac Serv. Co. v. Escobedo, 603 S.W.3d 119, 120 (Tex. 2020).

However, the Act’s exclusive-remedy provision does not prohibit an injured employee from pursuing intentional-injury claims against his employer. Escobedo, 603 S.W.3d at 124–25 (noting that the legislature has never codified or rejected Middleton’s intentional-injury exception and stating: “Notwithstanding the breadth of some of its terms, [the Act’s] evident purpose was to confine its operation to only accidental injuries, and its scope is to be so limited.” (quoting Middleton v. Tex. Power & Light Co., 185 S.W. 556, 560 (Tex. 1916))); Reed Tool Co. v. Copelin, 689 S.W.2d 404, 406 (Tex. 1985) (“The Texas Workers’ Compensation Act is the exclusive remedy for work-related injuries with the exception of intentional injury.”). Under Middleton’s intentional-injury exception, an injured employee may pursue common law remedies for the intentional torts committed by his employer if he can establish the employer’s specific intent to inflict injury. Escobedo, 603 S.W.3d at 125; Reed Tool, 689 S.W.2d at 406; see Berkel & Co. Contractors, Inc. v. Lee, 612 S.W.3d 280, 285 (Tex. 2020). As such, to prevail on an intentional-injury claim, the injured employee must establish that his employer intended for, or believed that, its actions were substantially certain to result in injury to the employee. Berkel, 612 S.W.3d at 285; Escobedo, 603 S.W.3d at 125; Reed Tool, 689 S.W.2d at 406.

Because the present case is before us on a plea to the jurisdiction, we look to Appellants’ pleadings and determine only whether sufficient facts were alleged to affirmatively bring their claims within the trial court’s subject-matter jurisdiction. In their first amended petition, the “operative pleading” below, Appellants alleged, with respect to the rollover incident, that “Basic Energy knew that it was subjecting its truck drivers to fatigue by virtue of requiring them to drive excessive hours and Basic Energy believed that [these] injury-producing events were substantially certain to result therefrom, especially when traversing poorly-maintained dirt roads such as the roadway at issue.” Regarding the post-rollover incidents at the hospital, Appellants alleged that Basic Energy, through its agent (Garcia), pressured hospital staff to withhold medical care from Pedro and that “with respect to said withholding and premature release, Basic Energy desired at all relevant times to cause the consequences (including the injuries to Pedro and Angie ...), or alternatively, Basic Energy believed at all relevant times that said consequences are [sic] substantially certain to result from said withholding and premature release.”

Because Appellants’ operative pleading alleged that Appellee believed that its conduct was substantially certain to result in Pedro’s injuries and Angelina’s loss of consortium, we find that Appellants’ pleaded claims fall within the purview of the intentional-injury exception to the Act’s exclusive-remedy provision. Therefore, Appellants’ factual allegations affirmatively demonstrate that the trial court has subject-matter jurisdiction over these claims.

B. Failure to Exhaust

Appellee also asserts that the Act deprives the trial court of subject-matter jurisdiction over Appellants’ pleaded claim with respect to the post-rollover events that occurred at the hospital in Odessa. Specifically, Appellee characterizes this pleaded claim as a dispute over medical benefits and argues that Appellants’ post-rollover claims are barred by the Act because Appellants failed to comply with the Labor Code’s medical dispute resolution procedures and exhaust their administrative remedies. See LAB. § 413.031(k)–(k-1) (West Supp. 2020). Appellee’s reliance on this statute is misplaced.

The Labor Code provision advanced by Appellee is only applicable to medical benefit disputes and medical fee disputes. See id. In this case, Appellants have alleged neither. Therefore, the Labor Code’s medical dispute resolution procedures and exhaustion requirements would not be triggered.

Instead, Appellants alleged that Garcia’s undue influence, and the pressure he exerted on hospital personnel to withhold medical care for Pedro, ultimately resulted in further injury to Pedro. Appellants further alleged that Garcia’s post-rollover conduct was “not job-related and [was] separate from the event for which a workers[’] compensation claim was filed and the[se] [post-rollover] acts produced an independent injury separate from the injuries for which any workers[’] compensation claim was filed.” Appellants pleaded an intentional-injury claim, alleging that Garcia’s post-rollover affirmative conduct resulted in an independent injury to Pedro. Therefore, Appellants’ factual allegations affirmatively demonstrate that the trial court has subject-matter jurisdiction over this claim.

C. Election of Remedies

Finally, although the Act’s exclusive-remedy provision does not exempt intentional-injury claims, the Act also does not expressly exclude workers’ compensation coverage for injuries that result from an employer’s intentional tort. Medina v. Herrera, 927 S.W.2d 597, 600 (Tex. 1996). In fact, an injured employee’s receipt of workers’ compensation benefits and his pursuit of common law damages from his employer for the same intentional injury are mutually exclusive remedies. Id. Here, Appellee argues that Pedro’s receipt of workers’ compensation benefits divests the trial court of subject-matter jurisdiction over Appellants’ present claims. Appellee submits that Appellants’ intentional tort claims are barred as a matter of law because Pedro elected to file for and receive workers’ compensation benefits; therefore, Pedro’s “election” deprives the trial court of subject-matter jurisdiction over Appellants’ claims. We disagree.

“The doctrine of ‘election of remedies’ is an affirmative defense that, under certain circumstances, bars a person from pursuing two inconsistent remedies.” Id. (citing Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848, 850–52 (Tex. 1980)). However, whether Appellee can establish this affirmative defense to Appellants’ claims does not bear on the trial court’s subject-matter jurisdiction over the case.3 We additionally note that, under Reed Tool, an injured employee’s acceptance of workers’ compensation benefits does not bar an employee-spouse’s derivative claim against the employer for intentional impairment of consortium because the employee-spouse’s own claim for intentional injury is not excluded by the Act. Reed Tool Co. v. Copelin, 610 S.W.2d 736, 740 (Tex. 1980) (holding that wife’s derivative claim of negligent impairment of consortium was barred by husband’s workers’ compensation agreement but that her action for intentional impairment of consortium was not); see also Reed Tool, 689 S.W.2d at 407–08 (holding that summary judgment in wife’s action for intentional impairment of consortium was proper because wife could not establish employer’s requisite intent to injure).

Here, because Appellants’ claims are not within the Texas Department of Insurance’s exclusive jurisdiction and because Appellee’s election of remedies defense is not an impediment to the trial court’s exercise of subject-matter jurisdiction over the case, we hold that the trial court’s determination that it lacked subject-matter jurisdiction over Appellants’ claims and its order granting Appellee’s plea were erroneous. Accordingly, we sustain Appellants’ sole issue on appeal.

IV. This Court’s Ruling

Appellants pleaded sufficient facts to affirmatively show that the trial court has subject-matter jurisdiction over their asserted claims. Therefore, we reverse the order of the trial court and remand the cause to the trial court for further proceedings.

Footnotes

1

Appellants argue that affirmative defenses may not be raised by a plea to the jurisdiction. Although the Texas Supreme Court and some of our sister courts have generally adopted this premise, see State v. Lueck, 290 S.W.3d 876, 880 (Tex. 2009); Schmitz v. Denton Cty. Cowboy Church, 550 S.W.3d 342, 361 n.22 (Tex. App.—Fort Worth 2018, pet. denied); Dallas Cty. v. Cedar Springs Invs. L.L.C., 375 S.W.3d 317, 321 (Tex. App. —Dallas 2012, no pet.); Univ. of Tex. Med. Branch at Galveston v. Barrett, 112 S.W.3d 815, 817 (Tex. App.—Houston [14th Dist.] 2003), aff’d, 159 S.W.3d 631 (Tex. 2005); Martinez v. Val Verde Cty. Hosp. Dist., 110 S.W.3d 480, 484–85 (Tex. App.—San Antonio 2003), aff’d, 140 S.W.3d 370 (Tex. 2004); Tex. Dep’t of Mental Health v. Olofsson, 59 S.W.3d 831, 833 (Tex. App.—Austin 2001, pet. dism’d); Anders v. Weslaco Indep. Sch. Dist., 960 S.W.2d 289, 292 (Tex. App.—Corpus Christi–Edinburg 1997, no pet.), the application of this principle is not necessary to our disposition of Appellants’ issue on appeal.

2

We note that Appellee also filed a motion for summary judgment challenging the merits of Appellants’ pleaded claims on the same grounds; however, this motion was never presented to the trial court for a ruling.

3

In their briefs, the parties argue whether Appellee has established the elements of its election-of-remedies defense. Because the only issue before us is whether the trial court has subject-matter jurisdiction over the case, our review on appeal does not consider that merits determination.

Court of Appeals of Texas, Eastland.

IN RE SENTRY INSURANCE A MUTUAL COMPANY

No. 11-20-00240-CV, No. 11-20-00241-CV

|

Opinion filed November 6, 2020

Original Mandamus Proceeding

Panel consists of: Bailey, C.J., Stretcher, J., and Wright, S.C.J.3

Willson, J., not participating.

MEMORANDUM OPINION

KEITH STRETCHER JUSTICE

*1 Relator, Sentry Insurance a Mutual Company (Sentry), filed these original petitions for writ of mandamus in which it requests that we instruct the Honorable Glen Harrison, Presiding Judge of the 32nd District Court of Nolan County, to dismiss for lack of jurisdiction Real Party in Interest, Donald Bristow’s counterclaims against Sentry and third-party claims against Judson Francis, Jr., a Professional Corporation (the Corporation), in Cause Nos. DO-92-17,178 and 19,940. We conditionally grant the petitions for writ of mandamus as to Bristow’s claims based on Sentry’s alleged delayed payment of, and failure to pay, medical expenses. We deny the petitions for writ of mandamus in all other respects.

Background

On September 17, 1990, Bristow was rendered a paraplegic from an accidental injury suffered in the course and scope of his employment for Nunn Manufacturing Company. Sentry was the workers’ compensation carrier for Nunn. Bristow’s injury occurred before January 1, 1991, and his claim for workers’ compensation benefits was determined based on the law in effect at the time of the injury. See Act of Dec. 11, 1989, 71st Leg., 2nd C.S., ch. 1, § 17.18(a), (c), 1989 Tex. Gen. Laws 1, 122.

Bristow filed Cause No. DO-92-17,178 against Sentry in the 32nd District Court.1 Sentry and Bristow settled the lawsuit on March 31, 1993. Pursuant to the parties’ Compromise Settlement Agreement (CSA), Sentry agreed to pay Bristow (1) $30,000 on his claim that he was entitled to a van, (2) $30,000 every six years for the rest of his life in order to replace the van, and (3) $125,000 for the cost of home health care that Bristow had received before March 31, 1993. The parties also agreed that Sentry would pay a monthly sum of $3,650 for future home health care to “Bristow and his attorney” and that the amount of Sentry’s monthly obligation would not “increase or decrease” from $3,650. Sentry was required to pay for home health care “only for so long as Bristow [was] at his home residence and not absent in a hospital or other health care facility.” Finally, Sentry’s obligation to make the monthly home health care payments commenced on April 3, 1993, and was required to be paid “monthly, thereafter, as incurred, and by the 3rd day of each month” to Bristow and his attorney, Francis & Cross, P.C., at the attorney’s address.

The parties agreed that, based on Bristow’s physical condition, Sentry could contest that he no longer needed home health care. Sentry was required to provide written notice to Bristow and his attorneys that it contended that Bristow’s physical and mental condition no longer reasonably required home health care. After Sentry gave this notice, any dispute as to home health care would be submitted to the trial court.

The trial court approved the CSA and incorporated it into a final judgment on April 6, 1993. The trial court dismissed with prejudice all claims asserted by Bristow or that could have been asserted by Bristow prior to March 22, 1993.

*2 On January 12, 2018, and January 16, 2018, respectively, Sentry filed a motion to terminate home health care services and an amended motion to terminate home health care services. Sentry requested that the trial court order that Bristow’s physical and mental condition did not reasonably require home health care and that Sentry had no further obligations under the CSA to make the monthly payments of $3,650.

Sentry also filed a motion to abate home health care payments. Sentry alleged that, pursuant to the CSA, it was required to pay Bristow $3,650 per month for home health care, as incurred; that it had made the monthly payments; and that, since 2014, Bristow had incurred only a total of $7,686.75 for home health care costs. Sentry alleged that it was entitled to a credit or offset against future payments for home health care costs of at least $167,513.25 and requested that the trial court abate Sentry’s obligation to make the monthly home health care payments until the actual amount of the credit or offset could be determined.

On June 8, 2018, Judge Harrison denied Sentry’s motion to abate. Judge Harrison specifically found that the CSA was still in effect and required Sentry to pay $3,650 per month to Bristow for as long as he incurred home health care expenses and that Bristow continued to use, and incur expenses for, home health care. The record does not reflect that Judge Harrison ruled on Sentry’s amended motion to terminate home health care services.

On August 13, 2018, Sentry filed Cause No. 19,940 and requested a declaration that it was entitled to a credit or offset of at least $167,513.25 against any future amounts that it might owe Bristow for home health care pursuant to the CSA. Judge Harrison subsequently consolidated Cause No. 19,940 with Cause No. DO-92-17,178.

Bristow sent three letters to the Texas Department of Insurance – Workers’ Compensation Division (the Division) on February 14, February 21, and February 22, 2019.2 Bristow provided the Division with a copy of Sentry’s petition for declaratory judgment and requested a prehearing conference (1) on a dispute over the CSA and as to attorney’s fees, (2) on Sentry’s failure or refusal to replace dressing for a wound care vac machine, and (3) on medical benefits for nursing care services, wound care, and home health care beginning April 1, 1993, to the present and continuing into the future.

The Division denied Bristow’s request for a prehearing conference on the ground that, after a final award or a court judgment, it has jurisdiction only to issue successive awards regarding liability on medical disputes for the cost or expense of medical equipment or services actually furnished to and received by the employee. According to the Division, “any dispute as to home health care must be submitted to the court in accordance with the terms of” the CSA. Finally, the Division indicated that, if Bristow wanted to pursue an award on unpaid bills for medical services received by him and denied by Sentry, he could submit a written request to the Division for a formal hearing to adjudicate the unpaid, disputed medical bills.

*3 Bristow filed a third-party petition against the Corporation. Bristow alleged that, pursuant to the law in effect at the time of his injury, his attorney, Judson Francis, Jr., was to receive attorney’s fees in connection with the CSA. Sentry sent the monthly checks to Francis, and Francis would disburse funds to Bristow. After Francis died in 1996, his surviving spouse, Bettie Francis, became the president and registered agent for the Corporation. Although Bettie is not an attorney, the Corporation continued to deduct attorney’s fees from the monthly payments from Sentry. At some point after Sentry filed the motion to abate, the Corporation ceased making payments to Bristow. Bristow asserted that the payments of attorney’s fees to a nonlawyer and a nonlawyer entity were illegal and against public policy.

On November 25, 2019, Bristow filed a third amended answer and counterclaim against Sentry in which he requested an accounting of the attorney’s fees paid to the Corporation. Bristow also alleged that Sentry (1) violated the Texas Deceptive Trade Practices Act (the DTPA) because it engaged in a course of conduct meant to avoid its liability under the CSA; (2) breached the duty of good faith and fair dealing when it paid attorney’s fees to a deceased attorney, made multiple attempts to avoid payment of benefits to Bristow, and failed to pay benefits timely; (3) violated the duties of good faith and fair dealing and the duty to engage in fair settlement practices imposed by Chapter 541 of the Texas Insurance Code; and (4) committed fraud based on representations when it signed the CSA that certain benefits would be paid to Bristow and then attempted to “vitiate the agreement.”

Bristow filed a fifth amended answer and counterclaim on September 25, 2020, in which he expanded his common law and statutory claims. As to his claim that Sentry violated the DTPA, Bristow also alleged that Sentry attempted to avoid its obligations under the CSA even though it had received medical advice and opinions that were “in favor of Bristow and adverse to Sentry.” Under his bad faith claim, Bristow added allegations that, since 2015, Sentry had engaged in a “pattern of conduct” to delay and fail to pay for medical expenses for the treatment of ulcers that Bristow developed as a result of his confinement to a wheelchair. Bristow alleged that the purpose of Sentry’s conduct was to cause the ulcers to become infected so that Bristow would be hospitalized and Sentry would not be required to pay for home health care. Bristow also expanded his fraud claim to allege that Sentry “conducted a fraudulent scheme by deception and omission of material facts” when it failed to disclose to Bristow that it had obtained medical opinions that were adverse to its position that Bristow no longer needed home health care. Finally, Bristow added a claim for enforcement of the CSA on the grounds (1) that Sentry had denied payment of reasonable and necessary medical expenses and (2) that he was in continuing need of home health care.

Sentry filed a plea to the jurisdiction. Sentry asserted that the Division had exclusive jurisdiction over all compensability and medical disputes in the workers’ compensation context and that a claimant’s failure to secure a determination by the Division that benefits were due precluded a suit for those benefits as well as for all damages that resulted from a denial of those benefits. Sentry specifically argued that Bristow had not obtained an award in his favor from the Division on any claim asserted against Sentry; that Bristow had failed to give notice of his intent not to abide by the Division’s decision that it did not have jurisdiction over any dispute about home health care and failed to submit his claims that Sentry delayed payment of, or failed to pay, medical expenses to the Division; and that, based on the Texas Supreme Court’s decision in Texas Mutual Insurance Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012), Bristow was precluded from asserting any claim for common law or statutory bad faith.

*4 Sentry also filed a nonsuit of its petition for declaratory judgment. Sentry stated that Judge Harrison did not have jurisdiction over the request for a credit or offset because Sentry had not presented the claim to the Division. Sentry indicated that it intended to “fully exhaust the required remedies with the Division” and then, if necessary, appeal the Division’s final ruling.

Judge Harrison denied Sentry’s plea to the jurisdiction. Sentry filed these petitions for writ of mandamus in which it requests that we direct Judge Harrison to dismiss for lack of subject-matter jurisdiction Bristow’s counterclaims against Sentry and third-party claims against the Corporation. Sentry specifically argues that Judge Harrison does not have jurisdiction over any of Bristow’s claims because he did not exhaust his administrative remedies and does not have jurisdiction over Bristow’s common law and statutory bad faith claims because those claims are no longer viable after Ruttiger.

Analysis

Mandamus is an extraordinary remedy and is warranted only when the trial court clearly abused its discretion and there is no adequate remedy by appeal. In re C.J.C., 603 S.W.3d 804, 811 (Tex. 2020) (orig. proceeding); In re Murrin Bros. 1885, Ltd., 603 S.W.3d 53, 56 (Tex. 2019) (orig. proceeding). The relator bears the burden to prove both of these requirements. In re H.E.B. Grocery Co., 492 S.W.3d 300, 302 (Tex. 2016) (orig. proceeding).

A trial court abuses its discretion when its ruling is arbitrary and unreasonable or is made without regard for guiding legal principles or supporting evidence. In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (orig. proceeding). “Similarly, a trial court abuses its discretion when it fails to analyze or apply the law correctly.” Id.; see also In re Geomet Recycling LLC, 578 S.W.3d 82, 91 (Tex. 2019) (orig. proceeding). “A trial court has no ‘discretion’ in determining what the law is or applying the law to the facts.” In re Geomet Recycling, 578 S.W.3d at 91 (quoting Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding)).

Under the law in effect at the time of Bristow’s injury, “[a]ll questions” arising under the workers’ compensation act generally are required to be determined by the Division. Act of May 23, 1977, 65th Leg., R.S., ch. 412, § 1, 1977 Tex. Gen. Laws 1113, 1113. “After the first such final award or judgment,” the Division has continuing jurisdiction “to render successive awards to determine the liability of the [carrier] for the cost or expense” of medical services “actually furnished to and received” by the employee not more than six months prior to the date of the successive award. Id. at 1114.

A party is required to give notice within twenty days of the Division’s final ruling or decision that he will not abide by the ruling or decision. Id. at 1113. The party must then file suit within twenty days of when he filed the notice not to abide. Id. If the party fails to timely file suit, the Division’s final ruling or decision is binding on all parties to the ruling or decision. Id. at 1114.

When, as in this case, the suit is settled and the settlement is approved by the court in an agreed judgment, any dispute that subsequently arises over “the payment of medical, hospital, nursing, chiropractic or podiatry services or aids or treatment, or for medicines or prosthetic appliances” must be “first presented” to the Division. Act of May 20, 1983, 68th Leg., R.S., ch. 501, § 1, 1983 Tex. Gen. Laws. 2934, 2934. A dispute arises when a “written refusal of payment” is filed with the Division. Id. However, the Division does not have jurisdiction “to rescind or set aside” an agreed judgment approved by the court. Id. at 2935.

*5 If the Division has jurisdiction over a dispute under an agreed judgment, the party is required to first submit that dispute to the Division. City of Houston v. Rhule, 417 S.W.3d 440, 443 (Tex. 2013) (per curiam). A claimant’s failure to exhaust his administrative remedy divests the trial court of subject-matter jurisdiction. Id.

Because Sentry filed a notice of nonsuit of its request for declaratory relief, the matters pending before the trial court are Bristow’s counterclaims against Sentry and third-party claims against the Corporation. Bristow’s claims fall within two categories—claims based on Sentry’s obligations under the CSA and claims based on Sentry’s alleged delay in payment of, or failure to pay, medical expenses related to ulcers suffered by Bristow.

Under the first category of claims, Bristow requests an accounting of the attorney’s fees paid by Sentry in connection with the monthly payments under the CSA and asks that the CSA be enforced because he is in continuing need of home health care. Bristow also alleges (1) that Sentry violated the DTPA because it engaged in a course of conduct to avoid the payments of benefits to Bristow and attempted to avoid liability under the CSA after it received “medical advice and opinions” that were adverse to its position that Bristow no longer needed home health care, (2) that Sentry breached the duty of good faith and fair dealing when it paid attorney’s fees to a deceased attorney, (3) that Sentry violated Chapter 541 of the Texas Insurance Code “based on the same facts,” and (4) that Sentry committed fraud because it made representations when it entered into the CSA that certain benefits would be due and payable to Bristow and then attempted to avoid the agreement and because it failed to disclose to Bristow that it had obtained medical opinions that were adverse to its position.

We have reviewed the petitions for writ of mandamus and the mandamus record as it pertains to Bristow’s common law and statutory claims related to Sentry’s performance under the CSA, request for an accounting, and request for enforcement of the CSA on the ground that Bristow still requires home health care. As to those claims, we hold that Sentry has failed to show that it is entitled to the requested relief. Therefore, we deny Sentry’s petitions for writ of mandamus as to those claims. See TEX. R. APP. P. 52.8(a) (stating that, if the appellate court determines that the relator is not entitled to the relief sought, it must deny the petition).

Under the second category of claims, Bristow alleges (1) that Sentry violated the DTPA based on a “course of conduct” that was intended to avoid its liability under the CSA, (2) that Sentry breached the duty of good faith and fair dealing when it engaged in a “pattern of conduct” to delay and fail to pay for medical expenses for the treatment of ulcers that Bristow had developed as a result of his confinement to a wheelchair and when it failed to pay benefits timely, and (3) that Sentry violated Chapter 541 of the Texas Insurance Code “based on the same facts alleged above.” Bristow also seeks enforcement of the CSA because “Sentry has denied payment of reasonable and necessary medical expenses.”

The Division has continuing jurisdiction to render a successive award to determine Sentry’s liability for medical services and expenses provided to Bristow after March 31, 1993. See Act of May 23, 1977, 65th Leg., R.S., ch. 412, § 1, 1977 Tex. Gen. Laws 1113, 1113. Therefore, Bristow was required to submit to the Division any claim based on Sentry’s alleged delayed payment of, or failure to pay, medical expenses for treatment provided to Bristow after March 31, 1993. Indeed, the Division informed Bristow that he needed to submit a request for a formal hearing to adjudicate any dispute over the payment of medical expenses. Bristow failed to submit to the Division any claim that Sentry delayed the payment of, or refused to pay, any medical expenses for services provided to Bristow and, therefore, did not exhaust his administrative remedies as to any claims based on or related to those expenses.

*6 Because Bristow failed to exhaust his administrative remedies as to any claims based on or related to the allegedly disputed or unpaid medical bills, Judge Harrison did not have subject-matter jurisdiction over those claims. See Rhule, 417 S.W.3d at 443 (holding that claimant’s failure to exhaust his administrative remedies for breach of a settlement agreement divested the trial court of jurisdiction); In re Liberty Mut. Fire Ins. Co., No. 04-14-00254-CV, 2014 WL 3747332, at *4 (Tex. App.—San Antonio July 30, 2014, orig. proceeding [mand. denied] ) (holding that, because the carrier’s obligation to pay any disputed expense was required to be determined by the administrative process before the trial court had jurisdiction to review the administrative determination, a claim for misrepresentation pursuant to the Texas Insurance Code must also be dismissed for lack of jurisdiction); see also Am. Motorists Ins. Co. v. Fodge, 63 S.W.3d 801, 804 (Tex. 2001) (“[J]ust as a court cannot award compensation benefits, except on appeal from a Commission ruling, neither can it award damages for a denial of payment of compensation benefits without a determination by the Commission that such benefits were due.”). Therefore, Judge Harrison abused his discretion when he denied Sentry’s plea to the jurisdiction as to those claims. Further, relief by mandamus is appropriate when a claimant fails to exhaust his administrative remedies through the workers’ compensation system prior to filing suit. In re Accident Fund Gen. Ins. Co., 543 S.W.3d 750, 754–55 (Tex. 2017) (orig. proceeding) (per curiam); In re Crawford & Co., 458 S.W.3d 920, 928–29 (Tex. 2015) (orig. proceeding) (per curiam).

This Court’s Ruling

We deny Sentry’s petitions for writ of mandamus as to Bristow’s common law and statutory claims related to Sentry’s performance under the CSA, request for an accounting of the attorney’s fees paid pursuant to the CSA, and request for enforcement of the CSA on the ground that Bristow still requires home health care.

We conditionally grant Sentry’s petitions for writ of mandamus as to Bristow’s common law and statutory claims based on or related to Sentry’s alleged delayed payment of, or failure to pay, medical expenses incurred by Bristow after March 31, 1993. We direct Judge Harrison to dismiss for lack of subject-matter jurisdiction Bristow’s claims (1) that Sentry violated the DTPA based on a “course of conduct” related to the delayed payment of, or failure to pay, medical expenses that was intended to avoid Sentry’s liability under the CSA; (2) that Sentry breached the duty of good faith and fair dealing when it engaged in a “pattern of conduct” to delay or fail to pay medical expenses for ulcers that Bristow had developed as a result of his confinement to a wheelchair; and (3) that Sentry violated Chapter 541 of the Texas Insurance Code based on Sentry’s alleged delayed payment of, or failure to pay, medical expenses and Bristow’s request that the CSA be enforced because “Sentry has denied payment of reasonable and necessary medical expenses.” A writ of mandamus will issue only if Judge Harrison does not comply by November 13, 2020.

Footnotes

3

Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland, sitting by assignment.

1

Bristow’s petition is not included in the mandamus record.

2

The legislature created the Texas Workers’ Compensation Commission in 1989 to implement and enforce the provisions of the Texas Workers’ Compensation Act. Tex. Mut. Ins. Co. v. PHI Air Med., LLC, No. 18-0216, 2020 WL 3477002, at *2 (Tex. June 26, 2020). The Commission is now the Division of Workers’ Compensation at the Texas Department of Insurance. Id.; see also Act of May 29, 2005, 79th Leg., R.S., ch. 265, §§ 1.001–8.016, 2005 Tex. Gen. Laws 469, 469–610.

Court of Appeals of Texas, Eastland.

Penny RIGGS, Appellant

v.

OLD REPUBLIC INSURANCE COMPANY, Appellee

No. 11-18-00276-CV

|

Opinion filed October 1, 2020

On Appeal from the 35th District Court, Brown County, Texas, Trial Court Cause No. CV1310459

Attorneys and Law Firms

Robert D. Stokes, Colin Moore, for Appellee.

John E. Gibson, Tia A. Wilson, for Appellant.

Panel consists of: Bailey, C.J., Stretcher, J., and Wright, S.C.J.1

MEMORANDUM OPINION

KEITH STRETCHER, JUSTICE

*1 This is an appeal from a denial of workers’ compensation death benefits with the Texas Department of Insurance, Division of Workers’ Compensation (DWC). The DWC determined that the deceased did not sustain a compensable injury and that the injury occurred while the deceased was intoxicated, relieving the carrier of liability. The decedent’s wife subsequently sought judicial review. The trial court granted a no-evidence summary judgment and ordered that the decedent’s wife take nothing. We affirm.

Factual and Procedural History

In October 2012, 3M was starting a new production facility in Tuas, Singapore. Employees from 3M’s Brownwood facility assisted in setting up the new facility. The company provided rooms for its employees at the Swissotel and a shuttle service to transport the employees from the hotel to the plant. Ernest Riggs, an employee of 3M, traveled from Texas to Singapore on October 6, 2012, to assist with the new facility.

Riggs arrived in Singapore on October 7th and had breakfast at the hotel. He stated that he was tired after a long day of travel, and he retired to his room for a nap. That evening, Riggs attended a “cocktail hour” with other employees at the hotel’s executive lounge. Kenneth Campbell was with Riggs in the lounge. Campbell testified that he and Riggs stayed at the lounge from 6:00 p.m. to 8:00 p.m. drinking beer. Campbell did not remember how many beers Riggs had consumed. After the cocktail hour, Riggs and Campbell skipped dinner and left the hotel to go to Clarke Quay, an area near the hotel where employees would frequently sit and socialize after work. To reach Clarke Quay from the hotel, employees crossed a bridge on foot.

Once at Clarke Quay, employees could buy beer from a convenience store and mingle with other Americans who were in the area for business. Campbell testified that he and Riggs stayed in the area drinking beer and chatting with a group of people from Louisiana until around midnight. The two then crossed back over the bridge to the hotel side and met up with other employees as they returned from dinner. The employees stayed at the bridge and continued to drink; Campbell testified that he had “a couple” of beers and that Riggs probably did as well. Campbell continued to stay at the bridge with the other employees, and Riggs left to return to the hotel. Campbell did not remember Riggs slurring his speech, stumbling, or otherwise appearing intoxicated. Paul Barberie, one of the employees who crossed paths with Campbell and Riggs at the bridge, testified that he thought Riggs was “extremely intoxicated” and acting out of character. The next morning, Riggs was found dead in a grassy area outside the hotel underneath the window of his sixth-floor hotel room. Riggs appeared to have left his room through the window to access a balcony that was not attached to his room. Riggs died as a result of the fall.

Appellant, Penny Riggs, filed a claim for workers’ compensation death benefits. Appellee, Old Republic Insurance Company, disputed Appellant’s claim, and the DWC held a contested case hearing on May 28, 2013, to decide (1) whether Riggs suffered a compensable injury and (2) whether Riggs was intoxicated at the time of the injury. The DWC Hearing Officer decided both issues in favor of Appellee, finding that the deceased was not injured during the scope of his employment and that the deceased was intoxicated at the time of his death.

*2 Appellant timely appealed the DWC decision, and the Appeals Panel reviewed the matter and permitted the Hearing Officer’s decision to become final. See TEX. LAB. CODE ANN. § 410.204(c) (West 2015). Appellant then sought judicial review, asserting that Riggs suffered a compensable injury during the course and scope of his employment and that he was not intoxicated at the time of his death.

Both parties moved for summary judgment. Appellant filed a traditional motion for summary judgment; Appellee filed a combined no-evidence and traditional motion for summary judgment. In its no-evidence motion, Appellee asserted two grounds: (1) that there was no evidence that Riggs was in the course and scope of his employment when he died and (2) that there was no evidence that Riggs was not intoxicated at the time of his death. After a hearing on the motions, the trial court granted Appellee’s no-evidence motion for summary judgment. On appeal, Appellant presents two issues. In the first issue, she argues that the trial court erred when it granted summary judgment because Appellant produced some evidence that Riggs was not intoxicated. In the second issue, Appellant contends that the trial court erred in admitting an unredacted copy of the DWC Hearing Officer’s decision.

Standard of Review

We review an appeal from a summary judgment de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We review a no-evidence motion for summary judgment under the same legal sufficiency standard as a directed verdict. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). Under this standard, the nonmovant has the burden to produce more than a scintilla of evidence to support each challenged element of its claims. Id.; King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003). We review the evidence in the light most favorable to the nonmovant, indulging every reasonable inference in favor of the nonmovant and resolving any doubts against the movant. Merriman, 407 S.W.3d at 248. Where, as here, the trial court’s order granting the no-evidence summary judgment does not specify which of the two grounds it relied on, we must affirm the judgment if either of the grounds are meritorious. See Lucan v. HHS Systems, L.L.C., 439 S.W.3d 606, 609 (Tex. App.—Eastland 2014, no pet.) (citing FM Properties Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000)). We find one of Appellee’s grounds dispositive of this appeal: the element related to the course and scope of Riggs’s employment.

Analysis

The Texas Workers’ Compensation Act (the Act) provides for a modified de novo judicial review of a final DWC decision involving compensability or eligibility for death benefits. Rodriguez v. Service Lloyds Ins. Co., 997 S.W.2d 248, 253 (Tex. 1999); see LAB. § 410.301(a). The party appealing the final DWC decision has the burden of proof by a preponderance of the evidence. LAB. § 410.303. Additionally, the Act limits judicial review to “issues decided by the [DWC].” Id. § 410.302(b).

Under the Act, a compensable injury is “an injury 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 means “an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and 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 essential element that an employee must prove in order to recover workers’ compensation benefits is that the injury was sustained in the course of employment.” Biggs v. U.S. Fire Ins. Co., 611 S.W.2d 624, 627 (Tex. 1981).

*3 The trial court granted Appellee’s no-evidence motion, in which Appellee had asserted that there was no evidence that Riggs was in the course and scope of his employment at the time of death and that there was no evidence that Riggs was not intoxicated at the time of his death. Thus, Appellant had the burden to produce some evidence that Riggs was acting in the course and scope of his employment at the time he fell from the sixth floor of the hotel. On appeal, Appellant appears to have essentially abandoned this element. Instead, Appellant argues that “[t]he DWC Hearings Officer found that Mr. Rigg’s [sic] business trip to Singapore originated in the business affairs of his employer” and that, because Appellee failed to challenge that finding, “it is now binding.”

It is true that the DWC Hearing Officer made such a finding of fact and that Appellee did not raise a challenge. However, Appellant’s reliance on the finding is misplaced. The relied-on finding is factual, and findings of fact are distinct from “issues decided.” LAB. § 410.302(b). Here, the issues decided by the DWC were (1) whether Riggs suffered a compensable injury resulting in his death and (2) whether Riggs was intoxicated at the time of his injury. Judicial review is limited to issues decided by the appeals panel. See id.

Accordingly, one of the issues before the trial court was whether Riggs suffered a compensable injury. The test for whether an employee was injured while acting in the course and scope of his employment—and thus suffered a compensable injury—encompasses more than identifying the origin of a business trip. See, e.g., Shelton v. Standard Ins. Co., 389 S.W.2d 290, 293 (Tex. 1965) (considering the scope of employment for an employee “whose work entails travel away from the employer’s premises”). Instead, the general rule is that a compensable injury “(1) must be of a kind or character originating in or having to do with the employer’s work, and (2) must have occurred while engaged in the furtherance of the employer’s business or affairs.” Biggs, 611 S.W.2d at 627. Although Riggs was traveling at the behest of his employer, to be compensable, his injury must have “its origin in a risk created by the necessity of sleeping or eating away from home” and must not bear the characteristics of “a distinct departure on a personal errand.” Shelton, 389 S.W.2d at 293.

Even assuming the issue has been properly raised on appeal, the record is absent any evidence showing that Riggs was acting in the course and scope of his employment when he fell from the sixth floor of his hotel.

Because Appellant did not meet her burden to present more than a scintilla of evidence regarding course and scope, and because it is an essential element of a workers’ compensation claim that the employee was injured while in the course and scope of employment, the trial court properly granted Appellee’s no-evidence motion for summary judgment. To the extent that Appellant raises this matter in her first issue, we overrule that issue.

Having now decided that summary judgment was proper because Appellant failed to produce evidence that Riggs was acting in the course and scope of his employment, we need not address the portion of Appellant’s first issue in which she complains that summary judgment was improper to the extent that it was based upon the matter of intoxication, nor need we address Appellant’s second issue in which she complains about Appellee’s summary judgment evidence. See TEX. R. APP. P. 47.1 (written opinion of appellate court must address only issues necessary for the final disposition of the appeal).

This Court’s Ruling

We affirm the judgment of the trial court.

Willson, J., not participating.

Footnotes

1 Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland, sitting by assignment.

Court of Appeals of Texas, Eastland.

Garrett MARTIN, Appellant

v.

FASKEN OIL AND RANCH LTD., Appellee

No. 11-18-00111-CV

|

Opinion filed April 2, 2020

On Appeal from the County Court at Law No. 2, Midland County, Texas, Trial Court Cause No. CC18845

Attorneys & Firms

Anna E. Brandl, for Appellee.

Matthew J. Olivarez, San Antonio, for Appellant.

Panel consists of: Wright, S.C.J.1

MEMORANDUM OPINION

KEITH STRETCHER, JUSTICE

*1 This is an appeal from a summary judgment granted in favor of Appellee, Fasken Oil and Ranch Ltd., in a suit in which Appellant, Garrett Martin, sought to recover damages for retaliatory discharge under the Texas Workers’ Compensation Act. See TEX. LAB. CODE ANN. § 451.001 (West 2015). In a single issue, Appellant argues that the trial court erred when it granted Appellee’s motion for summary judgment. We affirm.

Background Facts

In September 2014, Appellant began working for Appellee. As of January 2015, Appellant was working in the pipe yard, which required him to inspect pipes used for oil production and load them onto storage racks, which were stacked as high as seven feet or more. By nature of his job position, Appellant was at times required to help load pipes as large as seventeen inches in diameter and thirty-five feet in length, which can weigh up to 700 pounds.

In March 2015, Appellant suffered a non-work-related injury to his knee while weightlifting. Accordingly, Appellant was placed on leave of absence until he returned to work in July. Upon his return, Appellant was placed on light duty work with restrictions from his doctor that prohibited him from climbing or lifting, which gradually reduced as his injury healed. On Appellant’s first day back at work, Tommy Taylor, Appellee’s Director of Oil and Gas Development, further instructed Appellant to comply with the restrictions from his doctor and to refrain from climbing and lifting.

On Tuesday, September 15, 2015, Appellant injured his back while he and two other men were loading pipe onto a forklift. According to Appellant and several of Appellee’s employees, the forklift operator motioned at Appellant and the two other men with three fingers, signaling for all three men to lift the pipe onto the forklift. Nevertheless, Appellant proceeded to lift the pipe by himself over express objections by his coworkers warning him that he could injure his back by lifting the pipe alone. Appellant then proceeded to finish his shift without pain but was unable to get out of bed the next morning.

On September 17, Appellant informed Taylor that he had injured his back while moving a pipe, and Taylor asked Vince Hancock, Appellee’s safety coordinator, to start an investigation into the cause of Appellant’s injury. Through Hancock’s investigation, Taylor learned that Appellant had moved the pipe by himself despite his medical restrictions and the admonitions of his coworkers. Importantly, Appellant’s e-mail to Taylor, notifying him of the injury, omitted the fact that Appellant had lifted the pipe by himself—a decision he later admitted was unsafe.

After injuring his back, Appellant did not return to work until Monday, September 21, 2015. When he arrived at work on the 21st, he was instructed to go meet with Hancock and Jimmy Carlile concerning his injury. According to Appellant, both Hancock and Carlile instructed Appellant that they could not tell him how to handle his injury. Carlile, however, also allegedly told Appellant about an employee who had injured his hand at work and took care of the medical expenses himself because he knew he caused his own injury. Appellant took Carlile’s comments to mean, “[b]asically, do not have a worker’s comp claim.” Later that afternoon, Appellant decided he wanted to file a workers’ compensation claim, which Appellee then reported to its insurance carrier.

*2 The next day, Appellant was observed climbing on top of pipe racks despite having been told to stay on the ground by more than one individual. On Wednesday, September 23, 2015, Taylor informed Appellant that he was being terminated in light of his “unsafe work practices, his inability to follow instructions and his untruthfulness and lack of candor regarding the details of the incident that occurred on September 15, 2015.”

Appellant filed the current cause of action on July 19, 2016, alleging that Appellee terminated him for filing a workers’ compensation claim. Appellee later filed a combined no-evidence and traditional motion for summary judgment, which the trial court granted. This appeal followed.

Analysis

On appeal, Appellant argues that the trial court erred when it granted Appellee’s motion for summary judgment. We review a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

In this case, Appellee asserted both no-evidence and traditional grounds in its motion for summary judgment. When parties move for summary judgment on both no-evidence and traditional grounds, we first consider the no-evidence grounds. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). Accordingly, we first review claims under the no-evidence standard, and any claims that survive the no-evidence review will then be reviewed under the traditional standard.

To defeat a no-evidence motion, the nonmovant must produce evidence raising a genuine issue of material fact as to the challenged elements. See Ridgway, 135 S.W.3d at 601).

In this case, Appellee’s no-evidence motion for summary judgment alleged that Appellant had not established a causal connection between his termination and the filing of his workers’ compensation claim. The motion additionally alleged that Appellant had no evidence to rebut Appellee’s evidence that the decision to terminate Appellant was non-retaliatory.

Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 453 (Tex. 1996)).

*3 To succeed on a retaliation claim, an individual must show that the termination would not have occurred when it did apart from the filing of the employee’s workers’ compensation claim. Id. (citing Kingsaire, 477 S.W.3d at 312. Such circumstantial evidence may include:

(1) knowledge of the compensation claim by those making the decision on termination; (2) expression of a negative attitude toward the employee’s injured condition; (3) failure to adhere to established company policies; (4) discriminatory treatment in comparison to similarly situated employees; and (5) evidence that the stated reason for the discharge was false.

Armendariz v. Redcats USA, L.P., 390 S.W.3d 463, 469 (Tex. App.—El Paso 2012, no pet.).

If the employee is able to establish a causal link between the termination and the filing of a workers’ compensation claim, the burden shifts to the employer to provide evidence of a non-retaliatory reason for the termination. Tex. Div.–Tranter, Inc. v. Carrozza, 876 S.W.2d 312, 314 (Tex. 1994). If the employee fails to produce additional evidence rebutting an employer’s evidence of a non-retaliatory termination, the employer is entitled to summary judgment. Id.

In this case, Appellant’s claim rests entirely on the fact that he was fired two days after he filed his workers’ compensation claim and on his subjective interpretation of comments made by Carlile. Temporal proximity alone, however, is insufficient to create an issue of fact, and Appellant’s assertion that Carlile did not want him to file a workers’ compensation claim is no more than a conclusion and is not competent summary judgment evidence. See id.; Willis v. Nucor Corp., 182 S.W.3d 536, 546 (Tex. App.—Waco 2008, no pet.).

Other than the temporal proximity and the statements of Carlile, Appellant himself acknowledged during his deposition that he could not produce sufficient circumstantial evidence on a majority of the Continental Coffee factors:

Q. Do you have any personal knowledge as to who made the decision to end your employment with Fasken?

A. No, sir.

Q. Do you have any personal knowledge as to who participated in making the decision to end your employment?

A. No, sir.

Q. Do you have any personal knowledge of what information was provided to the person making the decision to end your employment at Fasken?

A. No, sir.

Q. Do you have any personal knowledge of what information was relied on by the person making the decision to end your employment at Fasken?

A. No, sir.

Q. Can you identify any policies or procedures at Fasken that the company didn’t comply with in separating your employment?

*4 A. No, sir.

Q. Did anybody ever express a negative attitude towards your injury?

A. No, sir.

Q. Can you identify any facts for me that cause you to believe that the reason Fasken has provided in this lawsuit as to why it separated your employment is false, untrue?

A. Facts?

Q. Let me rephrase it for you. Can you identify any facts that cause you to believe that the reason Fasken has given for its decision to separate your employment in this lawsuit is false?

[APPELLANT’S COUNSEL]: Objection; form.

A. No, I can’t give you any facts.

Q. Can you identify any other employee who did not follow the instructions of Tommy Taylor, and who never had a workers’ compensation claim at work who wasn’t terminated?

A. No, sir.

Because Appellant failed to produce any summary judgment evidence that would call into question Appellee’s non-retaliatory explanation, the trial court did not err in granting Appellee’s motion for summary judgment. See Willis, 282 S.W.3d at 555. Accordingly, we overrule Appellant’s sole issue.

This Court’s Ruling

We affirm the judgment of the trial court.

Willson, J., not participating.

Footnotes

1

Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland, sitting by assignment.

Court of Appeals of Texas, Eastland.

Francis GONZALES, Individually and as Surviving Widow of Carlos Gonzales, Appellant

v.

Brad WILLIAMS d/b/a Brad Williams Farms, Appellee

No. 11-17-00130-CV

|

Opinion filed June 28, 2019

On Appeal from the 106th District Court, Dawson County, Texas, Trial Court Cause No. 15-05-19588

Attorneys & Firms

Ann Phillips Stegall, M. Kathleen Davidson, for Brad Williams.

David Martinez, for Virginia Gonzales and Francis Gonzales.

Panel consists of: Wright, S.C.J.1

MEMORANDUM OPINION

JOHN M. BAILEY, CHIEF JUSTICE

*1 Appellant, Francis Gonzales, individually and as surviving widow of Carlos Gonzales,2 appeals the trial court’s order granting summary judgment in favor of Appellee, Brad Williams d/b/a Brad Williams Farms. Appellant filed suit against Appellee for negligence and gross negligence arising out of a single-vehicle accident that resulted in Gonzales’s death. In a single issue, Appellant contends that the trial court improperly granted summary judgment in favor of Appellee. We affirm.

Background Facts

Carlos Gonzales was involved in a single-vehicle rollover accident involving a 1987 Freightliner that occurred near O’Donnell. It is undisputed that, at the time of the accident, Gonzales was acting within the course and scope of his employment with Appellee. Gonzales died from his injuries while being transported to a hospital. Appellant filed a wrongful death lawsuit against Appellee for negligence and gross negligence.

Appellee was a nonsubscriber under the Texas Workers’ Compensation Act. In reliance upon a statutory defense in the Act, Appellee filed a traditional motion for summary judgment alleging that Gonzales was intoxicated as a matter of law because Gonzales had multiple controlled substances in his body at the time of the accident. See fentanyl in his blood at the time of the accident. Dr. Rosen’s toxicology report concluded that, based on the level and ratio of methamphetamine in Gonzales’s blood, Gonzales “had to have introduced methamphetamines into his body prior to [the] accident and his death. The amounts indicate voluntary introduction and the substance is a controlled substance[.]” Thus, Appellee asserted that Appellant’s claims against Appellee were barred as a matter of law because Gonzales was intoxicated.

Appellant timely filed a response to Appellee’s motion for summary judgment, alleging that a fact issue existed as to whether Gonzales was intoxicated. Appellant’s argument was based solely on the affidavit of Texas Department of Public Safety Trooper Joshua Loftin, which detailed conversations Trooper Loftin had with Appellee and another witness, Alejandro Esparza, sometime after the accident. Trooper Loftin recalled that Appellee had said that, at breakfast on the morning of the accident, Gonzales “appeared to be normal and there were no indications that there was anything wrong” with his physical or mental abilities.

The trial court initially heard Appellee’s motion for summary judgment on January 2, 2016. Both Appellant and Appellee appeared, through their attorneys, at this hearing.3 At the end of the hearing, the trial court expressed concern that the only evidence offered to rebut Appellee’s argument that Gonzales was intoxicated at the time of the accident was Trooper Loftin’s affidavit. However, the trial court decided to “leave [the] motion for summary judgment open” to consider later after the parties had additional time to develop evidence.

*2 Over a year later, the trial court set another hearing on Appellee’s motion for summary judgment. The trial court set the hearing for February 22, 2017, in an order entered on February 8, 2017. Appellant filed a motion to set aside the hearing, arguing that, pursuant to Rule 166a(c) of the Texas Rules of Civil Procedure, she did not receive twenty-one days’ notice before the hearing. Appellant also asserted that the consideration of Appellee’s motion for summary judgment was premature because additional discovery had not been completed since the first hearing.

Appellee responded to Appellant’s motion, asserting that he had complied with Rule 166a(c) by timely filing his motion for summary judgment and supporting affidavits before the first hearing in January 2016. Appellee asserted that he was not required to provide twenty-one days’ notice for the February 2017 hearing because Appellee was “not submitting a new motion for summary judgment” but, rather, was “requesting a re-hearing on the same motion that was heard last year.”

The trial court conducted the second summary judgment hearing on February 22, 2017. Appellant did not present any additional summary judgment evidence. After hearing the arguments of counsel, the trial court concluded that no fact issue existed and that Gonzales was intoxicated at the time of the accident. Accordingly, the trial court granted Appellee’s motion for summary judgment.

Analysis

In a single issue on appeal, Appellant asserts that the trial court erred in granting Appellee’s traditional motion for summary judgment. Appellant presents two arguments in support of her sole issue on appeal: (1) Appellant did not have reasonable notice of the second summary judgment hearing and (2) there were genuine issues of material fact that precluded summary judgment. We review a summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003).

A party moving for traditional summary judgment bears the burden of proving that there is no genuine issue of material fact as to at least one essential element of the cause of action being asserted and that it is entitled to judgment as a matter of law. City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005).

Appellant argues that summary judgment was improper because she did not receive “reasonable notice” and that the trial court erred “in not setting aside the hearing due to Appellant’s specific objection on the lack of twenty-one (21) day notice.” In her motion to set aside the summary judgment hearing, Appellant asserted that she was “entitled to twenty-one (21) days’ notice before the hearing.” The trial court disagreed with Appellant’s contention by noting that the hearing in February 2017 was not another hearing but rather was a continuation of the prior hearing.

*3 Except on leave of court, Id. at 556. The court based its holding in part on the principal that a ruling on a motion for summary judgment is interlocutory and may be changed or modified before final judgment is rendered without a further motion or prior notice to the parties. Id.

We agree with the reasoning in Winn and find that it is applicable to the circumstances in this case. There is no dispute that Appellant was provided with the requisite twenty-one days’ notice of the first hearing on Appellee’s motion for summary judgment. That hearing concluded without the trial court entering a ruling on the motion. Instead, the trial court invited the parties to submit additional summary judgment evidence as discovery occurred in the case. Over a year later, the trial court again considered Appellee’s motion for summary judgment. As was the case in Winn, the second hearing to reconsider the pending motion for summary judgment did not require twenty-one days’ notice to the parties.

Appellant also asserts that summary judgment was improper because there were genuine issues of material fact as to whether Gonzales was legally intoxicated at the time of the accident. Appellant contends that (1) the affidavit of Trooper Loftin, (2) a statement made in Dr. Rosen’s toxicology report, and (3) Appellant’s answers to Appellee’s interrogatories created a genuine issue of fact as to Appellee’s affirmative defense of intoxication. Conversely, Appellee asserts that the trial court properly granted summary judgment in favor of Appellee because Appellant failed to raise a fact issue to rebut his probative evidence of intoxication.

§ 406.033(c).

The relevant definition of intoxication as provided in Section 401.013(a)(2)(B) of the Labor Code is as follows:

(2) not having the normal use of mental or physical faculties resulting from the voluntary introduction into the body of:

....

(B) a controlled substance or controlled substance analogue, as defined by Section 481.002, Health and Safety Code.

Id. § 401.013(a)(2)(B). A controlled substance “means a substance, including a drug, an adulterant, and a dilutant, listed in Schedules I through V or Penalty Group 1, 1-A, 2, 2-A, 3, or 4.” TEX. HEALTH & SAFETY CODE ANN. § 481.002(5) (West 2017). A controlled substance analogue means the following:

*4 (A) a substance with a chemical structure substantially similar to the chemical structure of a controlled substance in Schedule I or II or Penalty Group 1, 1-A, 2, or 2-A; or

(B) a substance specifically designed to produce an effect substantially similar to, or greater than, the effect of a controlled substance in Schedule I or II or Penalty Group 1, 1-A, 2, or 2-A.

Id. § 481.002(6)(A)–(B). In cases involving controlled substances, “there is no level or test defined by the statute that establishes per se if a person has lost use of his or her physical and mental faculties.” § 401.013(a)(2).

If an employer “rebuts the presumption of sobriety with probative evidence of intoxication, the burden shifts to the employee to prove that he was not intoxicated at the time of injury.” § 401.013(c).

Appellee introduced summary judgment evidence that Gonzales was intoxicated as defined by 21 U.S.C. § 812.

Dr. Rosen concluded that, based on the levels of fentanyl are controlled substances and that amphetamine is an analogue. Dr. Rosen further explained:

Methamphetamine and Fentanyl is a sedative pain killer and would also cause difficulty driving a vehicle in someone who does not have significant tolerance to this drug.

....

... [I]t is ... likely that Mr. Gonzales had used Methamphetamine recently and that his impairment would have resulted in intense, distracting and overwhelming rapid flow of ideas with excitation, panic and potentially perceptual distortion, hallucinations and delusions. There is a significant decline in concentration and inability to divide attention following use of methamphetamine. Following use of this drug there are errors in judgement and perception.

*5 Based on the autopsy and toxicology report, we conclude that Appellee, a nonsubscriber under the Workers’ Compensation Act, rebutted the presumption of sobriety with probative evidence of Gonzales’s intoxication under § 406.033(c).

Appellant contends that the affidavit of Trooper Loftin created a genuine issue of material fact as to whether Gonzales had the normal use of his mental or physical faculties at the time of his injury. Trooper Loftin was one of the troopers who investigated the accident. The affidavit notes that sometime after the accident, Trooper Loftin spoke with Appellee and Alejandro Esparza, the passenger in the vehicle that Gonzales was operating at the time of the accident. In the affidavit, Trooper Loftin states that he recalled Appellee telling him that Appellee, Gonzales, and Esparza “met early for breakfast” on the day of the accident. Trooper Loftin notes in his affidavit:

During the breakfast[,] Carlos Gonzales[ ] appeared to be happy and in good spirits. Physically and mentally[,] he appeared to be normal and there were no indications that there was anything wrong with Carlos Gonzales[’s] physical or mental abilities.

Finally, Trooper Loftin notes that Appellee and Esparza did not express concern regarding Gonzales’s ability to operate the vehicle.

Trooper Loftin’s affidavit does not specify what time Gonzales, Appellee, and Esparza allegedly ate breakfast together on the day of the accident. The affidavit does not provide any indication of whether it was a matter of minutes or hours between the breakfast—where Gonzales allegedly appeared to have the normal use of his mental and physical faculties—and the accident, at which time he was intoxicated. As such, Trooper Loftin’s affidavit does not raise a genuine issue of material fact as to whether Gonzales was intoxicated at the time of the accident.

Appellant also asserts that there is evidence that the accident was caused by faulty breaks on the vehicle that Gonzales was operating—rather than intoxication. Specifically, Appellant points to her answer to Appellee’s Interrogatory No. 20, in which she asserted that the vehicle had faulty brakes and no inspection sticker. However, “a party cannot rely on its own answer to an interrogatory as summary judgment evidence.” Morgan v. Anthony, 27 S.W.3d 928, 929 (Tex. 2000). Appellant also contends that the investigating officers concluded that the cause of Gonzales’s accident was the vehicle’s faulty brakes. The Texas Peace Officer’s Crash Report, attached to Trooper Loftin’s affidavit, included the “Investigator’s Narrative Opinion of What Happened”:

Unit #1 was traveling Southbound on FM 2370. The driver of Unit #1 attempted to stop at the intersection, but the brakes failed on the truck causing him to disregard the stop sign at the intersection, take faulty evasion action to the left, and roll Right Over Top through a fence. Unit #1 came to rest upright in the South barrow ditch facing Northwest.

Appellant also notes that the same crash report is referenced by Dr. Rosen in her toxicology report.

However, causation is not relevant to the intoxication defense. See LAB. Section 406.033 further identifies the defenses that implicate the employee’s conduct and on which a nonsubscribing employer may rely: the employee intended to bring about the injury, or the injury occurred while the employee was intoxicated.”). As such, Appellant’s argument that she provided evidence that the vehicle’s faulty brakes caused the accident is irrelevant to whether Gonzales was intoxicated at the time of the accident.

*6 We thus conclude that Appellant has not presented any evidence raising a genuine issue of material fact as to whether Gonzales was intoxicated at the time of his injury. See LAB. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678–79 (Tex. 1979). Accordingly, the trial court did not err in granting Appellee’s motion for summary judgment. We overrule Appellant’s sole issue on appeal.

This Court’s Ruling

We affirm the order of the trial court.

Willson, J., not participating.

Footnotes

1

Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland, sitting by assignment.

2

We will refer to Francis Gonzales as “Appellant,” and we will refer to Carlos Gonzales as “Gonzales.”

3

The Texas Supreme Court has held that a reporter’s record is neither necessary nor appropriate to the purposes of a summary judgment hearing. Schneider Nat’l Carriers, Inc. v. Bates, 147 S.W.3d 264, 292 n.141 (Tex. 2004). Irrespective of this directive, the parties have filed a reporter’s record for two hearings held on Appellee’s motion for summary judgment. We have been aided by the reporter’s record because it permits us to review the parties’ arguments concerning notice. The reporter’s record has also provided us with the details of the trial court’s rulings at each hearing. We have not considered the reporter’s record for determining the merits of Appellee’s motion for summary judgment.

Court of Appeals of Texas, Eastland.

Julie T. CHAU, Appellant

v.

SELECT MEDICAL CORPORATION d/b/a Regency Hospital of Odessa, LLP, Appellee

No. 11-17-00047-CV

|

Opinion filed July 19, 2018

*415 On Appeal from the 161st District Court, Ector County, Texas, Trial Court Cause No. B-136,673

Attorneys & Firms

Robert Chris Pittard, for Appellant.

Jon Mark Hogg, San Angelo, for Appellee.

Panel consists of: Wright, S.C.J.6

OPINION

MIKE WILLSON, JUSTICE

Julie T. Chau alleged claims of discrimination based on race, national origin, and age, and of retaliation against her employer, Select Medical Corporation d/b/a Regency Hospital of Odessa, LLP (Regency). Regency filed a traditional motion for summary judgment based upon the statute of limitations because Regency believed that Chau failed to timely file her petition. The trial court granted Regency’s motion for summary judgment, and on appeal, Chau asks this court to review whether a question of material fact exists concerning the timeliness of the filing of her petition under the mailbox rule in TEX. R. CIV. P. 5. We reverse and remand.

I. Summary Judgment Evidence

Chau filed a charge against Regency with the Texas Workforce Commission, Civil Rights Division, and she received her notice of the right to file a civil action on September 27, 2013. Chau had sixty days from this date, or until November 26, to file her petition. See TEX. LAB. CODE ANN. § 21.254 (West 2015).

Chau asserted that her lawyer mailed her petition to the district clerk on *416 November 25, and the clerk filed it on December 2. December 2 was the first business day after the Thanksgiving holiday.1 Chau contends that the filing was timely under the mailbox rule.2 As shown in Chau’s response to Regency’s motion for summary judgment, Chau’s attorney filed an affidavit and attached exhibits, including a copy of the cover letter that was mailed with the petition.

Chau’s attorney stated in the affidavit that “Plaintiff’s Original Petition was mailed to the Ector County district clerk on November 25[,] 2013, requesting citation,” and he cited to the attached letter. The letter was addressed to the Ector County district clerk and contained a heading, which read “Via Priority Mail, USPS Tracking,” above the recipient’s address block. The United States Postal Service tracking and return tracking numbers appeared in print at the bottom of the letter, and the corresponding tracking numbers were stamped in the bottom right-hand corner of the page. Chau’s attorney’s affidavit also stated that the Ector County district clerk received the petition on December 2 and issued citation on December 3. As Regency points out, Chau did not produce a copy of a stamped envelope, postmark, or mailing receipt.

II. Analysis

Chau argues that she produced more than a scintilla of evidence that raised a question of material fact on the timeliness of the filing of her petition, under the mailbox rule. Regency responds with two arguments. First, the mailbox rule in Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003). Consequently, we address both of Regency’s arguments.

A. The mailbox rule in Section 21.254 of the Texas Labor Code.

Whether the mailbox rule applies to the limitations period in Rule 5 of the Texas Rules of Civil Procedure provides:

When by these rules ... an act is required ... within a specified time, the court for cause shown may, at any time in its discretion ... order the period enlarged ... or ... permit the act to be done after the expiration of the specified period where good cause is shown for the failure to act....

If any document is sent to the proper clerk by first-class United States mail in an envelope or wrapper properly addressed and stamped and is deposited in the mail on or before the last day for filing same, the same, if received by the clerk not more than ten days tardily, shall be filed by the clerk and be deemed filed in time. A legible postmark affixed by the United States Postal Service *417 shall be prima facie evidence of the date of mailing.

TEX. R. CIV. P. 5.

The second paragraph of TEX. R. CIV. P. 5.

Because the mailbox rule “does not extend the substantive limitations period” but instead “defines what constitutes ‘bringing suit,’ ” there is no conflict that prevents the application of Gutierrez are distinguishable.

The issue in Rule 5 as a reference only to “good-cause” extensions in the first paragraph of the rule.

Next, the Rule 5 is questioned.

We see no substantive distinction between the deadline in Section 21.254 “does not contain the mandatory dismissal language”).

There are two other reasons to hold that the 60-day deadline in Section 21.254, we now address whether Chau’s evidence was sufficient to create a material question of fact on the timeliness of the filing of her petition.

B. The affidavit of Chau’s attorney and attached documents are sufficient to create a question of material fact on Chau’s compliance with the mailbox rule.

Chau argues that her attorney’s affidavit and the attached cover letter are evidence that she complied with the mailbox rule. Regency does not dispute the affidavit, but it instead argues that this evidence was insufficient to prove “that the petition was sent by first class United States mail, that the envelope in which it was sent was properly addressed and stamped[,] or that it was deposited in the mail on or before the last day for filing.”

We review summary judgments de novo under a well-settled, multifaceted standard of review. Arnold, 24 S.W.3d at 471.

“A defendant moving for summary judgment on the affirmative defense of limitations has the burden to conclusively establish that defense.” Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 549 (Tex. 1985).

Generally, “a document is ‘filed’ when it is tendered to the clerk, or otherwise put under the custody or control of the clerk.” Arnold, 24 S.W.3d at 472.

An attorney’s uncontroverted affidavit can establish compliance with the mailbox rule. Jackson v. Texas Workforce Comm’n, No. 2-04-246-CV, 2005 WL 250872, at *1 (Tex. App.—Fort Worth Feb. 3, 2005, no pet.) (mem. op.). In this case, Chau adduced sufficient evidence for each element of the mailbox rule to create a question of material fact on the timeliness of the filing of her petition.

Chau’s attorney’s affidavit provides that he mailed the petition to the Ector County district clerk, which Chau asserts complied with the first element. The heading above the recipient’s address, which reads “Via Priority Mail, USPS Tracking,” and the stamped USPS tracking numbers show that Chau’s attorney used USPS priority mail, which Chau argues satisfied element two. See White, 554 F.Supp.2d at 690 (reasoning that the envelope was properly addressed because there was “no evidence that the petition was returned to White’s counsel for being improperly addressed, and the file-stamp shows that the petition reached the clerk’s office within forty-eight hours of mailing”). For the fourth and fifth elements, the attorney’s affidavit provides that he mailed the petition on November 25, 2013, which was before the deadline (fourth element) and that the clerk received the petition on December 2, which was within ten days of mailing (fifth element).

*421 Regency did not controvert Chau’s summary judgment evidence with competent summary judgment evidence to negate Chau’s compliance with the mailbox rule. On appeal, Regency argues that Chau lacks sufficient evidence on elements two, three, and four. In particular, Regency asserts that, because Chau did not produce a copy of the envelope, postmark, or mailing receipt, there is no prima facie proof of mailing. “But there are multiple forms of prima facie evidence by which a court may determine the filing date under the ‘mailbox rule.’ ” Rule 5. We sustain Chau’s sole issue.

III. This Court’s Ruling

We reverse the judgment of the trial court and remand this cause to the trial court for further proceedings consistent with this opinion.

Footnotes

6

Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland, sitting by assignment.

1

We may take judicial notice of state holidays. See, e.g., Martinez v. Windsor Park Dev. Co., 833 S.W.2d 950, 951 (Tex. 1992).

2

The parties do not dispute Chau’s diligence in serving process after the filing.

3

“First-Class Mail prices are the same regardless of how far the mail travels.” https://pe.usps.com/BusinessMail101?ViewName=FirstClassMail. In contrast, “[P]riority mail postage is determined by how far the mail piece must travel to get to its destination: the farther it travels the more you pay in postage.” https://pe.usps.com/BusinessMail101?ViewName=PriorityMail. “The actual distance is measured by ‘zones.’ ” Zones range from zone 1 (local, close to you) to zone 8 (very far away from you). The farther the mail travels, the more zones it crosses, and the more postage you pay. You can access zone charts online.” Id. “For some large, lightweight Priority Mail packages you will use dimensional weighting for postage if the package is going to zones 5-8.” Id.

4

See https://pe.usps.com/BusinessMail101/Index?ViewName=FirstClassMail.

5

In Rule 5, the mailbox rule.

Court of Appeals of Texas, Eastland.

Diana GODINES, individually and on behalf of Amando Godines, Sr., Deceased; Michael Godines; Amando Godines, Jr.; and Deanna Quitugua, Appellants

v.

PRECISION DRILLING COMPANY, L.P., Appellee

No. 11–16–00110–CV

|

Opinion filed May 31, 2018

On Appeal from the 238th District Court, Midland County, Texas, Trial Court Cause No. CV–52178

Attorneys & Firms

Greggory A. Teeter, for Diana Godines.

Stacy R. Obenhaus, for Precision Drilling Company, LP.

Greggory A. Teeter, for Amando Godines.

Greggory A. Teeter, for Deanna Quitugua.

Greggory A. Teeter, for Michael Godines.

Kevin P. Riley, for Parsley Energy Operations, LLC.

B. Calvin Hendrick, Tommy D. Sheen, for Briley Trucking, Ltd.

John Kenneth Woodard, for J.W. Mulloy Associates, Inc.

Panel consists of: Wright, S.C.J.2

MEMORANDUM OPINION

MIKE WILLSON, JUSTICE

*1 Appellants, the surviving spouse and children of Amando Godines, Sr.,1 sued Precision Drilling Company, L.P., among others who are not parties to this appeal, for wrongful death under negligence and gross negligence theories. Precision answered the suit and moved for summary judgment on traditional and no-evidence grounds. Precision argued that (1) proof of its status as a workers’ compensation subscriber conclusively barred the negligence claim and (2) Appellants produced no evidence of gross negligence—no evidence of Precision’s awareness of the risk, of a vice principal’s gross negligence, or of proximate cause. The trial court granted summary judgment for Precision, and on appeal, Appellants raise four issues. We affirm.

I. Summary Judgment Evidence

Precision worked with a trucking company, Briley Trucking, Ltd., to move an oil and gas rig from one well site to another. At the original well site, Briley sought approval from Precision to transport the derrick using the “two-truck method,” in which the derrick was only partially collapsed (or “scoped in”) and moved using two trucks. Because the derrick dolly needed repairs, the two-truck method provided Precision a way to move the rig more quickly. Precision supervisors, Benjamin Franco and Salvador Ulloa, raised concerns with the Briley “truck pusher” that moving the derrick in this manner was dangerous. The Briley truck pusher and Precision supervisors called Precision’s drilling superintendents, Roger Dean Moran and Roel Soza, to discuss the move. After the Briley truck pusher told Moran that he could perform the move safely, the superintendents approved the two-truck method.

To prepare the rig move, two tractor-trailers trucks were backed up to one another. Briley and Precision partially collapsed sections of the derrick and secured them using pins. The derrick rested horizontally on both trailers, with one truck facing forward and the other truck facing backwards. Briley drove the rig over ten miles on a highway and rough lease roads to the new well site.

When the trucks arrived at the new well site, the suspension equipment was not ready for the derrick. The Precision crew was using the crane for tasks involved with building the substructure of the rig. Precision and Briley supervisors testified that they planned to finish the substructure, have a “Job Safety Analysis” (JSA) meeting, and then suspend the derrick with either the crane or the pole trucks. The parties dispute whether a JSA meeting took place before the crew “scoped in” the derrick at the original well site, but the parties agree that no JSA meeting occurred to discuss “scoping out” the derrick at the new well site. The derrick remained on the tractor-trailers for almost two hours while the Precision crew worked on the substructure.

At some point, the Briley truck pusher at the new well site had a radio conversation about the status of the derrick, and he walked toward the derrick to check the “diaper pins,” which held the larger pins in place under the derrick. The truck pusher testified that he picked up a sledgehammer and was only going to remove the diaper pins, as opposed to the larger pins, and that Godines insisted on removing the diaper pins because it was his job. The truck pusher also testified that Godines took the sledgehammer, but another Precision crew member testified that the truck pusher gave it to him. Other testimony also suggested that the Briley truck pusher instructed Godines to remove the pins. In any event, all Precision supervisors testified that the derrick was not ready to scope out and that they did not instruct Godines to check the pins.

*2 Godines was fatally injured after he positioned himself underneath the derrick and removed one of the load-bearing pins. After Godines removed the pin, the remaining pin sheared off and the derrick collapsed on top of him.

II. Issues Presented

On appeal, Appellants’ first issue is a global issue, which asks whether the trial court erred when it granted summary judgment. In the second issue, Appellants assert that the trial court erred when it considered late-filed evidence. Third, Appellants argue that the evidence precludes summary judgment on no-evidence grounds. Finally, Appellants argue that Precision failed to meet its burden on traditional grounds.

III. Analysis

We first consider Appellants’ second and fourth issues concerning the late-filed summary judgment evidence and its effect on the negligence claim. Then we consider the first and third issues related to the no-evidence summary judgment on the gross negligence claim.

A. Issues Two and Four: The trial court did not abuse its discretion when it granted leave to file the workers’ compensation policy late, and the exclusive remedy provision of the Texas Workers’ Compensation Act bars Appellants’ negligence claim.

In their second issue, Appellants argue that the trial court improperly considered Precision’s late-filed summary judgment evidence. Because of that, in their fourth issue, Appellants assert that Precision failed to conclusively establish that it was covered by workers’ compensation insurance and that the exclusive remedies provision barred their negligence claim.

1. Second Issue—Standard of Review

“Summary judgment evidence may be filed late, but only with leave of court.” Lawler v. Dallas Statler–Hilton Joint Venture, 793 S.W.2d 27, 30 (Tex. App.—Dallas 1990, writ denied) ).

2. The trial court did not abuse its discretion when it considered late-filed evidence.

Precision moved for summary judgment and attached the affidavit of a risk manager to prove that it was covered by a workers’ compensation policy at the time of Godines’s death. Appellants filed a response and argued that Precision failed to meet its burden because it did not attach the workers’ compensation policy to the summary judgment motion. Then, on the day before the summary judgment hearing, Precision filed a motion for leave to supplement its evidence and attached the policy. The policy listed Precision as covered on a rider to the information page.

*3 Appellants objected to the late filing, arguing that the length of the document and the time of filing prevented them from identifying potential problems with the coverage. Precision responded that filing the actual policy was unnecessary but that it sought to supplement the evidence as a precaution. Precision argued that Appellants did not suffer prejudice because Precision’s attorneys notified them about the policy two days after the accident and they had attempted to file a beneficiary claim under the policy. Precision produced e-mail correspondence between the attorneys for Precision and Appellants and also produced the beneficiary-claim form that Diana Godines had filed. The trial court sustained Appellants’ objection at the hearing but then later issued a written order that granted Precision leave to supplement the record. On the same day, the trial court granted summary judgment in Precision’s favor.

The trial court acted within its discretion to grant Precision leave to file late evidence. The trial court could have reasoned that Precision had good cause to file the workers’ compensation policy late because it was a response to Appellants’ argument that the initial affidavit from the risk manager was insufficient. The trial court could have also inferred from the e-mail correspondence and beneficiary claim that Appellants would not have suffered surprise from the late filing. Therefore, we cannot say that the trial court abused its discretion when it granted Precision leave to file late summary judgment evidence.

Appellants also argue that, because the trial court sustained the objection to the late-filed evidence at the summary judgment hearing, the trial court should not have considered the workers’ compensation policy. But “[a] trial court has the inherent authority to change or modify any interlocutory order or judgment until its plenary power expires.” TEX. R. CIV. P. 329b(d). Therefore, even after it initially sustained Appellants’ objection, the trial court had the authority to change its mind and grant the motion to admit late-filed evidence.

3. Workers’ compensation is the exclusive remedy, and Appellants’ negligence claim is barred.

“Recovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance.” Morales v. Martin Res., Inc., 183 S.W.3d 469, 471 (Tex. App.—Eastland 2005, no pet.).

The “information page of a workers’ compensation policy” and an affidavit by a risk manager who maintains that the coverage was effective at the time of the incident is sufficient to prove that an employer maintained workers’ compensation insurance. E.g., Martinez v. H.B. Zachry Co., 976 S.W.2d 746, 748 (Tex. App.—Houston [1st Dist.] 1998, pet. denied) (holding that the affidavit of a “claims manager” coupled with the information page of the policy established coverage). Here, Precision produced an affidavit by its risk manager stating that it maintained workers’ compensation insurance at the time of Godines’s death. Then Precision supplemented its evidence with the full policy, which included an information page listing Precision as a covered entity. This evidence conclusively established that Precision maintained workers’ compensation insurance. The trial court was within its discretion to consider the late-filed policy, which conclusively proved that the exclusive remedy provision of the Texas Workers’ Compensation Act applies. We overrule Appellants’ second and fourth issues.

B. Issues One and Three: The trial court properly granted summary judgment on Appellants’ gross negligence claim because Appellants failed to adduce evidence that raised a genuine issue of material fact that Precision was consciously indifferent to Godines’s safety.

*4 We now turn to the no-evidence summary judgment on Appellants’ gross negligence claim. The standard of review for summary judgment is the same for gross negligence as for ordinary negligence. See Barker v. Roelke, 105 S.W.3d 75, 82 (Tex. App.—Eastland 2003, pet. denied).

1. Standard of Review

We review summary judgment motions under a well-settled, multifaceted standard of review. Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997) ). Once such a motion is filed, the burden shifts to the nonmoving party to present evidence raising an issue of material fact as to the elements specified in the motion. Id.

2. Appellants failed to adduce evidence that raised a genuine issue of material fact that an act or omission by a vice principal of Precision proximately caused Godines’s death.

Precision moved for summary judgment on no-evidence grounds because it asserted that there was no evidence to establish an act or omission by a Precision vice principal that proximately caused Godines’s death. In response, Appellants produced four expert affidavits, two affidavits by Franco, and various deposition testimony.

Several witnesses provided evidence in either affidavits or depositions. Dr. Jahan Rasty, a mechanical engineering expert, concluded that the pin on the opposite side of the derrick fractured after Godines removed the first pin, which caused the collapse. John P. Hughett, an engineering and oilfield operations expert, stated that the rig manufacturer published a manual for moving the rig and that the two-truck method is against the recommended practice. Hughett concluded that Precision ignored these dangers, that Precision “failed to see that the pins were installed in the correct direction,” and that Precision “failed to properly train its rig crew on mast rig down and rig up operations.” Matthew Meyerhoff, a motor carrier consultant, outlined reasons that he believed that the two-truck method violated its permit and transportation regulations. He opined that Precision’s decision to transport the rig using the two-truck method was “made based upon the quickest way to get the oil rig up and running.” He also stated that the decision prioritized “profits over safety and created an extreme degree of risk of harm to all personnel involved in the transportation of the derrick.” Appellants’ expert, Gary S. Nelson, described the elements of a workplace safety program and the JSA process. Specifically, if Precision had used a derrick dolly, “the rig would have to have been triple scoped to accommodate its use, and since a derrick dolly cannot be used to scope out a rig, then the rig would have automatically been supported by pole/gin trucks before scope out.” However, none of these individuals were vice principals of Precision, and none testified that a Precision supervisor had proceeded to “unscope” the rig or had instructed Godines to do so.

*5 Precision’s superintendent, Moran, who approved the two-truck method, confirmed that JSA meetings are required before scoping in or scoping out a rig and that a failure to perform a JSA “likely will lead to significant harm and injury on a work site.” Moran testified that the rig manager on site is responsible for ensuring that a JSA meeting occurs. Precision does not train its rig managers in a single safe way to move a rig; instead, “they have a rig move plan ... that they get with the trucking company” who moves the rig. The rig managers and the trucking company jointly create guidelines for a rig move at the job site. The rig manager is the Precision supervisor who is responsible for “[a]ll safety issues,” and Ulloa was the rig manager for Rig 305.

Precision still needed to move the derrick from where it was parked to the location where “it was going to be pinned into position and raised.” Setting up an oil and gas rig is a process with several steps, and Franco confirmed that he “follow[ed] the typical steps that you follow in setting up the pieces of the rig necessary to put it in position.” When asked about whether the rig manager would take instructions from a third party, Moran testified that the rig manager might have taken direction from a truck pusher in some circumstances. When asked about whether Precision’s protocol would have allowed a third party to instruct a Precision employee, Moran said, “[T]hey do job tasks if everything is done safely. We’ve—we’ve taken instruction from [a] third party.” Regarding Godines, Moran testified that “on a critical task you have to ... get the rig manager involved. And he wasn’t aware of the job task that was being done.”

Precision created a JSA for scoping out Rig 305 a couple of years before Godines’s death. Although Ulloa knew about the written JSA and the “risk potentials” that it listed, he did not use it. Ulloa maintained that he did not hold a verbal JSA at the new well site because it was not yet time to scope out the derrick. Moran also testified that Precision was not ready to scope out the derrick at the time of the accident, and he consistently maintained that Precision supervisors did not know that anyone was scoping out the derrick.

Franco, who was a driller for Precision, stated that Precision “knew that having people work around the derrick without it being supported with pole trucks, stands or a crane was extremely dangerous.” According to him, “[t]here was no reason for anyone to be near the rig” while the crane or pole trucks were not in place. In his deposition, Franco stated that Precision was not ready to scope out the rig at the time of Godines’s death. When asked whether the derrick “pose[d] any danger to anybody while it was just parked” at the new well site, Franco said, “No, sir.”

When asked how many crew members it would take to safely scope out the derrick, Franco replied, “As many as possible.” He confirmed that Godines could not have scoped out the rig alone. Franco characterized Godines as an experienced worker who had worked in the oilfield most of his life, and Franco said that he did not instruct Godines to check the pins. Franco blamed himself for the accident because he supervised Godines and he “wasn’t there to stop” him. Franco testified that he and the other crew members did not see Godines strike the pin under the derrick because they were doing other tasks.

Eduardo Quezado, a Precision floor-hand employee, saw Godines underneath the derrick striking the pin, but he did not realize Godines was performing a dangerous task. Quezado testified that the radios were only used by the Briley truck pushers, not Precision.

In sum, Precision argues that none of this evidence shows that a vice principal of Precision proximately caused Godines’s death or that any negligent act amounted to gross negligence. Even if we assume, without deciding, that Moran, Ulloa, Franco, and Quezado were all vice principals of Precision, we conclude that there was no evidence that raised a genuine issue of material fact that any Precision supervisor’s acts or omissions proximately caused the accident and Godines’s death.

*6 Appellants suggest that Precision knew that using the two-truck method was likely to damage the derrick mast during transportation and risk collapse. Appellants’ experts’ affidavits support the assertion that moving a rig in this way can cause damage to the derrick, but there is no evidence that any such damage actually caused the collapse. A plaintiff must prove all the elements of negligence as a prerequisite to a gross negligence claim. Travis v. City of Mesquite, 830 S.W.2d 94, 98 (Tex. 1992).

Dr. Rasty indicated in his affidavit that the two-truck method was a factor contributing to stresses on the failed travel pin, but he also stated that further analysis would be needed “to quantify the contribution of transportation-induced stresses” on the pins. Hughett’s affidavit stated that the two-truck method could cause damage to the derrick mast, and Meyerhoff averred that the two-truck method was dangerous because it violated motor carrier regulations.

We agree with Precision that these affidavits do not raise a genuine issue of material fact on a causal connection between the risks of transportation and Godines’s death. The parties do not dispute that the derrick collapsed after Godines removed one of the travel pins. None of the experts’ statements indicate that a single pin—even one in brand new condition—could have supported the weight of the derrick. Appellants failed to adduce evidence that raised a genuine issue of material fact that the transportation method damaged the derrick’s pins and substantially contributed to Godines’s death.

3. Appellants failed to adduce evidence that raised a genuine issue of material fact that Precision was consciously indifferent to the extreme risk that created the likelihood of serious injury to Godines.

Gross negligence has two elements: an objective and a subjective element. U–Haul, 380 S.W.3d at 141.

In Andrade, the plaintiff failed to produce any evidence that the defendant’s managers were consciously indifferent to the risk of electrocution by an energized crane. Diamond Shamrock Ref. Co. v. Hall, 168 S.W.3d 164, 172 (Tex. 2005) (holding there was no evidence the defendant was conscious that a “compressor was unsafe as designed and operated,” although the defendant’s efforts to protect against the dangers of working in an oil refinery were “imperfect” and “may have been negligent”).

*7 In contrast, the plaintiffs in Burk Royalty produced circumstantial evidence that the district superintendent of an oil well site was consciously indifferent to the risk of a fire on a rig. Lee Lewis, 70 S.W.3d at 784, 786 (holding that the subjective element of gross negligence was satisfied where a “job superintendent” saw employees working on the ninth floor of a building that was under construction with an “ineffective fall-protection system” and “did nothing to remedy it”).

The present case is more like Andrade because there was no evidence that a Precision supervisor was conscious that one of its employees was about to scope out the derrick from the two trucks but, nonetheless, allowed the employee to continue doing so without conducting a JSA meeting beforehand. There is no evidence that a Precision supervisor instructed Briley or any employees to begin scoping out the rig. All Precision supervisors, including Franco, testified that it was not yet time to scope out the derrick when Godines went to remove the pins and that the derrick was not in the position to begin that process.

Although Franco testified that he knew it was dangerous to work around the rig, his admission that the derrick did not pose a risk while it was parked on the tractor-trailers shows that he was not subjectively aware of the risk at the time Godines removed the pin. Like the managers in Andrade who all testified that they believed that they locked out the crane, all Precision managers subjectively believed that there was no risk to the crew at the particular time that Godines went under the derrick to remove the travel pins. Franco also testified that “[t]he instructions from the truck pusher to Godines were not cleared through” him, and he admitted that there was no reason for his crew to be around the derrick at that time.

Furthermore, Godines was an experienced employee with the authority to stop work if he thought an activity was unsafe. Employee experience and “stop work authority” are factors that decrease the foreseeability that a worker would encounter an extreme risk without specific instructions. See Petri v. Kestrel Oil & Gas Props., L.P., 878 F. Supp. 2d 744, 768 (S.D. Tex. 2012) (holding that there was not clear and convincing evidence that the employer was subjectively aware that an experienced worker with stop work authority “would miscalculate the danger, not comply with company safety standards, nor use a readily available life vest, despite the clear sign requiring it, nor exercise his stop work authority”).

Appellants argue that circumstantial evidence indicates that Precision was aware that the process of scoping out the derrick had begun. Another Precision employee, Quezado, was in the area around the derrick when Godines went to remove the pins, and Quezado heard the Briley truck pusher discuss scoping out the derrick on his radio. However, Quezado testified that he was working on the mud boat nearby, and the uncontroverted evidence shows that only Briley truck pushers used the radios. Without evidence that Precision supervisors communicated with Briley or were otherwise aware of Briley’s actions, the radio conversation does not raise a question of material fact that Precision supervisors consciously allowed their crew to begin scoping out the rig without a JSA meeting. Standing alone, circumstantial evidence of the proximity of one other employee performing different tasks in the same area is too meager to impute actual awareness to Precision’s supervisors. See Blount v. Bordens, Inc., 910 S.W.2d 931, 933 (Tex. 1995) ). Therefore, these facts do not create the inference that a Precision supervisor was aware that the Briley truck pusher or any employee would begin the process of scoping out the derrick and consciously disregarded the risk to Godines. Appellants failed to adduce evidence that raised a genuine issue of material fact that a Precision supervisor was aware of the risk to Godines and that such supervisor began scoping out the derrick with conscious indifference to Godines’s safety. Thus, Appellants failed to raise a genuine issue of material fact on the mental state required to prove gross negligence. We overrule Appellants’ third issue.

IV. Conclusion

*8 The trial court did not abuse its discretion when it allowed and considered the late-filed evidence, and the trial court properly granted summary judgment in favor of Precision on Appellants’ negligence claim. Because Appellants failed to raise a genuine issue of material fact on one or more elements of their gross negligence claim, the trial court did not err when it granted Precision’s no-evidence motion for summary judgment. In light of this court’s disposition of Appellants’ second, third, and fourth issues, we also overrule Appellants’ global first issue.

V. This Court’s Ruling

We affirm the judgment of the trial court.

Footnotes

2

Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland, sitting by assignment.

1

Godines died while working for Precision Drilling Company, L.P. as a motorman on the rig crew.

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